You at Lexus their greatest curiosity is you because the most amazing machines are inspired by machines, their inspired by people? That's why Lexus ask different questions better questions, more human questions, like? Can you see with your ears and the answers are, is inspiring as you are, which may leave you with one question. What amazing ideas will inspire. You next discover the answers at Lexus: DOT, com, slash, curiosity, welcome to stop. You should know greenhouse networks that establishing the financial times Yeah then you know I usually I shy away from it. As you know, you were, This was a good up like timely and

easy to understand, and I think a lot of people over such people say there. Of the many people. Most people don't understand what I understand, but I think, if you like me before, you probably didn't know the debts Listen it's really not! That difficult I mean, I had an idea with the ceiling was certainly didn't, understand the nuts and bolts over here, and I also didn't understand that its fairly straightforward, the whole thing the hour that our company per company has that report in our country. Yet the way they do business here is just it's kind of stuff: oh it's an enormous shell game. If it's a pretty weird, it's being held together, duct tape on bubblegum, yet disheartening

meaning and all that stuff so arm chuck. The debt ceiling has been around for a while will talk about the history of in a little while, but it really can. It came into focus into doesn't eleven. Yet there is a big fight over raising the ceiling which, to that point, had happened more than a hundred times since the beginning of the twentieth century. Here if it had been routine at any given point in time like it was just the ceiling to be raised, congresses ok raise it and that's that yeah in today

eleven thanks to a faction other public and party known as the tea party, yet the this very normal procedure or routine, I should say, procedure of raising the debt ceiling was basically like held up. Yet and the therefore the function of government was basically held hostage and it happened again into doesn't thirteen to even greater effect by the whites crazy to me, after understanding him in investigating what the debt ceiling is and what's going on,

I'm chilled to say that I understand from both sides the idea where both sides are coming from and why the debt ceiling is this. It is literally the fulcrum on which the entire federal government, the entire country, and not just the operations, the government that the whole- U S, economy and in turn the global economy sits, rests, and if you hold up the debt ceiling, you hold the entire global economy. Hostage. If you hold up process of raising the debts. Yes, ok, yeah, you hold it up, like a buttered view, wholly ass, if you're doing that in your backards. Yes, but that's that's the point, that's why I was pretty shrewd to target the debt ceiling, but it's not just

goodness you like, I I understand that the people who held it upward characterises political terrorists. I think, even if you take that aside or not like it, was pretty smart that to target that you're, not just because that a grating the whole hostage, because you can make a case like therein is the greatest symbol or functional symbol of all of the problems plaguing the United States today or pollution all of its problems. Man you're right down the middle, and the sergeant I truly understand from both sides is really weird. I think healthy perspective. I guess so here you know. Maybe that's what it is unlikely to have a healthy respect here at a deadly beats, a hardline partisan views on things I think when it comes to something

Huge and complicated right of irony is that the people who were holding it up or about his hardline partisan is, as you can get there. You know, but the prospect of attacking the debt ceiling in focusing light on it is, I think, a very smart move politically yeah. So let me make friends on the playground. No, it either fully will know that it is effective. Yeah, ok, search, We talk about this, so whether debts must talk about the federal government in general. How operates here? There's a thing that I didn't know existed until recently and that is issued everyday called the daily Treasury statement, and if I were doing this, the sounds just like a company or dislike even your own personal finances. Yes, it is just a large what what what more zeros exactly a lot more terror site. It's the principles, the exact same,

the daily Treasury statement is basically just the balance sheet of what we spend a day as a government and what we take in a day. So us just pick a day at random. That's featured in this article. Ok, good October. Third, ok act over thirty last year, not too long ago, it's a Thursday the sun was shining here in Atlanta, the federal government again about a hundred ten billion in revenue, we're in LOS Angeles Elinor took it in about a hundred ten billion dollars. For my things, like massive amounts of taxes that we have to be here, my words bailout loan payments for my laptop yeah. Showing all jet planes, things and guns to other countries, twenty seven million dollars made on that day alone, and then we spent a hundred

three billion dollars, so if we took in a hundred and ten- and we say two hundred and forty three billion- and we spent a hundred and forty three on hundreds, if not thousands of programmes, sure just all sorts of everything from security setting made up the lion's share, the the spending that day, which is twenty four billion, founded tax refunds. Yet and not just programmes but, like you know, The electorate bill at the White House right exact, paying the private in the army. Yes, like you, know everything the government base for which includes a lot of programmes. So that is it a difference of thirty three billion dollars in that one day, a bad, a negative difference right so that a death Debbie ran on that day we ran deficit, which is not unusual, thirty three billion dollar deficit on its over third twenty; thirteen, ok, so of the rest of the three hundred and sixty four days

of that year, fiscal or otherwise we would have found it. Even if we, Lastly, we are today where we ran a surplus yeah you take all of those together. You take your surpluses in your deficits for all those days. Aunt em up and you have whether you have a surplus or a deficit for the year. If everything goes out, you would call a balanced budget for that year, which is just doesn't happen not very frequently. Now I don T, I haven't seen anyone I have seen like there's been a circular closer than out of fear. For the most part, though we ve been in a deficit, especially since well for many many years well, I've got some numbers Let's hear ninety ninety three in this. I am not saying this presidency good. This presents bad Bryce Congress in the House have probably more de Mr President, does not only that its possible some president's have inherited the carried the benefits of policies from other present. Economists don't know yet

its interests to man when people start, I read a few articles is really pretty interesting to see people's takes on the economies of the presidency but in eighteen, eighty three, regardless Bill Clinton, inherited a two hundred fifty five billion dollar deficit. In two starting ninety. Ninety eight we had the first budget surplus since nineteen sixty nine and then two years later in two thousand the high water mark of two hundred and thirty six billion dollars surplus in two thousand, which is I mean, that's mind, boggling these days, the man to think about that it means that the government, after paying all of its bills, still had two hundred thirty billion dollars left over yet and in people today store like couldn't got lucky, because or no Clinton's policies required or no it was the Republican controlled House in Congress right that forced him.

It was. It was kind of a lot of stuff right. I think the rational approaches there's a lot of stuff regardless right years and then the seventy thou Two hundred thirty six billion our surplus Clayton left office with a hundred and twenty seven billion dollars surplus in just a year later, we had a hundred and fifty seven billion dollar deficit, and by the time of Amr, came into office in two thousand and nine. We had a one point: two trillion dollar deficit. When he came in office, yes, and now it's it about seven, fifty nine billion, depending on what numbers you look at this is the deficit. Not the national debt. Ok are so. This is. This is a very big point of clarification that we need to make. That's the annual budget. Right here! That's the deficit. We know when you take all of those annual budgets over all the year

all the money with ever owed all the money we ve ever came out on top with come on a tablet, and you put it all together, you have, which called the national debt yeah. This is basically the money we borrow to cover those losses if, if we ever had, if you'd ever took all of those years together and we had a surplus than you call it the national surplus, I dont think that ever happened or ever happen. I don't think that's ever happened financial service here, since we sort of borrowing money, even though it had budget surpluses right because, let's say we ve had a good you, two hundred and fifty billion dollar surplus year- that's a great year, but we also we had five trillion dollars national debt that that we had to be thrown at right right. So when you take all of those deficits in all

for his new Adam altogether. What you come up with is how much in the whole of the United States is in. There is the national debt and, as it stands right now it s about, Nineteen trillion two hundred and eighty two billion five hundred and seventy five million zero Only four hundred thousand seven hundred and fifty five dollars in thirty five percent, that as of January twenty first, two thousand forty, and with every minute, getting more and more here too tired now than it was when you read it, which is pretty signify mouth here, especially if you consider that in two thousand it was about five trillion yeah! You know a number is bad when you have to look at it from right to left

in countless zeros, like I gotta see what the thousands of millions and billions. Ok that's trillion threat. So, if you, if you think about that anything about nature in in just fourteen years, like we ve gone up well over twelve trillion dollars in debt a trillion dollars or national debt has increased by that much and so now we can come to my info again appeal. Indulge me for a second. If you look at the increase right of course here there are two wars, though we thought Moreover, they definitely did that didn't help anything out of stone

not at work. So that was a lot of people to say you know those were eight peaceful years. I think they call it a Pisa packs from a peace dividend. Ok, yeah clean, prefer the surgical airstrike. That was his big things rather than troops and relying on NATO, but. It was so war, they caused quite a bit of money, so we were fighting not one but two wars. Then all of a sudden you have the global markets. Just go into the toilet here and now. And you have a lot of people who are unemployed, which means your tax revenue goes down there and you have in in office a present who believes in spending your way out of a crisis, my debt crisis- and this is why the tea party hijacked the theme that ceiling right, because a lot of people are saying

We don't agree with you, there's a lot of people who believe in austerity, which is you cut government spending to get your way out of a crisis? And if you look at Greece, they pretty much prove that you can't do that that it will just completely store your economy impossibly your entire government right and that was actually based on a paper. By a couple of economists who came out with this data that any government whose death income ratio with ninety percent Your debt was ninety percent GDP. Eating grow is fast right. It's all of a sudden. You had always people saying austerity, austerity, and then it turned out that this grad student from I believe, and my you gotta hold me. It's all data, and basically so they didn't carry like zero angrier incorrect thing and the government of Greece almost toppled because it is incorrect paper. That was why yeah well, but at the time

There are a lot of people saying well. First of all, we don't agree with deficit spending right means of getting out of an economic problem, but also you have some other people saying we may be there. Maybe it doesn't. History is improving that yet we still think is twelve trillion. Dollar increase in the national deficit is too much, so we need to curb this runaway spending, and one way to do that is to target that ceiling, yeah and debt ceiling. I don't think we ve even said specifically, is basically the MAX amount of of deficit. That weaken, incur yeah it literally. It's got a feeling when we bar or when we have a deficit, it hits that were at the ceiling in the only way to to change that is for Congress, like we said to to raise the ceiling, which has happened, how many times I think at least a hundred times

since it started well, since nineteen sixty am, they voted seventy eight times yeah. So let's call that modern times yeah it is a case in a matter what your politics are no matter what's going on a matter whose president this is the way the federal government set up. You have a bunch of money going out. You have a bunch of money coming it usually in the form of income tax or, like you said so in old fighter jet through that kind of thing sure, and the amount you have coming in very very rarely exceeds the amount you're putting out. There's two things you can do. You can increase your income where you can cut your spending and raise taxes right. So the while increasing income by raising taxes right exactly or you can cut your spending we had to political parties. One is completely attach to not increasing taxes near the other. One is completely attach to not cutting spending, especially an entitlement programmes here, so it doesn't matter.

Who's in office. These days, the way the things operate is you just go borrow more money, how you find the government? There has been no That's how you gotten around the politics to this point and we get Congress good race that you know by, like you said, raising taxes, that's not popular right or cutting spending another! That's this helps really kind of a bad situation, so we have is the? U S: Treasury, which issues death. That's right! U S! Treasury securities to people regularly mouse, large? Most though we were well desire matter, you can go by: U S! Treasury by banks, corporations governments! It's me We have very low interest rate loan and you know up until recently very, very safe one right and you still think it's pretty safe. But you know it's gotta go off the cliff it couldn't

was the big problem in October. Two thousand thirteen is a lot of people are saying they were gonna default, honour loan obligations that will get to that. Ok cassettes that the burden is at hand. That is in the Middle China, Japan, for instance, each on more than a trillion dollars and Treasury securities as of July last year, plenty thirteen threat. So a lot of people borrow money from the United States and pretty low rates. I think you it's it's worth explaining again like a treasury bond. Is you chuck going by going to the? U S government saying here, gives me Jimmy promissory note that says you're repay it with a little bit extra, the big write anything. At the end when this thing matures and the government has thanks we're gonna, take this money and we're going to use it to pay their bills yeah, because congresses

over and saying. Yes, we want to keep our national parks open and we want to. We want to find like so to get rid of her forever and we have built pay. So thanks for the money, we're gonna pay the bills. That's for Treasury. Does Congress and the money Treasury pays them on here and, if you're under the ceiling than its it's so good. Yes, fine, just figure out a way to pay the bills and Sicily. Company and Treasury also has more than one financial security. They are also the ones that different that mature different times and all that and dumb they. They do pretty good job of figuring out how to raise money yet, but the problem is for every Treasury bill that they sell truckers. That's that much more in debt. Yet a federal government has just said I agree with the deaths ceiling like you said there is a certain limit the amount of outstanding debt the Treasury Department can issue. Yet it's just like a credit card limit to an extent,

yeah, there's there's one pretty big difference is, but is a helpful way to think about it, because most people have credit cards, but the bank set your credit card limit because they say Josh now you're risky suspender. We do want to give your credit card more than my ten grand what say: yeah. So the bank puts the cap on it there on the other side of the coin, foreign governments that by Treasury securities like I'll take all you got basically right, So it's a reliable investment and the credit limit is by the borrow, and instead of the lender right, that's the big differently earth. With your credit card, it's the person lending the monies. That wants to say that that says no, you can't maroni more the with the debt ceiling it us saying? No, we can't. We can't go borrow anymore. It we could issue is,

it is we wanted and people by tee veils all day. Long because they're so safe, supposedly or in the moment, they are very concerned about the history of a bit of a hunter. Before we talk history, let's do a message board hey when you hear something amazing discovered matches all the cat. Back that you learn at the end of your first year automatically dollar for dollar, with no limit on how much you can earn amazing. Can I being showered with cash from above, which would also be put phasing in fact. It's so amazing that millions of people a year are getting their cash back matched they just can't get enough whether it's raining down on your head, reining in your bank account it's your cash back and discovers matching it discover cash back match? What are you waiting for? Learn more discover, dotcom, slash

Ash back match. Ok, and now we are talking about the history of the debt ceiling right, I think that's where we left off back in the day, Congress used to be a little tighter with this a lot tighter and We could not sell securities without explicit approval, treasury. To borrow money? So Congress would say hey what kind of security should we sell, large or small. What should the interest rate be? how many should we sell in the country that way up until war and eighty He ate the war revenue active. Eighteen. Ninety eight basically said you know what We need to listen. In a little bit and lets we can bar up to five hundred million dollars, but these security to define the war, the fund, the Spanish, make and war and then, after that they really coquet that works both listlessly that be and then

was war war wine, and there is the first and second liberty bonds acts which basically did the same thing. Help find world war wine and really well and the Secretary of the Treasury. I think Andrew Carnegie, Melon and Andrew Melanie. You can understand why be confused there and Henry Morgenthau later on in the nineteen. Twenty and thirty is basically said. Why not just do this to fund? remain, as it is a whole year, instead of just in times of war and now today, if you could go back and sit down with me, you could say, because. I think it's out of control in you do has its Cray right, but they gather was it Franklin year after year They got Roosevelt on COM Board and they got Congress to pass this for the first time ever in aggregate debt limit, which is all the debts,

U S owed here as long as it was beneath a certain amount of the Treasury could do whatever it wanted to pay, it fills Xyz it did. To borrow any more than that, and that was the first time that a debt ceiling was ever set in thirty nine, I think you're thirty nine, and that was it pretty somewhere to count the debt feeling that we have today not to different Congress, approves spending. Treasury figures are how to pay for it all and longer. Under that, it's all good. The problem is when you bump up against it, like we ve been doing over and over again lately, it seems like yeah so, like you said that it is a problem, each vote to raise it. Yes and again this been pretty routine. You know a hundred times since the the nineteen thirty's nineteen forty a hundred times things been lifted,

I need to say: ok, well, fiscal issues, some more debt people want the debt yeah people want to learn this money, so go if you some order and we can keep paying our belts because here's the thing with the debt ceiling, when you raise the debts feeling a lot of people like well, if you don't raise the debts him ceiling at curb spending right, it's true indirectly wait. What the treasuries doing is paying for stuff tat. We ve already receive yeah, I'm credit, whether it's you know, meals for soldiers from a private contractor, write to you know a bunch of like Boeing jets yeah, whatever we ve already see these things now Treasury has to pay. So if, if you dont extend the debt ceiling, then your defaulting on payment, you have to make bills, you have to pay you dislike you, your credit card. Exactly and that's not good and it's kind of the same thing happens. Really, if we default,

Here's what happens if we don't raise it that ceiling and we are in danger of defaulting. We devolving would basically start raising all other interest rates across the board. What might learn rates basement, thing your average Joe going it alone for you you're right, you're gonna. Right and the reason why, because the ten year Treasury know is what the hormone rates are tied to and if the vow You were the credit rating of tea. Bill goes down, there, The people who are lending money in return for tee bill are gonna, be ever say like yeah. The money but you're a little more risky than you were before. I want a higher percentage rate, an interest which means it's more expensive for the

from it to borrow money, and if the percentage of interest goes up on the table, anything that's attached to that. Like homelands, business loans, yeah go up as well, which means what will that means? Everybody suffers exactly end. The whole country goes into economic drag and maybe even worse, you could get a lot worse. Did you see that that thing I sent you Forbes yeah. So a lot of people were saying in October, like our going over defaulting on our debt. That's not that big of a day that really, but it's a colossal deal, no matter what your politics are. One thing could happen is we can actually lose our credit aaa credit rating, which would be horrible. It would be horrible because people who, by tee bills, say I wanna higher interest rate, yet it still are the money. They were just stick to it right or right, but the thing is to make it more attractive because you

people would want to borrow money so to make it more attractive, the government would have to raise the interest rate on what it paid back, Riah, also the tea bills. If everything just went off If in the governments are you know what we can't pay back this debt, any t bill you hold with these now you listen to any other table, no one no, what they work, maybe gonna, eventually, reach Asia what was worth while they they were so they would all in effect, become worthless there. The problem is it not only do entire for federal go, Foreign governments rely on tv elsewhere in their reserves. Yeah, so do banks, banks, so you see those collateral for overnight loans yeah. Sometimes companies Cashman, because they need to be more liquid right so there's a lot of use of tea bills that totally infringing the economy and

If all of a sudden, they went valueless because the government defaulted on its loans obligations on its dead, then there would be that, like the entire banking system with lose at least a third of its collateral near a writ, its reserves and they would actually Polly be whole holding these things illegally. So they have to get rid of them, so they be selling. These things are whatever they could genuine collapse of the market's, whereas this form writer puts it, they would make the what happened in two thousand data for the women debacle. Look like a children's exercise would be catastrophic. Cats and dogs living together exactly mass hysteria, and that's really not hyperbole, like that. Obviously the worst case scenario, but the pianist T bills are so entrenched in the global economy there just be became valueless so too, with the Eagle Vulcan,

yeah. I wonder how you regain your credit rating, of or how long, I sure it's probably much the same as an individual here, So one thing that happen. If we decided not to raise the debt ceiling. Is Congress would have to operate within a budget which means the things that we are talking about before, like huge spending cuts or raising taxes both found or both, and this is tricky politics- people would get upset like what programmes do you cut, whose taxes do you raise is justified

Very dangerous game only be very, very deep cuts to yet, and the problem is any time the federal government makes huge cuts so too do corporations and then all of a sudden unemployment goes up. Yet they have to raise taxes even further, because a few people who are employed paying taxes and air or they may fall onto the teeth of the government as well, because your unemployed should we be worried now because certain about Teresa debts in every time there is no way that they would ever default. The two again catastrophically ban near. I think, though, you can be worried about continuing on, like this yeah I mean that has to pay you gotta pay at some point them yeah. You know there is one thing we didn't quite touch on that I think really can reveals what a big show game is it so again, if you don't want to raise taxes, and you don't want to cut programs, you just go the treasury to get more money.

Well if the Treasury doesnt have that much more money, you can also go to your own accounts and take whatever you can so so security, for example, by the trust fund and you're not allowed to take them security right, except to a certain amount. I see security at any time has to have two billion dollars were addressed in a ridiculously. Low number would say two billion. And then one day. So security has, two billion one hundred million at its accounts. Federal government takes the extra hundred million because it over and above the legal mandate and then uses it. Whatever else right, but it gets so security from payroll right from payroll taxes through you being employed, so it's another with its basically hidden tax, it's like a hidden way of generating revenue, increasing social security tax isn't actually helping. So security is helping fund this the governor.

It's the cycle, hemorrhaging money left and right. It sounds like you know the old saying robbing Peter to pay Paul, that's exactly right, This were Al Gore was talking about the two thousand election with the famous lock box thing like puts us security, no black box, you think, there's a surplus, you can't touch it right right and then that waste, so security will be able to actually pay for the people exposed to in thirty years, rather than being robbed define the federal government which will either raise taxes or cut spending or both yeah. I think most people- and I know when it's gonna happen, but at some point someone's not gonna, get there security that they paid an area where I think we definitely in that generate you think so yeah, I don't think it's gonna keep going on much longer or for you will be such a paltry amount that all this be laughable right now,

People get rich off the security. Now I mean there is now a new certainly can't live on it. I mean you can ensure in certain parts of the country, but for most people as a supplement to something, but here I think it would be like fifty bucks or something for us here. Who knows I'm depressed, though it don't be depressed. Why take action we're by taking care of your own personal finances? In spite of the government? Nearing Issa remain here. It's weird, and this one is, I think, it's great because Everybody's involved, like all political factions, are involved in this, and everybody has an opinion. You know like how to do this best, but I feel like aside from the people who are ready to push the send, Thought everybody has an understanding like this is very Fred

game agenda going on right now we could conceivably gone like this, but it is better to fix it, but we need to do it surgically yeah jingo, that's a get it algae because the wooden tower feels like it could tablet and a moment ago hey everybody. I wanna talk to you about your website that doesn't look good and this hard to program because square space does it better yeah they do square space. Is this amazing magical tool that you can just basically good people and all of a sudden. You have a website to do whatever you want with. You can use it to sell stuff. You can use it to tell your world about all the great thoughts you have and now screw. Space also offers email campaign. So you can take. Business embryo low it up here we square space ourself are very popular, as well as K live website keeps track of all comings and goings on Oliver alive shows, and it's always a

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hey guys ahead. I had your how dying works by gas. My playlist for quite some time now afraid too and your take on what is happening in my life. At the moment I lost my further to a rare form of cancer, beginning of the summer, and I'm currently caring for my grandmother closing days were life good listener, and when that. Appeared on my part. Yes list. I began to avoid the topic. I decided to Listen to your take on the end of life today, I thought you know how much I appreciated your take on death and dying. It's a topic that is Far from my mind these days and I information. You provided both informational and uplifting thanks for an we need that death is a process not an event information, as I always do from your show, but a surprising amount of comfort and reassurance I also know you guys. Don't do shouts a lot, but I took the challenge at the end of the show seriously would like to ask if you give a shot out to my grandmother Mama, it's a great man.

Who is the person who originally and still the curiosity of Learning and me that led me to your podcast in the first place you're. How grateful I am for other things she has given me and caring. The entire life is the greatest gift I could ever asked for that is from Chris Howl, so Mama I hope you are still with us in listening. Thank you for raising an some grandson in instilling that curiosity and Chris. If I was no longer with us, then Godspeed. I hope I hope that in process was comforting, nice, somehow very nice thanks. Chris thanks Mama fits in those agreements. Else you have, if you some some nice email that will knocker socks off like that, you cannot twitters elsewhere escape. I said podcast you can join us Facebook that complex studies.

You can send us a regular old email to stuff Pakistan Discovery that camp and you can hang out with us at our website. It's called stuff you should, That calls for more openness and thousands of other topics. Herself workshop com, with over a hundred thousand title to choose from audible dot com is a leading provider. Of downloadable, digital audio books and spoken word, entertainment, good, audible, podcast, dot, com, flash, no stuff k in O w s t you have to get a free audio book download of your choice when you sign up today, stay will be here before you know it everybody but relax, because each in our black, as your one, stop tack shop, their tax pressure, experts, certified and train and eighteen are black, has up front transparent pricing, which means you know the price before you.

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