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 God, we've kicked Vietnam syndrome once and for all.
Thank you very, very much.
I say it, I say it again.
You've been hacked.
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.
We ain't killing they army, but we killing them.
We be on CNN like Say Our Name been saying, say it three times.
The meeting of the largest armies in the history of the world.
Then there's going to be an invasion.
All right, you guys, introducing Hunter DeRenzis.
He is an editorial assistant at the American Conservative Magazine and a student at George Mason University.
Here he is at TAC with the coming bankruptcy of the American Empire.
Welcome to the show, Hunter.
How are you doing?
Hey, Scott.
Happy to be here.
Cool, man.
Very happy to have you on the show.
Good to talk to you again and good to read this article.
I really liked it.
Tacking the right from the right.
It's the best way to do it.
Yeah.
Ben Stein from the Wonder Years and from famously getting the housing bubble wrong last time around.
He had a father who was also interesting in a way?
Yeah.
Ben Stein's dad was Herbert Stein, who was also an economist and probably certainly less known to us just because Ben Stein has gone into a kind of acting career and is more of a pop culture icon than just economics.
But yes, his dad also wrote economics in the popular press and was also chair of the council for – oh, let me check to just make sure I get the title right.
Yeah.
He was chair of the council of economic advisors for Richard Nixon for a while and then just a couple months under Gerald Ford.
Was I right about the Wonder Years or was I thinking of somebody else and he was in Ferris Bueller's Day Off or is it both?
Oh, Ben Stein was definitely in Ferris Bueller's Day Off and I know he had a bit part in the terrible movie Son of the Mask.
That's where I remember him most.
Yeah, I don't know.
What the hell do I know?
Anyway, yeah, the guy from Ferris Bueller.
We're not a Hollywood show.
He had a dad and his dad worked – and of course, I mean Ben Stein I guess famously was a speech writer, something for Nixon and is to this day one of the only people who was happy to defend Richard Nixon's legacy against all attackers.
So his father was on the chair – was the chair of the council of economic advisors under Nixon.
I did not know that.
And then – so I like this, Stein's Law.
What's this say?
So during this – in 1976 after he was chair of the council, Herbert Stein propounded what he called Stein's Law.
If something cannot go on forever, it will stop, and he applied this to economic trends and the economy in general just that if the foundations of the economy aren't great or if there's some sort of problem, eventually the – any prosperity you will see will eventually come to an end.
But I think as a general rule, this applies to a lot of other things in both life and specifically in the article I wrote in Foreign Policy.
And I think when you first hear it, if something cannot go on forever, it will stop.
It just seems completely obvious.
Like why are you even mentioning it?
Yeah, it sounds like it's just a tautology in a way, right?
Exactly.
But I think the problem is that people don't take things to their logical conclusion.
They don't really think things through.
So in the – just going through everyday life, the way we see the world, we tend to accept things as a given.
We tend to see the world and just say, OK, this is how it is.
This is the way it's going to be.
But when you actually start examining things and looking at their basic structures, then you can at least start to predict with not certainty of when it will happen but certainty that it will happen on a lot of different things.
And that's what I tried to do in this article in applying that to the American empire.
And yet, I don't know, man, because I remember say, I don't know, a decade ago or a little bit more than that, all the peak oil people used to say, aha, something can't last forever.
Then eventually it will end and we're going to run out of oil and it's going to be a big problem.
And all the capitalists said, yeah, no, that's because you don't understand how prices work.
That the price of oil will go up and so then people will have more money to spend on getting that oil out of the ground and bringing it to market and the price will go back down again because that's how it goes.
And so, wrong.
Oil, for example, will go on forever as an energy source for the price.
Somewhere on the face of the earth, it'll always be used and the people who said that there's such a thing as peak it were completely wrong.
And so it must be the same thing with the American empire.
Maybe the cost would go up, but it's too big to fail and there's nothing else to replace it.
And also, I'm like 40 something and it's always been here my whole life.
And so, yeah, it'll last forever and you don't know what you're talking about.
Well, the oil example is a good one.
When it comes to that, technically speaking, the people who talk about peak oil are right in the broadest sense of oil, like all things, is a resource that, like all things on planet earth, is limited.
Technically there must be some sort of end.
What they're incorrect about is not giving the market enough credit for, as a process, being able to find new sources of oil, being able to get new products out of the oil we already have, using the oil more efficiently.
And through all of these market mechanisms and the ingenuity of entrepreneurs, being able to take the limited source of oil we have and extend it so we're able to use it even longer than was predicted.
But technically, even if oil, we're able to use it as a resource for another million years, still technically there must be an end.
But when it comes to the American empire, I don't think you will have that same sort of entrepreneurial spirit applied to trying to preserve it.
Fundamentally, this country is $22 trillion in debt and growing, and there is no conceivable way to stop that right now.
It's just going to continue growing, and there is going to come, at some point, a debt crisis where our debt simply grows too large.
We already have the most debt of any country in the history of the world.
Now, in fairness, when you take that debt-to-GDP ratio, because we also have the largest economy in the history of the world, we're not in as much economic trouble as a lot of smaller countries with smaller debt, say Greece or other countries throughout the world.
But even the United States must have a limit.
There will come a day when we are in so much debt that we lose the confidence of the rest of the world to even lie about being able to pay it or our interest rates on that debt grow so large along with other spending that we just simply can't pay it.
And when we can't pay back our interest rates, then the bills are really going to come due, and you're going to see some kind of a debt crisis.
And you're right.
We've seen the – we've had the American empire all of my life and all of your life, and I imagine we're going to see it for quite a while longer.
We don't know whether this debt crisis will come in five years, in 25 years, in 50 or 100 years because we cannot predict what the market can technically take or what the people's confidence, how far it will go in the world.
But what we do know is that it must end, and that's the point of Stein's law.
Even if we can't predict when it will end, we can know with certainty that it will because the fundamentals are unsound.
If something cannot go on forever and the American empire, because of what it is in its foundation, cannot go on forever, it will stop no matter when that might be.
Well, I hope it's sooner rather than later, and the problem with saying that is – yeah, I'm typically not a must-get-worse-before-it-gets-better kind of a dude.
But it doesn't seem like there's any other real contravailing pressure against the American empire other than the point when foreigners are no longer willing to finance it by propping up our currency.
Yeah, there's not really any kind of pressure on the empire to go away in other ways.
When we talk about geopolitical foes, the United States, Russia, while it's certainly a regional power and we have to take it seriously due to its nuclear arsenal, it has a declining population.
It has an economy the size of Italy's.
It is on its way out as a great power.
The only reason we do take it seriously is because of its nuclear arsenal.
And China, of course, an up-and-coming power, a growing power economically and militarily, but they have the same problems that we have for the same reason.
You can just as much apply Stein's law to the Chinese economy as ours when they've had over 5 percent growth for how many decades when they are trying to put together a ramshackle economy based on central planning.
Sure, it might look good now and it might look like real economic growth, but it's unsound.
There's too much mismanagement.
There's too much misallocation of resources.
Eventually, just as Ludwig von Mises taught, there must be some kind of market correction.
And the longer the misallocation goes on and the more of it there is, the harder and worse that that correction is going to be.
And I think you can just as much predict a collapse of the Chinese system eventually just like you can the American.
So you don't really need outside powers to force the United States to pull back.
It'll do it on its own because it doesn't have a choice.
Right.
And I don't really know exactly how the proportions break down there, but just on the surface, it sure seems like they are due for a much bigger correction just for the reasons that you say.
Because regardless of how corrupt the American system is, it just pales when compared to the Chinese system in terms of the degree to which politics dictates over economic interest when it comes to decision making on projects, including creating entire new cities.
In places where nobody wants them.
I read a thing the other day where they said fully a quarter of housing in all of China right now is unoccupied and is family's third homes as pure investments only and this kind of thing.
This is a huge bubble.
And when it comes down, I mean, that may be what brings down the American economy as well the next time.
Because China, I think, is facing a great depression.
I don't know in terms of length, but they certainly have very far to fall when it comes to their current pricing structures coming correction.
Absolutely.
And they're called ghost cities.
And you're right, they do exist.
You have the Chinese government funding the construction of these massive skyscrapers, of these entire modern cities that are basically empty.
They have no population.
They have no need for people to live there.
And they're using resources and doing all this because they just have to keep the economic engine running.
They have to keep spending this money.
You have to keep employing people to build these cities that you don't need because you need to keep up this economic growth just to sustain the system.
And for China, it is going to be much worse because as much as we complain about the American economy and the cronyism that happens in our own country, you're right.
It pales in comparison to what the Chinese Communist Party is doing with their corruption.
And also the Chinese system, just because of what it is, a one-party state, a one-party dictatorship quickly becoming under a Z.
You're not going to be able to have their government respond as much as our government.
You can have a Great Depression in the United States or worse and still try to keep some semblance of the rule of law and of at least attempted good government because we have elections and people can kind of let steam off by voting in some other guy and kicking the bums out of office that they don't like.
The Chinese don't have that system.
They don't have that valve to let the pressure off.
So while they might be able at gunpoint to keep the economy going because it's hard to say you don't trust the economy when a Chinese soldier has a gun to your head saying trust the economy, at some point it will happen.
And I don't even see how their mode of governing can at all survive such an economic collapse, which again is inevitable.
Alright, so here's who all sponsors this show.
First of all, Mike Swanson and his great book, The War State, about the rise of the military industrial complex after World War II.
An excellent history there.
And get all of his investment advice at wallstreetwindow.com.
Then there's Roberts and Roberts Brokerage, Inc., where you buy your precious metals.
And that's at rrbi.co, rrbi.co for all your gold, silver, platinum, palladium, etc.
No dev, no ops, no IT.
A great book about how to run your technology business like a libertarian.
No dev, no ops, no IT by Hussain Badakhchani.
It's really great.
I'm no businessman and I really enjoyed reading it.
So I think you should check that out.
And also Kesslin Runs, the great new novel by our friend Charles Featherstone.
It's in the very near future and only slightly dystopian.
No, maybe worse.
Kesslin Runs.
And also, check out Horizon.
Global.
That's Zen Cash.
They're changing.
They're not just a digital currency.
They are working hard on becoming a new platform for all different sorts of blockchain-type secure applications.
And so for all you techies who really understand, check out all you need to know at Horizon.
Global.
LibertyStickers.com for your anti-government propaganda.
Tom Woods Liberty Classroom to fill your brain with good stuff.
Follow the link from my site so I get the kick back there.
ScottHorton.org.
At ExpandDesigns.com, you can get a brand new 2018, hey, a 2019 model website there.
And get a $500 discount if you use ExpandDesigns.com slash Scott.
I wonder though whether precipitated by a Chinese collapse or just from its own bubble popping, your action might help to sustain the problem, the empire itself, longer in the sense that when you have a big crash in the markets, then you have a lot of loans called in, a lot of loans cancelled out, a lot of new currency that's been loaned into circulation all X'd off the boards in a way that's at least nominally deflationary.
I don't know in the larger sense, ultimately deflationary.
But it seems like that could actually help to prop up the dollar.
Same as what happened with the last crash.
People fled out of stocks and into U.S. securities.
And the dollar at the end of the day, they took America off the gold standard, but the rest of the world was already on the dollar standard and they've stayed on the dollar standard where American $100 bills count as gold bricks in the vaults of so many foreign governments as well as massive international corporations and so forth.
And it seems almost like if we had a longer and more unsustainable bubble in the currency, in the inflationary boom, that that actually might do more to jeopardize the stability of the global empire in the medium term or even in the short term rather than having a correction come too soon and continue to prop the thing up.
I do think it'll be different.
And I think that the kind of debt crisis that we're speaking about now will be fundamentally different than the economic crisis of 07-08 because it's not just a market bubble.
It's not just a correction after an inflationary period.
It's not just mismanagement in the economy.
We're talking about the actual United States debt.
It's a crisis of government.
It will fundamentally be a crisis of the dollar.
And I think that's going to be very different than just Goldman Sachs having a crisis.
Yeah, but I guess what I mean is, will the next Goldman Sachs crisis delay that more serious crisis that you're talking about?
In other words, smaller crashes, dot-com and 08-sized crashes, propping up the dollar in a sense by cooling off just how out of control the debt is getting.
Yeah, that's entirely possible that you could have.
And I believe you were recently talking to Bob Murphy on your show that the U.S. economy, as it is now, we are due for another economic crash because after the 2008 crash, we just bulldoze over the misallocations in our economy with more inflation and even more spending without allowing any correction.
The same as what happened in 99 and 2000 with the crash of the NASDAQ and all that.
They just went right on ahead with the housing bubble.
So when the housing bubble popped, they just went right on ahead with the, I don't know what all bubbles, banking bubbles?
It's hard to keep track.
Certainly the stock market is at an all-time high.
When they say that Bezos has more than $100 billion in his personal accounts and that kind of thing, that's when it's time to start placing your shorts.
And I guess Amazon and Apple have both already tumbled since then a few weeks ago.
And we are due for something much worse than 2008.
And when that will come, of course, we don't know.
And Austrian economics doesn't pretend to be able to predict things to the day.
But a small crash could, I suppose, just like the peak oil example, elongate things or give more confidence in the U.S. dollar due to other arrangements.
But even then, the important thing to remember of this is that it is a sure thing.
We don't know when it will happen, but there will be a debt crisis.
Even if these small economic crashes extend that slightly, it will still happen.
It cannot be prevented.
And all this raises the question of just the perspective that Americans should be bringing to the questions of our foreign policy and what the eggheads call our grand strategy here, where according to the Project for a New American Century and the Center for a New American Security, who apparently speak for everyone, the two of those groups, America must dominate the entire planet Earth, and including Russia and China, so they better hurry up and fall apart or commit suicide or roll over or bend over or do something.
And then it has to stay like that forever.
The middle part of North America must dominate not just the new world, but all of the old world, and forever.
Because if we don't, then someone else might try it, and then there would be a conflict, and things would be bad.
That really has been the consensus of the entire foreign policy establishment, really going back to the end of World War II, but certainly since the end of the Cold War.
They seem to never ask the question you're asking, which is, who's going to pay for that?
For how long do they really think that a policy of American unilateral domination of the rest of the entire planet Earth could last?
That's supposed to last for the end of this century?
The end of the next one?
Forever?
Is that what they really think?
Because that doesn't make any sense at all for anyone who's ever looked at an atlas or even a cartoon of a globe somewhere.
The so-called world island of Eurasia is, what, five times the size of both Americas combined?
And it's just not here.
It's there.
It seems like if the U.S. government, as just its basic premise, if they're really here to serve as the security force for the people of the middle part of North America, then that is absolutely contradicted 180 degrees by the policy of attempting to dominate all of Europe and Asia from now on in the name of providing that security.
Only a fool could believe that.
Or only someone who's personally, directly invested in pretending to believe that could believe that.
Well, our leaders, these people who believe in this quote-unquote foreign policy consensus, they don't have to worry about those little things like counting pennies or worrying about what the change is for every dollar.
Because the thing that I try to push on everyone I speak to on these issues is that the wars we are fighting, the foreign policy we have now, is completely ideological.
The only reason we are doing the things we're doing is because the leadership in this country believes certain ideas.
Nothing what we're doing has to do with the actual strategic interests of the United States.
Now, if you look at the United States as just a country, as a nation of people with borders and relations with other countries and other governments throughout the world, then you can actually look at what is in the strategic interest, what is good for the American people and what is bad for the American people, what helps defend them and what does not, what wastes their money and what doesn't.
But all of these people, they have this ideological mindset of imperialism that, like you said, the American people, by the grace of God or by the grace of democracy or what have you, have a right to rule the world.
And when you look at it from that vantage point, then a lot of what they're doing makes a lot more sense.
Oh, of course we have to have hundreds of thousands of troops stationed in the Middle East.
Why?
Because that's America's backyard.
Because we own the world and everything is our backyard.
Because they come at things from that vantage point, then the empire becomes justified because everything is in our national defense.
Everything is in our interest because we must control every square inch of humanity.
The dialogue over these issues in this country is completely dominated and almost monopolized by this intellectual class in the beltway who believe in the ideas we've been discussing, in the ideas of empire, of imperialism, of rule in the world.
The average American, I think, does believe in America first, even if Donald Trump doesn't.
The average American does believe in taking care of their own country first, that they care about the empire more than as a chest-beating measure to kind of feel good about it.
But fundamentally, and this makes me sad because I, like you, I put foreign policy as my number one issue.
But fundamentally, the American people don't vote based on foreign policy.
They really don't care about what else is going on in the world.
The only time it becomes a forefront issue is during the depths of Vietnam or Iraq when there's so many body bags coming home that we can't ignore it.
Besides that, the American people vote on jobs, on health care, on the local economy, on inflation.
Well, and you know, we're never really given a chance to either.
I mean, I think, you know, Donald Trump's election in part was a repudiation of Hillary's foreign policy, but just think if he had really run against it.
What if he'd really made a point of focusing on Trigger, Happy Hillary, and how reckless she was?
Particularly how Obama beat her in the primaries in 2008.
You know, Kerry and Bush certainly gave us no choice.
Bush won over Gore because he portrayed, partly because he portrayed Gore as overly enthusiastic and interventionist and himself as humble and restrained.
You know, contrary to that.
The American people have consistently voted for the less interventionist candidate.
I think there is an attitude in this country that they would be willing to pull back.
Yeah, it's usually we just don't have a choice, right?
Even if they think, oh, we got to go get those terrorists, the average American still says, what the hell are we doing in Germany and Japan?
There's still improvements that can be made just on the opinion of the average American, which as much as this election has proved, you can only go so far in the electoral system before a candidate or an agenda is completely hijacked by the hacks already in D.C.
All right, you guys, that's Hunter DeRentis.
He is editorial assistant at TAC, the American Conservative.com.
This one's called The Coming Bankruptcy of the American Empire.
Thanks, Hunter.
Thanks so much, Scott.
Happy to be here.
Appreciate it.
All right, y'all, thanks.
Find me at LibertarianInstitute.org, at ScottHorton.org, AntiWar.com, and Reddit.com slash ScottHortonShow.
Oh, yeah, and read my book, Fool's Errand, Timed and the War in Afghanistan, at foolserrand.us.
