♪ Blessing in the mornin' ♪ ♪ Come back Sunday morning ♪ California's top casino and entertainment destination is now your California to Vegas connection. Play at Yamava Resort and Casino at San Manuel to earn points, rewards, and complimentary experiences for the iconic Palms Casino Resort in Las Vegas. ♪ We got the store to sell ♪ Two destinations, one loyalty card.

Visit yamava.com/palms to discover more. Today on Radical Personal Finance, I have a special treat for you. A joint show with my friend David Stein, who is the host of the excellent Personal Finance and Investing podcast called Money for the Rest of Us. Back on episode 466 in June of 2017, I recorded an episode called The USA's Long-Term Fiscal Gap and Why It Matters to You.

America's Fiscal Insolvency and Its Generational Consequences. And I read an essay by Professor Lawrence Kotlikoff. I believe I read his testimony that he presented to the US Congress on the subject of what is referred to as the unfunded liabilities of the US government. Unfunded liabilities are those promises that have been made to citizens of promises of benefits, but promises that have not been paid for nor has money been allocated to those benefits.

Well, after I published that show, I received an email from David. He wrote to me and he said, "Joshua, I think you're wrong about this." And we intended to get together and record it, but I pulled off during the fourth quarter of 2017 and the first quarter of 2018.

I pulled back from doing a bunch of interviews and we didn't get it done until now, where I recently got together with him to debate this subject. So the audio you're about to hear is David and me sitting down and trying to figure out who's right. And I think you'll hear the challenge of that.

David is a really knowledgeable guy. He worked for many years as an institutional investor and now, of course, is his own private investor. And then he teaches investing on his podcast, Money for the Rest of Us. And I would say that the two of us would represent a fairly mainstream perspective in our experience.

He came from the world of institutional investment advice. I came from the world of personal financial planning and personal investment advice. But both of us were involved in fairly mainstream approaches to investing. But yet, both of us are trying to figure out the answers to these difficult questions, as is anybody who's involved in the world of investing, which is, sadly or appropriately, all of us.

And so I hope you enjoy this discussion as we try to wrestle through some of these issues. This show does not have a lot of facts and figures. We chose to focus on the simple audio discussion, but I still think it can serve you. You'll hear this audio in a couple different parts.

David's show is usually about 30 minutes long, and so we were trying very hard to fit that time constraint for his show. But I was still frustrated at the end of 30 minutes that I didn't feel like we'd arrived at an answer. So how could an episode of Radical Personal Finance be only 30 minutes, especially an interview?

So I finished the show, and then I said, "David, we've got to get to the bottom of this," and thus you'll hear the difference in the audio. So enjoy this conversation between me and my friend David Stein. David Stein, welcome back to Radical Personal Finance. It's good to be here.

So a number of months ago, I recorded a show talking about the future of basically the U.S. government economic situation, the fiscal situation. And in that show, I talked extensively about Lawrence Kotlikoff's discussion of the unfunded liabilities of the U.S. government, and I started the process of declaring my position on the unsustainability of current U.S.

government and fiscal policies. It's my personal opinion that the U.S. government and the U.S. American culture is effectively bankrupt, and that the process of that bankruptcy will proceed forward over the coming decades. I don't know a time, but it'll take-- over the coming decades, we'll see that bankruptcy more and more become apparent, the great default, as some people have termed it.

Now, after that show, you emailed me, and you said, "Joshua, I don't agree with you." And in that email, you said, "Let's talk about it." So here we are, months too late, but we're finally getting back to talking about it. So what I thought would be fun is let me, in short, describe my understanding, and I want to keep today's show free of a lot of numbers and detail.

That's better discussed in writing. But I'll very briefly describe my position, and then I want to hear your position and hear what you believe and don't believe. It seems to me that if I do an analysis of the last century of U.S.-American spending and government policy, it seems like we have made commitments on the level of government that we will never be able to keep.

Most importantly, Medicare, Medicaid, and Social Security-- or I guess I should rephrase that order-- Medicaid, Medicare, and Social Security are effectively bankrupt. They don't have enough money to cash the promises that they have made. And so over the coming decades, I expect those to be, over time, defaulted on in a myriad of ways.

And I look at the political situation in the United States, and I see no possibility. I see no political impetus. I see no one who's standing and saying, "Let's stop borrowing money. Let's pay our bills. "Let's actually balance our budget. "Let's actually figure out how to run on the money that we take in.

"Let's figure out how to adjust taxes and revenue "to be at least equal, let alone pay off debt." What do you think? Well, I think it gets back to what is money. In other words, a lot of the analogies-- the U.S. is like a business or a household, so it has constraints, but it doesn't.

The government's money-- essentially, it's magic money. Money is digital. And so when we look at what happens when the government spends, it's not-- doesn't have to sit there and wait for this money to show up. And so when you go back to what Kotlikoff, in his generational accounting, he's looking at all these promised payments, and he discounts them into today's dollars, and he looks at the potential tax revenue and discounts it to today's dollar, and there's this huge fiscal gap.

But the U.S. government has run a deficit basically forever since it's been around, and if--think about it in terms of monopoly money. If it was just monopoly money, we wouldn't have these things. So while I might agree with you that there's some fundamental decline in the U.S. government, I don't think-- there's not a fiscal constraint.

And we have examples of that. We have Japan that has a much greater debt to GDP than the U.S. But what do you have happening? You have the Japanese central bank effectively buying that national debt. They now own 40%. They've bought it out of money they created out of thin air.

But that doesn't mean there's no constraints, and that's where I think it's the key. It's not that the government can spend as much as it wants, because the wealth of a country is the ability of the private sector to produce goods and services that we can eat. So if a government like Venezuela is spending ridiculous amounts of money and buying off its population, yet has destroyed the private sector, then you have massive inflation because you have essentially a collapsing economy.

There's not enough food. The government's spending money, and you have hyperinflation. But in an economy like the U.S., where you have a robust private sector, and our deficits are small relative to the size of the economy, we can continue indefinitely like we've been doing and have done for centuries.

And it's not going to be a collapse based on accounting. If there's going to be a collapse, it's going to be based on a morally bankrupt government that doesn't follow the rule of law. So interestingly, I just have been reading-- I'm late to the party. I've been aware of it for a time, but I've just been reading David Stockman's book, The Great Deformation.

Are you familiar with that book or have you ever read it? I am, and I don't necessarily agree with him either. Right. So I know a lot of people-- He's a very, of course, divisive figure. But I've not read the book. I've read reviews. I might have started it.

I'm only partway into it, but it's something I've been really grappling with this question. He lays out a very strong case that in the 2008 financial collapse, that the moral connection between the natural free market system and the government getting involved, that that moral connection was broken. And he makes a very strong case that all of the governmental intervention was unnecessary.

Now, I also read the official U.S. report that was issued by the inquiry into the financial collapse, and of course they would disagree with one another. So the moral dimension is one thing, but let's stick with the-- I agree. Go ahead. I don't think the government should have intervened.

Right, okay. How they do. And I don't necessarily agree that the Federal Reserve should be creating money as part of the quantitative easing program. I don't think that was necessary. But that's separate from the fact that they can. Right. So I think I have to acknowledge, and I want to acknowledge, that for all of the talk of doomsday and collapse that we've seen people talk about for decades, it hasn't happened yet.

So those who say it's inevitable have to reconcile, well, it hasn't happened yet, and lots of people have said it was inevitable long ago. But do you think there is a limit with regard to deficit spending? Do you think there is a limit? And if there is, what would it be?

Because after I recorded that show, I had a listener who seemed very well informed write to me and said, "Joshua, you're wrong, "and you're wrong because you think "that there's a limit." And we've proven that there effectively is no limit on government spending, and what you need to do is read this, this, this, this, which demonstrate that there's no limit.

The government continue to do this because, as you say, the government controls the monetary supply. They can print more money. They can always satisfy their obligations because there is effectively no limit. No, and the limit is the ability of the private sector to produce. You're seeing Venezuela as a country where they've met their limit.

They have impeded the ability of farmers to grow crops. They don't have enough food. And it didn't matter that the government can create money out of thin air, can create cryptocurrencies, because there isn't enough to eat. And so that's the fundamental limit. Where there's not a limit, and oftentimes people, you'll see articles that don't understand how the monetary system works, will say, "Well, our grandchildren "are going to have to pay for this debt "that we've incurred." Now think about that.

Has anybody come to you from your great-great-grandparents asking for the debt that the government took on beginning of this century? - I would say yes, but in this way, that a significant portion of the federal expenditure, I don't have the number in front of me, but I would say, what, 15, 20% of the federal expenditure is currently spent on interest, no, it would be less than that, interest on the federal debt.

And that debt has accumulated since World War II. So we are still currently paying interest. - Oh yeah, we pay interest on it, but nobody's collected it, because what is government debt? It's assets of most of us. In other words, that interest flows right back into the economy, and it becomes income.

You always have to look at who's on the other side of the balance sheet. Government debt are household assets. And what is creating that debt each year? Because one of the things people talk about, we need to have a balanced budget. Well, the government can set what they want to spend.

They really don't have control over the revenue, because that is determined by the decisions of households and businesses, how much they want to save. And let me just give a brief example. Just think of, if businesses and households decide that they want to save more, that means they spend less.

And if they spend less, then they're buying less from other households and businesses, which means their income drops, which ultimately means that there's less tax revenue. Because if businesses, if people are trying to save more, and businesses are trying to save more by spending less, then other businesses aren't going to have as much income.

People aren't going to have many jobs, so there'll be less tax revenue, and that naturally puts the government into a deficit position. Even if the budget was balanced at the beginning of the year, we're going to spend, whatever, $5 trillion here, and we hope to get $5 trillion in revenue, as soon as the household and business sector decide they don't want to spend as much, then the revenue drops, the tax revenue.

And that's why we naturally have bigger deficits during times of recession, because of unemployment benefits. But it's ultimately the fiscal situation of the federal government is determined by households and businesses. Assuming that the government isn't out of control in terms of its spending. I mean, there has to be some basic understanding as we're not going to be like Venezuela, right?

And if we don't have that, then we're in trouble. And I used to have optimism that perhaps somebody, especially the Republicans, who ran on the idea that we're going to be fiscally constrained, I used to have optimism that the Republicans might follow through at some point. But with this recent, what I would term a boondoggle, with this recent boondoggle of tax bill a few months ago and spending bill that was passed by Republican-controlled Congress and Senate and signed by a Republican president, I have lost any optimism that there's any serious politician, with the exception of maybe Rand Paul, who staged some theatrical objections.

But it seems like there's almost nobody who actually stands for fiscal constraint. So I've lost that optimism. But let me go back. Let's talk about coffee. Go ahead. - Hang on a second. I don't, yes, but I don't think they're out of control. In other words, we could run a 3% to 4% deficit to GDP indefinitely.

We've done it. And it's just, it's been done. And it goes back to showing, when is the collapse gonna occur from a fiscal standpoint? Japan has twice as much debt to GDP as the US. So 240% debt to GDP. We're about 103%. And Japan is doing just fine and doesn't have issues with inflation because their population is shrinking.

And so again, the constraint is, is there enough people to produce the goods and services? And it'll be interesting to see because Japan will get into trouble way, way sooner than the US. If there is a constraint, Japan is gonna get in trouble. But right now, it's just not there.

- Okay, so here's the point though. The numbers that you're referencing are on-book liabilities. The official federal debt as is calculated, which is what, 20 trillion-ish? - Yeah, 20 trillion. - About 20 trillion. Whereas what Kotlikoff's point is, is the unfunded liabilities, which in his estimation, depending on the year of his work, range anywhere from 180 to 200 trillion dollars.

And what he's describing there is the commitments, the promises that are made to the recipients of Medicaid, Medicare, and Social Security that are not accounted for in official on-budget debt. And so here's where, in my guess, I've spent about a decade kind of thinking about this. And a decade ago when I started to think about it, I had this impression that, well, one day, the federal government's just gonna run out of money, and they're not gonna, that's not possible unless you have a society in anarchy.

Because the power behind the US dollar as a made-up currency without any fundamental connection to anything constraining, the power is the taxing authority of the entity, of the state behind it, and the state's ability to use force to enforce their taxation. And so on that basis, the US government can always write any number of checks that they want because they have the monopoly or the majority of force, and so they can force tax revenue, and they can just write checks.

But the problem is, what are those checks worth when they actually get there? And so I don't see any way that all of a sudden that all of the hoopla over government shutdowns notwithstanding, which is just, in my mind, political theater, I don't think that at some point in time you just stop, that the US government stops writing checks.

But I do think that the value of what is promised continually constricts. And it goes back to the world of financial planning. What did I tell when I was working as a financial planner? What did I tell all of my younger clients? And it was just a standard in the world of professional financial planning.

Don't plan on Social Security. Now that's just the tip of the iceberg because Social Security is one of the healthier ones. When you go to Medicare and Medicaid and you look at the numbers that are required, there's no way that I don't see any way that those promises can be fulfilled.

And that's what I refer to as default. - Well, and again, that's the, first off, my issue with Kotlikoff is it takes everything from the future and puts it in the present. We do this year by year. So five years from now, when it comes to Social Security and Medicare, the government can create the money.

I think we at least agree on that. - Right, I agree. - The issue is, will it be any doctors or hospitals to service the retirees that are sick? And that's the constraint. If they've created money and there's not enough doctors because everybody's retired, then we're gonna have inflation.

But through advances in artificial intelligence, robotics, just productivity increases. If there's a private sector that can, it's a question of accounting. Get the money to the retirees so they can pay the doctors that are there. Now, if the doctors already have too much business and there's not enough doctors, then you have inflation.

That's the constraint. The constraint isn't the accounting. And great example. So I used to have one of my clients as an institutional advisor was a retirement home. And they had a $30 million portfolio. But they also had financial statements. So every year in their financial statements, they would have their fees that they'd collect.

But a big portion was realized gains. And then they would have their expenses. So they had their wealth, which was their actual investments, but they had their financial statements. And I remember one year, the CFO came to me and said, "We don't have enough gains "because my financial statement shows we're losing money." Yet their portfolio was up that year.

And so I suggested, well, we could sell some stocks and realize the gains from an accounting perspective. And she's like, "No, we can't turn the portfolio." But in fact, that's what she wanted. She wanted her accounting statement to look better fiscally when their wealth over here was their actual investment assets with a ton of unrealized gains.

It's the same with this type of generational accounting. The balance sheet looks terrible. The government has always been insolvent because it always spends more money than it receives. The issue is the wealth. The wealth are the people and the households, the businesses. Will they be able to supply enough goods and services, including medical treatment, for the populace?

We can take care of the accounting issues, getting the money from whatever other people, but if we don't have the capacity to produce, then we're in trouble. So for the sake of argument, let me grant your point. Let's assume that accounting doesn't matter because I concur with your point.

Somebody who has a failing business and mountains of debt isn't necessarily doomed to guaranteed bankruptcy. They can't create money either. Correct, which is always-- the government has a monopoly on money creation and on force to extract tax revenue. But let's go then back to a realistic accounting of the future because those financial decisions are predicated upon the productivity of the sector, the health of the economy.

And I would dissent with your point that the government has always been insolvent, the US government. I don't see that in history. It seems as though there have been times of insolvency. Right after the Revolutionary War, the early US-American government inflated like crazy, but it's gone through periods. But for the last, say, since the early first quarter of the 20th century, there has been this continual trend towards increasing levels of debt, increasing promises, etc.

Because it loses money every year. I mean, when I say insolvent, I'm saying they're-- like most businesses cannot lose money every single year. I mean, they're effectively insolvent, and the government can, but by some definitions, it would be insolvent. So now let's talk about cultural capital. And I'm so torn on these issues because on the one hand, I can't deny that Wall Street-- for the sake of using a very collectivized term-- Wall Street has been deeply productive with their assets.

Wealth is growing. But I don't see the same strength reflected in the US-American culture. I see a very sick US-American culture, and I'm concerned with the idea that there is enough cultural capital to sustain through for decades. And so am I. What do you think? Oh, exactly. And I've talked a lot about some of those issues on my show in terms of income inequality, just the state of education, just the state of ethics.

If people-- because money is trust. And if we no longer have trust as a society, if we don't trust our neighbors, if we don't trust businesses, if we don't trust government, then you're right. We're in serious trouble. But what bugs me is the focus doesn't get put on that.

It gets put on the government's balance sheet. And we get into this, we need to balance the budget. Why don't we focus-- why don't we understand what money is and understand since we're no longer on the gold standard that we can create as much money as we want, why don't we make sure we have policies that assure that decades down the road we have a functioning private sector, a productive private sector, an educated private sector.

That's what worries me, not accounting issues regarding how money is created, et cetera. Because all the evidence shows to date that between the central bank and the U.S. government, the money can be created. What's not clear is whether hopefully the private sector will still function in the decades down the road.

But we can take it year by year and hopefully solve these issues, but not get distracted by this sideshow of the national debt. Where do you see reasons for optimism at the moment? I am really excited by the-- first off, I think people are fundamentally good. I've been traveling for three months, or I guess a month and a half now.

And people are good, and they want good things. And a lot of people are trying. And we certainly have problems, but I think by and large, society are good people trying to do the best for their families. That's a positive. I think the flexibility, the freedom we still have to start businesses here, and we don't have-- people complain about red tape, but it's so much easier to start a business here in Cuba where they've effectively outlawed any private business other than running a restaurant, running out a room in your house, driving a taxi.

That's it. Here we have that flexibility. I think the advances in robotics, in artificial intelligence, the ability--our ability to produce goods and services is growing dramatically. Now, that's creating potentially unemployment problems to where we might have everything we need, but nobody has a job because we can create so much.

That's a potential issue. Again, that's an accounting issue. How do we get money to the people? But if we have the goods and services, then I'm optimistic about that. So I'll give you my list, and then I'll ask for your list of what you're concerned about. My list would be, number one, I'm encouraged by the decentralization of information.

I'm encouraged that now a 10-year-old child in the poorest neighborhood of the United States or even the world can access the knowledge of the world through a $40 smartphone, and I'm deeply encouraged about that. I'm encouraged about the decentralization of education and schooling. I think that by the leader, for example, Salman Khan with the Khan Academy, I think that he is the harbinger of just a massive change in education.

I don't function--I don't live in kind of mainstream circles, but I don't know--I hardly know any young couples who are parents who are sending their children to government schools. Almost everybody is looking for other alternatives, and I see that as a great opportunity for children to be trained, and instead of being stultified and dumbed down by the monopoly on education, I see that as positive.

I agree with you as far as the ability to start businesses. I still live in the United States of America simply because I don't know anywhere better. If there were better, I would go, but I don't know anywhere better, and it is much easier to start businesses in the United States than that.

So I agree with you on those things, and I see that it's still--it's never been easier to meet the basic needs of a person or a family, of shelter over their head, of food in their belly, than it--it's never been easier than it is today. And I'm very enthusiastic about some of the advances in being able to shelter and feed people using robotic and AI technology to grow crops locally within the city using very calculated computer-controlled systems or to 3D-print houses for people for $5,000 that are safe and comfortable and warm.

So I'm very motivated and optimistic about those trends. And just the increasing ability for individuals to connect with other individuals. I do see those things as positive. What are you concerned about? What trends do you see that keep you up at night? I'm concerned about tribalism, people breaking down into groups.

And one of the things I hate when people say they should do this or they should do that as opposed to we should solve this together. So the strife, the--just how mad people get. It's not--in politics, for example, it's not enough to disagree. They hate the other side. And that terrifies me.

It really does. The lack of ethics, the corporations that knowingly pass on costs to innocent, negative externalities, and just lie. I mean, that will destroy a country. And so on one hand, I go around and I think people are basically good, but I think people get selfish and they forget.

They don't think about the consequences of some of their actions sometimes, particularly in business. So--but I think, generally speaking, things are better done on the local level, and I've talked about that on my show. I don't worry about bureaucracy, big government, and things of that sort. I think there's some things-- because the government actually has the power to create money, there's some things better for the government to finance, but then have it implemented at the local level.

If we get to the point where everything's created very easily for what we need, but people don't have enough jobs, then I think the solution is not to have the federal government hire a bunch of people, but finance businesses, give them grants to hire people to go visit the elderly or things like that, but it needs to be done at the local level.

But those are my concerns. I think it's just a lack of integrity concerns me, the breaking down into tribes, income inequality concerns me, when businesses, all they care about is profit, so they don't pay their workers enough, and ultimately they-- and it shouldn't be the government mandates it, I'm saying as a business we shouldn't be short-sighted, we should pay our people fairly.

Now it's hard to figure out, business is hard. It concerns me that businesses generally, it's easier to buy back stock, which is one of the things driving the stock market, as opposed to investing in the future and investing in their people. Again, there's always a balance, but it's easier to buy back stock as a CEO.

You get the immediate impact, you don't have the uncertainty of other areas. I mean those are a few of my concerns, but generally I'm optimistic, and I think these are issues we can solve. - I'll give you just a few of mine, obviously this is not comprehensive, but a few of mine would be, I agree with you, I concur with you, about the lack of ethics.

We've lost, as the United States of America moves into what seems to be, under current understanding, what seems to be a post-Christian era, we've lost a common ability to talk about ethics, where we all affirm the existence of a moral standard, but we dissent about what moral standard there is.

And so different people view things differently, on discussion of something like minimum wage. You have two people, one person says, you must mandate a minimum wage, because that's morally right, another person, I would say, you must not mandate a minimum wage, because that's morally wrong. Not that you shouldn't pay someone, but that's a use of coercion and force.

And so I see this continually, as we've lost the ability to discuss things within a frame where we can find common understanding, and we lack a common discussion of ethics. - And I agree with that. - And we don't teach ethics, because of this concern, we don't teach formally ethics.

We do in some place. I went through, when I was getting my master's degree in financial planning, one of the capstone courses was a discussion of ethics. And it was drawn from an entirely secular perspective, and the philosophy professor who was leading that charge, I asked her, I said, what is the basis for these ethical issues?

And how do you know what is right in the situation? What is right in this financial planning situation? What is right for this company? How do you reason from this? And since there's no agreement on those first principles, the application of it becomes different. I'm concerned about the, I agree with you about tribalism, and I see it as so dangerous, because especially in the United States of America, from my assessment, we've lost any kind of, we've lost a majority of our common cultural understanding.

I don't feel almost any connection to somebody who is a US American. Just because somebody's an American, I don't feel any kind of national pride, or national sense of identity with them. I feel that sense of connection to people who are outside of that, but I often feel more culturally connected to somebody who shares more of my worldview, who's of another skin color, from another continent, than I do of my neighbor, because there doesn't seem to be that historical identity that's being passed on.

And I don't know how a nation continues to function if it doesn't have a common heritage, a common creed that is passed on from generation to generation. I've lost that myself. I feel very little connection to the neighbor, to my neighbors. And then increasingly, there doesn't seem to be much outworking of that sense of community.

The communities tend to be siloed, and not geographic in nature, but ideological in nature. And without belaboring the point, it's hard for me to find a whole lot of examples where things are really flourishing, where people are really feeling good, where people are working towards common progress. I'm sure they exist, just hard for me to find.

- I think they do. But I think the key is, just go out and meet people. I mean, I'm sure you do it, right? But meet your neighbors, reach out, be human. I do think as a nation, we have a common set of values, freedom, entrepreneurialism, et cetera. - I think other nations do too.

But one of the things that does concern me is where America's the greatest country in the world is what politicians say. Well, you know, there's a lot of great places. And there's a lot of amazingly good people everywhere. And we just need to be kinder to the people and connect more with people.

And I think that's one thing the internet has done, is to allow sort of that common language, that common connectivity. And while we might have some of these moral discussions, minimum wage, et cetera, if we get to the point where we just straight out steal, and that becomes accepted, that's the problem.

- But we already are. And here's my argument. We already are there. So half of the population says, those other people shouldn't have it, so we're gonna take from them to give to these people. I call that theft. Now, it's theft by majority vote, but that is theft. And so certainly, is it different than me going and pilfering the stapler from my boss's office?

In a sense, but at its fundamental basis, it's no different. So you talk about this heritage of freedom. I don't see it. Maybe it's a generational thing, but I don't see a lot of people, I don't hear a lot of people talking about, I affirm your right to individual freedom.

It feels to me, speaking very subjectively, it feels to me like a lot of people wanna say, no, you don't have the freedom to do this. No, you don't have the freedom to do that. You wanna start a business cutting hair? Yeah, you have to go and apply for a license.

You wanna go and move into this occupation? You need to go and ask for a license. It's a constant stricture on freedom, so I disagree and dissent. We don't have a common heritage of freedom. We talk about it. We talk about defending freedom, but I don't see the common heritage.

- Those are issues on the margin. You can still, even if you have to get the license, we can talk about the amount of regulation you need to cut people's hair. You can't do that in Cuba. - You can do it until you get reported and until the government goons start knocking on your door and say, are you cutting hair illegally?

I have been in meetings with people. One lady, one was a client of mine. I don't know how she ended up as a client of mine. She was cutting hair in her living room in the inner city and doing that until she got the knock on the door from the government goons saying, we heard that you're doing unauthorized business activities here.

We're a lot closer to Cuba than we once were. That's what I see. - We probably are, and that's a different discussion in terms of how much regulation there should be. You and I have talked about your inability to have chickens here in Palm Beach County. - Right. - You've talked about it on your show, but yes, but those are issues regarding policy and the limits.

At the end of the day, though, the theft that you discuss, again, the government can create the money, right? They're not really taking money from you and giving it to somebody else. They're taking money from us because we have taxes. Then the other hand is creating the money to spend, and we have to come together in terms of how much should they spend and what they should spend it on and the amount of policy.

Coming full circle, those are issues other than the accounting of what the national debt is. I think that's sustainable for many years in the future, but we take it one year at a time. - My closing question for you, do you affirm that it's possible that there would be various forms of default, bankruptcy, and collapse?

In coming decades, and if it were possible, what would you look for? - I would look for just complete lack of honesty with our leaders. The government's been taken over by, be it the private businesses or whatever, and you can tell. I don't think we're there yet. We're still arguing about what the money should be spent on, but we are a far cry from, I'll give the example of Venezuela, where the government is threatening their citizens that you have to vote for me or we will not give you your food stipend because they're starving.

We're not even close to that yet, and for that, I'm fortunate, but we could get there, and that's why we all have to be involved as citizens in terms of who's elected and at the local level, get involved locally, and get out and meet our fellow citizens, and don't just stay indoors in our gated communities.

- So I affirm that I could be wrong, and I hope that I am. We're certainly not in Venezuela, but I hope that all of us can work together to avoid that fate. Thank you for coming on. - Hey, it was fun. - That was 37 minutes. So here's, I'm gonna, I turned the recorder back on 'cause I just wanna hear this.

So we got that time pressure off. The issue that I face, and I'm asking this sincerely, how old are you now? - 53. - Okay, so you're about 20 years older than I am, and you've been involved in a similar path as I have in terms of the financial world.

I don't wanna be a catastrophist or an alarmist. I don't want to scream that the sky is falling when the sky is not falling, which is why I'm very sensitive to the people who make foolish decisions and say, well, by 2010, the world's gonna collapse, and the US dollar's gonna be worth, I think those things are so overblown and overstated.

- 'Cause you're selling a newsletter. - Yeah, yeah, the US dollar is the strongest currency in the world, but I also don't want to just be a Pollyanna where everything is perfect because I see throughout history a systematic ebb and flow of growth and decline, growth and decline. Empires collapse.

They do collapse, and so just because somebody has said it will collapse and it hasn't yet doesn't mean that it's necessarily not gonna collapse, and I think back to the question of freedom. I hear almost nobody advocating for freedom. I don't hear, and I think political leaders are important 'cause they reflect the population to the extent that anybody can reflect the population.

I don't reflect the population. I'm a voice crying in the wilderness just kind of saying what I think is right, but a politician needs to appeal to a larger branch to get elected if a democratic action works as it's supposed to, so a politician is gonna reflect the culture.

Tell me who you hear talking about and advocating for freedom as a fundamental principle of US American society. - Well, I guess it depends on your definition for freedom. I think-- - You choose the definition. Just tell me who. I'm not, sorry, I'm not being snarky with you, but I don't care about the definition, but what would you define as freedom or any definition you want, I guess.

- The ability to get up and provide for my family and go where I want to go and within reason do what I want to do without necessarily impeding or putting harm on others. I think we have that, and so I think it's more a question of degrees. Maybe we don't have as much freedom as we would like, and we can argue about laws and regulations, et cetera, but as I've traveled around the world, we have so much more freedom than, we have plenty of freedom.

And you and I have talked about zoning issues, right? I mean, governments overstep their bounds because, and I've seen this at the local level, right? At the local level, it's amazing how much influence you can have at the local level to the extent that they've outlawed chickens in Palm Beach County, but they used to outlaw chickens in Rexburg, Idaho.

Well, the citizens came together and said, there's a lot more places in the US where you can have chickens in cities now than there were 20 years ago. - Right. - Because as citizens, we decided we want that freedom at our local community to have fresh eggs. And so I think, I mean, that's an example where freedom's gone the other way, despite where we are.

And so I do, I just, I don't feel constricted day to day in terms of what I can do. I really don't. You start a radical personal finance. I started money for the rest of us. Nobody said you couldn't do that. Many places, they would have. And so that's a freedom.

That's a huge freedom we have today that we didn't have 30 years ago. Everybody can create their own content, have their own radio station, in terms of a podcast. - Right. - That's a huge freedom. - So I affirm that the United States of America enjoys more of these freedoms than on most places in the world.

I affirm that. As I've traveled, every time I leave the country, I'm just so thankful for the opportunities. I think, and I've said this on the show many times, if you, and I probably, it's been a while, so I've been outside the border, so maybe it's time to take my own advice, but if you're feeling downcast about your possibilities that you have in life, get on an airplane and go somewhere else, and you'll be thankful for your job.

My wife and I, on our honeymoon, we traveled to Haiti, and that's just off the shores of Florida. I always come back from these places just thankful that I can have a job, that I can work, that I can do it, because when you're in a world where 75% of people can't even get a job, who want a job, it's so broken that you're thankful for the ability to go and get any menial job whatsoever in the United States of America.

And perhaps I am prone to thinking like an ideologue, but I just look at something as simple as work freedom, as freedom. A majority, seemingly, a significant percentage of the population believes that it's... I have a number of friends who are immigrants to the United States of America, and most of them, from different countries, a couple of them are out of compliant status with the United States in terms of immigration law.

Several of them are in compliance with the United States in terms of immigration law. But I am so frustrated at the idea that the US government thinks that it has the moral authority and right to tell a person, "No, you can't work for... "No, you can't go and do honest, productive work "to provide for your family "because you haven't applied for the proper paperwork," or that the US government would have the temerity to think that it can say to an employer, "No, you can't hire this person "because they don't have the appropriate visa requirements "to do honest work that you need them to do." Now, maybe I'm in a-- - Now, what's fascinating about that, right, 'cause that, I agree with you, and that, which is why this is a great conversation, that's not a conservative position.

- No, no, and this is my frustration with, this is what I am fed up with, with the political world, because it's like every about 50 years, the Democrats and the Republicans basically swap places and take each other's positions, about every 50 years, and that's what frustrates me, because I've not heard of a Republican position, I've not heard of a Republican, maybe there are, I don't hear a Republican politician affirming somebody's right to work.

Now, flip it around, let's just pick on the Democrats, so we pick on everybody and annoy every listener. On the same hand, there are lots of Democrats and Democratic politicians who say, "You should be able to hire somebody "regardless of their immigration status, "but we're going to require you, at the threat of force, "to pay them $15 an hour, "whether the work that they're doing for you "is worth $15 an hour or not." And so I deny both of those premises.

I affirm the fact that any person should be able to make any other private contract with any other person, as long as the work is moral and ethical and legal, as long as those things are there, without interference, that's freedom. But I don't hear anybody affirming that. And so when you talk about freedom, yes, we do have freedom, but I look at it and say, is this not an inheritance from centuries of work that are unique to the US-American experiment?

Because the early colonists of the United States were desperately longing for freedom. They were seeking religious freedom. And now I find myself, as a religious minority, with much of my religious freedom diminished, and what religious freedom I do enjoy banished to the idea of private practice as long as it's not public or as long as it has no effect on your actual life.

And so I look at that and say, the heritage was freedom, but where is the continuing press towards freedom? I don't see it. All I see is a continual stricture. Now, compared to the rest of the world, absolutely, it's there, but I don't see that change. - No, no, no, and I agree with that.

I think religious freedom, there's less of it than it was. And I don't know. And so I use this as evidence for my position that this common, I don't think we don't speak a common understanding. I don't hear those common ideas reflected in US-American culture. I hear the platitudes of, we live for freedom, fight for freedom, et cetera.

We all inherit the freedom that people have died for. I hear the platitudes, but I don't see much of the results. Much of the freedom seems to me to be enlarged by individuals, but largely by individuals with technological changes. There are tremendous freedoms. That's why I stated those things, like the destruction of the monopoly on the press.

I love that. I'm thrilled with it. Now, it's very uncomfortable, right? You gotta deal with fake news and all this stuff, but it is a good thing for freedom. And I'm the inheritor, for example, home education. Just simple things. I was born at home when I was born in a time when home birth was not particularly officially sanctioned.

I was homeschooled at a time when home education was not officially sanctioned. It was very much a gray area. Whereas today, it's relatively easy for anybody who wants to take control of those things to do it. But I don't hear that common conversation. So, I'm ranting and raving, and I don't know what my point is, so I'll let you say something smart.

- Well, I'll just wrap up. Get on the road like you plan on doing, and travel around, and come to Idaho. There's a lot of freedom out in Idaho. - Indeed. Thanks, David. Thank you for listening. You've honored me with your time and attention, and I'm grateful for that.

And I hope that I've effectively served you today with some ideas and strategies and tactics and techniques and tools that will help move you towards your goals. Before you go, three simple requests. One, if there's an idea that's been helpful to you in today's show, make a plan to take action on it.

Listening does lead to learning, but learning in and of itself doesn't automatically lead to a life change. It's action that leads to a life change. So, take action. Two, take something that was helpful to you in today's show and share it with somebody that you care about. I'm depending on you to be a co-laborer with me in helping me to propagate the message that I'm seeking to share.

That helps the person that you are engaging with, and it also helps you because teaching others is one of the most effective ways for you to learn and for you to cement your learning. Three, if there's an idea that's been specifically helpful to you and if you're gaining financial benefit from Radical Personal Finance, I'd be grateful if you'd consider paying me for this work voluntarily.

Come by radicalpersonalfinance.com/patron and you can sign up there to support the show at whatever level you feel is right for you. This is a voluntary support. That's my Patreon page. You can support me with a dollar a month, five dollars a month, ten dollars a month, any number that seems right to you.

But if you're gaining financial benefit from this show and if it's achieving financial results in your life, I'd be grateful for your financial support at radicalpersonalfinance.com/patron. Hey parents, join the LA Kings on Saturday, November 25th for an unforgettable kids day presented by Pear Deck. Family fun, giveaways, and exciting Kings hockey awaits.

Get your tickets now at lakings.com/promotions and create lasting memories with your little ones.