WEBVTT 00:04.660 --> 00:08.920 Well, if you thought anything was going to go back to normal after the whole COVID crisis 00:08.920 --> 00:12.640 and those huge amounts of deficit spending and federal spending, well, it's clear now 00:13.180 --> 00:14.360 that that's not happening. 00:14.500 --> 00:17.200 That things are not going back to normal. 00:17.420 --> 00:20.260 Of course, this is what always happens when there's a crisis, right? 00:20.820 --> 00:23.400 We're told that, okay, it's the recession, it's a war. 00:23.540 --> 00:26.220 We just need to have huge deficits, huge amounts of federal spending. 00:26.260 --> 00:27.380 That'll get us through the crisis. 00:27.500 --> 00:28.460 That'll solve the problem. 00:28.940 --> 00:31.060 And then we'll go back to normal afterward. 00:31.620 --> 00:32.720 That never happens. 00:33.060 --> 00:40.200 People who are more observant observers of the federal government know that that 00:40.200 --> 00:41.020 doesn't happen. 00:41.120 --> 00:45.280 What happens is it ratchets things up to a new higher level of spending and that 00:45.280 --> 00:49.920 becomes the new baseline from which huge amounts of new deficits and spending 00:49.920 --> 00:51.340 levels occur. 00:51.980 --> 00:53.580 So what's happening right now? 00:54.260 --> 00:57.880 Well, things ain't going back to normal is what the situation is. 00:57.880 --> 00:59.340 And so let's look. 00:59.580 --> 01:01.880 We're now two months in to the new fiscal year. 01:01.880 --> 01:06.340 We just had some new data come out from the Treasury and the monthly Treasury 01:06.340 --> 01:09.420 report on spending and revenue. 01:10.040 --> 01:13.800 And we can see what the deficits are month to month. 01:13.960 --> 01:16.080 So let's look at the first two months combined. 01:16.300 --> 01:22.140 And what we see is that for 2025 fiscal year, which started on October 1st, 01:22.140 --> 01:29.540 were $624 billion in a deficit so far, one sixth of the way through the year, 01:29.960 --> 01:37.760 comparing to 2021 fiscal year, which so that was October, November of 2021, 01:39.060 --> 01:42.860 very much in the midst of that first year of COVID. 01:43.440 --> 01:48.760 That was only $429 billion for that period. 01:48.760 --> 01:54.940 And it's just been getting, there was a slight amount of retrenchment after that 01:54.940 --> 02:01.720 in 22, 23, 24, but things have only accelerated in recent years. 02:01.900 --> 02:07.220 So now over a half a trillion dollars in just this small amount of the new 02:07.220 --> 02:07.980 fiscal year. 02:08.280 --> 02:12.000 And how does that translate into a full year then if we just project out 02:12.540 --> 02:15.780 for the full 2025 fiscal year? 02:15.780 --> 02:23.380 It's looking like it's going to be something like 3.2, 3.5 trillion dollars for that period. 02:23.520 --> 02:25.580 Now, how does that compare to COVID again? 02:25.980 --> 02:28.540 So if we go back and look at the full fiscal year for 2020, 02:29.220 --> 02:33.660 so that was that was some of late 2019, which wasn't a COVID period. 02:34.200 --> 02:40.280 But it includes all of that March, April, May, all that acute COVID freakout period, 02:40.620 --> 02:43.460 the lockdowns, and we're told huge amounts of spending being necessary. 02:44.000 --> 02:48.460 That was $3.1 trillion deficit for that year. 02:48.780 --> 02:52.540 And then it was $2.7 trillion for 2021. 02:53.140 --> 02:56.180 Yeah, dropped back to 1.3 trillion, which was still far and beyond 02:56.180 --> 03:00.440 anything that had been happening during the economic expansion before that. 03:00.520 --> 03:03.380 Even Trump, who at the time I had commented on and said, 03:03.460 --> 03:08.760 look, Trump in the 2019 fiscal year, he ran up $984 billion. 03:09.200 --> 03:11.300 That was back in the 2019. 03:12.860 --> 03:14.480 And I couldn't believe that. 03:14.700 --> 03:17.900 That just seemed huge, that you would have a near trillion dollar deficit 03:17.900 --> 03:21.280 in a year that was neither a recession nor a war. 03:22.240 --> 03:24.200 But it turned out that that was just little. 03:24.380 --> 03:27.620 That was that was child's play because in the next fiscal year, 03:27.620 --> 03:29.400 which of course included a lot of Trump spending, 03:29.600 --> 03:35.140 Trump signed off on those huge mega deficits that occurred during the first year of COVID. 03:36.520 --> 03:38.520 That just shot up to over 3 trillion. 03:38.520 --> 03:43.780 So now if we're looking at being on the conservative end, around $3.1 trillion, 03:44.200 --> 03:47.660 for our current fiscal year, well, then we can just say it's worse than COVID now 03:47.660 --> 03:49.000 in terms of deficit spending. 03:49.500 --> 03:53.560 And that's pretty remarkable that they've managed to get to that level. 03:53.940 --> 03:57.140 Now, you could say, oh, well, aren't things going to change before that happens? 03:57.300 --> 04:02.400 Well, I really don't think that the Department of Government Efficiency, 04:02.780 --> 04:08.420 DOGE, is going to reign in spending a significant amount during this fiscal year, 04:08.420 --> 04:10.100 which of course just ends in September, 04:11.660 --> 04:14.580 what DOGE even have time to really make a difference. 04:15.080 --> 04:18.660 And that's assuming that they would really even be able to make a difference. 04:18.740 --> 04:22.000 Because if you're a season observer of Washington, 04:22.240 --> 04:25.300 you know that presidents have been sending down recommendations to Congress 04:25.300 --> 04:26.120 for many, many years. 04:26.280 --> 04:30.140 Congress is in charge of the budgeting process as required by the Constitution. 04:30.940 --> 04:33.160 Yeah, they get recommendations from the executive branch, 04:33.220 --> 04:35.240 which is what a DOGE recommendation would be. 04:35.600 --> 04:38.020 And they pretty much throw those recommendations at the garbage 04:38.020 --> 04:41.500 because Congress has its own constituencies. 04:41.840 --> 04:43.120 It has its own priorities. 04:43.560 --> 04:44.940 It's a totally different thing. 04:45.980 --> 04:51.720 And when you start to get down into the details of federal spending, 04:52.440 --> 04:57.700 you start to see that there's very little appetite for it, especially at the voter level. 04:57.860 --> 05:02.140 Where are these members of Congress going to hear that they want specific cuts done? 05:02.140 --> 05:06.900 Because when we look at poll after poll specifics on spending, 05:07.100 --> 05:09.180 always pretty much end up with the public saying, 05:09.340 --> 05:10.720 yeah, you should spend more. 05:11.100 --> 05:14.240 Yes, we get these polls that say, oh, in general, 05:14.280 --> 05:17.280 the public thinks that we should spend, 05:17.820 --> 05:21.120 that we should cut a lot of money from the overall budget. 05:21.300 --> 05:23.160 But then when you start to drill down and say, okay, well, 05:23.180 --> 05:24.620 should you cut money from Social Security? 05:24.720 --> 05:26.760 They always say no, like lopsidedly, right? 05:26.900 --> 05:29.120 Two to one against any significant cuts. 05:29.120 --> 05:33.160 Social Security, Medicare, even for these other poverty relief programs 05:33.640 --> 05:35.780 that many people probably think they'll never be on. 05:36.220 --> 05:37.280 Those are still popular. 05:37.400 --> 05:38.240 People don't want to cut those. 05:38.820 --> 05:42.680 Education programs, they say, if you ask, should we cut education? 05:43.120 --> 05:44.040 Should we cut health care? 05:44.460 --> 05:48.000 They always say no, lopsidedly against cuts. 05:48.300 --> 05:50.160 And then if you look at military spending, 05:50.720 --> 05:53.620 which of course is always discretionary spending for the most part, 05:54.180 --> 05:55.360 they say no there too. 05:55.360 --> 06:00.200 Maybe less than one third think that too much is being spent 06:00.200 --> 06:03.280 on the military in terms of these polls. 06:03.840 --> 06:06.660 So if Congress looks around and they look at that sort of thing, 06:07.180 --> 06:09.380 it would be political suicide in many cases 06:09.380 --> 06:11.280 to go back to your constituents and say, yes, well, 06:11.560 --> 06:15.320 in order to make good on cutting federal spending, 06:15.440 --> 06:16.500 we're going to cut Social Security. 06:16.620 --> 06:17.360 We're going to cut defense. 06:18.080 --> 06:20.780 There are, of course, huge amounts of government contractors 06:21.940 --> 06:24.500 in each congressional district. 06:24.500 --> 06:27.040 And they're not going to be in favor of that sort of thing. 06:27.060 --> 06:31.180 And then, of course, you would be crazy to go against the elderly vote 06:31.180 --> 06:34.580 and start cutting Medicare or Social Security. 06:34.680 --> 06:38.840 So it's just really hard to see where these cuts are going to happen 06:39.600 --> 06:41.300 without a major change in ideology. 06:41.640 --> 06:42.060 That's the thing. 06:42.220 --> 06:46.840 There's just not going to be one of these top down big cuts to spending. 06:47.020 --> 06:48.980 And I'm not even saying they have to cut the whole deficit, 06:49.100 --> 06:51.720 right, which of course require like $3 trillion in cuts, 06:51.740 --> 06:54.360 which is just crazy town sort of talk. 06:54.500 --> 06:55.420 In Washington. 06:55.720 --> 06:59.780 But hey, maybe just $1 trillion cut. 07:01.400 --> 07:04.200 No appetite for that from what I can see. 07:04.660 --> 07:06.360 When will that happen? 07:06.660 --> 07:08.720 It'll have to be after the public starts to see, 07:08.900 --> 07:10.540 and we can discuss that in another video, 07:11.060 --> 07:13.000 when the public starts to see the real connection 07:13.000 --> 07:16.960 between deficit spending and higher interest rates, 07:17.260 --> 07:20.100 the connection between deficit spending and price inflation, 07:20.700 --> 07:24.060 the impoverishing effects of deficit spending upon the public. 07:24.500 --> 07:25.920 The public doesn't see that yet. 07:26.080 --> 07:28.120 They still think that it's pretty much the deficit spending 07:28.120 --> 07:30.860 is something that their grandchildren can deal with later, 07:31.080 --> 07:35.640 and it's no big deal for us here in the here and now. 07:36.480 --> 07:37.340 That's a mistake. 07:38.180 --> 07:41.060 And we're going to have to see some changes in public opinion 07:41.060 --> 07:43.340 and ideology in terms of spending 07:43.340 --> 07:46.420 before we can expect any significant cuts. 07:46.580 --> 07:47.980 And until then, I think we'll just continue 07:47.980 --> 07:49.740 to see these huge deficits. 07:50.880 --> 07:53.660 They might increase decrease slightly to $2 trillion. 07:54.720 --> 07:56.480 Maybe even go down to $1 trillion. 07:56.840 --> 07:59.020 But just a few years ago, those would have been considered 07:59.020 --> 08:00.980 huge, huge deficits. 08:01.440 --> 08:03.720 And of course, they're just moving us ever faster 08:03.720 --> 08:06.720 toward $40 trillion in debt. 08:07.020 --> 08:08.600 And you have to pay interest on that. 08:09.180 --> 08:12.060 You have to deal with that in a variety of ways 08:12.060 --> 08:14.000 that affect the public and affect their ability 08:14.000 --> 08:15.580 to save and pay their bills. 08:16.060 --> 08:19.060 And there's just no sign that that's a problem politically 08:19.060 --> 08:23.420 yet for people who are running up these huge bills. 08:23.420 --> 08:25.320 So in the future, there'll be a change, 08:25.420 --> 08:27.840 but I just don't think that's on the menu for 2025.