Two weeks ago, I told you that the US government had just published its annual financial report.
The government by its own admission lost $4.1 TRILLION in FY 2022. And this is 34% worse than the the previous year’s $3.1 trillion loss.
And the rest of the financial report only gets worse from there…
They describe Social Security’s extreme insolvency, projecting total unfunded liabilities of the program to be $76 trillion.
And they forecast that US government debt will one day reach 566% of GDP.
I’ve written about this extensively over the years, because history tells us that the consequences of this type of financial mismanagement are severe.
This is not the first time that a country has had a lot of debt, nor the first time incompetent leadership has consistently failed to recognize and solve big problems.
So in today’s podcast episode we go back in time thousands of years to heed the lessons of one of history’s biggest scumbag rulers.
Unsurprisingly, he raised taxes, debased the currency, violated the rule of law, confiscated property, eliminated dissent, vastly expanded the government, and created all sorts of idiotic and destructive laws.
BUT, this is fixable.
And today we actually discuss some common sense ideas to demonstrate how easy it should be, at least conceptually, to take giant leaps in the right direction once again.
Unfortunately, the people in charge seem to have zero interest in doing any of that.
So I wouldn’t hold my breath waiting for politicians and bureaucrats to ride to the rescue.
But at the same time, as I often point out, this is not a bad news story.
The world is not coming to an end.
In fact, I believe the world is still full of abundant and incredible opportunities, despite the trajectory of its largest superpower.
And we close this episode with the core central message of this organization: we have control over our own lives.
Regardless of what they do or how badly they screw up, you do not have to go down with a sinking ship. You have the power to solve these problems for yourself.
You can listen to today’s podcast here.
Today we’re going to go back in time to the 26 September in the year 480 BC to a very critical island in the Mediterranean. Now, if you know your history, you might be thinking, I know what he’s going to talk about, because 480 is a very famous year. 40 BC is a year where Greece, which I’m going to do Greece and air quotes for right now. I’ll explain why in a moment. Greece and Persia, they’re at war with each other in a in a war that historians is often described as this epic battle between eastern civilization and western civilization.
If Greece loses against Persia, there is no Socrates, there is no Plato, there is no Western civilization. So it’s a really important year. 480 BC was the famous battle of thermopole 300 Spartans fending off the Persian. There are other people there as well. There’s 700 Thespians and some others as well.
But this very small number of people in this, like the battle of the Alamo, fighting off the whole army so that everybody else can live and regroup and defeat the Persians, this is followed by the Battle of Salamis, this famous naval battle. Salamis was a very important island in the Mediterranean. And this battle of Salamis where the Greeks vanquished this much larger Persian fleet and embarrassed Xerxes, and it was the turning point in the war, again, supposedly took place on September 26, 480 BC. I say supposedly took place. This is according to very painstaking astronomical calculations.
It’s not like the Greeks tell us, oh, it was September 26. There was no such thing as September in 480 BC. So the people have gone back and done these astronomical calculations to figure out the date of this based on information that we know. And they said, well, we think the Battle of Solomon’s took place on September 26, 480 BC. But that’s actually not what I wanted to talk about.
There was something else going on on September 26, 480 BC, also in Greece. But what I mean by Greece remember a lot a lot of people say Greece talk about ancient Greece, and ancient Greece is really just a catch all word that we use today to really lump together dozens of these independent city states. You know, the Athens and Sparta, Corinth, thebes Ithaca, Argos, Troy. These are all different city states, but they’re all totally independent from one another, right? Just because Athens is doing something doesn’t mean that Ithaca or Argos is doing it as well.
These Greek city states typically shared a common language, common religion, common heritage, et cetera. But they’re vastly different from one another. They don’t share the same internal politics. One might be democratic, the other might be might have a monarchy, right? They have different systems of government, they have different economies, different everything, and they’re all independent.
Saying Greece in the ancient world is like saying Latin America today. Again, there are things that are common. Typically a shared language and typically, maybe shared religions and culture and so forth. But Panama is totally different than Bolivia in the same way that Athens is totally different than Ithaca. And just because Athens and Sparta were at war with Persia again, doesn’t mean that all of Greece big, g greeks, all of greek civilization was at war with Persia.
And this is where I want to talk about, because far to the west of the Greek mainland, there’s another island. And I talked about this as this important, critical island in 40 BC. Well, there’s another island that wasn’t salamis. There’s another island that was part of greek civilization. This island was Sicily.
Sicily had been the greeks been coming in since 735 BC. But there were a lot of people that had come before. There’s a neolithic civilization, early bronze age civilization, even in the 2000s BC. The phoenicians. We talked about the phoenicians before this really great seafaring trading culture set up outposts all over the Mediterranean.
They had been coming into Sicily. The carthaginians were really interested in it. Everybody loved Sicily. Why? Because Sicily was a paradise.
It was everything that the mainland greeks wished that they had had, especially in athens. The Athenians are like, oh, my god, this place is incredible. In athens, the soil was terrible. It was rocky, it was hot, it was very little nutrients. It was really hard to make it work in athens.
In Sicily, they had incredible soil. They had a lot of rain. They had the agricultural production was off the charts. They had fruit orchards just bursting with trees, vineyards, beehives flowers, huge grassy plains where they had plenty of carrying capacity for livestock. They got a cattle and sheep and everything they wanted.
They had endless forests with timber in the hillside. They could build anything they want. They had fish everywhere, and the fish reproduced faster than anybody could fish them, anybody could eat them, and it created a lot of wealth. There are people that were, I mean, almost perplexed by the level of well, Plato was disgusted. Plato went to Sicily.
It was almost disgusted by just the level of wealth that was there. There’s another philosopher, a guy named empedocles, and empedocles remarked he went to a city in Sicily called accra GENTO, and he said, these people here, quote, devote themselves to luxury as if they were going to die tomorrow. But they furnish their houses as if they’re going to live forever, basically saying, there’s just no end of the spending here. They just go out and gorge themselves every single night, the banquets, the wine, the liquor, everything. And then they go and they just have the most incredible extravagance in their homes.
And for people, it was perplexing, but as a result, this was the big prize. Sicily was just this this big prize. It was this big paradise. And the ultimate prize in this was the city of syracuse. Syracuse was started off as just a tiny village.
The Corinthian Greeks had come there and they start, they started this little outpost, this tiny village, but relatively soon it become this major center of wealth and trade. And people there were incredibly rich, just the richest of the rich. There was one story, a guy that supposedly had a clothing collection worth 120 talents, which would be worth basically $15 million in today’s money, right? Again, Plato wrote about this. He said, yeah, there’s just women everywhere, people looking for rich husbands, constant banquets, performances, nightlife, and this was the envy of the region.
Everybody wanted who wouldn’t want that, right? Everybody wanted to be Syracuse, and everybody wanted to control Syracuse, wanted to control Sicily. And most of all, that desire was coming from the Carthaginians. We’ve talked about Carthage before, we’re talking about them a little bit again today. Carthage at this time was the dominant power in the western Mediterranean.
Again. This is before Rome and even the Roman Republic. And Roman Empire. Rome was just really getting started at this point. And Carthage was the dominant power in the western Mediterranean.
And they had been working for quite some time. They’ve been thinking about Sicily, they’ve been thinking about Syracuse, making overtures and setting up little outposts. And finally, 480 BC, they got their shot, right? You got the Greeks in the east, Sparta and Athens, they’re fighting Zerksis and the Persians, and Socarth says, now we got our chance. So they go and they invade Sicily to take the island once and for all.
And this is where we opened in the podcast on September 26, 480 BC. This was literally, according to Herodotus, a story. And Herodotus literally on the same day as the Battle of Salamis, just as the Greeks in the east were thrashing the Persians in the west, there was this big battle called the Battle of Umara and the Battle of Amara. The Sicilian Greeks, led by the king of Syracuse. His name was Galon.
They thrashed the Carthaginians, they humiliated the Carthaginians. And we know to this day it was a big deal because archaeologists actually found the remains, these mass graves of 10,000 plus buried soldiers that date back to this area. We know this was a really big deal. And again, according to Herodotus, literally on the same day, you have all of Greece basically being saved on the same day in the east from Persia and the west from Carthage on the 26 September, 480 BC. Now, this is really the start right in the east.
The war with with the Persians didn’t end immediately, but it was really the turning point. And this is the start of the classical era, the golden age of Greece, and particularly Athens, where you have Socrates and Plato and Sophocles and the construction of the Parthenon and all these sorts of things. And again, the general consensus among historians you see this say, well, none of that would have happened without the victory over persia, right? So this is a really important period of time for Western civilization that allowed Athens and democracy and all these things to flourish. And this was also a really important time for Syracuse, because frankly, it actually wouldn’t be that long.
Now with the Persians in the rearview, they said, oh, we vanquished the Persians. Well, Athens and Sparta ended up going to war with each other. And as Athens and Sparta were going to war with each other in the famous Peloponnesian Wars, syracuse was over here, way out to the west, sitting on its beautiful island with all of its wealth and all of its abundance and all of its banquets. And they said, you know what, this is great for us. And Syracuse became one of the biggest and wealthiest Greek cities at half a million people.
People were super rich, and life was pretty great for decades after 40 BC, life was pretty great. But finally, 71 years later in 409 BC, athens and Sparta, they’re still at war with each other, duking it out over who’s going to be the big cheese, over all the Greeks, the Sicilians, the Syracusans are sitting there off in Sicily. The carthaginians came again. The Carthaginians decided, you know what, we’re going back. Athens and Sparta are caught up with each other, so we’re going to go back, we’re going to invade Sicily again.
We’re coming after Syracuse. We’re pissed. We haven’t forgotten our loss. We haven’t forgotten that humiliation 71 years before at the hands of the King of Syracuse, and we’re coming. And they invaded.
They brought this massive armada, 1500 ships, 20,000 men, and they started capturing Sicilian cities down the coastline, slaughtering survivors. And it was barbaric. It was barbaric. The Sicilian, Greeks were shocked. They said, oh my God, these people are coming to kill us all.
This is crazy. And the Syracusans caught word of this. They actually interrupted their banquets for a change, and they turned to a guy. And just to give you an idea of how committed the Carthaginians were, they were very briefly stopped in their invasion because they got hit by a plague. And again, this was not terribly uncommon in the ancient world.
Military history is full of plagues and so forth. We talked about the plague of Antonine from the Romans recently. So in this plague, even the commanding general, the Carthaginians, died. And the Greeks thought like, oh, thank goodness, maybe they’re going to go away. Well, it didn’t happen, actually.
A new general took over. A new general assumed command and assumed that, well, the reason we got this plague is because the gods are angry with us. So this guy, this Carthaginian general, sacrificed his own son in order to placate the gods and said, all right, guys, I killed my own kid to placate the gods. Let’s go back to war and kick their asses. And the Syracusans are freaking out.
The Syracusans find out again, they stop their banquets and they turn to a guy, and they said, deliver us from this. And this is a guy who had started his career in government as a humble scribe, had risen through the ranks and become actually quite a capable general. And his name was Daunesius. And Daunisius was given by the people of Syracuse absolute power. Go and dispose of the Carthaginian threat.
We trust you. They basically made this guy a tyrant. Now, that was actually not unusual. In Greece today, the word tyrant carries a very negative meaning. You call somebody a tyrant, basically, it’s like calling them an evil dictator.
And this has been the case for quite some time. John Wilkes Booth, when he assassinated Abraham Lincoln, jumps from the balcony in Forge theater. He screams out sick semper tyrannis. Basically because he thought that Lincoln was a tyrant, it carried that negative connotation. But thousands of years ago in the ancient world, in 40 BC.
409 BC. It did not have a negative connotation, right? Tyranny was normal for the Greeks. They often, when confronted with an emergency, whether it was some kind of climate disaster, agricultural emergency, military invasion, they would invest all absolute authority in a tyrant and say, Go and deal with this. The tyrant was neither good nor bad.
It was somebody that was necessary at the time. And then, of course, when the emergency subsided, then the tyrant was supposed to relinquish absolute power, and some people actually did. Dagonesius did not. Now, nobody knows entirely exactly what happened. Dionysius, as soon as he gets this absolute power, he goes and he has a meeting with the Carthaginians.
Nobody knows what he said, but somehow he managed to convince them to just go away. He said, look, you got some land here in the south. We don’t care about that land. That’s not ours anyways. Just fine, keep it, but don’t come after us.
Nobody knows exactly what he said, what words he used, but the Carthaginian said, okay, fine. Remember, they were out for blood specifically for Syracuse. And yet after this conversation, this one meeting with Dionysus, they said, all right, we won’t come for Syracuse anymore. And so Dionysus goes back to Syracuse, said, yeah, hey, guys, I saved us. We’re fine.
They’re not going to come for us. And people are like, oh, my God, this guy’s a hero. And of course, he’s enjoying this. Hero status does not relinquish power. In fact, according to the historical record, he actually seems to have faked some sort of attempt on his life.
You know, he shows up and says, oh, my God, somebody’s trying to kill me. And so the Syracusans go and they give this guy, you know, he says, oh, you’re, you’re a hero. You’re so important to us. We have to protect you. So they gave him hundreds of men as a personal guard, which he then, of course, uses these goons to go and secure power for himself and maintain his dictatorship.
And this guy down east has gone down in history as one of the most villainous, horrendous rulers ever. One of the first things that he did was, of course, A, not relinquish power and B, double the pay of his soldiers just so that he could command their loyalty. He gave premium real estate to his military officers. And the whole point being that they were no longer there to serve and protect the people, but they were there to serve and protect Dionysius from the people. And they were also there to carry out his decrees, whatever he said.
Now he had all these goons to go around and enforce his decrees under threat of violence. So again, we had significant expansion in the state specifically to protect the leadership and impose the government’s will on the people by force. We also know that Downesis was incredibly intolerant. He did not tolerate any dissent. He ridiculed, imprisoned, exiled people, engaged in censorship.
And there were rumors as even stories about Downesis trying to sell Plato into slavery. Plato, it didn’t last very long. Plato was apparently soon ransomed by a very wealthy patron and admirer. But and we know these things because they were written about people wrote about Dionysus extensively, including Plato, including Aristotle, including so many. You can look at the works of Plato.
He has a work called The Letters. And you can look at letter seven where Aristotle wrote a lot about Dionysus. And we’ll get to Aristotle here in a minute. We also know that Dionysus was incredibly arrogant. This is guy.
He he thought he was a he thought he was an intellectual. He thought he was a scientist. He thought he was a writer and a poet and just was obsessed with these things. He is rumored to have purchased the writing desk of Escalates and the tablets of Euripides, all these famous Greek playwrights. But apparently everything he did sucked.
His plays sucked, his poetry sucked. And there was one famous writer who was in his court, a guy named Philoxinus. And Philoxinus was called to Dionysus in one story. And he said, philosophy, I’m going to read you this poem. Tell me what you think.
And Philosophis gave an honest opinion and he said, you know, it sucks. So Dionysus had him in prison, and Philoxinus is in prison, and people go later and they convinced Dionysus, hey, you should really let this guy out of prison. So Dionysis lets him out of prison, and the next time he calls him back to Courtney, says, I have a new poem I want to read. Tell me what you think of this one. This is a new poem.
So Dionysus reads Philoxinus’s new poem. He says, what do you think? And Philosophy says, Take me back to prison. This is actually a real story that has been passed down to us from the ancients. And this is just sort of typical of this guy, just really arrogant, really petty, surrounding himself with all these individuals again, including people like Plato, thought himself to be so smart, so brilliant.
Apparently none of the intellect has rubbed off. But on top of that, we also know that he had this steadfast belief. He was so out of touch. He had the steadfast belief that he was just and he was righteous. And he wrote about this extensively.
He actually wrote dionysius himself wrote that Tyranny is naturally the mother of justice. And he was constantly complaining about all the stress of my job. Oh, I work so hard. I and I alone can manage this for all these little people that can’t take care of themselves. And I and I alone can do this.
And I work so hard and I’m so tired and I’m so exhausted. In many respects, he wrote about death as like the ultimate, like, finally you die and you can rest because I work so hard and oh, I can’t wait to die because then I can finally rest for all this hard work. If you heard the parable of the sort of Damocles, it actually comes from this era. Damocles was an attendant to the son of Dionysus. And according to the story, Damocles shows up and and says, wow, wouldn’t it great to be king?
Look at all this wealth and luxury you have. And the story is that, you know, the king is so offended by this. Don’t you know how hard I work? I’m so stressed out taking care of all these little people that can’t take care of themselves. And the story is that Dionysius dangles the sword.
He says, Go and sit on my throne. Down Mcclese. And Sant Demicles sits on the throne and has this sword dangled over his head that’s just suspended from a single horsehair. And of course, democracy is freaking out because he thinks the horsehair is going to break at any second. He’s going to be impaled by the sword until he’s screaming, please, please, I don’t want to be king anymore.
Just give me the humility of a normal life and that’ll be fine for me. And again, it’s this sense of like, oh, look at me. I work so hard. It’s so hard being king, sitting on this throne and stealing and plundering all this wealth from people. And this guy really believed that he had this honorable burden.
He was doing it on behalf of the people and that he was just and righteous in his cause. The guy was also super paranoid. He was convinced that even though he was sort of in many respects saying like, oh, death is going to be such a vacation for me, he was actually terrified that people were going to assassinate him constantly had him surrounded with himself, with security. He spent a great deal of public money on erecting this impenetrable fortress. And I even actually read that he is said to have slept in a bed surrounded by a moat, that he had to cross a little bridge every night before going to sleep and then pull his little bridge up into his bed because he was so terrified that somebody was going to steal into his room and assassinate him in the evening.
But what I really wanted to talk about this guy down east was how domineering he was. He stole everything and anything that he wanted. He had all of his goons and he wasn’t afraid to use it. And this is where Aristotle comes in. If you want to look at yourself.
Some of these stories Aristotle writes, he has a work called Economics. Some people think it wasn’t Aristotle. It’s at least attributed to Aristotle. Book two of economics. He talks about this.
He talks about Dionysis jacked up tax rates and Syracuse essentially just a great way to steal money from people spending on things that benefited himself personally. But the lengths that he went to, this is where it gets really ridiculous. One day, this is according to Aristotle, downesis calls a public assembly. He gets all the people together and he says, the goddess Demeter has appeared to me. The goddess Demeter has appeared to me and bade me to collect all the jewels and all the adornments and so forth and bring it into her temple.
So everybody has to do this. And he said, look at me, I’m doing it too. I’ve gone into my own home. I’ve collected all my fancy ornaments and all of my fancy jewels, and I’m bringing it into the temple of Demeter. And anybody that doesn’t comply is a heretic and you’ll be damned to Hades forever and ever until the end of time.
So everybody went home. They were terrified of this guy. And they gathered all their jewels and they put them in the temple of Demeter. But then, you know what? The Dionysus comes the next day.
He says, hey, Demeter has appeared to me again. And she’s decided that instead of her taking all of these nice fancy jewels that I should have them all, so I’m just going to go ahead and take them. And he sends his goons to the temple and he takes everybody’s, everybody’s wealth. So basically lies to them, tricks them into this, forces them to do this, and then goes and steals everybody’s property. Totally ridiculous.
There’s another instance in which he decided that the state needed money. And so he goes into his palace. He brings out all of his furniture and fancy items and things like that, and he takes it out to be sold, almost like having a yard sale, you could imagine. Like Joe Biden goes out and brings his collection of aviator sunglasses and his Corvette, whatever, and brings it out to the south long of the White House and puts a for sale sign on there. And people just get to go and mill around and buy all of all of his stuff, right?
So he collects all the money for everybody. But then he makes a note. He has all his goons there, making note of who’s purchasing what. And then as soon as the yard sale is over, he has his goons go over to everybody’s house, knock on the door and said, oh, I see you took the President’s Corvette, give it back, and basically confiscates all the assets that everybody just bought from him, fair and square. Naturally, though, he kept the money.
There’s another instance of debasement, lots of instances of debasement. There’s one instance where he goes and he mints these new coins that he makes them of cheaper materials, tin, iron, et cetera. And this is a time in the Greek world where the primary coin, the drachma, was made of silver. And the drachma was sort of like a reserve currency. Everybody in the ancient world knew about the drachma.
It was a very well respected currency. The Greeks didn’t mess around very much for their currency, and it was a silver coin. But he says, no, I’m going to make this of this new cheap material. But he went and had gathered another assembly and basically said, look, we have these new coins. You should accept them just as if they were silver, and basically forced everybody to do that as if they were silver.
Forced everybody to do that under threat of penalty and imprisonment and violence, et cetera, and basically debased the currency by creating his own money. There’s another instance where he actually forced everybody to loan him money. And one of the ways that he did that, he actually went and had everybody again under a penalty of death. He threatened everybody under a penalty of death. Go and bring me whatever silver coins you have in your home.
Not the new crappy coins that he just minted, but real silver coins. And so people went and brought in the silver coin, and he basically restamped every coin with a face value of two, double the face value. So in the same way, it’s like somebody brings you $1,000 in $100 bills, they bring you ten hundred dollars bills, and you take a magic marker and you scribble out 100 and you write $200. And then you give them back five of these new $200 bills and say, hey, I gave you back $1,000. You gave me $1,000, I’m giving you back $1,000.
Right? So he just basically stole everybody’s money, debased it, and then repaid them with his debased money and kept the rest for himself. This is typical debasement tactics. Dionysus was very, very famous for this. He was also famous for being a liar.
This guy defaulted constantly on his promises. There was one I mean, think about these people. He conquered this city called Reggie. Today. It’s Reggio di Calabria.
This is in southern Italy, just off the just across from Sicily. And he conquered this city. And he tells the inhabitants, he said, hey, everybody, it’s my right. I’m your conqueror. I can sell you all the slavery if I want to.
I can enslave every last one of you. I won’t do it if you just pay me this really hefty bounty. So of course people paid the bounty. They went back home, they said, oh my god, let’s get our money. They pulled their money money and they paid off their new conqueror.
And Dionysis went and sold them off as slaves. Anyhow totally lied through his teeth, took the money, sold them as slaves. There’s another instance actually, where they conquered another town and the soldiers went in and after the successful military campaign, the soldiers plundered the local town, they plundered the temple. And down NiSi’s caught wind of this and he said, oh jeez, all by soldiers made all this money. I didn’t get any of that.
So he goes and he tells the soldiers, he says, men, I understand that you took all this money, you took all this loot. I’ll tell you what, bring me half of it, and you can keep the other half, but just bring me half. I mean, this is all free money for you anyhow, right? So just give me half and we’ll leave well enough alone. And so the men said, okay, and you probably know this is going.
So they bring him the first half, he gets the money, he counts as well. This is a lot. Now he says, now bring me the second half. That basically lied, stole from his own troops. What’s amazing is that Downesis actually did not die.
He wasn’t assassinated. He actually drank himself to death. He won a poetry contest, if you can believe it. It was his shitty poetry won a contest. And he was so excited that he celebrated and partied so hard, he actually drank himself to death and died.
So that’s the end of Dauneesius. But we can see the key themes here. We can see taxation, confiscation, default, lying, no rule of law whatsoever. This guy, he taxed people, he confused their property, he defaulted on his promises. He did whatever he wanted with no rule of law.
He debased the currency. He imposed all sorts of stupid, silly regulations. He imposed people controls. He expanded the state, and he did everything under constant threats of violence. If any of this sounds familiar, it probably should, because these are the same tactics that a lot of governments still rely on today, especially when they’re bankrupt.
And we’ve already seen so many examples of this. We talk about Dionysius tax people. Well, these people, the politicians, they are constantly howling for higher taxes. They just passed this dividend buyback tax that went into effect on January 1. Literally days later, they started saying, we want to quadruple it.
They’re never satisfied. They’re always whining about wealth taxes, higher capital gains taxes, higher income taxes. So just like Downesis, we have this constant howling for higher taxes today. Just like down nicely is complicated property. We’ve talked about.
At length the rise of civil asset forfeiture, where government goons come in, including state and local people, and just take whatever they want. There’s no due process. There’s no innocent until proven guilty. They just take, they seize property. It is a completely legal thing when the government steals from you.
It’s called civil asset forfeiture. Just like Dionysius confiscated people’s property, just like Dionysius lied and defaulted on its promises, politicians today, they lie and they default on their promises. They default on their promise to maintain a fiscally sound Social Security program, to maintain a financially responsible government, to maintain a modest national debt, to do all these things. They completely default on their promises. Just like Downesis didn’t follow the rule of law, they never follow the rule of law anymore.
They don’t follow the Constitution. They say, oh, the CDC is going to take over all of the US housing market, because that’s just what we feel like doing. Sorry, that’s not part of the law. Most recently, this idea of like, oh, well, we decided we’re going to forgive student debt. You can’t do that.
The law doesn’t say you can do that, but they just do it anyways. That was just in the Supreme Court earlier this week. So this is the sort of thing we see, just a decline in the rule of law. Just like downesis. Just like Downesis, we see the currency debasement, unprecedented inflation of the currency, unprecedented monetary expansion, 40 year highs in inflation a day.
Same thing. Just like Downesias with all those stupid regulations. The same thing today. It’s just countless instances of this stupidity. We talked about one very recently where the FTC has decided that they’re going to fix the economy.
And they decided that the thing that the Federal Trade Commission is going to do to fix the economy. The reason why the economy is SPutting right now is because there’s too many non compete clauses in private labor contracts. So we’re going to get rid of non compete clauses. You did it, right? You figured it out.
You cracked the code. Non compete clauses are what’s dragging the economy down. No, it’s not the war against the energy company. It’s not the insanely stupid regulations. It’s non compete clauses, right?
So this is the stuff that they do. They ban non compete clauses. The Labor Department imposes rules to encourage vote capitalism, all this sort of stuff. Just like downesis people controls. This guy had people, crazy people controls.
We saw this during COVID-19, where you can go, what you can do, what you have to put in your body, what you have to wear on your body, how you can live, whether you can go outside, what you’re allowed to say, what you’re allowed to think. Just like Downesius, the expansion of the state, 80,000 new IRS agents, anybody, right? The expansion of the state. And just like Downesius, everything under constant threats of violence. You can’t even apply for a passport in the United States of America without being in threat, without being threatened with fines and imprisonment.
If you don’t believe me, go and check out the application for U. S. Passport form DS eleven from the State Department. Go down to page four and read the text. You are being threatened with penalties, fines, and imprisonment for passport application.
Like, why can’t these people just chill out already? Like, Jesus, it’s a passport application. Just relax. Good God. But everything has got to be under these constant threats of violence.
And again, you also lose the sense that the people that are supposed to be providing security, they’re not there for your benefit. Sure, it’s perfectly fine. For countless people to stream across the border and whatever, that’s all fine. But God forbid an angry parent shows up to a school board meeting. Those people need to be investigated by the federal government, right?
So this is a familiar story. Dionysis wasn’t the first guy. He was one of the more famous tyrants throughout history. But these tactics, they haven’t gone anywhere. I mean, they’re still very, very prevalent, very front and center.
And financial insolvency makes this worse. Countries that are heavily in debt and have trouble making ends meet do tend to double down on this stuff. We’ve seen this so many times before. You don’t have to be a PhD in economics to figure out where this goes. You just crack a history book and see what Rome did during its crisis period, what the French monarchy did in the late 17 hundreds during its crisis period.
You see higher taxes, more currency to basement, more money printing, more expansion of the state, more goons, more bureaucracy. They just make everything worse. And this is important because, as we’ve covered before, the US government, specifically the west in general, but specifically the US. Government, which we covered for, are really in dire straits financially. I think it was last week or the week before we did a podcast talk about the financial report of the US.
Government, which was recently released for FY 22, showed their really true budget deficit. What they call the net operating cost was minus $4.2 trillion. That was worse than $3.1 trillion. So Joe Biden likes to say, like, oh, I brought down the budget deficit. No, you didn’t.
That’s a complete lie. It got worse by $1.1 trillion on top of that the government’s net worth. Basically is -30 $4 trillion. That’s all their assets, every tank, every bullet, every acre of National Parkland put together all their assets minus the liabilities, including the national debt et cetera is -30 $4 trillion and on top of that is another $76 trillion in unfunded Social Security and Medicare long term liabilities, it’s $110,000,000,000,000 negative net worth. That is extremely unhealthy.
Now we talked about before.
This is escapable. This is not terminal. There are ways around this. If you are a turnaround specialist, it’s not hard to sort of look at this and go, okay, Jeez, first thing first. Throw all the bums out.
Get rid of these people in Congress, the Federal Reserve, the White House, put in actual responsible leadership, professional managers who have experience in things like operational and financial efficiency in large organizations. Wow, jeez, what a concept. And scale down the size of government. You got to make it really fast and easy to terminate underperforming government employees. There are some really smart, really wonderful people who work for the federal government and there are a lot of dirt bags.
You got to make it easy. No organization can survive if there’s just dirt bags and lazy people and underperforming people. You got to make it easy to get rid of those guys. You got to drastically cut spending. You got to slash entire departments.
Why do we have why is there even a Commerce Department or Housing Department? Why does the Defense Department need $800 billion in think about this. Ten years ago, in 2013, the Defense Department had a 500 billion dollar budget which is even with inflation, let’s call it 600, $650,000,000,000. Today it’s 25% higher than it was after adjusting for inflation than ten years ago. Bearing in mind ten years ago they were fighting a war in Afghanistan and Iraq at the same time.
They’re not doing either of those now, but the budget is 25% greater even after adjusting for inflation. It doesn’t make any sense. You’re telling me that you can’t find leadership that can somehow prioritize national security over wokeness and can maintain a strong fighting for us while just scaling back to what it used to be ten years ago when we’re actually fighting two wars at the same time. We’re not fighting any wars today. It just seems so obvious with all the savings that you could actually you do that you get rid of some of these departments, et cetera, and some of these other basic things.
Say you look at Social Security, it’s not rocket science. You’re going to have to raise the minimum age of Social Security. Security, it can’t be 62, 63, 65 anymore. It’s going to have to be 68, 70 in order to get benefits. But one of the biggest things is did you know Social Security, the trust funds, when you pay taxes and Social Security, it goes into these trust funds.
The trust funds are extremely limited in what they can invest. In fact, the trust funds take that money and they invest it in exactly one thing. Guess what? US. Government debt, how much does that government debt pay?
How much does Social Security actually earn in his trust funds investing US. Government debt? Less than 3%. Gee, why don’t we take there’s a lot of really brilliant asset managers in the United States. Why don’t we unleash those asset managers?
You can privatize the management of Social Security and let some of these really smart asset managers go instead of making 3% go and make I don’t know, 8%, just like a normal pension fund. It makes a huge difference. It really moves the needle. If you go from making 2.6% to making 8.2% and makes a really, really big difference, it’s so offensive that Social Security makes less than 3%. Anyhow, when you look at bond yields, even Treasuries right now, you can make 4%, 5% in Treasuries.
So if I buy Treasuries today, I can make 5%. If Social Security buys Treasuries, they make 3%. I mean, it’s disgusting, honestly. So disgusting when you look at it. Go, jeez, guys, in theory, this should be a pretty easy fix, right?
There’s so many of these things you can do, obviously. You got to fix things to help with productivity. You got to create the right economic incentives to create productivity, to help very talented people, frankly, from all over the world, to be able to come legally, start businesses, work, invest, contribute to overall prosperity, help people be able to start businesses, work hard, save their money, create the right kind of incentives to do that. You get rid of all these regulations that you know, and then there’s almost 200,000 pages in the code of federal regulations in the United States state. Almost 200,000 pages of regulations.
In the mid 1990s, there was about 100,000 pages. Now, somebody explained to me what has gone so wrong with the world over the last 30 years that we need to double the size of our regulation. I mean, were we just on the verge of chaos and anarchy in the 1990s and mid 1990s when we only had 100,000 pages of regulation? Can we not go back to 100,000 pages? Can we slash the code of federal regulations by half or even just a third?
And somehow the world not come to it? It seems to me that you should be able to do that. It seems to me that if you go, well, jeez, we used to be fine with this low, lower level regulation, why can’t we go back to that? I mean, this isn’t rocket science. This is very simple, common sense stuff.
It’s the same thing with the tax code, where you go, these people are constantly saying, we need more taxes. More taxes. Well, that’s a stupid idea. And this isn’t like some sort of libertarian theory that’s just the idea is very simple. If you look at the data in the modern history of the United States, tax rates have been all over the board.
They’ve had tax rates at 28%, they’ve had tax rates at 90%. And yet, as a percentage of GDP, the government’s slice of the economic pie, government tax return has basically been 18, 19% of GDP. That’s it. They can raise tax rates to 90%, and you’re still going to get 1718, 19% of GDP. That’s it.
It’s not like you raise tax rates and suddenly you’re getting 30% of GDP. Or if you slash tax rates, it goes down to 5% of GDP. It’s always the same. The government’s slice of the overall tax revenue slice. The economy is very, very constant.
So wouldn’t you just say, jeez, why don’t we focus on what do we need to do to increase the size of the pie? If we want a bigger slice, then we need to increase the size of the pie. That way everybody wins. Duh do a win win deal. What does it take to increase a slice of pie?
Well, having 200,000 pages regulation probably doesn’t increase the slice of the pie. Having all these new taxes and threatening quadruple taxes doesn’t increase the slice of the pie. Going to energy companies and treating them like they’re the, you know, like, like they’re some kind of evil force in the world that’s destroying us all, like that’s probably not going to increase the size of the pie. So this is all relatively common sense stuff. Are they going to do any of this?
Probably not. What are they really going to do? Most likely the same thing that the Romans did. The same thing that the French did. The same thing the downesis did.
Higher taxes, more regulation, more disunification. If you disagree with them, they call you all these terrible names. They try and silence you. They try and censor you. They call you antiscience.
More government, more goons. These are the sorts of things that are just common. We can see this over and over and over again throughout history. Now, I’m not saying all this is some kind of bad news story. It’s not.
You can’t rely on politicians to get it right. Maybe they do. But you can’t rely on that. You can’t hold your breath. You can’t hold your breath for your fellow citizen to figure out priorities.
There’s people out there that are still convinced that the number one problem in the United States is which bathroom people can use. And look, sure, for certain people that’s a dramatic part of their lives, fine, but we have bigger problems, right? The country has much, much bigger problems. And you’ll notice, by the way, I didn’t actually say anything about climate, climate change. A lot of people think that’s the number one problem.
I would say very briefly, I could do a whole podcast about this, honestly. But I don’t lie. Wake and I worry about climate change. And the reason why is because those solutions already exist. Nuclear power is a real thing.
It already exists. Nuclear fusion has actually already happened. Last year, nuclear fusion actually became no longer some like crazy scientific pipe dream. Nuclear fusion actually happened. Nuclear fusion has been around for decades.
Nuclear has a very bright future. These solutions already exist. You want to talk about a clean energy source, low CO2 emissions, all these things, it already exists. Right now you’ve got a bunch of idiots. You get the Greta Thunbergs of the world that apparently get to decide what everybody is going to do.
You know, they they said, no, we don’t like nuclear, and they scowl the camera and tell us that we’re all bad people. But the reality is all the solutions for the environment already exist. I like a clean environment. Personally. I’m sitting a place right now.
I’ve got solar panels on my roof. I’ve invested a ton of my own money in planting trees, in carbon credits and all sorts of things, right? So, I mean, I like clean air. I like clean water. I like these things.
I don’t lie, wait at night, worry about it, because I know those solutions exist. I know it’s up to the private sector to get it going. And I know because it’s up to the private sector, sooner or later it’s going to happen, right? The problem is all these economic issues, they rely on these crooks in the public sector. They rely on these incompetent buffoons, the guys who shake hands with thin air.
That’s who the economic issues come down to. And there’s very little momentum in the right direction. In fact, most of them is in the wrong direction. And so you can’t rely on these guys to get it right. You can’t rely on your fellow citizen to figure out the priorities, because there’s still people that are saying, our number one priority has got to be bathrooms.
Our number one priority has got to be whatever, all these things. But those aren’t really existential risks, the economic problems. Social Security goes bankrupt. That’s an existential risk. The currency, we have a currency crisis.
We default on our debt. Those are existential risks, right? So this is something that it’s a big deal. But I don’t want to cast this as a bad news story, because the reality is you actually do have an enormous amount of control. We can go back and look at all these consequences and say, okay, jeez, look at what happened in Rome.
Look what happened in Downesis. Look at what happened to the French. Look at what happened all throughout history. Every time governments got into dire straits, what do they do? They raise taxes.
They inflated, they defaulted. They did all these things. Well, guess what? You have so much control over your life, you can take steps. They’re going to raise taxes.
You can take steps to reduce what you owe completely, legal steps. Social Security is going to have problems. It’s going to raise the age. They might have to default. They might have to reduce benefits.
You have all the control in the world. You can take steps to reduce that impact on your life. They’re going to inflate the currency. Great. You can take steps to reduce that.
You can make money from that, right? You can make money from that. That actually creates opportunity. And this is really the message, is that it’s up to us how we view these things. We can view it through the lens of panic and chaos and oh my God, the world’s coming to an end.
The world’s not coming to an end. We have control. They don’t like us to feel like we have control, but we have control. We have control over our health. We have control over our children’s education.
We have control over our finances. We have control over how we view the opportunities in front of us. Even the economic chaos has created a lot of investment opportunities, business opportunities. I mean, you look at this. I’ve written about this.
I’ve talked about this. I mean, there are really good quality, well managed energy companies that are selling for nothing. Very low multiples of their earnings, very low multiples of their book value. Agriculture, businesses that you have really strong prospects that are selling for, very low multiples of their book value. These are excellent investment opportunities.
We did a whole podcast about, for example, making money from carbon credits. People have a fanatical idea of coming up with solutions, and so they’re pushing carbon credits. It’s becoming a really, really big thing. And it’s something that right now is a very nascent market. We did a whole podcast about this, and this is something that, frankly, is an opportunity.
People can make a ton of money speculating in carbon credit. So there are just so many opportunities, and we can look at it through this again, this lens of panic, and go, oh my God, all these problems and so forth. And yes, there are a lot of problems. We can hold out hope and say, maybe they’re going to fix it. But the reality is that we have control over our lives.
We have control over how we view these problems and how we respond to them. They have control over how they respond to problems. Their response to problems is to do nothing. Their response to problems is to make things worse. Our response to problems can be to make things better at a minimum, at least in our own lives, and set ourselves up to be in a position of strength.
We started this podcast in 480 BC. 480 BC. We talked about again the battles salamis the Greeks, in the east, fighting against the Persians, and in the west fighting against the Carthaginians. We started in Sicily. And 480 BC again, turns out this is one of the most important years in history for the rise of Western civilization.
If we’re being intellectually honest, future historians may look back and look at the 2020s so far seem to be shaving up to be among the most important years in the decline of Western civilization. I’m not saying that to be dramatic, nor am I thinking that the world is going to come to an end. I don’t think that at all. I’m actually an optimist. I’m incredibly optimistic about the future of the world.
But we need to be honest in our assessment about the circumstances under which we live. It is difficult. It’s difficult to stomach all this. It’s difficult to see. It’s difficult to see the news, read the headlines and see the debt and this fiasco, the insolvency, the constant bickering back and forth, but just their inability to solve a problem.
It’s this obvious problem, the debt is too large, can you solve this problem? No, they can’t solve the problem. They have this sort of brinksmanship approach. Instead of actually cooperating, rating and compromising saying, jeez, let’s all agree we have a big problem, let’s figure out what we want to do to solve it. It’s brinksmanship.
It’s no, I’m not going to do anything. I’m going to dare you to do it. We’re going to go all the way to the edge. To me, this is a criminal level of incompetence. Their failure to be able to solve problems in a way without resorting to this kind of brinksmanship, without resorting to this total catastrophe.
It is a criminal way. And it’s difficult to see it, it’s difficult to stomach the debt. It’s difficult to stomach their inability to solve problems, the political incompetence. It’s difficult to see and stomach a society eating itself from within, people at each other’s throats, the, the disunity, all those things. And look, you know, maybe we catch a break, maybe we get lucky and things turn around.
It has happened before and we talked about like, it’s not rocket science to turn things around economically and you turn things around economically, it shouldn’t be that difficult to turn things around even socially. There are plenty of avenues for that, there are plenty of historical examples for that. But even if not, there will always be plenty of opportunities for you to take back control over your own life. That is my constant message to you. We cannot control what happens in the world.
We cannot control what happens in our country. We can absolutely control what happens in our own lives. Thanks very much for listening and we’ll speak again next week.