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All right, y'all, welcome back to the show.
I'm Scott Horton.
Website's scotthorton.org.
Keep all my interview archives there.
More than 2,500 going back to 2003.
And Facebook, YouTube, and Twitter is Scott Horton Show.
All right.
So our next guest is Charles Goyette.
He's my friend.
And his website is charlesgoyette.com.
And he's the author of the books while he's also the most independent talk radio show host in America, always will be even if he doesn't have a radio show right now.
And he's the author of The Dollar Meltdown, which is yellow and has a melting dollar bill on the front, and you can buy it at the bookstore online too.
And the other one is called Red, Blue, and Broke All Over, and it's about mostly, well, it's the problem, but also the solution, liberty, of course.
Welcome back to the show, Charles.
Thank you.
You know, Scott, we've been friends for a very long time.
When you said you've been doing this show since 2003, I'm thinking you and I first got together on the phone and started doing shows and things like that maybe when?
2004 or 2005 anyway?
Yeah, 2005 because it was during the Cindy Sheehan protest at Camp Casey.
Oh, there you go.
Wow, what a great memory you have.
Well, actually, Ernie helped me with that because I was on Ernie's show earlier today, actually.
And he mentioned that, and he's reminded me of that a couple of times.
I met him and was like, hey, wow, you're the Ernie Hancock, you know?
And then he was on the phone with you and handed me the phone, and I said, hey, nice to meet you kind of thing.
Oh, great.
Yeah, there you go.
Well, I like having you for a friend.
You're real smart and teach me all kinds of things.
Well, you teach me a lot too.
You're about as smart as they come.
All right, enough of this, Scott.
All right, enough of this.
Yeah, yeah.
Let's talk about this thing that you've written here, first of all, after the fiscal shipwreck, the fiscal cliff.
What is the fiscal cliff?
I try hard not to pay attention.
I can tell on the surface that it's a bunch of crap, so I try to tune it out.
It doesn't seem like it's very important, but go ahead.
All right, well, in the conventional parlance and the conventional wisdom, the fiscal cliff is the event that is going to take place on January 1st that will throw us back into a recession.
Truth is, in my view, we've never been out of a recession.
We still have Depression-era levels of unemployment.
What did you see the number the other day?
New record high number of Americans on food stamps.
I mean, this country has been bumping along on the bottom since December of 2007.
There hasn't been a real recovery.
But in any event, this is the event at the first of the year that purportedly will throw us back into a recession.
So, of course, typical of Washington, they always take their eye off the ball, and the ball that they take their eye off is the gross federal debt, the indebtedness of the American government, and as a consequence, by pass-through device, the American people.
I mean, the fiscal cliff would be nothing.
It would be like falling off a molehill, were it not for $16 trillion in visible debt and maybe, by some reckoning, $222 trillion in total debt, including all the unfunded liabilities.
So what we really have here is a big Washington debate about a problem that they're not going to solve.
Well, now, you give the number here, you say it's $1.2 trillion over 10 years.
That's $100 billion a year.
And the budget every year – wait, how much is – the budget every year is about $4 trillion, but how much of that is deficit every year?
It's incredible.
I mean, it's $1.2 trillion a year.
It's over $1 trillion a year, been over $1 trillion a year for the last four years.
So you think about it.
Yeah, you've identified a number that they're talking about.
In fact, let me even back up and explain that.
You remember 15 or 16 months ago the debate over raising the national debt ceiling and the governing classes in New York.
Yeah, that's how they stopped talking about Libya.
The governing classes in Washington said that, well, we're going to solve this problem.
We're going to have a bipartisan commission, and if the bipartisan commission agreement isn't agreed to, then we will have automatic spending cuts to sequestration that will kick in on effectively January 2nd of 2013.
So the problem that Washington is up at arms about today is the solution that they offered to us 16 months ago.
The spending cuts that they said would fix our problem 16 months ago are the spending cuts that they're terrified of today.
But you're right.
They're talking about sequestration cuts that come to a little over $100 billion a year over the next 10 years.
You know that's all pie in the sky anyway.
Let's just take it one year at a time.
Next year, $109 billion.
Well, $109 billion, we run a deficit every week of $25 billion.
We run a deficit every month of $100 billion.
You're right.
The budget is just under $4 trillion, and so what is $100 billion in cuts in a $4 trillion budget?
It is absolutely nothing.
So, of course, they're never serious about any of these problems.
Here's the thing, though.
You know, I think the first time that I ever heard that the ratios were all out of whack for the retirement of the baby boomers and how there was too few workers per retirees in this era that's coming soon, a friend, and I was very young when I first heard this, and a friend said, you know what, it is a problem.
However, the politicians will solve it because they have to.
You know, if they don't solve it, then they won't get reelected.
So it's not that they're good or wise or anything like that, but when it really comes down to it, Charles, they'll fix it because they have to.
You know, so it's a self-correcting system.
When it really comes down to it, their motivation is to get reelected.
So when it really comes down to it, the solution is not solving the problem.
The solution is papering it over, covering it up, kicking the can down the road to get them through the next election, and this is exactly what we're seeing.
You know, why do you think all this stuff kicks in on January 1, 2013?
Because it was right after the election.
Everybody wanted to get reelected.
So, you know, they put the drop-dead date, you know, six weeks after the election.
I mean, you know, this goes on and on and on.
So, you know, the prospect that these people, these people who created the problem are really, it reminds me of Weinstein's famous dictum, and it probably gets repeated too often, but I'll repeat it one more time.
You know, a problem can't be solved with the same consciousness that created it.
You know, we appeal to the very same people that got us into this mess, into this black spinning hole of debt that threatens to suck all of our prosperity down with it.
We got into this at the hands of the Republicans and Democrats, and we turned to them to get us out.
I mean, the people who predicted this calamity, the Ron Pauls of the world that told us about it and what it was going to mean, what was going to happen while the problem was in creation, it seems to me are the sort of people you'd want to turn to once the problem is full-born.
You know, when the mortgage meltdown hit, you know, they turned to the Bernankes of the world and, you know, the Paulsons of the world and the Geithners of the world to fix the problem that they hadn't seen coming, that they denied was in development.
And the advice of people like Ron Paul and the Austrian school economists that told them, you know, what was going to happen when the mortgage crisis was building, was in creation, were not turned to.
They were not consulted for their advice on how to get out.
So the objective is not to get out of this problem.
The objective is to get reelected, always and everywhere.
Yeah, well, so it's really too bad that it sounds like the incentives are to keep making everything worse instead of to make everything better, but then I guess that's how we got this world empire in the first place.
And it seems to me like that's the root of all of this.
It's not even – and, you know, I'm against the state's existence at all.
I don't want welfare for anyone, but it seems like whenever anything gets cut, whenever austerity comes, it's never no more bailouts and it's never no more contracts for Raytheon and Lockheed and a bunch of general salaries and retirement plans and whatever like that.
They always balance it on the backs of the poor.
Yeah, of course.
And they're very clever the way they go about this.
I mean, if it took a strategy to erect a defense contractor or defense contractors in every congressional district in the land, then that's what they would do and that's what they have done.
So the fight in Washington is over whether it's the constituents of Democrats or the constituents of Republicans to get the defense boondoggle money.
But, you know, but you're right.
I mean, it's not going to be balanced on the back of – I mean, look at this.
All of this – the reason the Republicans are terrified of these spending cuts – wait a minute.
The fiscal conservatives, the people that have spent a generation telling us about their fiscal conservatism, the reason they're terrified of this is because it amounts to some paltry cuts to the, you know, to the national police state and the global military empire, some paltry little cuts.
And they're terrified of them.
Both parties have cultivated their constituencies for generations.
And, you know, they are protective of them because their constituencies are keys to the kingdom and the kingdom is re-election.
You know, I saw some stupid talking head debate on CNN last night where the Democrat, you know, apparatchik was making fun of Ari Fleischer and saying, yep, somehow we have to raise taxes because we have to pay for the Republicans' increase in their Medicare Part D.
And, you know, Ari Fleischer's only response to that, which I think actually might have been effective, was to just laugh as though it wasn't true.
Yeah.
Oh, yeah, right.
Like the Republicans ever increased Medicare or something like that.
He didn't say that, but that's what his laugh meant.
I think he might have gotten away with it.
I was on the John Stossel show six months ago or so with one of those women, those blonde women that was the spokesperson after Ari Fleischer of the Bush administration.
And her name is, slips my mind, but everybody knows her now.
She's a Fox News commentator.
And we were on there to talk about the Social Security shortfall, the Social Security problem, the mess that it is.
And she came on and said, well, you know, President Bush, when I worked for President Bush, President Bush, you know, tried to solve this, but nobody would go along.
And I said, how can you, I'd be very careful about giving too much credit to President Bush because, you know, we're talking about an unfunded liability in Social Security that is much smaller than the unfunded liability that he created a couple of months later with, you know, his prescription drug bill.
So these guys are all, look, they're both on the same team.
The Republicans and Democrats are on the same team, a big government.
And, you know, it's practice, so they wear different jerseys, shirts and skins or whatever during practice time.
But they're both on the same team.
They are the servants of the growth of the state.
Hey, how much do they spend on militarism every year, Charles?
$1.2 trillion for the National Police State.
Wow, how can you be so sure of those numbers?
I mean, it's pretty easy to pencil them out.
But if you'd like to look at them, I'll break it down for you.
I'll synopsize it for you.
In my latest book, Red and Blue, It Broke All Over, Restoring America's Prosperity.
I mean, you know, the numbers are all there.
Oh, they try to hide them.
You know, they put some of the, you know, the war budget in the Department of Energy for nukes and things.
They put some of the war budget in the Department of State.
They try to, you know, they got black budgets.
They got off-budget budgets and stuff.
You know, if you start to add it all together, you know, you realize, oh, you know, there's the military component of the deficit.
That should be attributed to the military, right?
When you figure out how much the military costs, you've got to call, you know, the debt service on their portion of the debt, you know, what costs to the American people.
So you start to add all these things up, and the number becomes staggering.
That's why Ron Paul was the only serious candidate in the last presidential election when he said, yeah, I'm going to cut a trillion dollars in year one, a trillion dollars.
Now you begin to get a handle on the problem.
You can't cut a trillion dollars out of an almost $4 trillion budget when you have a national security police state budget of $1.2 trillion.
Yeah, I think you can.
And to show you what a moderate Ron Paul was with that suggestion, Ron Paul was talking about cutting five Cabinet departments.
As I remember, Nobel Prize winner Milton Friedman wanted to cut eight or nine Cabinet departments.
So it just shows you Ron Paul was being so moderate about it.
Yeah.
Well, I mean, that was his whole thing.
He wanted to make a bargain that, look, we'll shore up Social Security instead of raiding it all the time and spending it all in the general fund by abolishing the empire.
Because you can get the American people to agree about that a lot easier than you can get them to agree about cutting Social Security.
But one way or the other, we've got to avoid the real cliff, which is a dollar crisis.
And what does that really mean?
That one day everybody's going to panic and dollars are going to become worth nothing?
I mean, really nothing?
Well, it can unfold in a number of different ways.
But the real answer is that it's not going to be anybody's preferred currency.
I mean, it is a wasting currency.
Somebody asked me once how many currencies in the history of the world have reverted to their intrinsic worth of just paper and ink to nothingness.
And the real answer is, I know somebody has done a project on that.
They came up with 5,000 or 6,000.
But the short answer is all of them.
All paper currencies return to their intrinsic value, which is paper and ink.
And that's where the U.S. dollar is certainly – there's no reason that it should be an exception to that rule in the history of mankind.
Thousands of these things revert to worthlessness.
The U.S. dollar has clearly been headed down that track at a pretty good clip since the creation of the Federal Reserve and the abandonment of the dollar gold standard.
So there's no reason that it should be immune from an immutable law like that.
It will return to worthlessness.
Now, it's fine.
Maybe it will do so slowly.
And you'll be able to buy a pair of shoes for $37,000.
I mean, maybe you go to the grocery store and you get a bag of groceries and it costs you $116,000.
So you could make the case that, oh, it's not worthless, it still has value.
Yeah, well, I suppose all things being equal, it's a pretty poor substitute for real money.
Why don't you tell us about the Freedom and Prosperity Letter?
Well, I started a new newsletter.
You know, when I wrote the dollar meltdown, I started getting a lot of inquiries from people who said, you know, this is all very great, but the economy is a moving picture and how do we stay in touch?
And I got to the point where I couldn't keep up with the emails asking me, what do you think today about this, and what is tomorrow's developments, and so on.
So I have a monthly newsletter.
It's called the Freedom and Prosperity Letter.
It's published by Weiss Research, by Martin Weiss's wonderful company, Weiss Research.
And it's a monthly newsletter.
You can just Google Freedom and Prosperity Letter and it will be taken right there.
You can go to Weiss Research, W-E-I-S-S, Weiss Research, and find it.
It's the Freedom and Prosperity Letter.
I write about the advance of the police state, the economic calamity that the Republicans and Democrats have built for us, about the kinds of investments that do well in these environments because, after all, this isn't our first currency crisis or fiat money rodeo.
The world's been through these things many, many times over.
So it's a very valuable and very affordable newsletter, Charles Goyette's Freedom and Prosperity Letter.
Well, you know, it's funny to me, but I guess it's typical, right, that the most common is the lowest common denominator and that when it comes down to how economics works, pretty much everybody's wrong.
There's a very small minority of people who seem to get it about the money.
Without getting all into the details, it's the Austrians.
And since you're one of them, it seems like you've got a pretty good basis for investment advice here.
And, of course, the books are full of this kind of wisdom.
And I've said before on the show that I already knew that you're a brilliant guy.
I listen to your show a lot of times.
But when I read that first book, especially, I was just floored by just how smart you are to put things together the way you do as well as you do.
And if I had any money to invest, I would be reading this thing.
And you didn't pay me to say that or nothing.
I'm just saying.
I read one just now, and it's great.
Remember this fiscal shipwreck, our inconvenient debt truth?
And you do talk about looking for income and safety.
Here's what you can do now.
And so for people who do have a little bit of money, I mean, what's the secret?
Just buy silver bars and bury them in the backyard?
Well, one of the secrets is to insulate yourself from the dollar.
I mean, the dollar is, you know, over the long term, the dollar is going to revert to paper and ink, as we discussed.
You know, people get confused sometimes because they turn on TV or bubble vision or, you know, read in the newspaper, the dollar is up, the dollar is down, and so on.
But all the world is printing money recklessly.
I mean, the Bank of England's printing money.
China's printing money.
Japan's printing money.
The European Central Bank's printing money.
The United States is printing money.
Even, God help us, the Swiss have been printing money.
All of the world is racing to the bottom.
They think that prosperity lies in destroying the value of their currencies.
This is an acknowledged objective of central bankers worldwide.
They've agreed on this for many, many years.
Even I think the head of the Bank of England said the other day, we're killing ourselves with this race to the bottom to destroy this competition, to destroy the value of our currencies in hopes that it will make us somehow stronger.
But this is what they're doing, and so the solution for most people is when you hear that the dollar is up, remember that they're measuring it against other currencies that are going down.
All the currencies are sinking, so they're really only talking about, you know, the Lusitania is going down at a 22-degree angle, but the dollar today has only gone down at a 19-degree angle.
All paper currencies are sinking, and you've got to insulate yourself from them.
Right now, I have a very rudimentary understanding of this kind of thing, as you know, but I'm under the impression that at least on computer screens, the banks of America all have, and maybe around the world, all have gigantic reserves of new dollars that Ben Bernanke has handed them for basically free, but he's also paying them interest to keep it at the Fed and not start loaning it out.
But it counts as on their books, and then the idea is that if the economy ever shakes off enough of the bad debt to really get back to going again at all, then all that new money is finally going to begin.
If you're complaining about price at the grocery store now, forget it, because that's when the new currency really starts, you know, hitting our price levels is the multiplier effect of the reserve ratio on loan.
Your understanding isn't rudimentary at all.
I couldn't say it better.
The Fed has created a couple of trillion dollars buying the wasted, the poisonous, the toxic assets, the bank paper, the mortgage-backed securities of the favored money-sitter banks, and buying the downgraded debt of the United States with money that it makes up out of thin air.
It just creates the money by bookkeeping entry, and so it's added all these assets to its balance sheet, and they sit as reserves, as the bank's reserves, on their accounts at the Federal Reserve.
And you're right, it's a fractional reserve banking system.
This means, in essence, that the banks get to loan out many times over the reserves, the amount of reserves that they have with the Fed.
They only have to have a fraction of their loans represented in reserves with the Fed.
Well, is it right that we're talking about trillions and trillions of dollars that are sitting there now, of new dollars?
We're knocking on the door of $3 trillion right now.
Look, until the mortgage went down, we were going along, the monetary base, the balance sheet of the Fed, the monetary base was going along about $800 billion, $800 billion, $800 billion, $800 billion, and suddenly, shazam, it exploded to now it's about $2.8 trillion.
So they've created $2 trillion out of thin air to buy U.S. government debt and to buy the wasted assets, transfer them off the books of the private banks.
But that's not even the worst of it.
We are on track now for the monetary base, which is about $2.8, $2.9 trillion now, with QE3 and QE4, which the Fed, by the way, may announce tomorrow, to be at $5 trillion by the end of 2014.
So the multiplier effect of that, when the economy gets, when businesses start borrowing again, when banks start loaning to commercial activities again, is just, I mean, it's simply staggering.
So thank God for the recession and all this deflation and bad debt still being liquidated because it's preventing all of this price inflation from kicking in.
Isn't that ironic that they've got us in a situation where even a recovery will be a disaster?
Unbelievable.
Well, OK, now, and in this piece, you say after the fiscal cliff, you talk about David Stockman, who people I think are beginning to become familiar with.
He was Ronald Reagan's budget director, and he's constantly complaining now about how, oh boy, are we in big trouble because the politicians didn't get it right.
And it seems basically the point you're making here is that that was the last chance for getting it right would have been back then if Ronald Reagan could have somehow listened to this guy, and then the Congress would have gone along with that.
Then maybe they could have got us out of this.
But boy, that was a long time ago now for it being too late and everything.
Well, and it's not only that, but it's a great precedent for the way that this kabuki dance in Washington is going on now.
It became very clear, and it was a bitter disillusionment to Stockman.
He thought when he was named Reagan's budget director that everybody took this stuff seriously about cutting spending, getting the size of government under control, reducing the debt, reducing the deficit, and so on.
And he found that he was the Lone Ranger in that enterprise.
And so I recount that in the recent newsletter in his unhappy landing as he recounts how none of the cuts – oh, you may remember if you were around at the time, every time you turned on the media, the Reagan administration is cutting spending to the bone, they're cutting this, they're cutting that.
Well, it was all poppycock.
I mean, it was phantom budget cuts.
It was programs so that they would look like they had been cut, were just put off budget.
Numbers were doctored up and faked out.
They put in placeholder revenue increases in the budget about things that wouldn't take place for years.
Down the road, they used a device called the magic asterisk, which said these are cuts on this line item to be identified later.
But his disillusionment was in discovering that it was the Reagan administration itself that was as guilty as anybody in wanting more, more, more.
I'll give you one example from Stockman's book called The Triumph of Politics, How the Ronald Reagan Revolution Failed.
I'll give you one example.
When they were projecting the Pentagon budget for years down the road, they thought, okay, we're going to do the budget.
What's the outline of the budget if we're going to try to get a handle on spending?
What's the outline of the Pentagon budget in, say, two years, three years, four years?
What kind of budget are we going to be able to plan for?
And they thought because they had just come out of an era of double-digit inflation, they were projecting for years down the road, a couple of years down the road, 7% or 8% inflation rates.
So they used that as a baseline to create future Pentagon spending.
But the inflation rate eased off with Paul Volcker.
The inflation rate came down substantially, actually to less than 4%.
So when those out years came to pass, Caspar Weinberger threw a you-know-what fit and dug in his heels and appealed to the president directly, and made a big stink about how dangerous it was so that he could have even the windfall of an increase even in constant dollar terms beyond what they had prepared for because the inflation rate had come down to something less than they had projected.
So nobody in the Reagan administration really wanted to cut anything.
And this is what we're going through today.
It's the same melody.
It's played in a different octave 30 years later, but the melody remains the same.
It just sounds that much worse, though.
And you know what's funny is, well, I'm from Austin, so pretty much everybody was a Democrat.
And in the 80s, even the conservatives were still Democrats.
It took them a while.
They were the last ones to finally switch to being Republicans, you know, and the whole Southern strategy.
So everyone in my neighborhood disliked Ronald Reagan when I was a kid.
And the conservative Democrats across the street, they had the official Ronald Reagan doormat so you could wipe your feet on his face before he came in their house, which was nice, you know, because it would have been bad if I'd grown up in an environment where people respected the president.
You know, that would have been horrible for my upbringing.
And anyway, so thank goodness the way it was at the time.
But now.
So I remember and I don't know where I picked this up exactly, but I remember being a very young kid at the at the end of Reagan, you know, right when Bush senior was brand new in office complaining that he left a four trillion dollar debt.
Those Republicans.
Could you believe it?
A four trillion dollar debt.
And I remember getting in a fight with the Republicans said, no, the Democrats made him do it or whatever.
But anyway, just that was Reagan's legacy to me was he was the biggest spender of all time.
My dad would say, oh, yeah, I see you're going to buy a thousand new MX missiles and you're going to cut taxes.
Yeah, that's going to balance out at the end.
Sure it will, because your fancy graph says so.
Right.
And of course, it was a lie.
Yeah.
And Stockland, to whom I've been referring, you know, got a year or two into the Reagan administration.
He started to panic and he said, you know, I can look down the road.
I can see we're going to have we're going to have 200 billion dollar deficits as far as the eye can see.
So his eye could see a few years.
He was right about the 200 billion dollar deficits they were creating.
But, you know, if he could see it a little further, he would have seen the trillion dollar plus deficits that we've created for ourselves, for ourselves now.
It is, you know, it's simply a calamity.
I remember since I'm older than you.
I remember at the beginning, very early in Reagan's presidency, signing a petition that somebody passed around that said no trillion dollar debt.
In other words, the Reagan administration was planning on, you know, borrowing enough money one year that would put us over that magic hallmark of one trillion dollars in debt.
It was an outrage.
No trillion dollar debt.
People were circulating petitions.
You know, and so I signed it.
No trillion dollar debt.
And you're right.
By the time you started paying attention years later, after the Reagan administration was ending, you were talking about, wait a minute, it's a four trillion dollar debt.
And then when Bush was president, he pushed us over the top to 10 trillion dollars.
And now we're at 16 trillion dollars.
But it's all still only the tip of the iceberg.
Because hidden under the waterline, invisible to most of the geniuses in the media that talk about these things, and the elected officials are all the unfunded liabilities.
The promises that these politicians have made to people in order to get reelected.
The promises of things that they're going to give them, buy and buy, down the road, pie in the sky.
The promises of, you know, health care.
The promises of social security benefits.
The promises of pension guarantees.
All the promises that they promised down the road, for which there are no resources to pay.
And that's the real calamity these guys have created.
And it's not as though they're just empty promises that have no impact.
These are promises that people depend on.
When old people buy a home in a retirement community or something like that, they're counting on their retirement check from the government, their social security.
They're retiring on the promises that have been made to them.
After all, it is true, they have paid into these Medicare frauds all their lives.
Paid into social security all their lives.
So they've relied on these promises.
The government has persuaded people in the American culture they don't really need to be savers.
Because, after all, there's the government down the road looking out for them in their retirement, in their golden years.
They don't really need to be savers.
So they've destroyed the saving instincts of normal, natural, healthy people.
They've destroyed those with their promises.
And you get down the road and the cupboard is bare.
Well, you know, that's the problem that really...
Well, it's one of the worst things about all this, to me, is how easy to see how it could be otherwise, right?
If instead of having a police state and a world empire and a phony currency and all of this, you know, madness and faith and politicians in D.C., if America was a free society, if our politicians didn't fear, oh no, the Chinese are now making more money than us, so now we need to clamp down our world empire even more so that we can cut off their fuel one day if we have to and whatever their crazy full spectrum dominance.
It just looks like a petulant child throwing a tantrum, you know?
And we don't need an empire in the first place.
And I know that you agree with this, although you say it a hell of a lot better than me, because it's in your book, Red, Blue and Broke All Over, that if America as a society, never mind a country and a nation state and a government and all this crap, but if America as a society just had individual freedom and your kind of, never mind purist libertarianism, but just kind of your basic enlightenment thinking going on here, then we would be just fine.
Everything would be just fine.
We would be great.
We could manufacture everything that we needed to manufacture.
We could buy everything else that somebody else manufactured for us, whatever.
Prices would never have equilibrium for more than a day, because every day would be a new day and we'd have a wild free market economy and pretty much everybody would be rich and it would be fine.
And we don't need any of this.
This is all like desperation grabbing for things.
And you don't have to be anybody to see how short-sighted and suicidal and ridiculous it all is.
You've got Hillary Clinton running things up there.
You know what I mean?
It's just retarded.
It's ridiculous.
I think from time to time how the streets would be paved by gold, and it may be just a metaphor, but in the absence of, look, wealth comes from the formation of capital from deferred spending.
In other words, this year you don't eat all the corn that you grow because you're going to save some to grow more next year.
And so that's deferred consumption.
You don't consume everything you produce, you save.
That's what capital is.
And so with the mountains of capital, think about the mountains of capital that would create it, as I say, streets lined with gold or wealth and prosperity in this country that we can't even begin to imagine.
I mean, it's beyond our ability to even imagine.
But all of the wealth that the American people would have created, the mountains of capital, if they had been saving for their own retirements as people, for example, in China do because the state's not there.
But instead of doing so, they've been encouraged by the state to be consumers because it makes the retail sales numbers look good for the next quarter, for the next election, and the state will take care of you by and by.
You don't have to save.
And so instead of saving for their own retirement and creating magical mountains of capital that would have improved not only ourselves but the state of human beings around the world in ways, as I say, you can't even imagine, instead of that, the money's been squandered.
It's been given to the state.
You've gotten an IOU back that you can try to cash in when you retire, but the money's been given to the state and it's been used to give to tyrants around the world and blow up bridges and reward political cronies that have been reckless with the money that they've been in charge of watching out over.
So the capital's been wasted, and instead of producing miracles of economic growth for us, it's left us indebted.
It's left little children in this country staggering under a load of debt that will burden them in a way that they'll never be able to have the standard of living that we've had.
All right, well, so what if some politician just said, you know what, we repudiate the debt, start over, like that movie Fight Club.
Just forget it.
Well, I mean, it's going to happen anyway.
I mean, the debt, you know, the debt is very real.
There are people dependent on it, and the debts will be paid.
And by that, I mean, you know, the books will be balanced.
They'll be squared.
There will be a fiscal reckoning of all this in some way, and that means that either the debts will be paid in an overt and honest way, which is impossible.
I mean, it's mathematically impossible.
Or they will be defaulted on, and the people that are expecting them, the people that loan money to the government or are dependent on its promises and paid Social Security and Medicare taxes for years in expectation of a future benefit, they will all be defrauded.
People that hold U.S. dollars will be defrauded as the purchasing power of the dollar is destroyed by additional fiat money creation.
I mean, you know, so people will end up eating the losses.
These losses of government debt are very, very real.
Somebody has to eat them.
And the people who will eat them are the American people in the destruction of their currency and the failure of the state to pay promises that people think that they are owed.
You know, the government will repudiate this debt either in a slow motion fashion or default on it suddenly.
Do you prefer one to the other?
Yeah, actually, I think the mountain of evidence is that you've got to get it over with fast.
The objective is to get back to restore prosperity as quickly as possible.
You can drag this thing out in such a way, Scott, as you know perfectly well, that destroys the entire functioning of civilization.
You can throw sand in the gears of commerce by dragging this thing out.
You can destroy the long-term capital markets so that there is no capital to create magic of growth in the future.
You can do that, as nation-states have done around the world, by dragging this thing out year after year, drip, drip, drip, of the destruction of the social fabric, of the destruction of the currency, or you can get it over with.
And the object lessons of history are that if you choose to just confront reality, there's something healthy about doing that, about confronting reality in real and honest terms.
You can actually turn an economy around in a very, very short period of time.
I give great examples in the book Red and Blue and Broke All Over, about the German economic miracle after World War II.
Even the end of World War II and the American soldiers coming home and the remarkable recovery of the American state, or our mutual friend Tom Woods likes to use the example of the Depression of 1920 or 1921 that nobody ever heard of.
Why did nobody ever hear of it?
Even though the initial conditions were worse than the Great Depression, in terms of the economic impact of the Great Depression of 1920 or 1921, even though the initial conditions were worse, it was all over in a year, because the state wasn't allowed to intervene and distend it and distort it and make it much, much worse and drag it out forever.
Economies are amazingly resilient.
Free people are dynamic creatures and can restore prosperity because that's what people do.
The hands like to be occupied, the mind likes to be engaged, and free human beings like to better their circumstances.
Turn them loose and let them do it.
So, yeah, we can restore our prosperity really, really fast if the state vacates the stage.
All right, there you have it, Charles Goyette.
It's the Freedom and Prosperity Letter, and the books are The Dollar Meltdown and Red, Blue and Broke All Over.
Both of them, excellent.
And I think the first one is New York Times bestseller, right?
That's it.
Yeah, hell yeah.
And charlesgoyette.com is his website.
And tell us again real quick how to get the Freedom and Prosperity Letter, Charles.
Yes, the Freedom and Prosperity Letter, you can just Google it, Freedom and Prosperity Letter, or you can go to Weiss Research, W-E-I-S-S, research, Weiss Research.
Weissresearch.com.
Yep.
All right, great.
Thanks, Charles.
Appreciate it.
Great to speak to you, Scott.
Thank you.
Hey, y'all.
Scott Horton here.
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