American Thought Leaders - America’s Debt Is Growing Faster Than Its Economy. Is This Sustainable?—W. Bruce Lee

Episode Date: August 21, 2024

W. Bruce Lee is the executive director of the Phoenix Correspondence Commission, the first nationwide convention of states since 1861. It’s a little known government body owned by all 50 states organized to provide another check on the federal government.“After 40-some odd years of no progress in Congress, the states are being looked at as the solution now. And the states do need to buck up,” said Lee. “If Congress is unwilling to control itself, then there needs to be some external enforcer.”He argues the best way to rein in federal spending and reduce the $35 trillion national debt, is through a balanced budget amendment to the Constitution.“At $35 trillion, we’re spending more on interest payments than we do on our national defense,” he said. “If you do not have economic stability, you do not have anything. The whole house of cards comes tumbling down.”Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of The Epoch Times.

After 40 some odd years of no progress in Congress, the states are being looked at as, hey, you are the solution now, and the states do need to buck up. Bruce Lee is the executive director of the Phoenix Correspondence Commission, the first nationwide convention of state since 1861. It's a little-known government body owned by all 50 states organized to provide another check on the federal government. He argues that the best way to rein in federal spending and reduce the $35 trillion national debt is through a balanced budget amendment to the Constitution. At $35 trillion, we're spending more on interest payments than we do on our national defense.

If you do not have economic stability, you do not have anything. The whole house of cards comes tumbling down. This is American Thought Leaders, and I'm Jan Jekielek. Bruce Lee, such a pleasure to have you on American Thought Leaders. Jan, I am delighted to be here, and I really appreciate the work that you and the Epoch Times are doing. And it's a blessing to be here.

Well, thank you for that. And I'm actually going to read something that I read off of the letterhead of your organization, which I thought was fascinating. The states are separate and independent sovereigns. Sometimes they have to act like it. That's from Chief Justice Roberts. Yes, sir.

And, I mean, we don't often remember that these days, do we? Sometimes they have to act like it. That's from Chief Justice Roberts. Yes, sir. And I mean, we don't often remember that these days, do we? Well, we tend to forget about it a little bit. And citizens might forget about it. And the state legislatures tend to forget about it. Because we have, over a period of many years, ebbed into this thing of that, gee, the federal government is the big boss,

and almost to the point where the states are the administrative arm of the feds. Isn't that what it's supposed to be like that? But that's not correct. The states actually created the federal government, not vice versa. Unlike many countries around the world, where you have the national government creating these subsections, we created the feds ourselves and gave them specific powers and retained everything else to the states. Over the last few years, I've been learning about various types of checks and balances in the government. And of course, the ones we think of most typically, we have of we have, of course, the judicial, legislative, and executive branches, and they're all supposed to check each other.

There's another check. The ultimate check, if you will, is the states upon the federal government. It's called federalism. You know, this government's responsible for this. The state government's responsible for that. Local governments may be doing certain responsibilities that are delegated to them. But this is federalism. And American federalism is an extremely important component.

And ultimately, the founders, as they created our country, our governance, allowed the vast majority of power to be retained by the states for fear of a centralized government. And the founders just got rid of King George. And they said, well, you don't want to establish another centralized government. Because if you look in the Federalist Papers and other founding fathers who authored PIN different points, it says the natural tendency of government is to pull power

unto itself. And that is something to be very cautious about. No, absolutely. Well, and so one issue that I've become increasingly interested in that we've covered a bit on the show, we're going to be covering quite a bit more is the federal debt. You know, it really was something that I started noticing over the COVID years, because I believe we added something like $6 trillion to that debt, which is even, that is a substantial amount in itself, even to compare to what was there before, which people were worried about already. Yeah. The Phoenix Correspondence Commission, of which I am the executive officer, was created back in 2017 for the purpose of looking at this rebalancing of authority between states and the federal government. And the big issue, or the biggest gorilla in the room, is the national debt, which has been proclaimed by many as the greatest threat to our national security.

We don't necessarily treat it that way because it just grows and grows and grows a bit by bit. Now, last January, the national debt was $34 trillion. As of this week, congratulations, it's $35 trillion. So it's growing much more rapidly. There are a few things that one needs to know about that. And with your permission, I'll share a bit about it. Please, absolutely. Okay. Well, as of last January, the debt to gross domestic product, which is the major way of evaluating how much debt can I really keep? It's like

as a household, you know, I earn $100,000, but how much debt is healthy for me? $50,000, $70,000, you know, $100,000, that would be 100% ratio. Maybe if I'm a household of $100,000 and now I have $125,000 in debt, in debt well okay that begins to stretch it I'm just trying to bring it home to what what those numbers mean but it's projected to be 172 percent by 2050 and quickly crossing 200 percent thereafter I just finished chatting with a former comptroller of the USA David Walker he. He's a friend. He's a great guy. And he's sort of the Paul Revere behind the debt issue. And as he pointed out to me, we have $35 trillion in debt that's subject to the debt ceiling. However, we also have another

$12 trillion of unfunded liability, military, other pensions, et cetera, things of this nature. And we have another $78 trillion in unfunded liabilities with Social Security and Medicare. So really, when you talk about debt, we have $135 trillion, and no one talks about that. We always talk about the 35, which is sobering enough. At $35 trillion, we're spending more on interest payments than we do on our national defense. Okay, national defense is important. And if we begin to transfer this to meaningful terms as to the everyday taxpayer. So, $35 trillion is greater than the economies of China, Germany, Japan, India, and the United Kingdom combined.

$35 trillion is $266,000 per taxpayer. I have a burden, and if I don't pay this $266,000, my children or grandchildren are going to have to pay this because it doesn't go away. It's simply kicked down the road to another generation. If every household here in the United States contributed $1,000 a month for the next 22 years, then we'd be getting you know some balance 35 trillion is enough to pay for a four-year public education for all high school graduates in the United States for the next hundred and six years and we're spending over two billion dollars a day on just interest so you're trying to bring that at home it seems to to me, as I've been watching

government here in D.C. over the last five, ten years, there isn't really a huge effort to rein that in. It's just sort of assumed that it will continue. And you're suggesting this isn't normal. So how did we get here? I'll give you just a little bit of a history on this. So we've always had a national debt and there's nothing wrong with that. There's nothing wrong for a family to borrow money for a car or some essential etc. right? But do we have excessive debt? That's the issue. And if I will, just for a second, historically, we started off in 1794 with around 23% the debt-GDP ratio. Okay. And that went up in the Civil War, and it went down to almost zero. And then we had World War II.

That popped up. And World War I, that is. And then we had the Great Depression, and that popped up, and then World War II. It grew to the highest point ever, 114% ratio, but then immediately it was brought back down to around 26% in the years following. That's because Congress, with the power of the purse, was deciding to spend money prudently. They used the concept of stewardship, a concept which sometimes has been forgotten, that what we're doing here today is not just for ourselves,

but for our future generations. You had the Great Recession, which brought it down. Then we had the pandemic, which shot it back up. And now, again, we're projected by 2054 to be 172%. And so the phenomenal growth rate in just the past few years has been like mind boggling and staggering. So how did we get here? Well, honestly, and I'm not trying to pick on anybody, but I have to lay at the doorstep of Congress. They have the power of the purse. And Congress has been slightly dysfunctional in this process.

And there's a few fundamental reasons for that, too. I had a chance to interview Congressman Chris Stewart of Utah. He's been a congressman for about 12 years. And he voluntarily retired. He didn't have to just a few months ago. So he and I had a conversation, and some of his observations was, one, that this is the most dangerous time the United States has ever been in since the 1850s and the Civil War,

that most members of Congress don't fully appreciate all the responsibilities they have, that Congress does very little to engage substantially in intergenerational problems. What are the implications long term? Well, I'm going to be out of here in three or four years. I'll let someone else handle it or whatever. But the good news is that we can actually fix all the problems we have, and it's not difficult to do. But Congress tends to, from his testimony,

Congress tends to think the American public are cowards. They're not willing to buck up. They're not willing to bite the bullet. So we've got to just push it along, push it along. And, you know, Congress has not incentivized the thing long term. And D.C. is a bit of a favor factory in this process. So, hey, I want to run for election. Hey, there's a little tweak in the tax code here or whatever it may be. That's why we, just speaking to budget staff. You know, we get these. Our tax code is phenomenally complex. And probably Congress could at any time say,

hey, wait a minute, time out. Let's get our fiscal house in order. They have the power to do that. And they actually did that back in the 1990s with the great modernization. And they put in statutory fiscal rules for debt sustainabilities. But the rules were and have been routinely subverted and suspended. Because that's the easier thing to do than face the tough issues.

I think there's another issue out there that some members of Congress buy into, and this is a new monetary theory. Well, if the economy grows and grows and grows, then don't have to worry about the debt. Well, maybe some merit to that. But new monetary theory is built upon three assumptions. One, the economy will grow. Secondly, interest rates will remain reasonable. And thirdly, there will be someone willing to lend you the money.

But the first two we already realize is the economy is growing slower than the debt. Interest rates are not stable. We're paying more and more in our debt all the time. And there are states like Japan and China now saying they're shying away from U.S. debt. So the three legs of that theory are very shaky. The Federal Reserve Chairman, Jerome Powell, on a 60 Minutes TV show here recently, pointed out, he said, the debt is growing faster than the economy. It is unsustainable. I don't think that's at all controversial. So here it is.

It's staring us in the face. What are we going to do about it, boys and girls? Well, the other thing that strikes me is for most of the seats in Congress and the House, obviously, every two years they're running for re-election. So half of your tenure is basically spent fundraising and running as opposed to legislating, let's say. That's a little bit an over-explication, but unlike a senator, which has six years to

accomplish their work, they're spending a ton of their time doing that. It's sort of a curiosity, but it would seem to engender a kind of shorter term thinking, naturally, just by the way it's structured. That makes sense. Two-year terms were based upon the idea of being close to your constituents. So that's a plus. But this process now, and the expense of elections and this

type of thing, so there are other issues out there. There are many issues out there. You know, God bless the average congressman. You know, he's faced with, you know, today inflation, border security, health care, Social Security, being reelected. But also, obviously, you know, where's the biggest gorilla in the room? And frankly, Jan, if you do not have economic stability, you do not have anything. The whole house of cards comes tumbling down. So we have to set our priorities.

But one thing I have observed over the years, and I've worked with the government most of my life, legislative bodies have a terrible track record in setting priorities. And I remember chatting with the speaker of the California Assembly, and I come from the California area, and one meeting in San Diego, they say, okay, what are the budget priorities for next year? And they said, well, you know, we've got to do education.

We've got to do this, and we've got to do that, and we've got to do this, and we've got to do that. And then they paused. Well, we just have to do everything. Now there's about 20 of us in this group, and I didn't want to embarrass her at the time. But a few minutes later, I said, hey, Madam Speaker, doing everything is the definition of having no priorities. And we're here to make tough decisions. This is not easy stuff, but it's really important stuff. And so we can't default to just doing

the easy thing. That's so immature. That is so unreliable, irresponsible. Just like the chief justice was saying to the states, you're independent sovereigns. You've got to act like it, i.e. buck up, boys. Bruce, we're going to take a quick break right now and we'll be right back. And we're back with W. Bruce Lee, executive director of the Phoenix Correspondents Commission. You know, another thought I have is sometimes it's very difficult to be the first person through the door around things like this, right? Because that's, and this is where perhaps your work might be of interest, right? And might be useful in this other check. So let's actually dig into that. The states, by many, after 40 some odd years of no progress in Congress, the states are

being looked at as, hey, you are the solution now, and the states do need to buck up. Now, the Phoenix Correspondents Commission, a newly created organization in 2017, met in Phoenix, Arizona by the farsighted goodwill of the Arizona legislature. First national convening of all states since 1861. they're looking at the budget issue what would be the biggest tool in the tool bag for the states or the heaviest tool is an article 5 convention because the US Constitution can be amended by two ways by Congress and then states ratify and the states may propose an amending, and then the states ratify. And if Congress is unwilling to control itself, then there needs to be some external enforcer. It could be the president.

It could be this. It could be that. But Congress needs some type of external enforcer. I was talking to David Primo, Dr. Primo, of Rochester University, who just a month or so ago, and he was saying, hey, it's obvious the federal government, Congress, is not going to reform itself. It doesn't have the will or the aptitude or the mechanism for doing it. So the states need to step up to the plate to do this. And this is not a partisan issue. This is a structural issue.

So the states in Arizona came together and they created the Phoenix Correspondence Commission. Phoenix, because we happen to meet in Phoenix. Correspondence Commission, in that if you go back to the beginning of the 13 colonies, Delaware had a Correspondence Commission, because they wrote letters corresponding to all the other little communities. Hey, what do you think about this? What do you think about that? And pretty soon all 13 states had their correspondence commission. So the PCC is to be a forum of all 50 states to discuss this issue of balancing and federalism and dealing specifically with the federal debt crisis.

It is a crisis. So, many ways of exercising influence. And some would say, and this possibly has merit, as the states begin to buck up and work together through the PCC, Congress says, well, if we got a reform, we'd rather do it ourself, you know, so that might prompt them to action. And that's been done previously. If you want to talk about Article 5 itself and how it's implemented and actually works, I'd be glad to do that. So let's say there's people at home that are, you know, watching this and have become curious,

and want to become engaged on this issue of the states acting as an extra check. What do they do? Well, I think there are a few things they can do. One, they can encourage their state legislators themselves to be active, be aware, be involved with the PCC. Two, secondly, they can learn a great deal about federalism itself. And if you actually go to the PCC website and go to our section on insights on federalism, and I can give you the link for that. It's a vast trove of information that is very interesting and educational. Three, we do produce a

monthly newsletter, American Federalism, a Month in Review. And again American federalism is a little different than some other federalism, but that is a wonderful publication looking at the executive branch, judicial branch, legislative branch, and the states, what's going on in this rebalancing process real time, month by month. And if folks like that, just go to our website. There's a little contact. Contact us. Say, hey, I'm interested in the newsletter. You can put me in the mail list, this type of thing. That would be great. And

fourth, if people are interested in saying, hey, you know, our citizens need to know more about federalism and the state's role in this type of thing. We have an educational mechanism that we work with, too, a 501c3. You can help fund that if you're so moved to do that. Our civics education is no longer as sterling as it used to be. It's sort of like a half-hearted civics education, I think, in much of our public high schools etc. So letting in and that's the first step to citizens taking and exercising ownership of their government is to realize they have these roles, responsibilities and that they have these authorities that they did not realize that they had and legislators themselves. You come up local city mayor whatever it may be you work

your chain up and you're all focused off times on what's going on locally and you get to the state level and you may not be necessarily aware, wow I have this more global responsibility for our nation. So there is an educational process there that's needed too. There is a historian who made this observation recently that the downfall of all great empires, it has a simple historical law, any great power that spends more on his debt than it does on its defense will not be great for long. True of Spain, ancient France, Ottoman Empire, British Empire, for the first time the U.S. is testing this law this year.

Well, Bruce Lee, it's such a pleasure to have had you on. It's been a joy, and I could talk about this for a long time, but I really appreciate what you're doing in informing, empowering our citizens and our legislators and bringing, I think, an intentionally balanced approach to our news and what's going on in the world. Well, thanks a lot, Bruce. Thank you all for joining Bruce Lee and me on this episode of American Thought Leaders. I'm your host, Jan Jekielek.