Sorry I'm late.
I had to stop by the Wax Museum again and give the finger to FDR.
We know Al-Qaeda, Zawahiri, is supporting the opposition in Syria.
Are we supporting Al-Qaeda in Syria?
It's a proud day for America.
And by that we've kicked Vietnam syndrome once and for all.
Thank you very, very much.
I say it, I say it again, you've been had.
You've been took.
You've been hoodwinked.
These witnesses are trying to simply deny things that just about everybody else accepts as fact.
He came, he saw us, he died.
But we ain't killing they army, but we killing them.
We be on CNN like Say Our Name been saying, saying it three times.
The meeting of the largest armies in the history of the world.
Then there's going to be an invasion.
Alright, you guys, introducing David Stockman.
He was a two-term congressman from Michigan.
I didn't know that.
He was also the director of the Office of Management and Budget under President Ronald Reagan.
And he's the author of three books, including The Triumph of Politics, Why the Reagan Revolution Failed, and The Great Deformation, The Corruption of Capitalism in America.
And if I may say so, you're basically the best writer we've got, the most important writer we've got in the libertarian movement.
And I know you don't necessarily consider yourself exactly libertarian or whatever, but I don't care.
I think you're great.
Thank you, Dave, for coming on the show.
How are you, sir?
Very good, and thank you very much for that compliment.
I do the best I can, and you know, every passing day, this situation becomes more worrisome, more dangerous.
As we see the welfare state and the warfare state in combination continue to mushroom, we're borrowing money in the tenth year of a business cycle expansion that's about run out of gas like there's no tomorrow.
And the deep state, you know, won't let go, even when Trump tries in his unusual and sometimes awkward ways to rein things in.
So, you know, this is a time where people who really believe in a constitutional democracy and free enterprise and sound money and non-intervention need to be paying attention, because this is truly dangerous, what is going on.
All right, you guys, Tom Woods has been trying to get me to do this forever on Facebook, but I hate Facebook.
But now I'm going to do it on Reddit instead.
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Thanks.
Yeah.
Well, and everybody else's answer is all we need is more power to make everything my way.
And it's only the very few of us who say, no, what we need is liberty.
That's what works.
That's the only thing that ever worked around here.
Yeah.
And so therefore, we need to focus on the warfare state.
We need to focus on this bombshell over the weekend when they released this the FISA application redacted with, you know, page after page of black ink.
But still, from it, you can see that it's a disgrace and a joke, exactly like Carter Page said.
Because after all, the first paragraph labels him a foreign agent and he has nothing to do with military policy, defense policy, military secrets, the compromise thereof, the stealing thereof, nothing.
And that's really the only reason why, you know, that's that's what espionage is.
That's the only possible reason I can think of of why the state should be in the business of spying on citizens, either at home or abroad.
And what was poor Carter Page doing?
He was an energy academic and applying his trade by going to conferences around the world and apparently a couple in St. Petersburg.
And like anybody else who's got a shingle hanging out and trying to make a buck in life and, you know, support his family, I would presume he claimed that he was an informal advisor to the Kremlin on energy policy.
And I say a big so what?
That isn't espionage.
That isn't, you know, operating as a foreign agent, because if that is the new definition of what a foreign agent is, you know, we have a intelligence community spying operation totally out of control.
So, you know, I hope the right lesson will be drawn from this release and not, you know, whether it was three or four different times they used the Steele dossier in direct form or indirect form through the leaks to the press and so forth to justify the warrant.
That was bad enough.
But I think the bigger issue is, why in the hell does anybody in the intelligence community, all these people who signed, you know, the application from Comey to McCabe to Kerry to Brennan, who was behind it, the Secretary of Defense then, Ash Carter, why would they even think that someone in the energy policy advisory business ought to be investigated as a foreign agent?
I mean, you know, that's crazy.
And I think it's evidence of the fact that we almost have a Salem witch hunt kind of environment percolating in Washington today.
I would call it, you know, 20th century, 21st century witchcraft, where they have deemed Putin the devil.
And by definition, if you are anywhere within a country mile of Putin on any topic on any matter, including, I suppose, going to the Olympics in 2015 or the World Cup recently, you're likely to be labeled an agent by these Democrats in the mainstream media and, frankly, the deep state intelligence operation that's totally out of control.
So, you know, this is a pretty serious moment, and I never thought I would see anything like this, even though I can remember vaguely as a young guy, you know, the 1950s, and I began working in Washington in 1970, which is quite a while.
Nothing like this has ever flared up in the modern period, as far as I can see.
So it's very dangerous.
Yeah.
Well, the level of nonsense reminds me a lot of 2002 and demonizing Iraq and trying to implicate them in the 9-11 attack and all of that kind of thing.
But that parade was being led by the president, and the entire national security state was on board, and the enemy was external, and I guess they did say, oh, if you oppose us, how come you hate freedom and love terrorism so much, and that kind of thing.
But there was no one with power for them to really go after and demonize.
There was no internal purge campaign so much as just ignoring the hell out of everyone who knew better, like you and me.
Yeah.
And the other thing is, what lesson should have been learned from that whole episode, and that is you can't trust the intelligence community.
It can be manipulated for political purposes.
Now, let's look at what happened with Rumsfeld and Cheney and the other neocons at the core of the Bush 43 administration.
They manipulated the intelligence.
Now, that was the lesson.
Iraq, the invasion and occupation was a horrid mistake.
It's left the Middle East in shambles, really, ever since, because one thing spread to another, and we got ISIS, and we got Syria, and we got everything that has flowed from that.
But the lesson was, you can't trust the intelligence community, because the information and the conclusions can be easily manipulated for political or partisan purposes.
And, of course, that's exactly what has happened now.
And one of the things with the so-called Russiagate and the collusion and the whole Mueller investigation and all the rest of it, one of the things that I've been writing about in a couple posts I've had recently is, let's go to why Putin has been so thoroughly demonized, and Russia has suddenly become this dangerous monster, when, if you think back five years ago, which isn't that long ago, you didn't have that impression at all.
As a matter of fact, if you go back to the 2012 presidential debates, September 2012, I remember it well, when Romney said, you know, I think Russia is the number one security threat to the United States today.
And he got taken to school, and appropriately so by Obama, because it wasn't true then.
Frankly, it's not true now.
And this mainstream press that today is totally all in on this Russiagate hoax back then was harrumphing about how dumb is Romney that he doesn't know that Russia is not the number one threat to the United States.
So what has happened in the interim?
I think the answer is that in August 2013, they persuaded Obama to draw the red line.
They then launched this false flag chemical attack in Ghouta, near Damascus.
And Obama then failed to deliver when he punted the issue of bombing Syria, of retaliation to Congress.
And deathly, at that moment, Putin stepped in, brokered a deal with Assad to have all of his chemical arsenal removed and destroyed.
And that, right then and there, set the neocon community on a path of revenge and retaliation, which they then implemented in February of the following year, 2014, when they funded and supported and fostered the coup on the streets of Kiev that have created this whole mess in the Ukraine, which is none of our business, the referendum in Crimea and so forth.
It was right there, in those six or seven months, from August 2013 to March 2014, it all happened.
And it's clearly the neocons who are now on a fanatical retaliation campaign against Putin for interrupting their grand plan for regime change in Syria, which was predicated on him being a chemical gasser of his people.
Well, once he gave up the chemical weapons, that rationale was off.
The regime change never happened.
Russia came to his aid because he invited them.
And so that's what's brought us to this moment.
And when you think about it, what does either of those situations have to do with our national security?
Syria is no threat.
And frankly, Crimea was part of Russia for 200 years, and the people voted to go back to Russia rather than be run by these crypto-Nazis who took power in Kiev.
What's wrong with that?
80% of the entire adult population actually voted for going back to Russia, being annexed to Russia, which, frankly, they were all Russian speakers anyway, and they had been part of Russia since Catherine the Great bought Crimea from the Turks in 1783.
So here we are now denouncing a president for treasonous behavior when he has a summit which was very much needed to take the edge off this unnecessary, dangerous confrontation, and has a press conference with him afterwards, and said some very sensible things about how we can begin to find a way to work together to bridge some of these differences and gaps and avoid a Cold War 2.0.
And listen to the response to that in the last week.
I mean, it's crazy.
It's worse than McCarthyism to say that that was treason, that he doesn't quite believe the national security establishment about Russian meddling in the election.
Well, I don't either.
But why would you?
Their business institutionally is to lie and mislead and deceive and create enemies and threats so that the $75 billion a year that they continue to get that appropriation and run this massive operation with all these lucrative contracts and jobs and all the rest of it.
Well, I got one problem with what you're saying here, and that is you keep putting your decimal points in the wrong place.
$750 billion a year.
I agree, but what I'm saying is, yeah, the whole national security and defense budget is a whole $750 billion.
What I'm getting at here is the budget for the so-called 17 intelligence agencies is $75 billion, which, by the way, is well more than the entire military budget of Russia, which is $61 billion.
And that covers everything, all their procurement, all their R&D, all their soldier pay, all the fuel, all their operations, including spare boots and uniforms.
And our intelligence agencies alone spend more than they do on their entire national security operations.
Not even including the Pentagon.
Pardon?
Not even including the Pentagon, but just the CIA and friends.
Let's put it this way, okay?
The idea that Russia is a threat to the security of America, or Europe for that matter, is one of the stupidest jokes that has come down the pike in a long time, and it tells you how badly this hysteria and groupthink has gripped Washington.
But here are the facts.
If you take NATO, including the U.S. as 29 countries, the combined GDP of NATO 29 is $36 trillion.
The GDP of Russia is $1.4 trillion.
In other words, the economic might of NATO is 26 times bigger than Russia.
The U.S. defense budget, as you indicate, is $750 billion.
It's about $250 billion for NATO 28, the others, Europe, Canada, and so forth.
That's a trillion dollars.
Russia is $61 billion.
Okay, that's 16 times.
So we've got an economy that's 26 times bigger and a military capability that's 16 times bigger.
And what are these people talking about, about this horrible threat posed by Russia?
And furthermore, what's the evidence that they're even aggressive?
They keep pointing to the seizure, quote, of Crimea.
That's ridiculous, you know?
The only reason that Crimea was ever part of the Ukraine to begin with is after 170 years as part of Mother Russia, including where, you know, the Charge of the Light Brigade occurred when the English invaded Crimea in 1854.
The point is, for 171 years it was part of Russia, and only in 1954 by a directive of the Soviet Presidium, then controlled by Nikita Khrushchev, who had just won the Struggle for Power and had his rival shot after Stalin's death, decreed that it would be transferred from the Russian Soviet Republic to the Ukrainian Soviet Republic because Khrushchev was rewarding his compatriots in Kiev who had supported his rise to power.
Now my point is, what the hell is the United States doing in 2018 trying to enforce the dead hand of the Soviet Presidium and a directive that it, you know, made in 1954 as part of internal Soviet Union politics?
It's crazy as hell.
And if that region of Russian-speaking people, you know, wanted to partition from its artificial marriage for a short period of time, historically speaking, from the Ukraine, so what?
What does that have to do with any aggressive intent on the part of the Soviet Union?
You know, it's right in the Sevastopol in Crimea is the great base for the Soviet, or the Black Sea fleet of both the czars and the commissars alike for the last 150 years.
It's Russian to the core.
It has nothing to do with the Ukraine, and yet if you push the narrative down in D.C. today, part of it is he seized Crimea.
Ridiculous.
Now we could go in, I won't bore the listeners with the Donbass story, which, you know, it's the same thing.
It's a Russian-speaking area that's got a horrible history from the 1930s and Stalin and the Kulak liquidation and the Nazi Wehrmacht coming through with Ukrainian collaborators who did horrible things to the Russians who lived there.
So the point is, we stepped into a hornet's nest that certainly Putin didn't ask us to do, and he had to cope with it the best he can, but that doesn't mean he's about ready to occupy the Rhineland or, you know, breach the gates of the Brandenburg Gates in Berlin.
It's really nonsense.
Hey, let me add one thing here on Crimea, which is, and this is just an obscure little footnote, so I try to bring it up when I can.
James Carden pointed out that there was a British parliamentary report on Crimea where they showed that there were, I forget if it was three or four, former Ukrainian presidents signed a letter saying, now's our chance, we have to kick the Russians out of Sevastopol.
And it was only after that, it wasn't just the coup in February, it was like a week or two later or whatever, when this letter came out, that was when the Russians finally moved, when they made an official threat that they were going to move on the naval base and kick the Russians out of it.
They're only warm water.
Yeah, and there was good reason.
Russia had a multi-decade lease agreement for the base until the 2040s, and suddenly the talk coming out of Kiev and this new government, when we had, you remember, Yats is our man, we basically installed and recognized instantly, which in itself is completely unjustifiable.
But the two things that came out was, one, we're going to remove any Russian language and culture from what you do in the east of the Ukraine or in Crimea, and second, we're going to reconsider the base at Sevastopol.
So, you know, the point is that the only thing that Russia's done here is mainly defensive attention to trouble it didn't cause or need on its very doorstep, including Crimea and its fundamental naval base on the Black Sea.
Well, I think that's a great way to put it.
It's the same thing with Syria, too.
I don't think either of us could defend all of Russia's actions in Syria.
They've certainly bombed a hell of a lot of civilians, just as the Americans have in the war in Syria, and yet what are they doing there?
They're there, you know, because of America's conflict and America's support for these guys, and there's even the leaked audio of John Kerry admitting that, well, we thought that we could manage the rise of ISIS and that it would put pressure on Assad to resign, but then, oops, that didn't work.
He just invited the Russians to come and help him.
So that's not to say everything that Putin does is wonderful.
It's just to point out, as you're pointing out, the context here is that every horrible thing he does, if you want to call it that, is still only a defensive reaction to America's foreign policies, and very aggressive ones.
Yeah, I agree with that completely, and here's the difference in Syria.
The government of Syria, the sovereign government of Syria, you know, Assad is no prince of men either, okay?
There isn't anyone in the Middle East that I can think of, I mean, that is some kind of democratic humanitarian.
You think the Saudis, who, you know, chop about 180 heads a year for crimes like, you know, dealing in drugs and— Sorcery and witchcraft!
Right.
Or General Sisi in Egypt.
I mean, you could go through the whole Middle East.
I'm not defending Assad, but he was the elected president of the country, and he has the sovereign right to have allies in the world political system.
And for 40 years, Syria, through his father, had been allied with the old Soviet Union and then Russia, a legacy of the Cold War.
So he invited the Russian forces in.
He didn't invite America to come in and invade his country for whatever purposes Washington had in mind, and certainly didn't invite them to come in and try to remove him from office and, you know, cast him to the same fate as Qaddafi or Hussein.
So, you know, the idea that two big things they keep offering are Crimea and Syria is evidence of the malevolent, aggressive, dangerous intentions of Russia.
And, you know, both of those cases are the cat calling the kettle black.
We meddled in the Ukraine.
That's what led to the Crimea annexation.
We invaded Syria in coalition with Saudi Arabia and Qatar and so forth and sent in billions in armed, you know, huge flow of arms to the so-called moderate rebels that all ended up with the jihadists and the radicals.
You know, the Free Syrian Army actually would take our weapons and sell them for the highest dollar they could get to the radicals.
So, you know, the facts are pretty clear, but somehow the narrative in Washington has gotten so distorted that even the liberal Democrats go around spouting complete nonsense.
And once upon a time, you know, when I was a kid, as a Vietnam War protester and a radical during the late 60s, and then as a young staffer on Capitol Hill and then congressman in the 70s, it was the liberal Democrats who actually stood up for some common sense on foreign policy and opposed what I call the empire.
And here today, you know, you have the New York Times, the Washington Post, and CNN, the War Channel, as I call it, all, you know, as handmaids, as I said recently, of the warfare state, and as believers in everything that the empire attempts to do and meddle all around the world.
Well, if it's okay, you're really probably the single best guy on this.
You're definitely great on it.
And that is the history of America's betrayal of the Russians after the fall of the Soviet Union.
And I want to, first of all, read to you my new favorite quote.
There was this article in the New York Times about the Russia hands that came out a couple of months ago.
And Strobe Talbot, Bill Clinton's former Oxford roommate and then Deputy Secretary of State and then National Security Advisor, was interviewed and was asked about NATO expansion and it backfiring like this.
And Talbot said, in this kind of hypothetical question, should we have had a higher, wiser concept of our real interests that would require us to hold back on what many people would say is our own current interest?
In other words, it wouldn't make sense.
In fact, he says in his preamble to that, he goes, well, if the leadership of a country has any view but the following, it is not going to be the leadership of that country for very long.
And that is, we do what we can in our own interest.
And then he says, oh, geez, but now you want me to take longer-term interests like avoiding a H-bomb war and have that take precedent when that's still 20 years out?
And that's supposed to take precedent over winning Polish votes in Illinois for Bill Clinton to be re-elected?
Yeah, well, that was the fundamental sin of the Clinton era, is that in attempting to guarantee his re-election in 1996, they violated everything that Bush the Elder and Jim Baker, as Secretary of State, promised Gorbachev at the time that the Berlin Wall fell and then the Soviet Union disappeared.
And that was in return for acquiescence in the German reunification, NATO would not expand eastward by one inch.
There were 15 countries in NATO at that time.
Had George Bush Senior not been such a CIA man and a cold warrior his whole life, he should have used that occasion to declare victory, to declare mission accomplished and disbanded NATO after the Soviet Union disappeared and its 50,000 tanks were melted for scrap.
There was no reason for NATO to continue to exist, but Bill Clinton double-crossed that whole promise and one by one added the old Warsaw Pact members and then engaged in this ridiculous intervention in Serbia and Kosovo and so forth and essentially created a 29-nation monster right on the doorstep of Russia that makes no sense whatsoever.
And that's another sort of route through which we got here to this current Cold War 2.0 confrontation unnecessarily because it was a huge mistake to bring not only the Warsaw Pact countries, but Poland, the Baltics, etc., but also attempt to actually bring into NATO former republics of the Soviet Union, Georgia and the Ukraine, that had become independent countries after the Soviet Union disappeared.
I mean, this is one of the giant mistakes.
And by the way, the father of containment of the old Soviet Union, George Kennan, in his late years, in the late 90s or maybe around 2000, said it was a horrendous mistake to expand NATO and in fact its mission, its job was done.
And he was, remember he wrote the famous containment article in Foreign Affairs in 1946, which was the basis for, for better or worse, for Cold War policy.
Well, and his rival Paul Nitze, who was the father of rollback, who said containment ain't good enough, agreed with him.
He said the Soviet Union is gone.
What are we doing?
Yeah, I know, I know.
And so now you have a whole generation in there that has no memory.
You know, when you think about, you listen to some of these Democrats come on the War Channel, or just Washington types, including all the neocon-serving republicans, and they are so rabid and rash about, you know, attacking Russia effectively, notwithstanding the 2,000 deployed warheads and 4,000 total nuclear warheads that they have, that you, they don't know that back in the 1970s even hardcore conservatives were not that aggressive and radical because they appreciated the danger of nuclear escalation.
And today, these people don't even get it, you know, so.
Well, and it really has been, hasn't it, since Joe McCarthy, that any Russian leader has been demonized like this in the American media, right?
Andropov, or whatever, they didn't talk that bad about the Soviets in the 70s and 80s.
No, Nixon went to Moscow, for crying out loud, and had a meeting with Brezhnev and came back saying that they had found some common ground for detente, and that his ABM Treaty was thereby justified, and that the SALT talks, which were then underway, were given new momentum.
No one accused Nixon of treason because he went to Moscow.
Maybe the Birchers.
Well, maybe.
He didn't meet him in Helsinki or some other spot, he met him in Moscow, and he went to China and met Mao, who was the bloodiest dictator in human history, because he was trying to further the national interest of the United States rather than run an empire that aspires to hegemony around the planet.
All right, now, speaking of China, I'm glad you brought that up, because, you know, there are those who say that the policy here, whether this is what Trump is up to or not, certainly Dana Rohrabacher thinks it should be, and we do hear kind of, you know, quote-unquote pro-Russia types or anti-demonizing Russia types say things like, well, you know, we have to tilt back toward Russia to lie against China, because they're the new rising power, they want to take over the planet, and we need Russia's help to threaten them and hem them in.
Yeah, well, I don't buy that, because I don't think China is any more a threat to the United States than Russia is.
The Chinese economy depends vitally on $500 billion worth of exports every year to the United States, a trillion or more if you take the rest of the Western world.
You know, it's a red ponzi.
It is the most unstable, unsustainable economic boom supported by credit and wild speculation in human history.
So you don't have to worry about China.
It's going to collapse on its own, wait 5, 10, or 15 years out.
It's the same lesson that was not learned about Russia during the Cold War, that sooner or later, socialism, communism, state-dominated economies fail, because they defy the laws of free men and free markets, if you want to get it that basic.
And you don't have to worry about them occupying the planet, because their economy won't be around long enough to do that.
And that was the real lesson of the Soviet Union.
You know, the Soviet Union fell apart finally, because it was just so centralized and inefficient, and its economic resources were so badly wasted, that we didn't need the Reagan defense buildup.
When I was OMB director, I fought it tooth and nail every day of the week.
I didn't get that far.
But it wasn't the Reagan defense buildup that led to the collapse of the Soviet Union.
It was communism that led to the collapse of the Soviet Union.
And it was baked into the cake.
And we already had all the military we needed in 1980, and the nuclear triad was all we needed for defense.
We didn't have to spend an extra dime from the $140 billion that Jimmy Carter left us.
But they doubled it to $350 billion before it was over.
So at least maybe we should learn the lesson from the demise of the Soviet Union, and that is China is an incipient failed state in spades.
You can't build an economy with $40 trillion of debt, which is what they have today, with massive wasteful investments in infrastructure and in empty apartment buildings.
There are 70 million empty apartment units in China.
By building industries that are five times too big, their steel industry has about 1.4 billion tons of capacity.
They don't have need, really, in the long run for 400 million tons.
So it's massively overbuilt.
And sooner or later, it will all catch up with them.
And they're struggling to try to keep the Ponzi alive.
But they don't need any military containment from the United States.
If they want to build sandcastles in the South China Sea, who the hell cares?
I mean, they're not going to interrupt world trade, because if they did, they'd be shooting themselves in the foot, because they vitally depend on several trillion a year of inward and outward flowing trade.
So again, it's the warfare state apparatus, military-industrial-surveillance complex, the whole deep state set of interests that never stop looking for an enemy, because they know, as you pointed out before, the $750 billion that we spend every year won't get appropriated in a country going bankrupt, which we are, unless they can keep finding boogeymen and threats and dangers to scare the elected politicians of Washington into coughing up the money.
And that's clearly what they're doing right now with China.
Well, and yeah, you know, you mentioned at the beginning here about how we're in this giant bubble now, and time is running out for us.
And if a fascist economy doesn't work for China, it doesn't work for us either.
We've seen this boom and bust about every ten years now.
How long do you think before the next crash?
I think we're in the final stages.
This business cycle is already 109 months old.
This bull market is the second longest in history.
It is massively overvalued.
It's the greatest bubble, both in stocks and bonds, and in the so-called tech stocks especially, and NASDAQ 100 and the FAANG stocks.
It's crazy, utterly crazy, worse than we saw in 2008, far worse than even the dot-com bubble in 2000.
And it's only a matter of time before some unexpected jolt comes along and bursts the bubble, and it's a long way down from where we are today.
Well, and they're raising interest rates right now, right, which means they're trying to pop the bubble.
Yeah, well, they need to be.
The idea that we had negative real interest rates, by that I mean after inflation, for nine years running is crazy.
It defies every norm of sound finance that's ever existed.
It was a giant subsidy and inducement for speculation in all of the financial sectors, financial markets.
And now even the Fed realizes that they've got to rein this thing in or it's going to blow sky high.
It's a dollar a day late and a dollar short, as they say.
But they have to be doing what they're doing.
They should have been doing it a long time ago.
In fact, they never should have had interest rates at zero to begin with.
They never should have expanded the balance sheet of the Fed from $800 billion on the eve of the so-called financial crisis in 2008 to $4.5 trillion at the peak a couple years ago.
That was crazy.
That was a giant mistake in itself.
And then after they did that, to wait this long to try to normalize and rein it in is the second big mistake.
So it's a very unstable condition, and I don't think the current status quo is going to last much longer.
As an economist, I'm a great anti-war guy, but I try.
But I'm reminded of Rothbard in his chapter on central banking and foreign new liberty, which is kind of introductory Austrian economics.
But he says, listen, they always try to take a little needle and prick the bubble and let the air out slowly, but that never works.
It always pops.
It always leads to disaster.
And so there's a disaster.
Wherever you see a big bubble, you're going to see a big crash.
Yeah, absolutely.
And this time they were particularly negligent because they waited and waited and waited and made one excuse after another.
I mean, here we were in 2014, 2015, well into recovery by any historic standard, and they still had ultra-emergency rates in effect.
When the money market rate's below 1%, that's an ultra-emergency because it had never been there even during the Great Depression.
Money market rates weren't 1% or 50 basis points or 30 basis points where they actually had the federal funds rate.
So it's one thing they shouldn't have done it.
It's one thing to do it for a year when you think the sky is falling.
I think they caused it, and they should have let the system blow out its excesses and then recover in a healthy way.
But in any event, after a year they should have been reeling this thing in, and they didn't.
They just kept waiting and waiting.
And now they have the mother of all financial bubbles.
And the worst part of it is that by driving interest rates so low and then pushing the yield curve so flat, it allowed the federal government to borrow $20 trillion compared to the $6 trillion that existed, let's say, around 2004, 2005, without any increase in interest costs because they kept pushing the interest rate lower as the debt exploded.
And that in itself, going back to the topic at hand, is what enabled this massive expansion of the warfare state.
That's how we end up today with $750 billion of budget.
And let me just give you one defense budget.
Let me just give you one figure that tells you how crazy this is, that if you put it all in constant 2017 dollars, in other words, current purchasing power, at the peak of the Cold War in 1960, when Eisenhower gave his famous farewell address on the military-industrial complex, by his light, and he was the greatest general we ever had and was a president who actually reduced the defense budget that he inherited by one-third and understood.
I think he was the greatest president of the post-war period.
But notwithstanding that, he felt that in today's dollars, $380 billion was enough defense to protect the country, even against the Soviet Union at the peak of its military-industrial power.
In other words, we're spending double that today, and there's no real enemy left in the world.
That's how crazy this is.
Well, and I just saw a report yesterday that the White House is predicting a trillion-dollar budget deficit for next year.
Oh, yeah.
Well, I mean, that's minimum.
I think they'll actually borrow $1.2 trillion, and then it goes up from there.
You have baked into the cake now.
As far as the eye can see, trillion, multi-trillion deficits per year.
By the mid-'20s, it'll be $2.5 trillion.
There's baked into the cake right now, and I see no way to stop it because the Republicans won't raise taxes, the deep state won't let you cut defense, and nobody wants to take on entitlement.
So you wrap that all together, you're going to be adding, under any realistic economic scenario, $20 trillion to the national debt.
In the next 10 years, on top of the 21 we already have, so before the end of the coming decade, we will have $40 trillion in national debt, 150% debt to GDP.
We will be buried in fiscal insolvency.
That's where this thing is heading.
Yeah.
If they don't get us all nuked first.
Yeah.
Well, thank you very much for your time on the show, David.
I really appreciate it.
Okay.
Very good.
All right, you guys, that is David Stockman.
He is the author of The Great Deformation, and his website is called davidstockmanscontracorner, at davidstockmanscontracorner.com, and we reprint a hell of a lot of it, if not everything, at antiwar.com.
The latest I titled, How Syria and Ukraine Drove the Russia Hawks Insane.
That's at antiwar.com.
All right, y'all, that's it for the show.
Check me out at libertarianinstitute.org, scotthorton.org, antiwar.com, twitter.com, slash scotthortonshow.
Appreciate it.
And buy my book, Fool's Errand, Timed and the War in Afghanistan.
