Judging Freedom - Kristin Tate on the Democrat spending bill & the blue-collar crisis

Episode Date: November 23, 2021

Judge Napolitano is joined by Kristin Tate to discuss the latest Democrat spending bill that has passed the House of Representatives, yet appears to be dead on arrival in the Senate. The Judge and Kristin also discuss the taxing of the rich movement and the hypocrisy of Democrats offering SALT (State and Local Tax) deductions to the 1% in blue states. Finally, the two discuss Kristin's excellent article on the blue-collar crisis in America and how it potentially threatens our way of life. Kristin Tate is an opinion contributor for TheHill.com and writes about government spending. Follow her on Twitter @KristinBTate Kristin's latest book is "The Liberal Invasion of Red State America" and it is available on Amazon - http://amzn.to/3sz3ECc #KristinTate #JudgeNapolitano #SALTDeductionsSee Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Hello there, everyone. Welcome to Judging Freedom. Judge Andrew Napolitano here, my new podcast, where I get to think whatever I wish and say whatever I think and speak to all kinds of people, friends and foes, mostly friends, certainly today is. Kristen Tate is a young, bright, and as you can see, beautiful, young libertarian who specializes in her work on economics, and she joins me today. Kristen, welcome here to Judging Freedom. Where are you? Where are you joining me from? Thank you, Judge.

I'm joining you from beautiful Texas. I am in the Houston area, so it's still very much summer here. I just put on a turtleneck for the show because I know it's very cold up where my extended family is and probably up where you are. But I am somewhere where it feels like summer outside almost all year. Well, I'm at my farm in Northwest New Jersey, and it's Thanksgiving weather. It's cold, it's raw, it's cloudy, it's about 38 to 42 degrees. But thanks very much for joining us. Much appreciated. There's so much going on in your end of the world. So out of one side of his mouth, President Biden is complaining about inflation. And then

the other side of the mouth, he's praising Congress for instructing the Treasury to borrow $1.2 trillion. We haven't even got to the social spending yet, just to improve railroads and roads and highways and airports, none of which is in the Constitution. What kind of sense does this make to complain about inflation and then to cause more inflation at the same time and in the same respect? Well, of course, it makes no sense at all. But this is kind of what we've come to expect, not just from Joe Biden, but from pretty much everyone in Washington, D.C., including many Republicans at this point. I mean, I can really count on one hand or maybe two,

the actual fiscal conservatives left in Washington, D.C. They just are completely addicted to spending taxpayer money, Judge. And, you know, eventually there are some real consequences to this kind of spending. You can't just keep foolishly spending trillions of dollars every couple months with no consequences. The whole house of cards collapses eventually. And we're seeing those consequences now. We have inflation that they told us for months was transitory, transitory, transitory. I mean, that's all they were saying for months. Transitory.

Well, now they've admitted, you know what? It's not transitory. It's here to stay. Now they're saying, Janet Yellen and her ilk are saying, oh, we think it's going to go away by the end of next year. Well, we all know the end of next year, if they keep doing this, inflation is still going to be worse than it is now. Then they're probably going to say, oh, just give us two more years and it will go away. This is what they always do. But it has gotten completely out of control at this point. And I think a lot of Americans are starting to worry about it because many Americans

today, myself included, have never lived through a period of true hyperinflation. So for us, it's always been this kind of academic discussion, not very tangible. But folks who lived through the 1970s and were adults during that time, they know what could be around the corner. And it is not pretty. It can happen very quickly. And people could see their life savings just completely demolished and diminished very quickly. It's going to be sad and probably a very dark situation we're about to enter. So explain to us two things. How, in reality, will the government go out and get $1.2 trillion, since the Fed doesn't really print cash anymore?

And how does the injection of $1.2 trillion from out of nowhere into the money supply raise the price and cost of everything? Well, they create money out of nowhere, like you said, and they blow it into the system. And, of course, inflation happens when there's a lot of cash out there chasing a limited supply of goods. So if you have $100 and all of a sudden $200 is created, your $100 is worth less than it was before that $200 was created. So that's essentially what's happening. And people who are on fixed incomes, people who are not on wages, wages can go up. Of course, they never go up as quickly as inflation. But if you're on a fixed income, or living off your savings, like if you're

an elderly person, for example, you get hurt the hardest by this kind of inflation when they just create money out of nowhere money that we don't have. And you know, they say, Oh, well, the rich will pay for it with tax increases well even if you raise taxes significantly on every billionaire in this country you would not be able to cover the kind of spending that uh that they're doing right now so this is a real a real problem like this is a recipe for a financial disaster and it's one of the reasons people are pulling out of the u.s dollar um and investing in alternative assets it's one of the reasons people are pulling out of the US dollar and investing in alternative assets. It's one of the reasons we've seen cryptocurrencies,

for example, skyrocketing over the last couple of years, particularly in the last year, though. It's probably another reason we're seeing real estate inflate so much because people want to take their money out of the dollar and put it into a hard asset. Precious metals are likely to soar over the next couple of years if inflation keeps going up. But again, it's those people who just are on the fixed income or the lower end workers who still have to put gas in their cars or go to the grocery store. These are the folks who really get hurt. It's interesting you mention the lower-end workers

because old Uncle Joe holds himself out as the champion of blue-collar union laborers. These people are suffering terribly. Yeah. And, well, certainly, I mean, the rich are always rich. They always have money to spend. But blue-collar laborers are going to be hit very hard by this. If Joe comes knocking on Janet Yellen's door and says, where's my one point two trillion?

Where will she get it? I mean, will the government sell bonds at shockingly low interest rates? Will the Fed just start injecting money into the stream by adding zeros to the bank accounts of its five favorite banks? How literally will the $1.2 trillion be created so that Yellen and company can spend it? Well, they just create it out of thin air. I mean, they are in the business of literally just creating money out of nothing and there's no tax revenue to cover this money. And I want to go back to what you said about the blue collar workers, because judge, I think part of what's going on right now in this country is we're kind of seeing a shift within the political parties. So, you know, you used to have the Democrats that were the party

of the labor workers and the unionists and, you know, the low end minimum wage workers. The Democrats are really their champions in the political arena for many decades. And I think we're kind of seeing that shift now. And the divide that I see in this country isn't even necessarily between rich and poor or the elite or the, you know, the educated people and the non-educated people. It's really the producers and the non-producers. So, you know, you have everyone from, you know, doctors and blue collar workers, people with very wide gaps in education and earning power who are kind of over here. And then you have the non-producers, the people who work for academic institutions, the people

who work for nonprofits, the people who are on unemployment or depend on the government. I mean, people who work for the federal government, the federal government's the biggest employer in this country. That's in the non-producing category because the federal government doesn't need to turn a profit. It's not accountable. So you have those people over here. And that's really the divide I see in this country. I don't see the divide among racial lines. I don't think it's about rich or poor. I literally think that the divide in this country that we're starting to see is producers and non-producers. And that increasingly true and we see the democrats catering to those non-producers by promising you know more handouts government handouts government dependency they want to expand the role and scope of the state everyone working for the government the i want i

want to ask you about two things one is the politics. If I recall correctly, President Trump yearned for a 1.2 or 1.3 trillion infrastructure package because he's of the view as the master builder that he held himself out as being. and railroads and airports and bridges were not up to par. And he had hoped that he would have been able to steer this kind of cash into this tremendous domestic construction program, the likes of which we haven't seen since the Eisenhower years. Yet, when this thing passed, he ripped apart the Republicans that voted for it. Now, this is almost the very same thing that he wanted. He didn't get to preside over it. It doesn't have the name Trump on it. It has the name Biden on it. Is his argument just politics or is this somehow different because the Democrats generated it than it would have been had he gotten it when Paul Ryan was the Speaker of the House? Well, Donald Trump was never a fiscal

conservative. And this is part of the problem with the Republicans. So the Democrats are over here catering to the non-producers, but the Republicans aren't doing a very good job catering to the producers, right? Because the Republicans always cave every single time to the Democrats. And Donald Trump wouldn't even really, you know, he didn't even say the right things. At least some Republicans say they want to cut spending. They say they want to cut taxes, even though, you know, they often don't do it. Donald Trump, he never even tried to say he was a fiscal conservative. He was just, you know, almost as bad as the Democrats.

He wasn't as bad, but almost as bad as Joe Biden on the spending. So I was never in favor of these huge infrastructure packages under Trump either. And of course, let's not forget, they call it an infrastructure package. The majority of the spending that happens in these packages has nothing to do with infrastructure. And we've seen all these word games they play in DC where they say, oh, you know, paid leave is infrastructure. Everything can be infrastructure with these people. They can make the argument for anything. So let's not kid ourselves. It's not infrastructure. It's just a bunch of new government spending that will be squandered and

wasted. And infrastructure is best dealt with and is typically dealt with on the state and local level. But this is, again, just another scheme to have a big government program to increase the power of the state. And politicians love passing infrastructure bills because it lets them tell the voters they are doing something. And infrastructure is something everyone can get around because it sounds great. It makes people feel good. Same with the Republicans. Donald Trump wanted to do the same thing. But at the end of the day, it's just another big spending scheme that really doesn't improve much in this country and makes us poorer. But no, I think it was just as bad when Donald Trump proposed it. But now I would say this is a worse time to do it, because

at least when Donald Trump proposed it, the economy was doing well. Correct. Right now, we really can't afford to be doing this. But the boom that you see in the economy, and of course, there's a little boomlet this morning when the White House announced that Jay Powell would be nominated for a second term as chair of the Federal Reserve. That'll create a lot of tension between the White House and progressives in the Senate. Senator Elizabeth Warren has already said she can't support him. She may have some of her colleagues. But these boomlets in the stock market, they're not real. I mean, they're caused, are they not, by artificially low interest rates. So how much longer can interest rates be so artificially low,

particularly when the government is going to be doing all this borrowing? So I did a little research this morning. As of this morning, the federal debt, I'm rounding the numbers off, $28.4 trillion. As of last year, the feds collect in taxes and fees about $4 trillion. As of last year the feds collect in taxes and fees about four trillion as of last year the feds spend 6.8 trillion and as of last year by last year i mean the last fiscal year which ended about a month ago the interest on federal debt 500 billion dollars all of it borrowed now isn't it utterly insane to borrow money to pay interest on borrowed money and it's just the interest that doesn't reduce the principal if you ran your household that way you'd be bankrupt in a year of course you would. And yes, it's absolutely nuts. But as individuals, all we can really do is prepare for the worst possible scenario, which is likely coming around the corner,

which could be stagflation or hyperinflation. And try to put your money in something other than the US dollar. You know, if the federal government wants to do this to our currency and our economy, they're going to see people pulling their assets out of the US dollar. I mean, we might not be the reserve currency anymore if this continues. So it's really scary. But as individuals, all we can really do is protect ourselves. And like I said, unfortunately, I think a lot of younger people have no idea what's coming. They are living on easy credit right now. I mean, I have friends who are making okay money.

They're making $60,000 to whatever, $80,000, but they're living paycheck to paycheck because of easy credit. They're all like renting Cadillacs and they live in these huge apartment complexes that are costing them like a huge chunk of their salary every month. People don't have savings. They don't have assets. They don't have investments that I'm seeing anyway. There's no incentive.

They're not ready. But there's no incentive to save anymore because the interest rates are so low. Correct. I mean, the Federal Reserve, which has been ruining us for 100 years, is continuing to ruin us with these artificially low interest rates. Yes. And I don't suggest people hoard all their money in cash because if we have a hyperinflation situation, that is not going to be where you want your money.

But what I'm saying is they are not ready for any kind of financial disaster at all. You know, if any little thing goes wrong, they're completely screwed because they're living paycheck to paycheck and they don't have any investments. They're all making credit card payments and rent payments. They don't own anything. What should they do? Should they own gold? Own things, own houses, own gold, own precious metals, own cryptocurrency, anything you can own that's an asset, I think will be very helpful in this future if we get to a situation where we do have stagflation or hyperinflation. I have been sort of pleased to see cryptocurrencies kind of going

mainstream. I think when PayPal got in on the game, and then Robinhood, it made it a little easier for people who aren't necessarily in the crypto world to start buying. But no, I'm really into gold and silver. I mean, I know gold is kind of passe now, but I still buy it. I think it's a great asset. I have cryptocurrencies. I think just any way that you can kind of own assets in it will help you. But but I just don't see a lot of preparation. Really, I see a lot of people who are going to be in for a world of pain when this this happens. And I think it's just because my generation has never really lived through economic hard times. 2008 wasn't anything compared to what's likely coming. As bad as things are now and as bad as you predict they will be in the future, add to this another $2 trillion in borrowing by the federal government. If this crazy spread the wealth program that the progressives are pushing on the cent on the White House,

that the House passed almost along a the Senate on the White House that the House passed almost along a party line vote the other day, if that ever becomes the law? Well, I think a version of it probably will. They say the Senate wants to pass something by Christmas. Obviously, you have Joe Manchin and the moderates of the Senate with all the power and Joe Manchin saying he doesn't want paid leave in that social spending package. So they'll probably make some changes to it and then send it back to the House. But no matter what they pass, it's just we can't afford any of this stuff. Don't they know that all this stuff is more cash chasing the same amount of goods and it will make inflation and your dire

prediction make your predictions come true they don't make inflation worse they don't care they want the political win of saying we're doing something and then guess what judge when everyone gets mad because inflation hits guess how they'll respond by doing this again and i can guarantee you right now, when hyperinflation hits, probably next year, when it gets worse than it is now, they'll say, well, this is why we need to pass a historic bill to do like food expansion to help families put food on the table and housing expansion. And they'll pass another one of these things, giving people money to, you know, pay their rent and put food on the

table, which sounds great, but this is all because of similar spending that got us into this problem. So they'll use the problems created by government spending as an excuse to just pass more government spending bills. This is how it always works, but they don't care about the reality of the situation. They don't care about the inflation. They just want the political win of saying they are doing something. And then they'll deal with the consequences later by trying to pass more government spending. And at the end of the day, everyone's going to be more poor, more people are going to be dependent on the government, the private sector is going to keep hurting. And by the way, in this social spending package they're trying to pass right now, you see the salt deduction. They want to basically increase the salt deduction, thereby making conservative states like Texas, where I am, have to subsidize more of this government nonsense going on at the state level in blue states by incentivizing you're you're you're hitting me where it hurts

because i live and i'm physically located at the moment in the highest taxed state in the union called new jersey i don't know why you live there it's i mean i i was born here and i love the place even though it's very expensive to live here. Last subject matter. And this is one of Senator Elizabeth Warren's favorite. Tax the rich. Tax the rich. The rich employ people. If you take money from the rich, they have less money to invest and less people, less money to spend on those they're going to employ.

Doesn't she see that? That's right. And I mean, eventually these taxes always kind of trickle down to the middle class, but no, you're right. And especially when you look at people who own businesses who are considered upper class, like, you know, I have people in my family, like my stepmother, she owns several restaurants throughout Boston and she keeps getting hit with all kinds of taxes at the state and local level and she employs I want to say like 40 to 50 people in here restaurants and you know when when she gets taxed more when they increase the minimum wage or when they do all these schemes to target the rich,

she has to respond by either putting price hikes on her menu or by letting employees go or by not hiring people who she would have hired otherwise. Because when you have more capital, you can take more chances with your workforce. So yeah, of course, these taxes on the rich always end up hurting the poor the most. They result in fewer jobs, higher prices for everybody. And it's just, you know, all these people, we just need these government people to get out of our lives, get out of the way, let the economy reopen, everything will be so much better. They could just go do nothing. I hope I wish they could all just take a year long vacation and do nothing. We'd all be much better off. But because of the urge to do something. Kristen, I couldn't agree with you more. But in this day and age, it's almost a pipe dream to expect that the federal government is just going to shut down.

They're just going to leave us alone. I mean, they will do whatever they think they can politically get away with, even if it causes more pain in the future, because it'll let them run for reelection and continue their cushy and their happy jobs. What a pleasure it is to chat with you. It reminds me of the old days on Freedom Watch and Liberty File of my former life. But thank you very much for joining us. And I hope you'll come back even if you are in that warm, wonderful, low tax state of Texas. Thank you so much, Judge. It's an honor to join you on your show. All the best. We'll do it again. God bless you. Have a great Thanksgiving to you and your family. God bless you. Happy Thanksgiving. Thank you.