The Fours Solutions For Western Economies. Dan Tubb Crypto

they've all come up with is one default on the national debt two cut the spending you're still running a deficit and you get back where we are here in 15 years hello everyone today our guest is Dan Tubb Dan Tubb is a podcaster and former venture capitalist in this interview Dan Tubb talks about the macro Outlook governments money Western economies and debt spiral if you enjoy this highlight videos please kindly subscribe and help share this video for us to share more of this valuable content thank you the Federal Reserve recently announced the seventh consecutive increase to the federal funds rate and indicated its intent to continue raising interest rates going forward the FED has repeatedly raised rates this year in an effort to quarrel rampant inflation that has reached 40-year highs however there are signs inflation is starting to cool higher interest rates may help curb soaring prices but it also increases the cost of borrowing which can make everyday Financial products more expensive like mortgages personal loans and credit cards but yeah so quick look at the U.S debt Clock um total U.S debt is is 31 trillion you know what does that mean well it's ninety four thousand dollars per citizen so you could buy everyone in the US Porsche 911.

If you didn't have that debt if you wanted to get back to that same debt point so if people were looking at this now and they see 31 trillion 31.4 trillion of debt who do they owe that money to oh well um themselves each other pension fund phone corporations the Chinese government I mean the whole thing with the modern monetary system is it's the the base layer of debt is sovereign debt and then that is then owed to everybody everywhere else it's like a spider web of nodes of of debt leaning lending money to each other and then it's all sort of netted off so it's the so everybody is the answer so a little bit like the crypto contagion we've just been through where everyone seemed to own oh yeah well the whole cryptocontation is just recreating the Fiat system on a blockchain it's a quarter of a million per U.S taxpayer is the current level of the debt um so that's enough um to to give everybody in Texas a million dollars including the children so this US debt is quite significant right and that's only if you look at the sort of on the books national debt you start adding in like the personal debt the corporate debt um and then if you start adding in the unfunded liabilities the way that a corporation would have to show these things um so you know Social Security and Medicare and stuff like that you're now well over 200 trillion of debt now is that a big number well it's enough to give every U.S adult a million dollars so this is a significant debt pile that they've accumulated at this point these numbers don't mean anything to anyone anyway I mean I kind of know what a thousand pounds is and I even kind of know what a million pounds is because you know a million pounds you can well it's you know it's like double your house or three times your house or something like that with if you're a professional person if you if you work really well you might have a million pounds in your pension pot at the end of a period so we kind of know what a million pounds is but we've got no idea what a billion is in any of these numbers so it's no good to us what we really need to do is we need to bring all of this stuff back to the back to the human scale right all economic activity ultimately comes back down to individuals there are 67 million people in the UK so if we want to bring these numbers down to the human scale you know you can divide it by that but I don't think that really works because that includes children time people people who are um sick and can't work you know ultimately not productive people yeah ultimately it's going to be with 33 million people who are economically active that's where the burden of paying for government um for paying for the debt it all falls on the economically active people and that's coming the same in in every country so you wanna you wanna basically bring it back to them so this is basically the same information except now we've divided it by the number of economically active people so you can see that the government is um collecting 25 000 pounds per economically active person in the UK um they're not collecting all of that from the economically active people because of course you know if your kids buy something from the shop they're paying v80 if your retired parents I mean they're going to be paying council tax they can be paying vat fuel Duty so there's a whole bunch of things that non-economically active people do but ultimately it comes from one way or another the economically active people even if they were even if they've now retired it's from prior savings now if you look at this I mean how does that strike you the government is spending 32 Grand for every economically active people but they're spending more than they're getting for each person yeah it's the obvious Point there's that as a thousand yeah so they need to spend on average 7120 to just just to be level yeah but just on the sheer scale of it you know 32 Grand per person who works that's a hell of a lot of money that the government has accumulated we'll come to that yeah I mean something has clearly gone wrong between now and then um depending where you are on the political Spectrum or I suppose we'll describe what you think has gone wrong so if you're on the left you're going to say well what's happened since then is that corporations become greedier yes if you're on the political right you might say well there's been five million plus in Immigration since then um if you're a Bitcoin or you're going to say well the money system itself is flawed which has resulted in governments um always spending more than they can more than they can collect um and because the money is generated at the Nexus between government and finance those two areas are ballooned disproportionately compared to the rest of the economy and therefore wages have got squeezed out yeah and if you're a Centrist like I am oh uh yeah gone I would say uh this is the result of successive governments uh using spending as a tool to win votes and maintain their position in government and being irresponsible and you you meet up with Bob and Bob's earning 50 Grand a year now so you know that sounds pretty good right I mean 50k perfectly perfectly reasonable South Africa man in this country to earn but what does that mean in terms of tax well first thing to remember is that before Bob gets paid his 50 Grand the corporate entity that he works for that's already paid a whole bunch of debt that's a whole bunch of um tax so they would have paid vat corporation tax employers National Insurance fuel Duty and a whole bunch of other taxes would have come out before it even got to him right then when it hits his payslip you're going to take out 12 and a half grand for um tax and National Insurance now left with about 38k doesn't stop there though because then he's got to pay um I mean depends on where in the country lives but he's going to pay a couple of Grand in council tax he's going to pay for fuel Duty about another ground he's going to pay vat depending on how much he buys maybe another four grand um and then other taxes let's call it two grand it would be more than that if he drinks smokes a lot but um you know you're down to 29k um before you've actually done anything and on top of that I think I'd make the argument you probably want to treat inflation as a tax as well um you could say maybe it's not but you know it's it's basically coming out of your oh no it is yeah it is a tax yeah because we know what causes it which is government spending expanding the money to play and we know is it is essentially a hidden tax a way to fund more things they can't afford so great let's treat that as a tax okay um the current official inflation rate which is obviously wrong it's obviously higher than the official rate but let's just go with the official rates for 10 at the moment so let's take another 10 of his salary off um and treat that as a tax so that's another 5K so we're now down to 24K less than half he's what he started with and the only thing that we have bought at this point is our government he hasn't he hasn't bought anything else at this point I mean I know we take we subbed off the v80 but you know now right now feed yourself pay the mortgage feed and clothe the kids and save for retirement so that you can pay half of those taxes all over again because even when you retire you're still going to be paying vat and council tax and fuel Duty and all the rest of it what are the four Solutions before I come up with is one default on the national debt two cut the spending three tax the rich four raised growth or a mix well yep possibly yeah um the reason I picked those four is because those are the four that you hear all the time um you know man in the pub economists on Twitter they all essentially I mean every every solution ultimately comes back down to these um with the exception of the first one the default on it I don't hit anyone ever talk about defaulting on the debt because that's what uh Brazil and Argentina and Cyprus does not bother United Kingdom yeah nobody is up for this um but you know here's the crazy thing okay I think default on debt comes at a time where there is literally no other option it's crazy than that because let's say that we we default on the debt we wipe it all out we say sorry bondholders you're not getting paid sucks to be you it's just gone forget about it move on okay here's the crazy thing because of the deficit that we're still running so you that 120 that you talked about you knock that out you're still running a deficit and you get back where we are here in 15 years is that even if you did it it wouldn't solve your problem because all you do is Kick the Can down the road 15 years and then be back here and that's assuming that government doesn't increase its spending which should has shown a clear propensity to do so you'd probably be back here before 15 years right so so here's some more problems with this idea um you also wipe out um basically the pension system because pensions are a lot of guilt um so all of those uh pensioners who thought they were going to be independent suddenly they're not because you've taken away their pensions and all of the taxes that you thought you were going to get from them you're now not going to get because they're going to be demiserated and and so that deficit is going to go up even more I think you did a show with Lynn Olden where she took the entire monetary system at a really zoomed out level and said well basically look it's it's just a series of banks owing other Banks money and then the um bank for international settlement I think she said um basically just Nets it all off and says okay well you know the end of each day you need to move money to here and here and here but it's the whole system the whole system is leaning on each other so series of nodes pushing against each other so if you take if I mean if you and the thing in 2008 was was what if the what if the Greek node goes dark and we were worried about the contagion collapse so that could have if you took out an economy the size of the UK obviously the whole thing is just going to go domino effect we're kicking right you could call it fat at the system but the point is if you want to go down the route solving the deficit and the debt and repaying the national debt then these are the sort of numbers and look 38 billion so effectively half the um usable budget of the of the education department okay and none of this is tenable yeah this is complete and utter fantasy as a solution because you would not get anywhere near government if you try to do any of this so we've done two solutions so far and both of them are complete and utter fantasy foreign left-wing economists on on Twitter like to talk about Tax Service yeah and again you know my Approach when I'm looking at all of these I'm not going to mess around um with a with a Half Baked solution we're going to go all the way in there with something really radical um and we're going to find that that doesn't actually solve the problem that's the case here so my no messing around solution with this one is that we are just going to take every single penny from the times 250 rich list okay so the top 250 richest people in this country which I think includes Rishi sunak I think he's on the 222.

Okay yeah um we're going to take the lot we come back to the practicality as to whether we can actually do that or not you know are they all keeping their money is Roman Abramovich keeping all of his money in the UK bank account waiting for it to be seized probably not but let's assume that you could actually do it well that raises you 653 billion what can you do with 653 billion powerful quarter of the national debt yeah all run the government for seven months okay that's the top 250 but like did you do other scales did you say take 50 of the top 2 000 yeah it doesn't work either because the next 250 they don't have even a fraction of the wealth at the top 250 have plus they all leave the country anyway yeah and that assumes that you could actually get their hands on the money the moment you even remotely propose something like this all of that money would vanish out of everywhere so what I think will actually happen is that they will select um bits all bits from the above and it will always be the absolute minimum that they need to pick from the above which is the least politically unviable to get them through the next three months the cancer of the political cycle yes and look at what the current conservative government is actually doing they are saying um well they put up a couple of taxes and they say we're going to put up more taxes and they say that they're going to cut spending but all of those big tax cuts and all of those big spending cuts at the other side of the election and they're not going to win the next election no I mean they're done yeah so they're they're not actually doing anything to solve this problem during the height of the pandemic the interest you can earn on money held in a savings account was next to nothing even high yield savings accounts often had apys under one percent but in a world of high interest rates savings accounts can earn much more considerable returns currently the best high yield savings accounts offer rates of over four percent with no monthly fees if you enjoyed this highlight videos please kindly subscribe and help share this video for us to share more of this valuable content thank you [Music]

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