While most political pundits reflect on the results from the Iowa Caucus, President John Pudner pushed onward and took his radio tour to Eugene, Oregon, discussing the implications, current state, and solutions of note for the $34 trillion US National Debt. More notably, however, both he and host Robb Holloway focused more on the less-taken path of this issue - how it has, could, and likely will affect the wallets of families across our Republic.
From record price increases, to the Dollar’s standing on the world’s stage, to the real possibility of the Social Security system deteriorating, Americans of every stripe are and can be directly hit by the effects of this debt crisis. As the federal debt continues to increase, the government will not only have to spend more of its budget on interest costs, crowding out investments into key areas like research and development, non-defense infrastructure, and education, but will also force hiked interest rates for loans of all kinds, including those to start a business or buy a home. As Pudner points out, this has allowed China to sow doubt on the stability of the Dollar as the world reserve currency, leading key nations such as Saudi Arabia to begin using the Yuan for international transactions.
Yet, many have yet to prioritize, or even know of, how important this issue can and will be. To that end, Pudner and Holloway both analyze what steps could be taken on this issue to avert this crisis and if politicians in Washington and across our Republic have the political will to accomplish this lofty task.
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The following transcript from this interview is presented in its entirety with minor edits:
SUMMARY KEYWORDS
national debt, reckoning, social security, dollar, crisis.
SPEAKERS
TBOR Action President John Pudner and Robb Holloway.
Robb Holloway 00:00
I was gobsmacked by this. Yesterday, it was announced that the United States debt has now surpassed $34 trillion, which is the record, previous record of $33 trillion was hit just three months ago, so over the course of three months, our debt has increased by $1 trillion. Let's talk about it this morning. He is the president of Take Back Our Republic Action, he's been an aid in the Bush administration, he is John Pudner, and he joins us on The Wake-Up Call this morning. John, thanks for being with us again.
John Pudner 00:58
Oh, thanks for having me.
Robb Holloway 01:00
To me, to add another trillion dollars, which is almost an incomprehensible amount of money for anybody, that we've put on that much debt in just three months, how does that even happen?
John Pudner 01:31
Yeah, Obama was blasting us after eight years of George W. Bush because it was going up half a trillion a year, which no one likes, but you're right. I'd just tried to make the analogy to credit cards transmitting credit card debt once you get to a point where all you're really doing is paying some of your interest. It just keeps going up even if you did no spending, so that number is just about incomprehensible, and unfortunately, I do think there's going to be a day of reckoning in the future here we're approaching.
Robb Holloway 02:08
And what is that day of reckoning going to look like?
John Pudner 02:10
Well, the problem is, the Chinese are jumping on this to try to say the US dollar is gonna be weak, they're so down in debt, don't buy these treasury bonds, and start using our currency as the standard currency, and they've made some headway. The Saudis are starting to deal with Chinese currency, not exclusively, but they're starting to do transactions with it, Argentina, Brazil. The Russians like to fight, but the Chinese like to win, and they see this is as their ultimate way. If they can take this weakness and debt, and use it to have even a few dozen countries move away from the dollar and say, the Chinese currency is the standard, more solid than the dollar, that's the day of reckoning for us.
Robb Holloway 02:56
How can you say it's stable considering how much they manipulate its particular value?
John Pudner 03:16
Oh, yeah, they're terrible, I'm just talking from what they're presenting to other countries, and I just think for someone like the Saudis to actually start using them for transactions was one of the first big alarm bells I found. I mean, this wasn't some little country with no influence in the world, I'm just saying their pitch. Yes, they manipulate it, they manipulate money into our elections, it's all a tool for them. The Bank of China controls all these things and it takes a lot of work to expose them by Peter Schweitzer and others, but I'm just repeating their pitches that they tried to get countries off the dollar.
Robb Holloway 04:01
Beyond that, what other reckoning can be caused by this just constantly multiplying huge amount of debt?
John Pudner 04:11
Well, we're just so used to having the ability to have money loaned to us as a country, that hasn't been in question for decades. People say you can print money, well, you don't really print money, but what you print is treasury bonds, and there's always just been such a market that we've always been able to get as much more money as we want in, and so that's why people haven't felt this is a crisis, why voters haven't really been voting on the debt for quite a while. But, if the government gets to a point where they can't find buyers for treasury bonds, then you actually are forced to not be able to buy things in the country, and that's where things turn and suddenly there's this crisis. Money is not free, what a novel idea?
Robb Holloway 05:09
What does that lead to? Is that going to lead to what we should be reasonably doing, which is being a little bit more austere? Is that forced austerity? Does that mean the government just lays off a ton of people? Does that mean we stop paying for the military? What does it mean? How is it going to affect the average person on the street?
John Pudner 05:35
The first thing the average person feels is their retirement, because, if at some point, you cannot issue Social Security checks, that would be one of those moments. We can get to a crisis where there was just not money there to pay Social Security checks, or just actually have to be cut in half all of a sudden, and with everyone being depended on them, you know, that could actually be a big layoff. The problem so far is, when you have these stopgap shutdowns, you end up paying everyone for the time they took off as a federal employee, so having a shutdown ends up paying more, but if it were actually a point where the government was forced to just lay off a ton of people, there'd be plenty of businesses saying they have to do this all the time, but obviously, that's a shock to the system to have that happen to that many people, and to have the unemployment rate drive up, and then those people are all out competing for other jobs, and you can see the spiral that happens there.
Robb Holloway 06:42
We've got $34 trillion in debt. What do we do to try, and at least, either hold where it's at or decrease it?
John Pudner 06:55
It's tough because you have to get a consensus to do real cuts, and when you have Schumer coming out last year saying he will never pass a debt reduction that comes through the Republican House, at that point, your chances of success are zero, because if one chamber says we will not pass anything, you're stuck. That's the first thing that he's got to back down on. We gotta at least have a process where there's an openness to accepting something from the House, at least consider and debate it.
Robb Holloway 07:44
We've got a question off an email here. What would happen to the US economy if oil was pegged to the one versus the dollar?
John Pudner 08:02
Complete crisis, particularly since we got to energy independence a few years ago and now we're not, we're dependent on overseas oil again, and obviously, the first buyer the Chinese had on starting to use the Yuan was Russia, of course, because of the boycotts over the invasion. We relatively had been spoiled by lower gas prices, they got very low under President Trump, they went up relatively, what we consider very high, and you got to be adding several dollars on top of that right off the bat, and then people suddenly paying eight or $10 for a gallon of gas...talk about a real crisis, and as we know, fuel is what feeds everything. You got to transport things, you got to buy other goods, they all have to be put on trucks so I think your email is right on.
Robb Holloway 09:07
All right, next question here. How much are tax cuts primarily responsible for increasing the debt?
John Pudner 09:17
Well, I think there's some blame, not going to dismiss that. Generally, when there's been a good tax simplification or cut, you have sometimes seen revenues go up, so that is true, that's not just Ronald Reagan, JFK did it, but long term, you're going to have to cut spending, and that's not a long term. I won't give a percentage. I think even the economists don't really have a good feel on that anymore. They certainly have something to do with this. We can't say that tax decreases help the debt.
Robb Holloway 10:06
Okay, so looking into your crystal ball, play Nostradamus, do you think that the debt is going to be addressed before it becomes a massive crisis or do you think, just because of the way that things seem to work, that we're just going to kick the can until everything blows up in our face?
John Pudner 10:34
I'm worried we're gonna just keep kicking it. There's just no political incentive right now to address it partly because Americans don't know who to blame. There's one poll that took place close to the near shutdown last year, and 29% blame the Republicans, 27% blame the Democrats, and 33% said they're both to blame, so everyone knows they don't like either side, but it's just not...you need incentives in a Democratic Republic like we have, and there's just no upside right now to getting serious on making some changes to Social Security. Okay, well, there goes a big chunk of your vote. I'm just worried, until the problem is immediate enough, let's just describe it as, at least, earthquake tremors, I just don't think it's going to be addressed seriously.