Why “Tax the Rich” Won’t Save You—The Brutal Truth About Inflation, Debt & the Disappearing Middle Class | Tom Bilyeu Deep Dive

In today’s episode, Tom and Producer Drew dive into the passionate—and sometimes heated—comments from their recent deep dive on taxes and economic inequality. Using your thought-provoking feedback as a springboard, Tom tackles the emotional debate around whether the rich are paying their fair share, why taxes hit the poor and middle class hardest, and what’s really behind the growing economic divide. From the complexities of inflation, debt, and money printing to the provocative notion that “eating the rich” can backfire historically, this episode doesn’t shy away from hard truths. Tom breaks down how government spending, loopholes, and the influence of lobbyists contribute to our economic woes—and why simply taxing the wealthy isn’t the silver bullet many hope it might be. If you’ve ever wondered how economic policy truly impacts everyday lives, or what steps we could take to restore prosperity for the middle class, you won’t want to miss this candid, sometimes contentious, and always insightful Q&A. Get ready to challenge your assumptions and gain a deeper understanding of the real issues driving our economic challenges. SHOWNOTES 00:00 Debt and Money Printing Debate 03:46 Flat Tax vs. High Brackets 06:55 Tax Fairness Debate: Wealthy Share 11:03 Revive Middle-Class Jobs with Manufacturing 13:03 Deregulation's Impact on Inequality 16:14 Economic Struggles: Debt & Inflation 19:32 "Eat the Rich: A Call to Action" 24:33 "Inflation as Theft" 28:05 "Wealth Imbalance and Market Collapse" 31:16 Wealth Redistribution and Economic Balance 34:24 Banking Inequality and Exploitation 36:08 "Learning, Investing, and Inflation Insights" 40:13 Risky Lending Encouraged by Bailouts 41:59 Debt and Money Printing Concerns CHECK OUT OUR SPONSORS Vital Proteins: Get 20% off by going to https://www.vitalproteins.com and entering promo code IMPACT at check out Allio Capital: Macro investing for people who want to understand the big picture. Download their app in the App Store or at Google Play, or text my name “TOM” to 511511. SleepMe: Visit https://sleep.me/impact to get your Chilipad and save 20% with code IMPACT. Try it risk-free with their 30-night sleep trial and free shipping. ButcherBox: Ready to level up your meals? Go to https://butcherbox.com/impact to get $20 off your first box and FREE bacon for life with the Bilyeu Box! Netsuite: Download the new e-book Navigating Global Trade: 3 Insights for Leaders at http://NetSuite.com/Theory http://netsuite.com/Theory What's up, everybody? It's Tom Bilyeu here: If you want my help... STARTING a business:join me here at ZERO TO FOUNDER https://tombilyeu.com/zero-to-founder?utm_campaign=Podcast%20Offer&utm_source=podca[%E2%80%A6]d%20end%20of%20show&utm_content=podcast%20ad%20end%20of%20show SCALING a business:see if you qualify here. https://tombilyeu.com/call Get my battle-tested strategies and insights delivered weekly to your inbox:sign up here. https://tombilyeu.com/ ********************************************************************** If you're serious about leveling up your life, I urge you to check out my new podcast,Tom Bilyeu’s Mindset Playbook https://open.spotify.com/show/47VE90Cittmo6TGGFqg2xf —a goldmine of my most impactful episodes on mindset, business, and health. Trust me, your future self will thank you. ********************************************************************** LISTEN TO IMPACT THEORY AD FREE + BONUS EPISODES on APPLE PODCASTS:apple.co/impacttheory http://apple.co/impacttheory ********************************************************************** FOLLOW TOM: Instagram:https://www.instagram.com/tombilyeu/ Tik Tok:https://www.tiktok.com/@tombilyeu?lang=en Twitter:https://twitter.com/tombilyeu YouTube:https://www.youtube.com/@TomBilyeu Learn more about your ad choices. Visit megaphone.fm/adchoices https://megaphone.fm/adchoices See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Tom Bilyeu?

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• 0:45Tom Bilyeu?

  Their dashboard tracks what comes next based on what your business actually needs. So EIN number, registered agent, licenses and permits, bookkeeping, business banking. I tell every founder the same thing. Just make it official. Click the link in the show notes to check out Taylor Brands and get started on your business today. This is a paid advertisement. I get hundreds, sometimes thousands of comments on my videos, and today we're going to be going deep into the comments on the recent deep dive on taxes. Here it is. Drew, welcome to the comment section.

• 1:19Speaker 01

  Hey, let's do it. These are all the comments directly on the latest deep dive. Do the rich pay their fair share? DubTube71 asks, "This discussion only considers income taxes. It does not address the regressive oppressive taxes in addition to income tax, such as sales taxes, property taxes, employment and Medicaid tax, which economically enslaved the poor and middle class more disproportionately." Tom, your response?

• 1:42Tom Bilyeu?

  So, he's not wrong. I didn't go into all the other ways that people get taxed. This is a big part of the reason why people don't like a VAT tax, a value-added tax, is it ends up being a consumption tax. Consumption tax hurts the poor and middle class. They are not wrong about that in any way, shape or form. The problem is when people are talking about the rich aren't paying their fair share, it's coming from a place of populism. We have shifted over into emotion. It's not actually based on reality. So if people want to have a conversation about, okay, the poor and middle class are hurting. We want to do things that will help them. I love that. That is the very thing that I'm trying to get across is I want people to focus on what the real problem is. The real problem is debt and money printing.

• 2:25Tom Bilyeu?

  If people want to know why the poor and middle class are suffering, it isn't because they have to pay tax on the things that they purchase. It's because they are stuck in a loop that is pushing them harder and harder into the have not category. I tried to explain in the video exactly how that happens. So I'll leave people to watch that. We addressed that very specifically. I've done literally like a dozen videos at this point on exactly how that works. But that's the real problem. And I just want to remind everybody, after World War II, we had a 90% tax bracket and we took in less money per taxpayer than we take in now. So the Laffer curve gets laughed at because I think people just think it's such a cop out.

• 3:10Tom Bilyeu?

  But this is where you're dealing with the physics of money. When you try to tax the wealthy, they stop producing, they leave, or they find loopholes. Okay, that just is what happens. So then you say, we'll stop them from finding loopholes. Okay, but at some point, you're just saying there's a flat tax. Otherwise, they will use the complexity against you. So if you do a flat tax, then it's like, okay, cool. I think most people would be fine with a reasonable flat tax. I know I certainly would be. The problem is that what people actually vote for, and we talk about this in the video, they vote to punish the rich, not to help the poor. And so we end up in this cycle where what they do is it's a populist moment.

• 3:55Tom Bilyeu?

  They're in their emotions. They're actually trying to hurt the rich, not help the poor. They keep trying to raise taxes, raise taxes, raise taxes. And when you raise taxes, people leave. And the only way to stop them leaving is what's called capital controls. As soon as you do capital controls, then the outside world says, yeah, I'm not investing in your country anymore. And you speed up the spiral. And that's why understanding tax, the economy as this incredibly...

• 4:25Tom Bilyeu?

  Like interrelated system where when you perturb one thing, it has huge and bizarre consequences in another place. You start to get a sense of, oh, this isn't going to be as easy as I thought. And you're certainly not going to be able to punish the rich. You might be able to help the poor. You can have a hard time punishing the rich because it ends up breaking the system.

• 4:47Speaker 01

  It sounds kind of almost like a Jenga game where it's like you want to take this one block out. And you think, yeah, I'll just punish the rich and I'll be good. And then it dismantles something and the balance is off and now other things.

• 4:54Tom Bilyeu?

  Yeah. And if you think about it a slightly different way and you say it's a Jenga tower, but I really want to break, I want to break 1% of the pieces. I'm not okay with them being in the Jenga pile. I'm not even okay like calmly removing them. I want to break 1% of them. And it, the bad news is that 1% is the absolute foundation of the economy. So you're saying, I'm going to break all the pieces at the very bottom of this stack that holds everything else up. And again, the top 50% pay 97% of taxes. And it's really like, as you go up and up, you realize actually it's the top 10% pay the vast majority. So you have this foundational layer of the people that create the jobs, that pay the vast majority of the taxes.

• 5:36Tom Bilyeu?

  And there is a reality to be faced that people emotionally want to see them punished. And when you do that, you knock over the whole Jenga tower.

• 5:45Speaker 01

  Eris now, what about Trump's tax cuts for people that earn more than 500K a year? What about all the subsidies to the oil industry? What about all the corruption and the big corporations having the means and the lobbyists to avoid paying their fair share? I kind of think there's way more on the table there.

• 5:59Tom Bilyeu?

  Okay. So we're back to they're not paying their fair share. So if you go through the math in the video, it just isn't true. So the question becomes, what do you consider their fair share? So the top 50% already pay 97% of the taxes. The top 1%, I forget what it is, it's like 80% or more. So do you want the top 20% to pay all the taxes? The top 10%, do you want the top 1%? Like there, where's the number? Cause they're not happy with the top 50%. And again, the top 10% are already paying north of 85%. So it's like, where's the number where we already print money over whatever? We tax, so we're all, we only bring in four trillion in tax, we spend six. So it's like, ah, I don't understand at what point they'll be like, okay, that's the number.

• 6:44Tom Bilyeu?

  And this is where you go, oh, this isn't about them wanting something good for the poor. This is about them wanting to hurt the wealthy. Once you flip your switch in your brain to, oh, this is about punishing the wealthy. Then it's like, oh, all the behavior makes all the sense in the world. When you're like, you actually want to help the poor and middle class and they're not doing anything that's going to help the poor and middle class. You're like, what's happening right now? So the two trillion that you spend over what you bring in in taxes hurts the poor and middle class. But nobody's even talking about balancing the budget, nobody. So it's like, ah, this, again, this is all short term thinking. This is all, I don't care about my kids.

• 7:22Tom Bilyeu?

  This is all politicians being really grotesque, immoral. Because Trump just flat said, remember, guys, you got to pass this big, beautiful bill. Because I know you want to reduce government spending and so do I, but we have to get reelected. So you will mortgage, they added another five trillion dollars to the debt ceiling. You will mortgage another five trillion dollars of your children's future, push this over 130% debt to GDP. Historically speaking, that's all but guaranteeing that we default on our debt. People stop investing in America, we turn violent against each other.

• 8:05Tom Bilyeu?

  Like that, you're basically saying, I just want to kick the can down the road.

• 8:11Tom Bilyeu?

  And people vote for it. People vote for it, politicians go for it. And nobody in office is immune to this from where I'm sitting. If you voted for that, we've got, we've got a problem. Now, look, as a pundit, I have the, um, the easy job of being able to make a statement like that. Not being honest about the fact that this is how politics work. And so I get to be Pollyanna because I'm not a politician. The reality is, and this is the thing that I find absolutely the most disturbing, is the way that the human mind works. We want to be seduced. And that's a really nice way of saying, we want our politicians to lie to us. And so they do.

• 8:57Tom Bilyeu?

  And if we were to say, no, we want to be disciplined, we want our politicians to always tell the truth.

• 9:05Tom Bilyeu?

  If we did that and then got that into office, maybe it would work, but I doubt it. I just don't think the human mind is wired like that. And I think in a world where other governments will use intimidation, subterfuge, lies, and you don't, you'll be at such a wild disadvantage. So it probably just is true that to be a politician, you're going to have to lie, dare I say, cheat and steal.

• 9:32Speaker 01

  If I could jump into Ari Snow's head right now, it seems like what she's asking for, what they're asking for is let's take away the loopholes. Let's get money out of politics. Let's at least clean up the political game, take the dirty money out of it. But what I'm hearing you say is yes, that will help a lot of things, but we still need to balance the budget. And so this will be kind of moral victories, things that will make us feel better. But until we talk about actually balancing the budget, until we talk about actually austerity, actually doing the beautiful deleveraging, it's more moral victories versus something that would actually help the poor or middle class.

• 10:07Tom Bilyeu?

  Correct. If you want to bring back the poor and middle class, you must bring back manufacturing, a very substantive portion, doesn't have to be all of it. But like you lost north of 2 million jobs. This is exactly what made it impossible for the average worker to negotiate their wages, because I just go, nah, then I'll just go to Bangladesh. I'll go to China. I'll go to Paraguay, whatever, and I'll find somebody that can do your job. And that's the glory of going global is for people that are invested for companies. Oh, heyday all day. It's like, yeah, great. You've got no ability to negotiate your wages.

• 10:52Tom Bilyeu?

  I can go anywhere I want for the job. So yeah, you're screwed. And that's why when you get protectionist, this is, it's a populist uprising. It's the people that have been disenfranchising, I'm not going to stand for this anymore. So I'm going to vote for a politician that's going to slap somebody around. It's going to be protectionist. And this stuff is so predictable. That's the moment that we're living in right now. And I mean, if Trump can grow his way out of it, that'll be phenomenal because that's that's the card on the table that I never talk about because I don't want to be even bringing it up now. It's weird. My brain starts glitching because I know if I hand people this get out of jail free card, they're going to play it to their own detriment. But if it is possible to grow your way out of this, but Drew, it's so unlikely. So I

• 11:36Tom Bilyeu?

  don't want to pretend that it's not there. But ooh, buddy. A lot of things will need to line up in order to make. A lot of things. So let's go back to it. So you would have to bring some manufacturing back. You would have to balance the budget. You would have to start working the debt backwards to get to the place where you're not going to go all the way back to 3% in 10 years, but you might be able to get there in 25 years. But every year, you'd have to be making meaningful progress. And remember, part of that meaningful progress could be growth. But so deregulation is a big thing. Shout out to all my deregulation haters. The part that you don't want to deregulate is the part where you can create monopolies,

• 12:21Tom Bilyeu?

  where labor is. Exploitative. Yeah, like there, there are, we don't want to go back to the Gilded Age. But once you realize that the Gilded Age was, had massive inequality for a very different reason than today has massive inequality, then it's like you won't make the intellectual error of being like, what did we do to get out of the Gilded Age problem? Because it was regulation. But it was regulation because there was like nothing. Like you had one guy like controlled all of oil. And so it's like, okay, oil, the railroads, like just, it was like Russian oligarch style back then. So cool. You did sensible regulation and you got to the point where the average worker started having some power. All amazing. If

• 13:04Tom Bilyeu?

  you try to use that playbook now, when your real problem is debt and money printing, you'll be like, why isn't this working? In fact, it's making the problem worse because we already have a gazillion regulations on us. Now you want to start stripping dumb regulations. You don't want to strip the ones that protect people. You want to start stripping. The dumb regulations that are just unnecessary red tape that slow everything down. So get rid of that stuff. Unleash growth like energy. You gotta make energy, man, for all the AI needs. You don't want to overburden AI. The turnaround on crypto is brilliant. So it's like, okay, there's things you want to do there to make sure that we're going in a good direction.

• 13:45Tom Bilyeu?

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• 14:29Tom Bilyeu?

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• 15:14Tom Bilyeu?

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• 16:12Tom Bilyeu?

  Thanks for staying tuned. Now let's get back to it.

• 16:16Speaker 01

  LMAO 01. One thing I learned today is that Tom forgot the weight of spending $20 on taxes when you only have 100 versus the weight of spending $20 when you have 10,000. Out of 100 solutions, he picked black and white while ignoring the rest, displaying them as they would not help at all. If they wouldn't help, there would not be policies like the big ugly bill and so much lobbying to get it to happen. Showing the questionnaire study where they paid tax to rich and displaying this in comparison of how bad taxing the rich solves the problem is only the starter how simplistic Tom's conclusions are. While daily we worry about how to buy bread, millionaires worry about how to hoard money.

• 16:53Tom Bilyeu?

  To talk about it, you have to oversimplify it. The economy is extremely complex. I think people hide behind complexity to hoard money, to be honest, to keep people down. I mean, this is how bankers get bailouts. You just don't understand what they're doing. It's really sinister. So I don't want to hide behind the complexity. I want to say, here's what I'm saying. Here's the effect that I think it's going to have. 85%.

• 17:20Tom Bilyeu?

  So I get it. I am oversimplifying, but there's a reason so you can actually understand what I'm saying. So then we can have a conversation about, do I get it? Do I get the cause and effect of all this? So now going to the thing about we're struggling to buy bread and you don't understand the weighting of it all. And $20 for somebody who only makes 100 is just, it's such a different game to somebody that has a ton of money. And they are so right. They are so right about that. The thing that I just, I, I am really trying to be heard. Debt and money printing. That's why bread costs $20. I know that's not literal. But it's like, the reason that the cost of everything is going up is because of debt and money printing.

• 18:04Tom Bilyeu?

  And when you take your eye off that ball, or you hide behind complexities, you, you just lose the forest for the trees. The problem is, we have created a situation where bankers are gonna win no matter what happens. Politicians are gonna win no matter what happens, because they can tax. Sure, it's only the top 50%, but in taxing the top 50%, they are able to break the middle class, because the purchasing power is just going down, down, down, down, down, down, down. And the only way to escape that is to get into assets. So what do the top 50% do? They get into assets. So now you have this runaway thing where the people that understand the game,

• 18:49Tom Bilyeu?

  they're protected from the problem. So yeah, you're like taking a bunch of their income, but they're generating a bunch of wealth. And then, those two things are different. And then, over on this side, they just don't know what's happening. And so they're getting pummeled. Not because they're dumb, it's not that. It's because they don't have time, they don't have the interest. But however you find yourself, where you're not even socking away $10 a month into the stock market, you're just falling farther and farther behind. Or worse, if you vote for free things, guess what they do to give you that free thing? They print money. The people over here are protected. So it's like, this keeps me awake, because I'm like,

• 19:34Tom Bilyeu?

  okay, this is a person, they're well-meaning, good intentions, they're very frustrated. They think I'm trying to pull a fast one. And I'm saying, You have to track the cause and effect. Why is the the price of bread going up? Why? It's going up because of inflation. What causes inflation? Inflation of the money supply. Is there anything else, Drew, that causes inflation? No. People are going to tell you that other things cause inflation. Inflation is every price going up. There are going to be times where selectively something goes up, like at Quest. There was a drought in California, caused the price of almonds to go up. Cool. It's not inflation. That's the price of almonds going up due to a drought. Okay, it's a totally different ballgame.

• 20:16Speaker 01

  Or like when the bird flu happened earlier, uh, earlier last year, all the prices of eggs went up because they had to kill 2 million chickens or something like that.

• 20:23Tom Bilyeu?

  Correct. So it's like, that's going to be a temporary thing that will end up correcting itself, just as egg prices came back down. Not because, uh, Trump did something miraculous, because you raised more chickens and you build the population back up. So, um, if you're confused about what's causing the problem, the solutions that you offer will make no sense.

• 20:44Speaker 01

  All right, Mr. Jeff, 2932. This is the exact reason the working class eat the rich. He is pontificating on the technicalities of financial literacy and how money and wealth looks in America. But nothing about none of that stops a hungry belly from growling. When the working class busts into your air-conditioned house, while you and your family are discussing financial literacy at your well-dressed dinner table, you pause and say, "Well, technically, the people who work more hours at a job than spending time with their families are not making a livable wage. Fix it faster than yesterday, because these are the people who eat the rich, and there is nothing the rich can do about it. Well, maybe rock it in this space."

• 21:21Tom Bilyeu?

  Okay, Mr. Jeff's right. This is why I talk about this so much. He is right. Now, the problem is, uh, if Mr. Jeff looks at history, he will realize, uh-oh, every time we eat the rich, it is bad, for an extended period of time. It is bad. They ate the rich in Russia, tens of millions starved to death. Uh, they ate the rich in China, 45 million people starved to death. Oh, and by the way, then decades of tyrannical rule. Uh, they ate the rich in Argentina, for 100 years, they became a backwater. They went from, uh, more attractive to the average immigrant than America. That is a true fact. More attractive to the average immigrant than America,

• 22:04Tom Bilyeu?

  to an absolute economic backwater for 100 years.

• 22:11Tom Bilyeu?

  And then, how are they now pulling out of that 100-year spiral? Millet came in and said, "Well, technically," and then explained how the economy actually works, and said, "These are the things we're gonna have to do." And it's brutal, man. And when you hear some of the quotes, like, people will go to him and say, "Millet, these policies are so ridiculous, people are gonna starve to death." And he says, "No, they'll find a way not to starve to death." That's icy, but it's true. And it's like, "We can get into all that, like churches and religion and the role they play, and this should be handled at the community level and not at the government level and all that." People are gonna hate it, and that's why I'm saying, once people are in their emotions, they just wanna see the rich punished. And the problem is, it's gonna make your life worse.

• 22:55Tom Bilyeu?

  But people would rather that and stay stuck where they are than go, "These motherfuckers are gonna get away with it." I get it, man, but that, I am literally worried about the bang-bang at the door, and, "Wait, well, technically," is not gonna get me anywhere. So, but here's the problem. "Mr. Jeff, I will have long since left the country." And that's where we're at. And that's what people don't understand. The wealthy will leave. I will get a private jet and I'll leave. And that's, I don't want that, Drew, but I'm gonna do that long before people are gonna come knocking at my door. I'm selfish. If there's a thriving middle class,

• 23:38Tom Bilyeu?

  first of all, I have some things I'd like to sell you. And then, also, it stops me from having my head separated from my body.

• 23:45Speaker 01

  So I think you enjoy those two things.

• 23:47Tom Bilyeu?

  Yeah.

• 23:47Speaker 01

  Skep Swag said something that actually bounces off of this. "I understand the money printing problem. I get that you don't wanna get rid of entrepreneurs, but acting like the richest people in this country aren't the ones printing the money is crazy. They also fund both sides of this crazy political system we are in. They have their thumb on the scale and always have. I mean, if you expect them to just be nice because we take less taxes, guess we can try, but what happens when they just continue funneling all that wealth upward? When's our next solution?"

• 24:14Tom Bilyeu?

  Okay, this is a great comment. I really like this. So, getting people to focus on what's actually the problem. Your actual problem is politicians.

• 24:26Tom Bilyeu?

  Bankers and then all of us that vote for this stuff. And as a reminder for anybody that doesn't know my backstory, I've spent a lot more time being broke than I've spent being wealthy. So I understand that people are going to look at me now and they're going to be like, yeah, well, this guy is wealthy.

• 24:38Speaker 01

  Easy for you to say.

• 24:39Tom Bilyeu?

  Yeah, yeah. Uh, but I have spent far more of my life not having money than I've spent having money. I get where people are coming from, but what I like about this is it's pointing out there's a reality to be faced, which is in 1913, the Federal Reserve Act was passed. That, that's the real question that people should be asking, not what happened in 1971, when we broke our final thread of a tie to gold. It's not like we were a hundred percent tied then, we were, I think, 10%.

• 25:05Speaker 01

  Yeah.

• 25:05Tom Bilyeu?

  Uh, we broke that final strand. This drama began playing out in 1913. So in 1913, we create a central bank. Once you create a central bank, now all money is fiat. It's not, doesn't, it's not tied to anything. If you want to bring it into existence, you can. And that's why they had to keep reducing the amount of gold that it was tied to, because they wanted to print, print, print. And in the beginning though, when you create a central bank, they're pretty reasonable with the amount of debt that they bring on. And so in the beginning, you feel like this isn't such a bad thing. And it's only the people that have watched this play out in history that go, no, no, no, this is exactly how you steal from the people. Inflation is theft. And I don't know if any of the comments are going to be about that, but like, that's the thing that you really want to attack.

• 25:48Tom Bilyeu?

  Because if you don't understand why money printing equals inflation, why inflation is the worst thing you can do for the poor and middle class very specifically, uh, then all of this is going to be confusing. But that's the design. So modern monetary theory, which is the fiat system that we have now, which comes about because you have the Federal Reserve, the central bank. Once you have that system, you're able to bring a lot of money into the system through debt. Okay, it's great. It actually has huge advantages. And if we could keep that to call it 3% of um GDP.

• 26:23Tom Bilyeu?

  You'd be great. You wouldn't have problems, but nobody does that. And so now, instead of being 3% of GDP, we're 122% of GDP. So at 130%, historically, that's been a breaking point. So you hit 130% debt to GDP ratio. If you stay there long enough, you will go into violence. So you have a civil war, you have a revolution. And I'm talking, it's usually pretty fast, like within two years. It's not like you have to stay there forever. Japan is the only country that's been able to avoid it. They've been there for a very long time and they haven't derailed. So it's not like an auto derail thing, but it's very problematic. So it's just, yeah, anyway, so that, that is,

• 27:06Tom Bilyeu?

  if we could stay at 3%, everything would be great. You would use debt to grow, which is exactly what you want to do. The problem is growing is very hard. So people start at that 3% mark and then they realize the growth is slowing down. People start voting for the people that promised that they can speed it up. People, politicians very specifically then go, well, I know how to speed this up. I'm going to put easy money into the system. Easy money is basically low interest rate money. So they start putting low interest rate money into the system, which is inflationary because they do it through debt. This is where like you start to, like all of these concepts become really important. The bad news is that I know I'm arguing with people who are in an emotional state. They will be offended when I say that, but they're in an emotional state.

• 27:51Tom Bilyeu?

  And if you can get them out of that and get them to start mapping cause and effect, like what leads to what? Like, okay, you want to tax the rich. What do you think that leads to? Well, Tom, it leads to more money in the system. No, it doesn't. You can look at history and you can see it doesn't play out like that. So it's like, if that's really your goal, and this is a thing that I do with entrepreneurs. Well, I'll say, okay, look, I'll advise you what I would do in your situation. But once I've done that, you tell me what you want to do and I'm going to tell you how to do that well. So it's like, if, if somebody wants to play the game, I want the wealthy to suffer. Okay, we can play the game. Let's talk about what we would want to do if we wanted the wealthy to suffer. It's actually very easy, tax wealth. If you want the wealthy to Suffer tax or wealth because they're gonna have to liquidate their assets.

• 28:35Tom Bilyeu?

  It will absolutely destroy them. The assets will start going down in value across the board because everybody's trying to sell them to be able to make the tax burden. This is why it can be so devastating for like a farmer when their parents die. If there's a huge estate tax, which you see in Europe a lot where they're like, uh. My dad just died. He left the farm to me, but now I owe forty percent tax on that farm. The farm doesn't make those kind of margins. My dad was land rich, cash poor. So the only way for me to pay the tax on this wealth is to sell the property. So you can imagine if everyone had to sell their wealth all at the same time. People are like, well, I'm just gonna buy all this stuff for a steal. Who are the people that are gonna buy it? They're gonna be the people with that are flush with cash.

• 29:19Tom Bilyeu?

  So that's gonna be banks. It's gonna be governments. It's gonna be the ultra wealthy. And so you would, there'd be a tiny, tiny, tiny people at the top that would find a way to sort of balance it out. But to be honest, you would just start eroding the system. Because even those people be like, well, everything that I buy, if it goes up in value, I'm gonna have to sell it to make the tax. So you, that's how you get into like despotic kings and queens. Because they're the only ones that will ultimately, they'll be able to hoard enough money. They leverage a monopoly on violence to be able to do it. So the government would essentially start owning everything because they already have the monopoly on violence. So it's like, but that's how you would hurt the wealthy. So if I just wanna be punitive, cool. We, there's a playbook for that. We know how to do it. The problem is what ends up happening to everybody else? They're punished even more or they're punished just as much.

• 30:04Tom Bilyeu?

  So you end up breaking the system. It ends up being a communistic regime.

• 30:09Speaker 01

  If Elon has to sell all his stocks and in fact you're a 401k, so now you kind of get hurt even though you're

• 30:14Tom Bilyeu?

  That's so well said.

• 30:15Speaker 01

  Stuff like that.

• 30:15Tom Bilyeu?

  Correct. So yeah, the very value of the thing goes down because everybody's having to sell a whole bunch of it to make their payments. You stop being able to aggregate wealth. That's beyond the scope of this answer, but it's like, there are gonna be all these knock on effects. But the reason I bring that up is so people understand you can play any game well. But there are going to be, first of all, there's physics to how you make it happen. So it's not gonna be based on emotions. It's gonna be based on cause and effect. And then in addition to that, there's gonna be second and third order consequences. And if you're not thinking through What those second and third order consequences are, the emotion can make it feel right. And this is why entrepreneurship can be so valuable for people. Because when you have to make payroll, all of a sudden you get very clear eyed about what works and what doesn't work. And the economy is like entrepreneurship.

• 31:00Tom Bilyeu?

  There are going to be things that bring prosperity and there are going to be things that destroy prosperity. And they're knowable. We can look back in history. It's a very complicated system. So I'm not saying it's just, oh, just do these three things and everything's going to work wonderfully. It's far more complex than that, but they're knowable. Like there's a cycle that repeats that Ray Dalio talks about endlessly. Once you understand the cycle, once you understand it's tied to debt, you can begin to be far more predictive. And this is why Ray has built the largest hedge fund in the world. He just understands that cycle better than anybody else. If you understand that cycle, you can look at any country and say, where are they in the cycle? I know where this leads because again, just cause and effect. So yeah, you can punish the rich, you can help the poor, but oftentimes you can't do the same thing at the same time.

• 31:45Tom Bilyeu?

  So if you want to punish the rich, you're inevitably going to punish the poor because that's who generates the money that pays for everything. If you want to help the poor, then you're probably not going to be able to punish the rich. So it's just is the way that it works. More to come. We'll be back in a bit.

• 32:05Tom Bilyeu?

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• 33:39Tom Bilyeu?

  All right, let's pick up where we left off.

• 33:41Speaker 01

  When people are in their emotional state and they want that angle, a lot of times it's if I punish the rich, it's going to add more money into the system or maybe we'll spend more on programs or maybe we can now afford healthcare and these other things like that. So I understand that there's a physics of everything. Can we redistribute the wealth in a better way?

• 34:01Tom Bilyeu?

  So Ray Dalio has a concept called a beautiful deleveraging. This is how you go from 122% debt to GDP ratio and you start bringing that back towards the 3%. Is you're going to do some wealth redistribution. The wealthy are going to hate it, but you're going to have to do it. So for all the people that are like, Tom's just trying to build the system, it's good for him. I'm banging a drum saying, I'm perfectly happy to see some wealth redistributed. I'm perfectly happy to see increase in tax. But again, you have to be careful, otherwise people just flee. So it's like you have to do these things in a very delicate way. You're going to have to do some money printing. You're going to have to do debt forgiveness. And you're also going to have to look at deregulation.

• 34:45Tom Bilyeu?

  Because if you don't start growing, you're going to be in real trouble. So you're playing with these stimulatory things, lowering interest rates, printing money. You are dealing with things that are confiscatory. So you're redistributing some wealth. You are raising taxes on the wealthy. Cool, you're going to do all of that. And if I saw that debt to GDP ratio going down, I'd be ecstatic. Now, how can people trust that I would ever want something that takes something away from me? Because when you cross 130% debt to GDP ratio, there's violence. And so who do they go after? They go after moderate elites first. So as a moderate elite, it's like, hey. I'm the first to get beheaded, so I really would rather not see us go there.

• 35:30Tom Bilyeu?

  Now, look, money can move, so if I saw us headed in that direction, I'm gonna leave. So it just doesn't make any sense to put myself in danger. And we've seen this play out so many times over the last 500 years that it's like it really is predictable. So there are certain things that you can see happen and you go, yep, gotta go. So, um, yeah, I would just tell people to be careful with that one. Going back to the initial premise of the question, I think this is really brilliant. So there's a book called The Creature from Jekyll Island, which I also did a deep dive about. You can watch it right here. That book details how bailout is the point. So the whole point of modern monetary theory is to put banks in a position where they can be super reckless. And they'll get bailed out. Now, what does it mean to be bailed out?

• 36:15Tom Bilyeu?

  It means that they do this thing that brings in these insane amount of profits. But it's super risky, which is why it's bringing in all the profits. And eventually it breaks. This is what happened in 2008.

• 36:25Speaker 01

  Housing market.

• 36:26Tom Bilyeu?

  Yep, so they inflated the housing market massively by doing all of these subprime mortgages and just taking these crazy risks that they never should have done. But the reason that they were willing to do that is they knew that they were too big to fail. They knew that the taxpayer would ultimately pick up the bill. Because when a bank gets bailed out, what they're saying is they're gonna create money out of thin air. They're gonna money print. When you money print, you create inflation. When you create inflation, you steal purchasing power from everybody equally. But obviously, it's gonna be far more devastating for somebody that, you know, has like a hundred dollars in their bank account than it's gonna be to somebody that has a hundred million or a hundred billion in their bank account. So that's where it's like, you have to understand that is their game.

• 37:09Tom Bilyeu?

  They want to create a system where heads they win, tails you lose. They literally can't lose. And this is why people were so outraged in 2008 during the bailout was because these guys were paying themselves billions of dollars in bonuses for having fleeced the American public. It's wild. And they can do it in public because people don't understand the cause and effect of economics. And so we find ourselves here. And the great news is, okay, this person has their finger on the right thing, which is I know I'm being screwed by these bankers. But they then go a little too broad. Now, fair enough. People, here's the part that nobody is gonna like.

• 37:52Tom Bilyeu?

  It is very rare that somebody can keep wealth unless they're smart. I'm not saying that it, you can't have a Nepo baby whose parents are like, listen, just work with this financial manager, shut up and let them do it. But ultimately, the financial manager is smart. You don't hold on to your money if you're dumb, full stop. So you've got people that they see how the system is set up, and they're gonna take advantage of it. Like, I will tell you right now, I see what the system is, and I'm gonna take advantage of the system. But Drew, I am banging the drum about what we need to do to bring back a thriving middle class. No one is gonna be able to say that I lied. I might be wrong about things, no doubt. The economy's complex. I like to say, I understand the economy extremely well. Scott Besson would laugh at me.

• 38:35Tom Bilyeu?

  So, um, you know, there's, as the island of my knowledge grows, so grows the shore of my ignorance. I get, the more I learn about this, the more I realize like, whoa, this game is very complex. So, I don't want anybody to over-esteem my abilities here, but I see the system and I'm playing it. And I've made, so I built a company, sold it, that generated my wealth. But I've since then, added millions of dollars to my net worth by investing that money, by coming to understand how the economy works, investing wisely, and then reaping the benefits. And I'm screaming as loud as I can, I, the thing that I bet on is inflation. And I just go, where do I need to be, knowing that inflation is gonna happen? I put money there, and it works all day, every day.

• 39:21Tom Bilyeu?

  And so, anybody can do it. You can buy a fraction of a share. So, we, the modern stock market is really a miracle, because it's so accessible financially. Intellectually, it's a totally different game. And I get it, people are trying to raise their kids. I built a company and sold it for a billion dollars and didn't know how to invest money. So I'd put all my time and energy into making money. I didn't know how to invest it. So, I have nothing but empathy for people that are like, bro, I am working two jobs. I'm trying to put my kids through school, like, I'm just trying to get by. And for the love of God, I wanna hang out with the people that I love every now and then. I don't wanna spend all my time on this.

• 40:01Tom Bilyeu?

  I get it, but ultimately, the system is rigged. It's rigged against you, but you can play it. And once you understand how it's rigged, then you can start making moves. Be careful, don't get out over your skis, don't assume you know something that you don't. As much as I think that I understand things now, I'm very cautious in my investments.

• 40:21Speaker 01

  Next one, the Mandrake Mechanism. Tom, sincerely love your stuff. You're too smart to not see how the elite's ability to borrow against unrealized gains is the largest major factor contributing to this problem. By allowing it, you incentivize money printing at the highest level. I'm a huge fan, but you're ignoring this constantly and your analysis is making your arguments insincere.

• 40:41Tom Bilyeu?

  Okay, so I love that he brought this up and I love that his name is the Mandrake Mechanism, which is bailouts. So, this is a great point and this is probably something that I should talk more about. And so shout out to the comment section. This kind of stuff is actually really useful to me. Okay, so the, what he's talking about is when you have cheap money in the system and you have assets, you can borrow against those assets. The way that modern monetary system is set up is the bank can make that money out of thin air. Now, I'm not ignoring this because I rail against inflation all the time. I'm saying, stop printing money. That, that, that's my whole thing. Stop printing money.

• 41:26Tom Bilyeu?

  So, debt comes in three flavors. So you've got government debt, you've got private debt, you've got corporate debt. So this is where he's getting private debt. So letting people just go ham, ham, ham on private debt is inflationary. And so 100% this person is not incorrect. So, to make that go away though, you have to say, we, once you try to do capital controls from the top down and you say, we're not going to let people borrow more than whatever, I think you're making a mistake. The reason that you're making a mistake is the trade off that you make by having the system that we have now is that you're saying, okay, we want to generate a lot of growth. We want to make money.

• 42:10Tom Bilyeu?

  Easy so that there are a lot of businesses so that people will start things, build things, create things, focus on innovation. Okay, this is hugely advantageous to that. And the strongest argument that people almost never make against my whole railing against modern monetary theory is that if you go back to a hard money system, the growth is going to slow down. It's just really hard to get additional money. So there, all of this is a trade off. Modern monetary theory, if people could keep it reined in, would be amazing. But alas, we don't. And because people know that they can get bailed out, they will loan money even to people that are not worthy of credit. So this wouldn't be bad if people were making a loan and they actually expected to get not just the interest paid back, but the principal as well.

• 42:55Tom Bilyeu?

  And so if banks were making sensible loans where it's like, okay, this is, you know, in 30 years, I'm going to have the interest and all of the principal back. But the reality is what they do is they just let people roll it over, roll it over, roll it over, roll it over, roll it over, because they can loan out up to. Drew, do you know the answer? Do you know, okay, if I go to a bank and I give them a hundred dollars, do you know how much they can loan out of that hundred dollars?

• 43:15Speaker 01

  Isn't it all hundred?

• 43:16Tom Bilyeu?

  All one hundred dollars.

• 43:17Speaker 01

  That's crazy.

• 43:17Tom Bilyeu?

  So there used to be a limit, and I think this might be what they're calling for, and I would be totally here for it. Uh, make them have reserves. Make them have Drew 80% reserves? 70%, but it's not zero. So I love that, and I'm very glad they're bringing it up. And I'm going to start banging on more about this. I think this, this is awesome. If you go to banks and you say, if somebody gives you a hundred dollars, you've got to keep eighty dollars on hand. Word? Now you've still got money that'll come into this system, that 20%, but you don't have the absurdity of the 100%.

• 43:53Speaker 01

  Wouldn't that lock down the money in the like flow of the system though? Where there will be less mortgages, less loans, less smaller credit card lines, things like that?

• 44:00Tom Bilyeu?

  Yeah. So this is one where um, I would need to look at it more to know what the right number is. But I'll tell you right now, the, the right number is not zero. That's wild. Like you're just saying, uh, please do a run on the bank. If, if a bunch of people roll up to any major bank right now. And they say, give me my money. It, that bank will collapse. The bank is insolvent. And, uh, most of them will hold around, it's like 9.3% or something. But legally, they actively changed it because it used to be 10%. Yeah. And they actively changed it to zero.

• 44:36Tom Bilyeu?

  So, uh, it, it is, we are in this wild money printing era where politicians and bankers are either dumb or corrupt. The bankers are corrupt. The politicians could be dumb or corrupt. Uh, but it, it is really, really insane. But again, there are three flavors of debt. He's only addressing one of them, but I'm glad that he brings it up. It is something I should talk more about. All right, that's all I got. All right, everybody. Thank you for being a part of the comment section. We are in there all the time, reading these things. It means the world to us that you engage with this content. I really believe that we can together make the world a better place, but we really do have to map cause and effect. All right, guys, if you haven't already, be sure to leave us that five star review. And until next time, my friends, be legendary. Take care, peace.

• 45:21Tom Bilyeu?

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