How Political Gridlock and Deficit Spending Threaten America's Future: Tom Bilyeu Debates Stephen Bonnell Pt. 1

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: 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 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: https://tombilyeu.com/call Get my battle-tested strategies and insights delivered weekly to your inbox:sign up here. https://tombilyeu.com/: 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. ********************************************************************** 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 On today’s episode of Impact Theory, Tom Bilyeu sits down with streamer and political commentator Stephen Bonnell—better known as Destiny—for a deep dive into the big questions shaping America’s future. The conversation kicks off with the rise of a socialist-leaning mayor in New York City, before widening into a no-holds-barred debate on the health of the U. S. economy, wealth inequality, deficit spending, and the political polarization gripping the nation. Stephen brings his signature sharpness and skepticism as he challenges narratives about the direction of the Democratic Party, the nature of economic growth, and the practical realities of policy-making in an era of gridlock. Tom and Stephen clash on the dangers of populism, the reality behind deficit spending, and the very definition of what’s driving the policies of both the left and the right. From housing crises and immigration to the looming threat of authoritarianism and the legacy of globalism, nothing is off the table in this wide-ranging episode. Whether you’re worried about runaway spending, civil stability, or just want to understand how smart people can see the same world so differently, this is a conversation you don’t want to miss. Tune in as Tom and Stephen try to map out—and argue about—the best path forward for America. FOLLOW STEPHEN BONNELL (DESTINY): YouTube: Destiny https://www.youtube.com/@Destiny Twitter/X: @OmniLiberal https://twitter.com/omnliberal Kick: Destiny https://kick.com/destiny Linkedin: Post your job free at https://linkedin.com/impacttheory HomeServe: Help protect your home systems – and your wallet – with HomeServe against covered repairs. Plans start at just $4.99 a month at https://homeserve.com Bevel Health: 1st month FREE at https://bevel.health/impact with code IMPACT ButcherBox: Your choice of holiday protein — ham or turkey in your first box, or ground beef for life — plus $20 off at https://butcherbox.com/impact Shopify: Sign up for your one-dollar-per-month trial period at https://shopify.com/impact Incogni: Take your personal data back with Incogni! Use code IMPACT at the link below and get 60% off an annual plan: https://incogni.com/impact BlandAI: Call it for free today: https://bland.aiOr for enterprises, you can book a demo directly: https://bland.ai/enterprise Connectteam: 14 day free trial at https://connecteam.cc/46GxoTFd Raycon: Go to https://buyraycon.com/impactto get up to 30% off sitewide. 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?

  Let's talk about the moment your side hustle becomes a real business. Now, I see way too many founders stay stuck running their business like it's a hobby, and then they wonder why nothing ever feels real. It doesn't feel real because it's not. I've helped thousands of entrepreneurs build real businesses through Impact Theory University, and the first step in the path to building a legit business is registering it. And Taylor Brands will help you do just that in a few clicks. An LLC, a limited liability company, is an official business structure. It's inexpensive to form and very simple to maintain. It's how you open a business bank account. It's how customers know they're dealing with a real company. And Taylor Brands doesn't stop at the filing.

• 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. Stephen Bonnell, welcome back.

• 1:09Speaker 01

  Tom, Bill, you, thanks for coming by.

• 1:10Tom Bilyeu?

  Dude, I appreciate it, and I appreciate you letting us use your studio. You are always extremely generous, which makes this so much easier for us. So really, really grateful for your time and for just the hospitality. Okay, we just had a socialist elected to be mayor of the biggest financial city in the world. What do you take away from that? Do you think that that's going to make New York City better? Is this a good direction for the Democrat Party or else?

• 1:41Speaker 01

  I feel like everybody's over indexing on this election a lot based on what they want to see. The far-left people online are saying this is the proof of concept that the whole Democratic Party is going to go to the socialist direction. I think conservatives are saying this is evidence of... Islamic jihadist winning elections, or see that's the really ridiculous, or other people saying like, oh, the whole Democratic Party is becoming socialist. But I mean, it's New York City, it's a very blue place. He won his primary, when the primary was won, he was basically gonna win. Cuomo probably not the best person to try to run against him for that, it's not his time anymore. I think Mondani ran a good campaign, and stuff is funny, if you watch the videos, I almost feel like I'm watching cutouts from like The Daily Show from like the 2000s. He's a funny dude, he's good on camera, which is one of the most important things unfortunately in today's media environment, so yeah.

• 2:26Speaker 01

  I think it'll probably more or less be business as usual in New York City, for better or for worse.

• 2:30Tom Bilyeu?

  Do you think it'll be business as usual because he'll be stymied and he won't be able to get the policies through? Do you think it'll be business as usual because he calms down some of the more what I would call socialist, like just blatantly socialist rhetoric? What's gonna make it be business as usual?

• 2:46Speaker 01

  Generally, the left doesn't overstep their legal authority, like I would say MAGA or the right does. So I think that for a lot of stuff, it's just not gonna be possible, he's either not gonna have the funding or the legal authority for it. And if for other stuff, I mean, I don't know, I welcome it. He's significantly to the left of me on a lot of economic policy, so if he tries stuff and it fails, then I can just point to that and go, look, like, these are bad ideas, we shouldn't do them anymore. If he tries it and it works, then I, you know, maybe I reconsider, I'm like, oh, maybe somehow there's some kind of external force that makes it so the city backing grocery stores, or the city, you know, investing more in like rent-controlled properties is actually a good thing, and then I would change my views on it, so.

• 3:20Tom Bilyeu?

  How are you approaching the issue? So are you looking at this going, okay, well, the economy's obviously broken, we obviously need to do something different, I have a rough idea of what we should do, but hey, if he's got ideas, let him go at it? Or are you approaching this from a building the economy sort of brick by brick, these things adhere to a set of rules? And I think that the way he's positioning this, it's more in line with the way that economies work.

• 3:49Speaker 01

  I don't know if we've talked about this personally or on camera before, but have we ever talked about the concept of like red teaming?

• 3:54Tom Bilyeu?

  Yes, well, I don't know that we've talked about it. I'm intimately familiar.

• 3:58Speaker 01

  Yeah, I don't know if like real stuff can happen without red teaming. And I kind of view politics very similarly, like left to their own devices. I don't know if either political party could figure stuff out on their own. I feel like having another side there to kind of keep you honest and to kind of check you on a lot of things is where the best kinds of discussion happen. And I would obviously say that the right has completely abandoned all forms of policy conversation for the past year. So I don't think we're even remotely able to approach solving any of the economic issues that we have right now in this country, because there's no serious way to have a conversation about it. I don't consider like super big price control policy to be a serious way of dealing with stuff like housing or cost of living. But there's like no counterpart to that right now. So, yeah.

• 4:37Tom Bilyeu?

  What do you mean there's no counterpart to it?

• 4:39Speaker 01

  As in, I don't know what the, there's not a serious policy discussion about what do we do about housing in the United States? Nobody is, we're not capable of having that conversation right now, because it's a very difficult conversation to have that's going to require some pain in different areas that people aren't willing to give on, I guess. Like, for instance, like when it comes to housing, people, the thing that you keep hearing over and over again is that housing's unaffordable, rents are too high. You hear that. That's like the popular talking point. The reality point is that it's like 70% of Americans live in an owned home. So, and these are your strongest voters, because people that have houses are probably older, they're more committed to an area, they're more likely to go out and vote. If you want to bring down rents, or if you want to bring down the cost of housing, you are necessarily hurting the people that already have homes.

• 5:23Speaker 01

  And there, I've never heard a single politician confront that reality. So there's a delusional fantasy where people pretend that they can protect homeowners, which are some of the most like loyal, like voting-based people. But you can also bring down rents and the price and cost of housing for everybody else, which is not possible. And also, these, the people that get hurt the most by high costs of housing are people who aren't even capable of voting, because technically, the people that are hurt the most are people who aren't even able to move to an area, because the cost of housing is prohibitively high. So it's a really weird, housing is a weird issue that's hard to solve in a democratic manner.

• 5:54Tom Bilyeu?

  If I'm tracking what you're saying, the reason that it's hard to solve in a democratic manner is because the very people that want the policies to be strict, the NIMBYism, not in my backyard, those people are always gonna try to vote it down. They have the most political power. They're older, they're more entrenched, more connected, all of that. They've got more money to back elections. Wah! So, all of that momentum pushes them in the direction of not only voting against reform policies, but they have the power to like, see it all the way through the system.

• 6:21Speaker 01

  Yeah, and it's in their interest to do so. They should be voting that way, technically. They would be making a sacrifice to vote otherwise. Imagine you buy a home, and then the next week, they talk about building massive high rises, you know, in your area. Well, that's gonna bring the cost of your house down, or it's not gonna go up as quickly. You don't want that. Like, now that you have a home, like, you wanna, you know, how many people say, "The house is the most important investment, or the largest investment of any American"? Well, I don't want you to build a whole bunch of new properties that are gonna drive down rents, and ultimately, the cost of real estate. So, you become incentivized to vote against the greater interest of the economy, of the city, or whatever, in favor of protecting your own narrower interest of your particular housing price.

• 6:55Tom Bilyeu?

  It's interesting. You're very right about that, and I think one of the reasons that the capitalist system works is because we're saying, "Humans are selfish creatures. If you create a structure in which they can just go be selfish, and we get to take advantage of the outcomes of all that selfish behavior." Look at Elon Musk, right, doing all this incredible stuff that's moving us forward from a technological standpoint, also making him fantastically wealthy, putting him in a position where he can control, like, just these armies of people, building all this incredible stuff. He can get his agenda done, he can influence politics, all of it. Okay, so, cool. There's obviously many people that are gonna argue about his level of influence and all that, but the system allowed for somebody like that to pursue their selfish interests, and it kicks off all this technology along the way.

• 7:38Tom Bilyeu?

  The catch becomes, from where I'm sitting, is that when I look at the NIMBYism, there is a point at which so many things have come together, where everybody is pushing for only their sole interest, that we begin to bake into the structure of the economic system itself, all these deranging elements. And then, it's like, "Yeah, you can point at housing, and you can say, 'Hey, well, it's really in your best interest to do this.'" But once everybody is acting like that at every level and everybody is solidifying power and voting for things that are good for only them, and then they don't realize they're disenfranchising the young and that there's a historical pattern that says you do not want to disenfranchise the young is they will completely flip the tables over

• 8:22Tom Bilyeu?

  and they will come for your head. That's where this starts to get problematic. And so getting people to understand that the economy is broken in exactly the way that someone like Mamdani is pointing out, he's right, like he's got his finger on the right problem, but his solutions are disastrous. And this is one where we'll differ in that you're very sanguine, you see maybe a positive thing coming out of this. And I just look at history and I'm like, this loop has played out so many times and it becomes way dangerous long before anybody learns their lesson because they're not looking, they don't have a metric that they could say, oh, I'm just going to watch this metric. I'm going to try the policy. I'm going to watch this metric and we can all agree that's a great metric, right? Yay.

• 9:04Tom Bilyeu?

  And then when that metric doesn't go up, they just end up blaming something else. They don't go, yeah, okay, this policy really just doesn't work, which is a fascinating part of, I've heard you lament recently about some of the, you didn't say emotional difficulties, I'm putting that phrase in your mouth, but the emotional difficulties of being a political streamer, I'm running into those same things. So for me, I'm butting up against something there where I look at this, it feels very dark, it feels very dangerous. It feels like there's this thing happening, a slide to the far left that sets off all these alarm bells in my head. And I cannot figure out how to get people to build a vision of the

• 9:48Tom Bilyeu?

  economy from the standpoint of cause and effect. So it's interesting to map out the way that you're looking at it. This is a red team moment. We need somebody to run the experiment. Nobody's having serious policy conversations. We're in gridlock. People are sort of doing what they're supposed to be doing, voting for their own interests. And so now this is sort of a natural beat in all of this where somebody comes in to try a new policy that hopefully will break up the distortions that have worked their way into the system.

• 10:19Speaker 01

  Sure, to be clear, I don't think this is a red team moment. The thing, the red team I was hoping for was supposed to be the conservative party, or at least more conservative people. And I feel like they've completely abandoned the policy discussion, so... And they would red team socialism? What would they red team? Um, well, I wouldn't say socialism, but just more, um, I guess like further-left economic idea stuff. You want them to, because... Like, on a very broad, on a very basic broad sense, the, um, the further left you go, the more price-controll-y people get. Meaning, setting artificial caps on things, like saying insulin shouldn't cost this much, it should be set at this price. Or, they'll set price, um, they'll bring up a price floor, like the minimum wage should be this high. And the further away your price controls get from market equilibrium,

• 11:03Speaker 01

  the further your market is distorted, and then other things start to happen to compensate. So, for instance, if you bring down the price of insulin too much, maybe companies don't produce it anymore because it's no longer financially worthwhile. Or if you bring up the cost of minimum wage too much, maybe companies start paying more and more employees under the table because it's no longer worth it to employ them, or they just shut down. And then on the flip side, you have, generally, this was, this was the general case, but again, this has not really been the conservative party for the past five or 10 years, is usually they fight for more like free-market stuff. So they'll say things like, "Well, the minimum wage should be lower", um, or, you know, "The company should be able to act in, in whatever way they want." And obviously, in some ways, that's not good. We have rare diseases in the United States, so there's not very much money that you are incentivized to, to, to cure, because why would you?

• 11:46Speaker 01

  But when the government offers incentives with the, there's a name for like this rare-drug-disease program, but, um, the, the government kind of offers bounties for curing certain diseases, even though the financial incentive wouldn't be there otherwise, like, well, that's a good thing, and conservatives would never push for stuff like that. So, yeah, you, you have to have like, I think, these two forces pushing and pulling on each other, and then it, it just forces you to be a little bit more honest about what your particular policies can do, and then you settle somewhere, um, not necessarily in the middle, but even if you settle more to one side, at least it's kept more honest by your opposition.

• 12:13Tom Bilyeu?

  We're hitting pause for a moment, but there's plenty more ahead, so don't go anywhere. There's a reason Quince sells cashmere for $60, and it isn't the cashmere. It's real 100% Mongolian cashmere. It's the same stuff luxury labels charge a fortune for. Quince just works directly with ethical factories and cuts out the middleman. So there's no need for a markup and no logo tax. The $60 goes to the actual sweater, not the fancy name on the tag. That's why everything they make runs 50 to 80% less. And it's not just the cashmere. I ordered a few things myself, their fleece joggers, a couple of their tees, which I wear obsessively. First thing I noticed was the quality.

• 12:57Tom Bilyeu?

  Soft, well-made, built to hold up. They make down jackets and wool outerwear now, too. So upgrade your stuff to things you'll actually wear. Find your next fall favorites at Quince. Download the Quince app for app-exclusive offers or go to quince.com. Get free shipping on your order and 365-day returns, now available in Canada and the UK, too. And when Quince asks where you heard about them, let them know it was Impact Theory. It's the best way to support the show. Let's talk about something that genuinely keeps me awake at night. My team at Impact Theory gets hit with phishing scams from bad actors pretending to be me all the time. And they keep getting more sophisticated attacks with details specific enough to look legit.

• 13:43Tom Bilyeu?

  AI has made a lot of things possible, including scams like this. But AI still needs raw material. It gets it from data brokers who sell your name, address, phone number, to anyone willing to pay. Incogni goes after that supply. They handle removal requests across 420-plus harmful broker sites. And they keep checking back as brokers constantly try to relist you. On the Unlimited Plan, the exposure scanner hunts down your information. Send a link, and their privacy experts handle the takedown. Track your progress in the app and get a monthly risk assessment showing exactly where you stand. Go to incogni.com/impact and use code IMPACT for 60% off an annual plan.

• 14:28Tom Bilyeu?

  Incogni is I-N-C-O-G-N-I dot com slash impact. Promo code IMPACT. It's completely risk-free with a 30-day money-back guarantee.

• 14:41Tom Bilyeu?

  Thanks for sticking around. Let's get right back into the action. If you had to distill down, what are the two opposing forces? Are they politically opposing forces or something else?

• 14:51Speaker 01

  Between like the right and the left today?

• 14:54Tom Bilyeu?

  Yeah, I can't tell if in that example, you're saying you need the right and the left to be pushing on different parts of how we, you know, move the levers of the economy and they disagree. And so they're each pulling on different levers and that just sort of on balance creates something good. If that's what you're saying, or if...

• 15:09Speaker 01

  That's what I'm saying.

• 15:10Tom Bilyeu?

  Okay. So, uh, the way that I approach is, I think the fundamental way that people are looking at this stuff is so broken and nobody in politics understands, uh, the economy. Scott Besson does for sure. That guy really understands. Uh, but the vast majority of people, the people he needs to convince to be appointed, um, they don't understand the economy. So you run into a position where the, if a politician's job is to get elected and get re-elected, then they have no incentive to actually learn how the economy works. They have an incentive to learn how to make the populace feel about something that they're saying. This is why Mamdani is so impressive in that he really understands the pain that

• 15:53Tom Bilyeu?

  people are going through. He can put his finger right on it and he can say a solution that sounds awesome. But when you were, it sounds awesome from an emotional standpoint. It will make people feel what they want to feel. Hope, things are going to get better, change, all that. Even though it is, uh, literally he's approaching people that are dying of thirst and offering them salt water. And so it's just gonna kill them faster.

• 16:13Speaker 01

  It's not like it was quite that bad.

• 16:14Tom Bilyeu?

  It's, it's probably worse than that. It's somebody lost in a desert and he's offering them a chance to lick the sun.

• 16:19Speaker 01

  What are like the worst...

• 16:19Tom Bilyeu?

  It is so bad.

• 16:20Speaker 01

  What are the huge, like horrible worries I guess you have economically for things that he would present?

• 16:24Tom Bilyeu?

  It depends on if you're talking about, is he gonna get checked? Like when he tries to do these? Probably. A lot of these things won't go into fruition and so it'll be sort of this long, slow thing. But let's just take the housing, uh, putting rent freezes. The reason that I'm so worried and find myself wanting to push just into like absolute hyperbole is because when you play those out down the road, um, what ends up... Happening goes like this. The first person gets in office and they promise things and make people feel emotionally good. And you go in, you do those things, you freeze rents, whatever. And then because we've already run this experiment in New York.

• 17:03Tom Bilyeu?

  We know what's going to happen and that's going to be if you tell somebody who makes a product, which is product or service, which is running that building. You can only charge this amount of rent. The problem is they have taxes, they have upkeep, they have employees, they have to pay all of that. And it can and will get to the point where for the amount that you can, you tell them they can charge, they're not able to pay for the building.

• 17:26Speaker 01

  Yeah. So just as a quick thing, like I don't disagree with any of this. I think rent control is a bad policy. Forget New York, it's been analyzed basically all over the world and it doesn't really work. But we also do it everywhere. So I don't consider that like a massive departure from what's going on, like California, San Francisco. I think parts of LA have like a lot of rent control. And Canada has like the whole world, everybody does rent control. So if he does more, I don't think it's good. But I don't see that as being like a catastrophic, like a step in the darkest direction in the same way that all of Trump's.

• 17:55Tom Bilyeu?

  Let me make my best case. There are three books that I highly encourage people to read to understand just how bad that can go. I would give different books if I were trying to get people to be afraid of Trump and authoritarianism, because that also goes completely pathologically. You're, it's, it's pathology on both sides. But here's what I see with this and how wrong it can go. Read Gulag Archipelago, Mao, the Unknown Story and Red Famine. And you very quickly realize that there is a, a thing. A property of the human experience that will trigger every time you try to do this, which is you're going to put these policies in place. They are not going to work and because they don't work, people will resist.

• 18:38Tom Bilyeu?

  And when people start resisting, you have to say, what am I going to do when that person resists? In a democratic situation, you go and that, you have to convince those people, whether you agree with them or not, they can vote you out of office and everything is fine. But if enough people vote for socialism and they want socialism, then you start marching down the path, certainly of. Where Europe is going, which we can talk about some of the problems that are being born of that. But right now, you will end up in a situation where you either abandon these, as we did in New York and then because in New York in the seventies and eighties in the Bronx, I think it was 20% of all

• 19:17Tom Bilyeu?

  buildings that burned were arson. So people could collect the insurance payment because it was cheaper to just burn the building and collect the insurance than to try to get around all the regulations. Okay, so we end up backing out of that by reinstituting capitalism, by reducing the regulatory burden, letting the free market go back and do its thing. But now here we are looping around again. Now, maybe America has protections and we'll just always loop. We're always going to be banded. But the thing that worries me is that we really will swing to the socialist side and we will come to the point where we realize people are going to disagree and the only way to get them to stop disagreeing is to silence them through jail or

• 19:57Tom Bilyeu?

  violence, uh, which obviously is played out over and over and over around the world. Even the UK right now is just become completely unhinged with locking people up politically. So.

• 20:08Speaker 01

  How do you rate this as an issue? So like, there's a world where I'm, I can hear what you're saying, but I feel like we've already swung so far on the right side with Trump, who controls a much more important office and it is ubiquitously echoed and resonant throughout the entire right wing federal party, like through the House, through Congress, everything else, and then our whole executive branch. That when I look at like a mayor in New York City, I'm like, this doesn't even register, basically.

• 20:34Tom Bilyeu?

  So you and I have a very different frame of reference. So my frame of reference goes like this. The Republicans are unhinged lunatics when it comes to spending. The second they passed the big beautiful bill, I knew I cannot trust them. They are not going to do the right things to overcome the wealth inequality that will lead this country into open revolution where people are getting killed. So, okay, well, they're not my ally. Uh, so then I say, well, is there anybody better? And the only people worse than the Republicans are the Democrats. So that's terrifying. So I have these people who are bad and then these people who are worse.

• 21:14Tom Bilyeu?

  And I mean, we can go through the mechanisms. I'm not sure if we need to, but if we do, I sort of.

• 21:21Speaker 01

  I guess like the confusing is I hear this a lot, but then I look at like, so I was promised communism or socialism after eight years of Obama. And I never got it. And then I was promised communism or socialism after four years of Biden, and then I never got it. And then on the other side, people warned of a whole bunch of horrible stuff that Trump would do. And a lot of it or more happened in the first term and then come to the second term, it is continuing to happen. So I just don't understand the fear of like rolling. So I think, I think we talked about this on maybe the first episode we did. Like everything that Trump has done is like very predictable. Like I think that from the first term, it was obvious that he wanted, he, he's a crazy spender. He spent a ton when he came into office after Obama. He doesn't care about balancing the budget. He did his huge tax cuts in his first term.

• 22:01Speaker 01

  He's permanent, made them permanent a second term. Um, he's not capable of leading the, there's a whole bunch of reasons to expect what's happening now because of what happened in the first term. And then meanwhile, on the other side, again, I keep hearing like socialism and communism are going to happen under the Democrats. It's like 98% of all jobs made in the past, like 50 years have come under Democrats. The last balanced budget we had was under a Democrat. Every time a Democrat comes into office, it's on the back of like a Republican led disaster. And it's like, I don't understand how we're voting in Republicans to give them another chance when, and then they destroy everything again, like they've already done. Because we're too afraid of electing Democrats because we're worried about them doing a thing that they haven't done and don't really show any inclination of doing. It's really hard for me to understand.

• 22:41Tom Bilyeu?

  We might have, uh, different things that we worry about. So I don't need them to usher in socialism in name. What I need them to do for them to be a not only moral hazard, but a literal physical hazard for the United States is to deficit spend. So I just rank order the parties by how much they're going to deficit spend.

• 23:02Speaker 01

  In that case, the, the Democrats still easily win. The Republicans

• 23:05Tom Bilyeu?

  They're gonna spend more?

• 23:06Speaker 01

  No, no, no, no, that the Republicans

• 23:08Tom Bilyeu?

  Well, they want to add more to the big beautiful bill. If they were saying government is shut down until we balance the budget, I'd be on team Democrat. But they're not, they're saying just add these things back into the bill. That is, again, this is not a I'm going to bat for Republicans. This is like, what the Republicans are doing is completely unacceptable and will drive us off a cliff. And then the Democrats are like, but wait, let's go faster. That's the part where I'm like, okay.

• 23:30Speaker 01

  No, it was because the Republicans did a whole bunch of like tax cuts, increased refunding for ICE and a whole bunch of other stuff like this. And they cut, the way they balanced it was by cutting

• 23:39Tom Bilyeu?

  They haven't balanced it.

• 23:40Speaker 01

  Foods, well, the way that they make this kind of work and the way that they didn't, it really, it doesn't work, right?

• 23:45Tom Bilyeu?

  Yeah, I was gonna say, we see this very differently.

• 23:46Speaker 01

  But the way that they've balanced anything, when I say balanced, the way that they brought back a little bit of the budget is by cutting things like SNAP and Medicaid.

• 23:51Tom Bilyeu?

  Yeah, but I couldn't fucking care about bringing it back a little. Like, this is, it's deeply problematic. What the Republicans are putting forward is, within 10 years, you go off a cliff.

• 24:00Speaker 01

  Sure.

• 24:00Tom Bilyeu?

  So now I'm just saying, you've got the Democrats going, no, no, no, we can do it in eight. And so now

• 24:06Speaker 01

  But all the big beautiful bill was a Republican bill.

• 24:08Tom Bilyeu?

  Yeah, what the fuck? So I think you think I am either identifying as Republican or I'm going to bat for the Republicans.

• 24:14Speaker 01

  No, no, no, I'm not thinking that, I'm just, you're saying that the Democrats are worse because they want to reinstate SNAP and Medicaid for, to bring back the old requirements. But it's like, those were things that Americans already had expected. And then the Republicans are cutting them to give dumb tax cuts and other like bad spending measures. But you're saying since the Democrats want to add these things back, they're worse. But the Democrats would have never passed a thing that looked like the big beautiful bill.

• 24:38Tom Bilyeu?

  So

• 24:39Speaker 01

  The bill that the Democrats would have passed would have been fiscally better than the big beautiful bill.

• 24:43Tom Bilyeu?

  Okay, if I'm hearing what you're saying, which is, I think, if we had just elected the Democrats and not the Republicans, then we would be in a better fiscal place.

• 24:54Speaker 01

  100%.

• 24:55Tom Bilyeu?

  They would be closer to a balanced budget.

• 24:56Speaker 01

  Easier, yeah.

• 24:57Tom Bilyeu?

  Given their movements now, I have no reason to believe that that's true.

• 25:00Speaker 01

  The easiest reason why I'm 100% correct is because they wouldn't have solidified the Trump tax cuts, which have been one of the biggest things that have pushed us more into debt, is having these huge tax cuts, reducing your income without decreasing your spending.

• 25:11Tom Bilyeu?

  Okay, my takeaway on that is, when I look at Mom Donnie, that feels to me like that's where the energy is in the party, which is way farther left, it's way more give things for free, it's way more tax, tax, tax.

• 25:22Speaker 01

  Wait, but why, he's just one mayor.

• 25:24Tom Bilyeu?

  Yeah, yeah, but if you think about, so my base assumption is that he's representative of where the party is gonna go.

• 25:29Speaker 01

  Why?

• 25:29Tom Bilyeu?

  If you believe he's just a random guy.

• 25:31Speaker 01

  But he's literally just the mayor of New York City.

• 25:33Tom Bilyeu?

  But look at how much energy he gets, how many people in the party are talking about him, look at the coverage.

• 25:39Speaker 01

  They're not. The coverage is big, and there's people online talking about it, but most, he's not that, the reason why, so people are really critical of Hakeem Jeffries and Chuck Schumer for not endorsing him, the reason why is because he's not actually that popular writ large with the Democratic Party, so that they didn't.

• 25:51Tom Bilyeu?

  And listen, it's entirely possible that the rumors aren't true and that part of why Chuck Schumer is holding this up is he's worried about getting primaried by AOC, maybe, or...

• 26:02Speaker 01

  He's probably holding it up because he wants to snap the Medicaid back for Americans and not just more deficit spending, and Republicans that refuse to do anything.

• 26:08Tom Bilyeu?

  Well, the deficit spending, that's where your argument weakens, because they're willing to increase the deficit. They are saying, I care more that people get these things than I care about the deficit. That one thing is where my brain switches on either party. The second a party says, I'm willing to deficit spend, what they're actually saying is, I'm willing to increase the wealth inequality, I'm willing to make the rich richer and the poor poorer. Deficit spending is that, that is it mechanistically.

• 26:35Speaker 01

  Okay, let me try this, I'm curious how you feel about this, okay? You and I are in LA.

• 26:39Tom Bilyeu?

  Yep.

• 26:39Speaker 01

  Okay, and we have a thousand dollars, and we want to take a road trip to Vegas, okay? And on the road trip to Vegas, I want to be able to buy my 12-pack of Red Bull, okay?

• 26:49Tom Bilyeu?

  Okay.

• 26:49Speaker 01

  This is my Red Bull, we've guaranteed this. Let's say that at some point, you bring two more friends, okay? So we have a thousand dollar budget, we're going to Vegas, I want my Red Bull.

• 26:58Tom Bilyeu?

  Yep.

• 26:58Speaker 01

  And let's say that you're like, actually, I want to take a road trip to Portland. I'm like, Portland? That's gonna cost like $3,000. And you're like, yeah, we're gonna do the Portland thing. And also, you don't get any Red Bull. And eventually, I'm like, okay, hold on, you got all your friends voting against me, all right? We can go to Portland if you want, but I'm keeping my Red Bull.

• 27:14Tom Bilyeu?

  Yep.

• 27:14Speaker 01

  In that situation, where you've increased the cost of our trip from $1,000 to $3,000, and then you've cut my $20 Red Bull, for me to say, well, I at least want my Red Bull, for you to go, oh, so you want to spend $3,020, you're even worse? Well, that's not true, because I wanted to go to Vegas the whole time.

• 27:29Tom Bilyeu?

  Yep.

• 27:29Speaker 01

  For the Democrats would have never solidified those tax cuts, which is the... Big, even under Biden, it was the interest and the additional, well, the lack of revenue collected that was even pushing a lot of deficit spending under Biden. And now to have those solidified, they would have never been solidified under the Democrats. The budget would have been closer to balanced. It was coming closer to being balanced under Obama and Biden than it was under Trump, who was massively deficit spending more than Biden, or I'm sorry, more than Obama at the end of his term, even though Trump came in under a good economy. I just don't understand how we ever look at Democrats and go, they're worse because they want to fight for a snap in Medicaid, when it's the Republican budget that was so much more dumbly done. That's just crazy to me.

• 28:03Tom Bilyeu?

  Okay, fair, but I will, fair in that you're a smart person, you're looking at it, you have a frame of reference. You sound like you're missing a key point from where I'm sitting.

• 28:13Speaker 01

  Okay.

• 28:13Tom Bilyeu?

  And that key point is, I don't have to look at hypotheticals. I just need to ask, we're in the situation that we're in, and how are they behaving? So your example is great in terms of, I totally get the emotion of like, hold on a second, now the one thing I said I wanted, I'm not even going to get, and we're driving somewhere else, what is happening? And so I am still going to get my thing, and I don't care if it costs more money. And so what I'm saying is, even if I can't get you to agree that I think that that analogy is kind to the point of being nonsensical, but even if I can't get you to agree to that, that's the surface. What I'm, what I am literally kept awake by is the fact that the entire nation is arguing

• 28:57Tom Bilyeu?

  up here, what my wife and I call, never talk about the tea. So the biggest argument I've ever been in with my wife was over a cup of tea. And after two hours of screaming at each other, almost ruining an entire vacation, I was like, there's no way I'm this mad about a cup of tea. So what am I actually mad about? Then I got into the, like, building blocks of what was actually going on. We started talking about that, which had everything to do with insecurities, and all of a sudden, we were able to resolve the issue. What I'm saying is, all this stuff that manifests up here at like, we've got to give this to that person, and I want my Red Bull, is, everybody needs to get on board with. It is a, um, the government has a moral obligation to balance the budget. So I have all of these.

• 29:39Tom Bilyeu?

  Base assumptions in my brain that run that paint my worldview. One of them is when you look back in history, every time minus Japan, every time a country has spent more than 18 months at over 130% debt to GDP, they've gone into open violence. So revolution, civil war, or just default, which leaves people starving in the streets. So it's happened every time except once, again, Japan being the only exception. And we're at 122% and growing rapidly. We add a trillion dollars to the budget. So you can look at a spreadsheet and it really is. It's somewhere between seven and 10 years from now, barring some miracle. We cross that 130% mark and given that we are already at each other's throats,

• 30:24Tom Bilyeu?

  like this all breaks. So I'm just like, any step in that direction? And I'm just like, this is crazy.

• 30:31Speaker 01

  Sure, I can kind of understand what you're saying. So in my analogy, right? Well, it's $3,000. It's a lot for that trip, but like $20, that's even more money.

• 30:39Tom Bilyeu?

  And by the way, I'm screaming at why the fuck, what are we? How are we already doing a $3,000 trip?

• 30:44Speaker 01

  Sure, I understand. I guess my question is, do you acknowledge, would you say then that had Kamala been elected, if there was a Democrat Congress, we would have been closer to a balanced budget than we got under the one big beautiful bill?

• 30:53Tom Bilyeu?

  It is a hypothetical rerun that I have a natural inclination to say no.

• 30:59Speaker 01

  Even though all the history disagrees, all the history points to Democrats.

• 31:02Tom Bilyeu?

  I'll walk you through the beats because dude, honestly, I'll give a 30 second pitch about why I don't care Republican or Democrat.

• 31:09Speaker 01

  Okay.

• 31:11Tom Bilyeu?

  I really believe this country is going to default on its debt and that will end America for 100 years in terms of anything that people think of as America being important on the world stage, having a stable economy, being a place where people are safe, that goes away for 100 years. It's just the normal cycle of this stuff. Even China had their 100 years of humiliation. Look at what happened to Argentina, same thing. It took 100 years. They're still not back yet. Maybe they'll make it, maybe they won't. But it's like, when, when a country defaults, it is so catastrophic. It doesn't sound scary, but it's like terrifying because you become uninvestable. And so now the part of debt. That's useful, goes away and you can't raise it. And so your country just gets stuck.

• 31:54Tom Bilyeu?

  And it, that is a nightmare scenario, the likes of which I really don't want to live through. Uh, and then if it's some lesser version of that, there's still going to be some untold number of people that get murdered in the streets. It just plays out over and over and over.

• 32:08Speaker 01

  I don't disagree with a single thing you've said so far.

• 32:09Tom Bilyeu?

  Perfect. So now it's like, okay, when I look at, if, if everything driving my thinking is economic, I'm going to look at the candidate that seems to have a better grasp of economics. And I don't expect you and I to agree on this, but Kamala Harris completely ruled herself out when she started saying words like what Mamdani is saying, he's more crystallized, he's farther down the road. But she was talking about the same thing, price controls and things like that. And for me, when somebody says that, it's just a disqualifying statement.

• 32:41Speaker 01

  What do you think? Cause Trump has said so many more things and more.

• 32:45Tom Bilyeu?

  We're never gonna agree on that.

• 32:46Speaker 01

  Well, no, but there are some things that you would just be objectively, factually incorrect on. So for instance, if you're worried about socialism, how do you feel about the fact that Trump now, the United States is getting shares? The United States government is getting shares in like Intel or US still Nippon Steel. Like that's like a social, that's like an AOC Bernie Sanders wet dream. Oh, the government has like shares, voting shares or whatever.

• 33:05Tom Bilyeu?

  Capital letters moronic.

• 33:07Speaker 01

  Yeah, but a Democrat would have never done that. That, so this came from Trump, right? And then when we look at things in terms of like catastrophic impact on the economy, nothing that Kamala said, and Democrats say a lot of dumb things, is the equivalent to the tariff regime that we have right now. That is continuing to, our currency devalued 10% over the past year. Uh, our trade.

• 33:25Tom Bilyeu?

  The tariff thing is very complicated.

• 33:27Speaker 01

  It's not.

• 33:28Tom Bilyeu?

  You have to devalue the dollar. There is no way out of this without devaluing the dollar. You have to generate more tax revenue. Tariffs are a tax. He, look, Trump is bordering on indefensible.

• 33:40Speaker 01

  So you're not gonna. Even what you just said doesn't make sense because if you're trying to generate more tax with a tariff, why can't you just raise income taxes?

• 33:49Speaker 01

  Wouldn't that be so much easier? And it wouldn't hurt our trade relations with the rest of the world? Or because bumping up your income tax by a few points in every bracket is going to raise you hundreds and hundreds of billions of dollars. Easy way to raise a ton of money. But the import tax is damaging. It's destroying our relationship with so many other countries around the world and it's hurting our domestic economy and it's having disproportionate impacts on the people that probably need the money the most.

• 34:10Tom Bilyeu?

  I think this is going to have to play out before we know if it's helping us on an international stage or hurting us. I honestly don't know.

• 34:16Speaker 01

  Okay, we've got zero deals in however many days. We said we would have 90 deals in 90 days. We have none so far.

• 34:21Tom Bilyeu?

  Well, that's not true. We do have deals.

• 34:23Speaker 01

  We don't. Trade deals? Real trade deals? No.

• 34:27Tom Bilyeu?

  What defines real?

• 34:28Speaker 01

  A trade deal would be like a market-wide deal that dictates different terms across the different sectors of your economy. Like, these are usually hundreds of pages long. It's not like we'll tariff you 10% and you tariff us 10%. Because there's a lot of, like, markets are sophisticated things, depending on how you run it. Like, let's say that, like, oh, I buy, you know, milk from you and I also sell milk to you. And you're like, okay, cool. And in our economy, we also have a thing where if you produce milk, you pay 0% taxes. Well, that's not like a tariff, but that's a pretty bullshit advantage that you guys have that's not really fair. These are the types of minutia that you get into when it comes to actually writing a real trade deal. It's not just saying like, oh, blanket tariffs.

• 35:05Tom Bilyeu?

  Taking a short break, but there's more Impact Theory after. Stay tuned. You're probably paying two salespeople to do one salesperson's job. That's where today's sponsor, Pipe Drive, comes in. An intelligent, AI-powered sales CRM loved by growing sales teams. Pipe Drive just launched meeting intelligence built right into the CRM. Before every call, it pulls deal history and past conversations into one brief. During the call, it records and takes notes. After it, it drafts your CRM updates to review and approve. So there's less admin and more selling.

• 35:43Tom Bilyeu?

  Switch to a CRM built by salespeople for salespeople and join the over 100,000 companies already using Pipe Drive. My link gets you an exclusive 30 days free instead of the usual 14-day trial. There's no credit card payment needed. Just head to pipedrive.com/impact to get started. Again, that's pipedrive.com/impact and you can be up and running in minutes.

• 36:13Tom Bilyeu?

  Thanks for staying tuned. Now, let's get back to it. But are you saying that, leading into this, that things were going well?

• 36:20Speaker 01

  Yes, phenomenally.

• 36:22Tom Bilyeu?

  Donald Trump is fucking that up?

• 36:23Speaker 01

  Yes, absolutely.

• 36:24Tom Bilyeu?

  So, we've at least now identified the base assumption that we do not share.

• 36:29Speaker 01

  Okay.

• 36:29Tom Bilyeu?

  So, I'm looking at the international trade deals that we have, and I'm like, I cannot believe we have allowed this to happen. We are now in Thucydides' trap. We let China grow powerful because we were idiots. And this is a tale as old as time. We could have, could have, and I'm sure there was somebody that's been screaming about it from day one, predicted that this is exactly what was going to happen, which we let happen.

• 36:50Speaker 01

  Wait, what was the bad thing that was gonna happen?

• 36:51Tom Bilyeu?

  That we have now completely gutted manufacturing out of America.

• 36:56Speaker 01

  But the manufacturing is at the highest point it's ever been. It was at Biden, it was the highest point it's ever been. We've exported a lot of low-level manufacturing, but we don't have people to manufacture everything. Like, China's not trying to expand their low-level manufacturing. China's trying to grow into the manufacturing that we do.

• 37:10Tom Bilyeu?

  Yeah, let me give you an alternate version of this is what I think actually happened. China admits this is what happened. The VCs are finally talking about this is what happened. It's the 80s, and China is backwards. Deng Xiaoping comes into power, realizes Mao was killing people en masse, and is basically like, "Thank God he's dead. We're not gonna repeat those mistakes. We're actually gonna let people get rich, but we don't know how to let people get rich." They ring, ring, "America, can you please teach us how to be rich?" We go over there, in fact, at first it starts with a conversation, I believe, with the Japanese. Japanese give them indications about how they're gonna have to do this by decentralizing banking. They contact America. America goes over and basically helps them get all of the capitalist system up and running,

• 37:53Tom Bilyeu?

  how you need to decentralize who gets loans, you need thousands of banks, not a single bank. You need a VC environment, and so, literally, American VCs fly over there, of course, selfishly, thinking that they're gonna reap all these benefits. They get all of these companies to go over to begin teaching them. Deng Xiaoping has an official policy: "To bide your time and never take the lead." And he's like, "This is a part of this long plan. We're eventually gonna take over, but first, we've gotta, like, get all this information." And so we realize, oh my God, we can get everything cheap by sending our manufacturing over there. But China's playing a different game and they're like, we're going to start with those things, but we're going to get them to send their best and their brightest. Look at what they did with Tesla.

• 38:34Tom Bilyeu?

  And they say, hey, Elon, we're going to let you build a Tesla factory over here. Normally we would force you to have 50 to 51% Chinese ownership. We're going to let you keep the whole thing. But you're going to teach our engineers Tesla now over whatever 10 years, 12 years that they've been manufacturing in China is now some tiny fraction of the EV market when it used to be 100%. And they have just learned everything they needed from him and now have surpassed him, you know, however much massively. And so that's the game that they've been running. And Tim Cook said, I don't know, a couple of months ago, he was like, I don't know what you guys think manufacturing is in China, but these are the best high end manufacturers.

• 39:13Tom Bilyeu?

  If you run the stats of America post World War One, leading into World War Two, we were the dominant manufacturing power for an industrial age economy. We have now, and that's by the way, why the probably apocryphal quote that the Japanese admiral said when he bombed Pearl Harbor. I fear all we did was wake a sleeping giant and filled him with a terrible resolve. What he was referring to is that America could just outproduce everybody in terms of ships, tanks, aircraft, everything. And so we just turned all that machinery on to building the war apparatus. Now flash forward, we're headed into the same style conflict with China, except China looks like us in terms of all the meaningful manufacturing like we did before World War Two.

• 39:57Tom Bilyeu?

  So now if we go into a head on collision with China, we will not be able to come anywhere near their production levels. So now it's like, I get it.

• 40:06Speaker 01

  How would we ever expect a country of 330 million people to be able to outproduce a country of what is China 1.7 billion?

• 40:12Tom Bilyeu?

  Of course.

• 40:13Speaker 01

  How?

• 40:13Tom Bilyeu?

  By keeping these things yourself, making sure that you don't let go of them. Building the incentive system to keep people focused on manufacturing, high end manufacturing, the same way that we're doing with AI with massive investments.

• 40:28Speaker 01

  But I'm saying, where are you going to get, if you want us to continue the high end manufacturing we do now? What are we taking from to start doing low end manufacturing again?

• 40:35Tom Bilyeu?

  What do you mean from a budget perspective?

• 40:37Speaker 01

  No, from a human capital perspective, unemployment is like four and a half percent. Where are we getting all the people to do the low end manufacturing? We have to move people from high productivity jobs down to lower productivity jobs. We're going to have to start to give in some part.

• 40:47Tom Bilyeu?

  I reject that wholeheartedly. So, right now, we have, it's like 4% unemployment technically, 3.8, something like that. But, once you factor in all the people that have just checked out of the job market, it's like 12%. So, it's a massive number that, for some reason, nobody talks about.

• 41:02Speaker 01

  So, the reason why people don't talk about it is because we have, so there's different ways to measure unemployment. The most common way is just call the unemployment number. It doesn't include discouraged workers. This is the U3 unemployment number. You're talking about the U6. People like to bring up the U6 when they say the U3 is fake. The reason why the U6 unemployment isn't the thing that economists look at the most is because there's a lot of reasons why people might stop looking for work. They might be in education, they might be at home, they might be...

• 41:21Tom Bilyeu?

  Totally agree. But I would put forward, the biggest one right now, certainly the most meaningful and important, is that there is a type of person for whom a certain type of manufacturing job is the jam, and those have gone away. We've shipped something like 2 million jobs overseas in that core type of manufacturing job. And, the stats, anyway, show that that is the biggest reason that your average worker has been unable to up their wages. It hasn't been the breaking of the unions. That's not correlated in the private markets to increased wages, basically, at all. And so, but if you have a bunch of jobs that need a bunch of workers, now, all of a sudden, the workers have the power to actually negotiate better salaries.

• 42:05Tom Bilyeu?

  Now, if we need to bring in labor, like, I think the whole world, the whole developed world, is about to be in a really weird position where we just don't have the birth rates. And so, we are going to have to bring in immigrants to fill these roles. So, having a sensible policy about how we fill in those gaps, I don't think would have been a problem at all. I think we took a suicidal approach to it, but there would have been a smart approach to get people in if there were jobs that truly, Americans, they had all the manufacturing jobs they could eat, then I think we'd be fine.

• 42:35Speaker 01

  So then, just as, so then, your assumptions are that, one, if we were to bring back a whole sector of manufacturing, we wouldn't have to take from anywhere because there's like a magical section of people that would be able to work these jobs that wouldn't...

• 42:46Tom Bilyeu?

  You say wouldn't have to take from anyone, you mean people?

• 42:48Speaker 01

  As in, you wouldn't have to move people out of higher productivity jobs to lower productivity jobs?

• 42:51Tom Bilyeu?

  I don't think you're gonna have to do high to low. As the things change, but you might have to, as technology advances. But you might have to import people. I'm perfectly fine with that.

• 43:00Speaker 01

  Okay, so then, so that's the first thing. And the second thing is, so I'm just curious, how, fuck, I don't know, the population of China, it's 1. something billion.

• 43:07Tom Bilyeu?

  Call it 1.4.

• 43:08Speaker 01

  Okay. How would you expect us to be able to out manufacture a country that's like five times our population?

• 43:14Tom Bilyeu?

  Comes down to where you're putting your resources. So China was way bigger than us and we were still out producing them because they didn't have years of being supported by the international banking community trying to spin them up. They didn't have people going over there and helping them to do everything our way. We did not see them as a competitor. And so we essentially traded cheap goods to build our biggest competitor.

• 43:37Speaker 01

  But eventually they're gonna figure it out, right? Like, how, like, how are you keep China from, like, is the assumption that they'll never?

• 43:42Tom Bilyeu?

  I think you can. I think on a long enough timeline, you're gonna find yourself in that situation. I'm just saying, don't be in a situation where they are both stronger than you based on size and stronger than you because you have outsourced your entire way of life to make sure that those prices come down.

• 43:59Speaker 01

  But then it feels to me then, like, if we know that we can't win on mass production like that, that our goal would be to produce, to have higher and higher productivity jobs. America works some of the most productive in the world. Where economically productivity is measured for how much a labor hour costs or in one hour, how much like stuff can you produce, basically, right? So it feels like the goal then would be to move to higher and higher productivity jobs. So when we look at like, what are the big things that people talk about right now? It's stuff like AI or stuff in computing. And these are the areas that America is still the leader on.

• 44:29Tom Bilyeu?

  Do you steer by efficiency? Like, as you try to map this stuff out in your head?

• 44:32Speaker 01

  What do you mean efficiency?

• 44:34Tom Bilyeu?

  Are you thinking along the lines of it is an obvious north star to steer by whoever is better at this thing? So Americans are better at getting high output per hour work, therefore we should focus on that.

• 44:49Speaker 01

  Oh, kind of. Well, the economic concept you're talking about is called comparative advantage, right?

• 44:53Tom Bilyeu?

  Yes.

• 44:54Speaker 01

  The, I'm just looking, when I just, I look at productivity broadly because productivity can tell you the amount basically of like.

• 45:00Tom Bilyeu?

  But is that your north star, just so we don't talk past each other?

• 45:02Speaker 01

  A bit, yeah, because the more productive your labor is, the more your workers are able to produce for the world, given the amount of time.

• 45:09Tom Bilyeu?

  Okay, I have a totally different North Star, which

• 45:11Speaker 01

  Yeah, what's that?

• 45:12Tom Bilyeu?

  Explain. So my North Star is rounded to national security and international dominance.

• 45:20Speaker 01

  Yeah, but national security is your most productive stuff. Like, what was one of the big, like, one of the big reasons why we won World War II? Was because we had all of the best and brightest minds, and we were the first people in the entire world to research the, you know, atomic bombs. For people that are fact checking, sure. But like I'm saying, like, we got technologically there before anybody else.

• 45:39Tom Bilyeu?

  Yes, that helped us with Japan tremendously, for sure, but the real story of World War II is we were able to manufacture like two thirds of every bit of equipment that was being sent over to Europe, so they were in our debt massively. We were able to aggregate all of the gold and we were able to build our own military up at some ungodly level higher than everybody else. And we weren't getting bombed. So at the end of the war, now we're, we have the gold, we have the manufacturing capabilities. We've got our GIs returning home, getting educated. We have a massive baby boom, right? So there's all these things that go into that moment, but the

• 46:24Tom Bilyeu?

  the linchpin, the one thing, if you were like, if you knock that peg out, everything is different, is our ability to manufacture the thing that mattered in that moment.

• 46:32Speaker 01

  Because that was like the most productive thing to work on at the time. But I think as technology has moved further and further into the future, other things become necessarily more important.

• 46:41Tom Bilyeu?

  We might be able to agree on that. Like, if we end up saying the most productive thing that we could be manufacturing right now, or everything that we need for our modern way of life, technology and war with China, then I would say yes.

• 46:53Speaker 01

  Okay. I just, I feel like those wars aren't going to be won by who can make the most ships. I feel like those wars are going to be won by who figures out like the best missile defense systems.

• 47:01Tom Bilyeu?

  That's going to be part of it, but it, uh, all of this stuff is a cat and mouse game. So if what we find is, hey, we're the software kings of the world, we're better at AI. And so we assume that this is going to be war played on the AI battlefield. We're ready for it. They can't fuck with us. Uh, well, then they go, oh, but they're not ready for drones because we have the entire drone supply chain. And so we're just going to swarm them with drones. And so, yeah, like they're going to fight back with, um, AI and that's going to be devastating for us. But we're just going to keep droning them.

• 47:30Speaker 01

  Sure. But then what do you think is easier to switch tactics for? For us to start manufacturing rudimentary drones or for them to start manufacturing complex AI related stuff? Software related stuff?

• 47:41Tom Bilyeu?

  Nobody's standing still. We're not standing still on drones and they're not standing still on AI. So.

• 47:45Speaker 01

  Sure. But everybody, I'm just saying that when you look at the world, everybody wants to be like what the US is. Nobody wants to be like what you're advocating the US becomes. Like the people that we exported our supply chains to, they want to be more like America. They're not thinking like.

• 47:57Tom Bilyeu?

  That's not true. We exported our supply chain to China and China has no interest in being like America.

• 48:01Speaker 01

  Absolutely. What do you, they're making huge investments in green energy. They're trying to make bigger investments into their microprocessor technologies.

• 48:06Tom Bilyeu?

  That's what you think of as America?

• 48:08Speaker 01

  The higher productivity, more specialized labor stuff.

• 48:10Tom Bilyeu?

  Okay. So when you say more like America, you mean highly specialized.

• 48:13Speaker 01

  Highly specialized labor producing like end of like supply chain levels of goods.

• 48:17Tom Bilyeu?

  Okay. That makes sense in terms of just being economically efficient, but I don't see how that collides with the argument in this moment. That doesn't in any way, shape or form alleviate the need for America to protect itself, for America to be economically strong, to make sure that workers are able to negotiate their pay better, to make sure that we have, uh, jobs that fit a massive bolus of a certain type of person that we have that right now, uh, has just checked out of the job market. Right?

• 48:48Speaker 01

  Yeah, I don't know if I would destroy my country to try to bring back old jobs because there's some sector of the economy that-

• 48:53Tom Bilyeu?

  So what's the part that would destroy it?

• 48:55Speaker 01

  Is regressing in terms of the types of goods that we manufacture. As in saying like, "I don't like the fact that we're making the X-87, why should I say the F-35 plane, because we should be making more aluminum widgets." So we need to take a little bit away, but in your mind, you're trying-

• 49:10Tom Bilyeu?

  Do you think I'm saying that?

• 49:11Speaker 01

  I don't, but one of the frustrating things when it comes to economics is people only ever talk about one side of an equation.

• 49:16Tom Bilyeu?

  I can talk about this whole thing, top to bottom. You can go anywhere where you think I'm weak and we can talk specifically about that.

• 49:21Speaker 01

  Well, but the problem is you've fictitiously invented this huge working group of people that can move into a job with no other negative benefits.

• 49:26Tom Bilyeu?

  So I maybe wrong, but I certainly have not-

• 49:28Speaker 01

  So like, what I'm saying is that for the manufacturing stuff, you are going to destroy higher productivity, you're destroying more advanced stages of your manufacturing sector if you want to bring back base manufacturing. That's an inescapable truth-reality.

• 49:39Tom Bilyeu?

  Okay, so that is perceived as false by me. So let's walk through and see if it really is false.

• 49:46Speaker 01

  Sure.

• 49:47Tom Bilyeu?

  So, base assumption number one for me is that there are very capable, almost exclusively men of prime working age, right now to the tune of like 8%, something like that, it's very close to 8, if not exactly 8, that are capable, but have checked out of the labor market.

• 50:04Speaker 01

  Sure, that's our fir-, that's probably maybe our fundamental big disagreement. I don't think that that's necessarily the case.

• 50:08Tom Bilyeu?

  Meaning that stat isn't real?

• 50:10Speaker 01

  I don't think so. I haven't heard that particularly.

• 50:12Tom Bilyeu?

  Okay, let's, just so we don't bog down, if it were true, does that puzzle piece click and now my entire argument makes sense to you and at least has internal logic, though, in your mind?

• 50:21Speaker 01

  If it was true, then I think looking for work for them might be good.

• 50:26Tom Bilyeu?

  Okay.

• 50:26Speaker 01

  But then the second issue, that's even assuming that was true, which I don't think it is, but that's the second issue that I have, is on that road, whatever manufacturing we were to bring back to the United States would leave those people still in the exact same spot.

• 50:38Tom Bilyeu?

  Okay, that's very possible.

• 50:39Speaker 01

  Sure.

• 50:40Tom Bilyeu?

  So, now, the thing that drives what manufacturing that I'm trying to bring back, and maybe it's just aspirational to get these guys back into jobs, and maybe once we really look at the kind of things that I'm saying we need to bring back, because I'm not saying start making widgets- Maybe we find, ah, sorry, man, like between AI, robotics, and just how high tech it is, just not going to be these guys, and they're still LOL, or SOL. Yeah, very possible. So we'll set that aside. They're a big cloud of maybe.

• 51:09Speaker 01

  Okay.

• 51:10Tom Bilyeu?

  But the thing that's driving me saying, we need to get those, we need to get jobs for them back, is that's how you get them negotiating power again, workers to have negotiating power to drive their rates up, which for me, as part of my North Star, it is an absolute must because you need a thriving middle class. And right now, if there's, if you can send jobs wherever you want, or import people cheaply from wherever you want, workers will never have the power that they need to be able to negotiate higher salaries. So that's just like, to avoid having my head lopped off as a rich person, I know I need to do that. So that's, that's like, not even just a moral good, that has to happen. Like, if you don't do that, you have destabilized capitalism to the point where it will break. It's broken many times in history for this exact reason. So.

• 51:54Speaker 01

  I guess that's like the sanity check that I would have here is, do you feel like this is an area that we're at right now in the United States, where we've done a lot of damage to our middle class or something?

• 52:03Tom Bilyeu?

  A thousand percent. It's mathematically showable.

• 52:07Speaker 01

  Okay, so then my question is, is what other country's middle class do you think is doing better than ours?

• 52:11Tom Bilyeu?

  China.

• 52:13Speaker 01

  That I just completely and totally fundamentally disagree with that.

• 52:16Tom Bilyeu?

  You don't think China increasing, their wages went up 30X in the same period that Americans stagnated. From the 70s until now, they've had a 30X increase in worker salary. Ours have stagnated.

• 52:28Speaker 01

  My son grew 100 times more than I did in the past 10 years of his life. Because he went from four to 14, and I probably haven't grown at all since 20.

• 52:36Tom Bilyeu?

  It's perfect.

• 52:37Speaker 01

  China, China's people are approaching, their wages have grown more, but that's to become, getting more in line with the United States.

• 52:44Tom Bilyeu?

  Yeah. What do you think that does to the psychology of a nation? Do you think that it makes them sad that they've grown that fast?

• 52:51Speaker 01

  No, but they're playing catch up to us.

• 52:52Tom Bilyeu?

  But it's gonna make them feel awesome, right?

• 52:54Speaker 01

  Yeah, but they're still behind us.

• 52:55Tom Bilyeu?

  What is it due to the psychology of a nation that stays flat for 40 years?

• 52:59Speaker 01

  I don't know if I would say we've stayed flat.

• 53:01Tom Bilyeu?

  We have stayed flat, it's just math.

• 53:02Speaker 01

  In what, in what regard?

• 53:03Tom Bilyeu?

  Salary, real salaries versus cost of living has just root, it's flatlined. In fact, cost of living compared to what people are making are, is going up. So.

• 53:12Speaker 01

  I think that's, there's a whole separate conversation you could have on that.

• 53:17Tom Bilyeu?

  Why do you think people feel like they can't make ends meet if everything is great?

• 53:22Speaker 01

  Well, I'm not a politician, so I would say it's because the American consumer is incredibly spoiled and has no idea what the standards of living are across the rest of the world, and is constantly lied to by their own politicians about what other people are living like in the rest of the world.

• 53:33Tom Bilyeu?

  Okay.

• 53:34Speaker 01

  The reality, the number of realities, the American consumer is the strongest consumer on the planet, and other people would kill to have the horrendous standards of living. Our homes are massively larger, we have the latest and cutting-edge technology when it comes to healthcare, we invent like all of the coolest stuff here, we're not caught in these weird manufacturing traps like Germany is, and our immigrants, even our illegal immigrants, are all at work. And in other countries, they're having legal immigrants that can't find work, their unemployments are higher, their inflations are worse, like every part of their stuff is like not running as what every other country on the planet wants to be like the United States of America. And the US consumer, the only reason we can even have these trade differences we have is because the American consumer has so much power. And there are arguments you can make around like cost of living, everything else, but it's depending on how you factor it, and it's a whole separate conversation. But like, for instance, like you could say like, oh, like, the amount that you would

• 54:17Speaker 01

  spend on a console today is flatlined, it's the same you'd spend on a console, you know, 20 years ago, and that's true, but like you could buy like a PS5 today, and in the past you could buy a PS1. So even if like the, technically the cost is the same or is flatlined in terms of real wages, you're getting a lot more for it. Same arguments can be made about stuff like healthcare, right? Even if healthcare costs are like fairly high, like a type 1 diabetic 100 years ago is dying in two years, whereas today, you know, it might be expensive or even more expensive because of the things they have to pay, so like, oh my god, the cost has gone up, but it's also because, well, now they live like normal lives almost. So it's hard to measure that directly, but when I'm doing like sanity checks on this, I'm just like looking at other countries. You mentioned China's growth, part of China's growth has been their liberalization of their economy, foreign direct investment.

• 54:59Speaker 01

  The only reason China can even afford to grow is because we have so much money here, we have so much investment here, and we've grown also as a result of our relationship with China, and China's trying to race towards what the United States is right now. And I think it's an interesting, as a sanity check, like, why, if China's racing towards to get to where we are, why do we want to go back to where they're coming from?

• 55:19Tom Bilyeu?

  We don't. And so I think the strategy that Trump right now is running is to be more China than China. I think that that is suicidal. Okay, there were a lot of things- laid out and I want to see if we can start putting some of these pieces together. So first of all, you put out the idea that if Americans knew how good they had it, that they wouldn't be as feeling bad about where they are as they are.

• 55:48Speaker 01

  A little, yeah. And just in qualifying that, we should always push for better stuff. I think that's great, but there are some Americans who think that like in Europe, they have free healthcare and for everything else and they pay no, like they think everything is so much better. And it's not really the case.

• 55:59Tom Bilyeu?

  You and I agree aggressively and lord knows, I wish that that felt like a winning battle, but convincing Americans that they really do have a good. I don't, it just doesn't line up with what I know about human psychology. So the Gini coefficient makes it very clear, the studies with monkeys make it very clear. If people look around and see somebody else and they have a perception that that person's being treated better than they are, they are going to lose their shit.

• 56:21Speaker 01

  Agreed.

• 56:22Tom Bilyeu?

  And right now, because of a very quantifiable economic problem, we've put young people in a position where they are buried under student debt largely. At a time where the government pie really is shrinking because the interest payments are growing and just gobbling everything up. It's more than defense. It's the third largest expense that we have in the government and it's growing. It will become the second largest expense almost certainly before the end of 2025. So this is happening very fast. So your interest payments will in the next couple of months, almost certainly pass Medicare or Medicaid as the second highest expense in the government.

• 57:02Tom Bilyeu?

  So it's like, that's creating this insane distortion in terms of what they can afford and what they can't afford. Because the way that the government makes up for that shortfall is with money printing. Money printing is inflation. They're not related. They are the same phenomena. And so things are becoming more expensive precisely because the government is deficit spending. And so as long as they deficit spend, they are making things more expensive for people by taxing everybody. But the only way to hide from the taxation that is inflation is to own assets. Okay. Well, great. Anybody can own assets, right? The bad news is only 10% of Americans own 90%. Thirty-three percent of the assets, and I'm gonna guess that follows another power distribution.

• 57:45Tom Bilyeu?

  And of the 10%, I'm sure that 80% are 20% of the people. And so you're gonna have some ridiculously small number that own all of the assets in America effectively. And then everybody else just gets absolutely hosed by inflation. And then they wonder, why can't I make ends meet? Now, when we did this in the seventies, we at least had women that could go into the workforce and start making money. And so houses, uh, household incomes could rise back up and match it. And cool, we were fine for another couple of decades. But we're now at the point where there's just, there's no that thing left anymore. There's no other person to put into the workforce. So I really think, despite that I agree with you very wholeheartedly, that people are in a position where,

• 58:29Tom Bilyeu?

  they really do have a good, poor people in America have it way better than people in other countries. However, it really is that things are getting more expensive. They really can't afford it. And the only asset they understand intuitively is a house. And houses are just completely out of reach because of inflation. And so now, because of deficit spending, they can't buy a house, they can't get out from under their debt, and they can't afford things. And so I'm not confused when they're like, hey, I really wanna be a socialist. And I'm just saying, the bad news is though, that will speed this problem up.

• 59:04Speaker 01

  Sure, so I, I understand what you've said. I feel like there's a couple of things that are difficult to understand though. One, so like one thing, you said that deficit spending was bad because it makes things cost more. But then I feel like earlier you said, one of the big things is we have to devalue the currency.

• 59:20Tom Bilyeu?

  Yeah.

• 59:20Speaker 01

  So when printing more money and devaluing the currency, wouldn't this like play into the same thing? When you want that to happen?

• 59:24Tom Bilyeu?

  If I say you should never hit a woman, and then a woman rushes into the room and is hitting your child with a baseball bat, beat the shit out of that chick.

• 59:31Speaker 01

  Okay.

• 59:32Tom Bilyeu?

  So I'm just saying, we're in a position where things are so bad. There are four levers that you have to pull. All of them are bad, but you have to pull all of them. You have to forgive some loans, okay? And that just means wiping out the wealth of some people.

• 59:43Speaker 01

  So then the inflation stuff, you think, isn't necessarily that big of a deal right now? Because we need to devalue our currency for reasons?

• 59:48Tom Bilyeu?

  No, the inflation is horrible, and I'm gonna make it even worse. But the only way- To get out of this predicament is to use deflationary and inflationary levers. We have four of them. Two are deflationary, two are inflationary, and we're going to try to, oh, God, get it just right and get it to the point where the people that were stealing from by eliminating their, because when one person owes debt, that's somebody else's liability, sorry, somebody else's asset. And so as you wipe out one person's liability, you wipe out their asset, and so they just lost money that they work for, and it's just gone. And you just, all you have for them is a sorry, that's just where we're at. So you're gonna do some of that. You try not to do so much that those people openly revolt.

• 1:00:29Tom Bilyeu?

  You're gonna have to do some money printing because you have to devalue the debt itself in order to get out of this. You're going to have to tax the wealthy more. There's just no way around that because you gotta generate some additional funds somewhere, and then you have to go into austerity, but not so much that you freeze up the economy. Ray Dalio details exactly how to do it. It's called Beautiful Deleveraging. No one's ever going to do it. But those are your levers.

• 1:00:54Speaker 01

  Okay, so I guess, yeah, I understand this, and we don't have to retread too much of this, I don't want to circle the drain on this, but I just, when I feel like I look at all of Trump's major economic policies, all of them just make everything you said worse. That's what I feel like. So you talk about like Gini coefficient inequality, like-

• 1:01:06Tom Bilyeu?

  So out of this, your goal would be to convince me, we're in a tough spot, Tom, but you're just better off with the Democrats.

• 1:01:12Speaker 01

  One trillion percent.

• 1:01:13Tom Bilyeu?

  Got it.

• 1:01:14Speaker 01

  The reason being that there are, so there are two huge things that are easy money makers.

• 1:01:19Tom Bilyeu?

  And really fast, just so I can map to this. The reason that you want to talk about that, which I find mildly interesting, but not super interesting, is because we live in a political world, we are gonna have to elect somebody, and so let's just focus on who the somebody is.

• 1:01:36Speaker 01

  A little bit, yeah. But it's also secondarily played into a thing where, like, somebody is telling you, you know, I really, really love, I love sweet foods, I love sweet foods, they're my favorite. And I'm like, oh, yeah, me too. Here's a candy bar, and then they dump like a bunch of salt in their mouth, and I'm like, very confused. I'm like, I feel like something is not matching up. It's like, I hear you give a lot of like baseline stuff, and I'm like, that sounds good. I think I agree with that. But then the prescriptions are being like wildly different in terms of my mind. So two easy ways to make money that the Democrats were doing is one is funding your IRS. You have to be able to collect the tax revenue that's owed to you. And the money we're saving here is on the scale of hundreds of billions of dollars for what the IRS itself has said is out there for monies that they could get. I think $600 billion is the last number I saw. So that's the first thing. Biden expanded, was it 80,000

• 1:02:20Speaker 01

  agents or something? And then Trump has now peeled that back. So that's one way to do it. And then the second way is income taxes are just such a nice and easy way to collect money. Everybody has a job. Generally, people have jobs. The money's just taken out of your paycheck. It's super easy to administer. It's very easy to collect. And it's very easy to kind of like target different people with different tax rates. Tariffs are like the messiest, worst way to absolutely fuck over somebody who has to buy certain goods that is more important to them. Like it's a consumption tax, basically. But it's a consumption tax that's probably disproportionately hurting poorer people. So when I look at Trump, we're making some money now through tariffs, which I would argue are also doing external damage. But forget it. Just looking at the consumer. So tariffs are probably one of the worst ways to tax the United States. And then he expanded the tax cuts, which

• 1:03:05Speaker 01

  is severely decreasing our government revenue. And then he peeled back all of our IRS collections up because they hate it. And then to satiate our debt woes, we got Doge, which went from saving $2 trillion to maybe $9 billion, if that. And it's like, everything I've seen Trump do is horrible. Kamala wouldn't have solidified the tax cuts, which would have helped a lot on the revenue side of things. They would have maintained the hiring of the IRS agents, which so we can enforce the tax cuts on the books, which is good. And then we wouldn't be doing this weird tariff thing so we could negotiate better trade deals if we wanted to. Or we would at least continue to have the poorest people be able to afford the things that they want, without disproportionately taxing them to try to make up for some new thing that she wouldn't have continued, which was the Tax Cuts and Jobs Act. Those are the big things that I see. And it just feels like

• 1:03:50Speaker 01

  all of them playing totally opposite directions from the Democrats and the Republicans. Yeah.

• 1:03:54Tom Bilyeu?

  That's it for part one. Make sure you are subscribed so you do not miss part two coming up soon.

• 1:04:02Tom Bilyeu?

  Let's talk about a pattern that is guaranteed to be killing your progress. You know what you need to do. You need consistent nutrition. We all do. You need vitamins, probiotics, greens. We all know that we should be doing more of it. When your morning gets chaotic, you skip it. When you travel, you skip it. When your routine breaks, everything tends to break. And that inconsistency compounds against you every single day. AG1 is designed to solve the execution problem. One scoop, eight ounces of water, and you're done. You're getting 75 plus ingredients, vitamins and minerals, pre and probiotics, nutrient-dense superfoods, everything that used to require six, seven different supplements, and perfect planning now happens in one drink that takes about 30 seconds to make.

• 1:04:47Tom Bilyeu?

  Right now, AG1 is giving you $87 worth of free gifts with your first subscription. You get a welcome kit, travel packs, vitamin D3 plus K2, and flavor samples. Click the link in the show notes or visit drinkag1.com/impact to claim this offer.