The Dispatch Podcast - State Corporatism on the Rise

Episode Date: June 16, 2026

Steve Hayes is joined by Kevin Williamson, Megan McArdle, and Scott Lincicome to discuss AI and state corporatism and what the national debt is costing us today. The Agenda: —Bernie Sanders' AI wealth fund proposal —Government ownership of tech —Anthropic's Mythos model —The national debt —America's most boring nightmare —NWYT: Optimism Show notes: —CATO Institute on a Social Security inflation calculator —Scott Lincicome on state corporatism —Europe 2031 —Klon Kitchen on Mythos —SCOTUSblog live event The Dispatch Podcast is a production of ⁠The Dispatch⁠, a digital media company covering politics, policy, and culture from a nonpartisan perspective. To access all of The Dispatch’s offerings—including audio versions of all our articles and newsletters—⁠click here⁠. If you’d like to remove all ads from your podcast experience, consider becoming a premium Dispatch member ⁠by clicking here⁠. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Dispatch podcast. I'm Steve Hayes. On today's roundtable, we'll discuss the increasing momentum of state corporatism and the growing calls for the federal government to take an ownership stake in America's top AI companies. Then we'll return briefly to a discussion on the national debt and what it's costing us right now. And finally, for not worth your time, a dose of optimism. I'm joined today by my dispatch colleague Kevin Williamson and dispatch contributors Scott Lincolk and Megan McArdle. Let's dive in. Welcome, everyone. Over the past two weeks, we have seen a flurry of activity from the proponents of what would have once been considered a fringe idea. The U.S. government taking a significant ownership stake in the companies whose extraordinary growth is driving the U.S. economy. If this had been proposed in, say, the 1980s, it would have been an opinion piece in the nation, along with frenzied debates on college campuses. all culminating in legislation from Ron Delums, former national leader of the Democratic Socialists of America, and it would get four or five sponsors that legislation, and then it would die and it would go away. Not today. On June 3rd, Democratic Socialist Bernie Sanders, senator from Vermont, wrote an op-ed in the New York Times, making the case for the American AI Sovereign Wealth Fund Act, a 50% one-time confiscation tax, he calls it,

of the stock of the largest AI companies in the world. The head of one of those companies, Sam Altman, quibbled with the 50% stake, but was more or less on board. Donald Trump, the Republican president, who's already pushed the government into taking ownership stakes of several other private companies, has been making a similar argument. The president said, last week,

if we do that, the public will become very rich. the people in our country, because that's the kind of money we're talking about, Trump said. I think they'll do that, and I think it'll make it very popular. With the national debt, now above $38 trillion, depending on how one counts, and other fiscal problems, the United States and the prospect of Americans being thrown out of jobs because of the AI revolution, this all makes a lot of sense, doesn't it, Scott? No, it definitely does not.

Look, you know, I think you can make these rather superficial arguments regarding, oh, we're going to make our money back. You hear that one a lot on some of these equity stakes, that, yes, the government needs to have some skin in the game and that it can use these stakes to attract private capital. Those are all the ideas, right? But, look, there are. I mean, fingers and toes, numbers of reasons why this is a terrible idea.

And this is, of course, something I've written for the dispatch and elsewhere. We at Cato are actually launching a big project on this in a couple months because, of course, it isn't just AI companies. We're now up to around 20 of these equity stakes, depending on how you measure it, because now the companies are now acquiring other companies, so it's very hard to keep track. It's kind of, you know, tentacles are spreading. But look, there are the obvious scene problem is you're injecting politics into private entities that you want to be operating based on solely commercial considerations, right? Especially at the tip of the spear of American innovation, you don't want politics to start creeping into their decision making in terms of where to locate server farms and how to train their AIs.

And then when you're talking about hard things, about factories and jobs and all this kind of stuff, and we've already seen it with things like U.S. Steel, which now Trump took a golden share, keeping open certain old, antiquated blast furnace mills that just happen to be in politically important places, that's the type of stuff that, you know, honestly, with a steel company, it's bad, but whatever. For artificial intelligence, for this potentially transformative technology that right now, the United States is in the lead on, but that's pretty scary. Now, that's, though, only the tip of the iceberg. The reality, I think, in fact, more problematic probably are all the unseen costs

of all this stuff. Because once the government starts backing certain companies, well, everybody else starts changing their behavior, too. Look at a company like Intel. We now have an equity stake in Intel. Well, Intel's share price has skyrocketed. Trump brags about this all the time. And some of that is Intel has made some management changes. They've gone from being, they were really struggling. They've made some changes there. They're riding this AI momentum wave as well. But there's still a huge delta.

It's a big difference between Intel share price and everybody else is in this space share price. And that's just private capital flooding into the government back champion, right? And that's private capital that could have gone to companies that are more productive. more innovative, smaller, you name it, right? So that's classic capital misallocation. You have all of these other questions about now companies need to do deals with these government-backed champions because they need regulatory approvals or they just don't want to upset King Trump and the rest. So all of these things are happening in the invisible ways, right?

And I think that's where the huge problems with all of this lie, that this is not a one-off deal. We now have 20 of these. And investors, capital markets, companies, you name it, are all trying to game the system and figure that out. And that just means a slower, less productive, less awesome U.S. economy. So, Megan, if you look at some of the arguments that Scott made there, they're answered by the people who are proposing. these kinds of things or backing these kinds of things. It's not an accident that politics would be part of the decision-making process, and it's not a bad thing that politics would be part of the decision-making process, because politicians are looking out for the common good, and these tech

oligarchs and capitalists and venture capitalists are just looking out for their own profits and their own bottom lines. No greater authority than Bernie Sanders made this argument in his New York Times op-ed, no longer with the future of AI and the transformation of huge. human life that it will bring be dictated by a handful of big tech oligarchs. The federal government would have the power through its voting shares and an equal representation on each company's board to block decisions that hurt our citizens and to push for policies that help them. Are you, like Scott, opposed to helping our citizens? By the way, for those of you who are listening rather than watching this, you need to know that

when Steve said the politicians are looking out for the common good, the entire panel, like, depressed smirk and laughter and rolled our eyes thoroughly and... Yeah, you miss the expression of my face, too. You should really... Am I not doing a very good job of steel manning here, Kevin? Check us out on YouTube. You're missing a lot here. Some real soft iron. So look, I am put in mind of PGR works great aphorism.

You know, there's a name for this. Indeed, the peoples of Poland and Czechoslovakia had some very pungent names for it. that, look, quite a part, we can debate whether the government has the best interests of the people at heart and always acts in the public interest. But we have mechanisms. If you are worried about the income effects, we have an income tax and an unemployment insurance system and various other things. If you are worried about the job impacts, what have you, or some sort of negative externality, we have a regulatory state that is meant to deal with companies that create negative externalities, which is just a fancy way of saying,

like, if I play my music really loud, I'm really enjoying myself, and you are maybe not, and, you know, the fact that I live with an audiophile has nothing to do with that particular example springing lightly to mind. But pollution's a classic negative externality. If you think that they are creating a problem.

But, you know, like, disruptive growth is not generally considered a problem of that sort in American history and for good reason. It is the reason that we are not all, actually I guess this is 90, I was going to say huddled in huts, but in fact, all of the men on this podcast and all of the men in the audience would now be out, wrestling with a large animal, attempting to make enough food to survive the winter come out of the ground, often failing. The women would probably be at the farm yard somewhere hauling water. disruptive growth is the reason we don't have to do those things. And so we don't think of that as an

externality that should be controlled. It can have bad impacts on individuals. And the government has ways to alleviate those impacts, such as unemployment insurance, such as various programs designed to make sure that no one is totally immiscerated and unable to survive. What the reason to take a stake in this company is that you want to control it without passing laws, without bothering with regulations. You just want to be able to say nice business there, you have their shame if anything happened to it. In fact, this is a way to do an end run around the democratic mechanisms that we have to set rules of the roads so that companies are not making money unfairly by cheating, but have to do it by providing value to consumers. The other thing I would say is, merciful heavens, have you ever

dealt with a government website? The state capacity of the United States government compared to other governments is low in general, but its technological state capacity is abysmal. We are, for a bunch of reasons. Number one, because we have this very tight GS scale for paying civil servants, we can't really compete with the private sector in key areas like tech. But more generally, the way that we do regulation, the way we do procurement, it freezes everything in amber and makes it incredibly difficult to innovate. So we don't have the talent and the talent that we do have.

is hemstrung by incredibly dumb regulatory and bureaucratic and procurement rules that make it impossible to do tech well. So you want to take the technology frontier companies that are powering American growth right now, that are giving us an incredible national security and economic advantage over the rest of the world. And you want to put the government IT people in charge of this? You want to put people who aren't even smart enough

to oversee, I shouldn't say smart, who are not even tech savvy enough to oversee those folks and you want to put them in charge of it, it would be a disaster. It would essentially be slaughtering our fastest-growing native industry, I guess because, like,

we think China doesn't have enough advantages and it's unfair that we got this head start. And so we're going to voluntarily hobble ourselves so that China can catch up and surpass us. No, thank you, sir. I say no, thank you. But Megan, let me push back on that, at least a little bit. Bernie Sanders would say, in fact, what he's doing is not trying to make an end run around democracy.

In fact, he's trying to restore democracy to the process. He's introduced this as legislation. He's out making arguments. He's trying to persuade people. He's trying to win over the approval of the president of the United States. And I think it's fair to say, he would argue that the way that this is happening now is anti-democratic. There's nobody looking out for the interests of the American voters because these big tech oligarchs are flooding campaigns with money. They don't have to be responsive to anyone.

The politicians are happy to go to these big tech companies with their handout. They can raise unlimited amounts of dark money to fund their campaigns. that's what's anti-democratic. To which I say, horse hockey, triple distilled balderdash, high-test nonsense. Because, again,

you don't need to take a stake in the company for any of that. If there is a law that should be restricting what these guys do, pass the law, right? If there is money that we need to get from them to ease whatever displacement,

I don't think the displacement is going to be as fast as people fear, then you can pass a tax, take the money, and redistribute it. The object of getting a 50% stake, which is a majority stake, is to give yourself a vote on everything,

the ability to hire and fire and remove managers. And to say that it's happening undemocratically, one could as easily say that the cup of coffee I am drinking happened undemocratically. No one voted on what brand of coffee that I decided to choose. Who knows what geopolitical implications

came from choosing Costa Rica coffee over Rwandan. I don't even know how many Rwandans I may have killed this morning with this cup of coffee. This is totally ridiculous. It's a transparent ploy to basically take control of this thing. And once they take control of it, they will kill it because they not kill it. That government is just not good at this kind of disruptive innovation. There are things that only government can do. but running companies is not one of them.

Yeah, there are two things, I think, buried in there, and of course bullied all of what Megan said, but I think there's two other things that are really important buried in there. First is I've yet to hear a coherent argument from the folks that champion these equity stakes for why other government mechanisms aren't sufficient. And these are free market things, you know, permitting reform, tax reform, that kind of stuff.

But also, you know, government non-market things, whether it's regulation or subsidies or other type by American rules, you name it, right? There are all sorts of levers the government can pull to influence corporate behavior as an independent arbiter, not as a participant in the private market. And that's really the difference. Government is going from being a referee in a game to a player. And that raises all sorts of weird incentives. While reserving the right to still call the plays, right?

Right, exactly. And that gets to the second thing. If you really care about the regulation of these tech champions, you should actually be quite worried about them getting tied up with the government because they're going to get favors. When you become a national champion, suddenly you get different regulatory approach. You get maybe a – so – and this has already happened, again, with some of these other companies. one of the rare earth's companies in which we invested, we, the government invested,

was bragging the other day that it got streamlined permitting for a project. And now you go, look, I want permitting reform, but do I want the government giving its champions that advantage and not letting the small startups, the innovative, especially in tech, which is so dynamic and disruptive. Do you really want those champions to have that kind of advantage? And we know from 250 years of American government that this is how it works, right? Lobbyists descend upon Washington.

They end up capturing the regulatory agencies that regulate them. It is just a terrible idea to further blur the line between regulator and private entity. All right. We're going to take a quick break, but we'll be back soon with more from the dispatch podcast. We're back. You're listening to the dispatch podcast. Let's jump in. Kevin.

I am here. 17 minutes in and I get to Kevin. Well, McCartle came loaded for bear today, which is always fun. Elephant, Kevin. Elephant. Yeah, no, I'm listening to Scott and I'm listening to Megan. I've got an elephant rifle right there. They are making, as always, the best arguments one can make on behalf of the positions

or arguments. I will just note that in the course of each of their arguments, they have pointed to things like increased regulation, additional taxes, arguments that you don't hear from Megan and Scott very often as an alternative to government stakes in these companies. Is that some measure of the political bind that opponents of these things are in? I mean, when you have Donald Trump and Bernie Sanders and the heads of these companies making these arguments, you have Democratic politicians across the country in Democratic primaries out maneuvering one another to see who can take the most anti-AI positions in these areas and

calling for additional regulation, calling for government ownership of these companies. Is it the case that the people who are behind this argument making this argument have a political upper hand right now? This is when usually you say blah, blah, blah, blah, blah, blah, blah, something, Overton Window, blah, blah, blah, blah. I think rhetorically what you're seeing here is the effect of three libertarians on a panel who are always conscious of trying not to sound like crazy people, as libertarians so often do. But I think McArdle gets to the point here, which is what this is really about is the board seats,

right? So if what you want is some claim on the revenues of these companies in this fast-growing industry to use those for constructive social purposes, you already have that. It's called the tax power. As everyone has pointed out here, you can tax them as much as you want. But what the Trump proposals and proposals going back to people from like Elizabeth Warren for other kinds of companies, Sanders and the AI stuff, what they all really have in common is they want board seats. And often these ideas, particularly ones from Elizabeth Warren, have come with bigger ideas about forms of corporate governance, particularly when it comes to things like political spending, political communication, campaign donations, things like that.

So they want to control these companies because they want to control their use of the resources outside of what they pay in taxes. So what are we going to tax these companies? You can have a corporate income taxed at 50% if you want to. I mean, there are countries that have done it. You can have one higher than that. But they're going to have some money left over. And they're going to be able to do with that what they want.

And some of what they're going to do with that is pay people in ways that these people don't like. Some of what they're going to do with it is spend money on issue advertising saying, we shouldn't do this. We shouldn't do that. Some of what they're going to do with it is campaign contributions or supporting. They're going to make donations to Kato God help. us and help pay Scott. Okay, now I'm sorry, I just realized I'm now in favor of this.

This is like if we can stop them from paying Scott's salary. Switch your position. Hey. They might throw a few dollars over the Competitive Enterprise Institute to up the writer and residence fee over there. After Kate or something like that. And that they wouldn't be able to put a stop to that stuff too. So it's no longer enough to use the tax power and the regulatory power to act like you're in

charge of the company. It's you have to actually be in charge of the company if you want to control everything the company does with all of its resources, not just with the share of income that's subject to taxation and its activities that are subject to regulation. So it's not just a way around the democratic process. It's a way around things like the First Amendment. You know, if you go back to this whole dumb conversation we've been having for however many years now about political spending as speech, it started with the question of whether someone was allowed to show a movie that was critical of a political candidate. before an election. And the law at the time said, no, you can't do that. And when this case went to court, the judges asked, hey, could we, you rather, ban a book under the same line of thinking? Well, of course you could. And they said, well, hell with that. We got this thing called freedom of speech and freedom of the press here,

and we're not going to allow that to happen. And that's really the root of what we're talking about here. So as long as you've got a First Amendment that's protecting political spending, political speech, activism of various kinds, the government can't really through any sort of regulatory mechanism come in and stop that. But if the government has half your board seats and three or four or some half of the remaining board seats are people who are allied with those government people because they're on other boards and they've got other financial interests and other needs of favor seeking related to the government, then you can control that whole thing. So the Luddite in me that really hates AI slop is kind of happy about this stuff in some ways

because, yeah, kill the industry. Why not? Sure. Although I don't think the Chinese version of it's going to make anyone very happy. You know, it's my, we go back in time and strangle baby Steve Jobs to keep them from inventing the iPhone and putting Twitter in everybody's pockets and making the world a better place. Someone brought up Intel earlier and I'm old enough to remember when Intel was cool. Like when I was in college, if you were a tech guy and you're like at the top of the class, Intel was one of the places you wanted to go work. And now it's just, it's essentially it's con-ed. You know, it's basically being turned into a utility. And that's not a great, trajectory. I don't think. I guess it beats bankruptcy. I guess it beats having your capital redistributed

to more competitive enterprises. But I don't really want to see that done to the tech industry at large because like anyone else who's ever lived in New York City, I'm not a huge fan of Con Ed. And I don't think it's exactly the model you want for the entire economy at large. I would just add that, you know, this is the European model of governance where you just entangle companies and government in ways where there's... There's not like a clear democratic mandate. They have that too. They have like a ton of regulation and so forth.

Or it was, but they've been divesting themselves. You know, I mean, Sweden and Norway and these other companies have been like, well, we don't really need all these state-owned enterprises. This is not actually the greatest way to do things. But just in general, government is much more kind of in the business of European companies in ways that are not always transparent and are often much more about like kind of backroom deals and so forth. And I don't know if people were paying attention this weekend.

And so Anthropic rolled out this version of, if you've heard about mythos, this was the one that caused the freak out because it found all the bugs and various kinds of open source software. So they rolled out like a defanged version to customers. And then abruptly withdrew it because Amazon had jailbroken it and figured out how to make it do stuff it's not supposed to do. And the U.S. government freaked out and slapped export controls on it and basically said, you cannot let any foreign national access this. And since they can't tell who's a foreign national on the internet, no one knows you're a dog. or whether you're a German dog or a French poodle. But so this was interesting because it coincided with the release of a kind of scenario that I highly recommend to everyone.

It's written by Tom Shivers. It's called Europe 3031 AI. And it was an exact instance of what this scenario talked about, which is that Europe is starting to realize that having strangled innovative industries and the name of worker solidarity has been a really bad bet. And it wasn't visible for a long time, and now they basically can't bootstrap an AI industry for a bunch of reasons.

Their labor law makes it really hard to shut down a company, and therefore really risky to start one, especially in a really disruptive field where you might easily go bankrupt and then, oh, your workers, like two years of severance. Their capital markets are thin. Their capital markets tend to focus capital on existing companies rather than on new startups.

There's a whole bunch of reasons. And so because of this, they're freaking out. Because America and China are basically the only players in the AI race, and they basically destroyed their tech industry in the name of solidarity. And what Bernie Sanders would like to do is that. What Elizabeth Warren would like to do is that. They would like the government to control everything to make sure nothing that they don't approve of ever happens.

And then when another country, unfortunately, they can't control everything. hilariously, Thomas Piccatee, Joseph Stiglitz, a bunch of left-wing economists basically, like, released a plan a couple weeks ago for a degrowth world government that was going to, like, shut down growth and redistribute it from the rich world to the poor world. And this is, like, this is how they think. This is what Elizabeth Warren would like. She would like a world in which not Elizabeth, Elizabeth Warren, and basically all of the bureaucrats in the EU are in charge of everything.

And they won't ever let anything disruptive happen because that would be, because it would challenge the power of people like them. And it's not going to happen. The best you can do is hurt America. You can't stop this thing from happening. Knowledge is out there. It is not stoppable. All you can do is make it so that America isn't also Iran. And China, and this is not just a geostrategic problem in terms of they will have better AI and therefore better military capabilities, not even an economic problem in the way that they're manufacturing. the fact that they're so dominant manufacturing has given them all these economic advantages.

It would be a tech problem because China likes to export its censorship regimes. It has used its economic power to force, for example, movie companies to pretend that Taiwan is part of China, to erase the record of Tiananmen and a bunch of other stuff. And you can see this in their open-source AI models

where, like, if you mentioned Tiananmen, it'll either freak out or say nothing happened. If you mention that Hong Kong, the Hong Kong protests, it will say that they were all violent outside paid agitators. I am, like, giving hypothetical examples. I'm not giving you the actual thing it says, but it does all of that on these hot-button topics. Do we want the AI of the future that's exported to the rest of the world

to have Chinese authoritarian values? I don't think so. And it's not just because, like, a kind of a red-white and blue American patriot. It's also because I think even if I were outside of America, And I had to choose between our values, whatever the problems with them, and Chinese censorship, and dictatorship, I would choose the open version. I would choose the open society. And the problem is, we've got these politicians who don't want to choose the open society. They kind of envy China. Not just kind of. Not just kind of. I mean, the China envy is explicit on both sides of the aisle these

days. You heard a lot. Now, the unstated part of this is that study after study, shows that all of that Chinese industrial policy and those subsidies and the state on enterprises, it's produced some stuff, but it's come at a massive economic cost. The capital misallocation, and you're talking about trillions of dollars in lost wealth because it compounds over time because you have these state champions that just kind of sit around and are zombie companies, do all this bad stuff. So maybe that makes sense for a authoritarian developing country like China, but it makes no sense for the United States. Right. Tip of the spear, productivity, very innovative. It makes literally no sense.

As a humorous aside to what Megan just said, I was giving an interview in the fall with a French publication. We were talking about these equity states, which we're building at a time. And literally at the end of the interview, they said, what you guys are doing is just like France in the 1980s. Don't you think that's? And I'm like, oh my gosh, yes, that's exactly what we're doing. And that is not even, they recognize. That's a very bad thing. Unfortunately, a lot of folks in Washington, don't seem to recognize the same. I take your point. I mean, this is really one of the, I think, key questions at the heart of this debate is kind of freedom versus anti-freedom, U.S. versus China. But there are serious national security implications to some of this that ought to be given real consideration. We published a piece from Clown Kitchen back in April about Mythos,

which Megan mentioned in her answer. Klon wrote, A Frontier AI Lab just decided its most capable, was too dangerous to release. That model internally called Mythos, autonomously discovered thousands of zero-day vulnerabilities across every major operating system and browser, including bugs that experts had failed to catch for decades.

And goes on to talk about the United States government now racing to address that before adversaries can match it. It is true, as you said earlier, Megan, that the U.S. government lags behind, and even its understanding of these things. When we talked about AI a few weeks ago, I mentioned conversations that I'd had with tech executives who talked to me about how difficult it was to even have conversations when they would go visit members of Congress on Capitol Hill

because the knowledge gap was so vast that they weren't even speaking the same language about these things. Wouldn't it be advantageous to have, if the U.S. government had a stake in these companies, you can make available the experts who are putting these things together, who can help you understand the gaps in information, who can point out these vulnerable. vulnerabilities before they're released. Why wouldn't we want to do that? I mean, these guys are doing nothing but Washington tours. And I will say, like, they'll bring their experts.

You can ask them anything you want. You won't understand anything they said, but you can definitely ask them. I mean, like, the number of dinners and so forth that I have been invited to with people from the AI companies in the last six months, they are very cognizant of the challenge of explaining their product to senators and so forth who are not, by and large, tech mavens, many of whom, like, barely write their own emails, right? They have staffers to do all of this for them.

But I will say this, is that in my experience in those meetings, Silicon Valley is as naive about Washington as Washington is about AI. And, like, Scott's nodding, so I expect he has had this experience, too. Where, like, I was sitting in one of these things, and someone was like, okay, well, what's the policy ask?

Right? Like, what would you like the government to do about this problem that you have outlined? It was something about security. And that they kind of said, well, we want Washington to like get involved and think about it. We're like, no, no, no. This is not how Washington works. You have to have a thing that you wish to happen that is executable by the government. And it cannot be a general, like, it would be nice if things were different, right? And so there's a lot of learning to happen on both sides. And I will say that Silicon Valley in general, I think, because it's not a big physical industry, it kind of got by for 20 years without interacting with Washington much, other than on national security stuff with like chips. And that was a mistake.

And it was a mistake on multiple levels. It was how the social media companies ended up alienating Republicans by deciding that they would just, for the sake of their liberal employees, they would just ban inconvenient conservatives. They're gross. No one wants them on the platform anyway. that was a huge mistake. And like, I wouldn't say came close, but there was a real threat

they were going to get basically regulated out of existence as a result of that mistake. And had they had a closer presence in Washington, they would not have made that mistake. And I think in general, they... Do you remember when Bill Gates used to brag about Microsoft not having an office in D.C.?

Yeah. And I hate to say this. This pains my libertarian heart, to be clear. I would like to live in a world where you don't need an office in Washington. Sure. But they did need offices in Washington. and they didn't have them.

And they just have a massive deficit to make up in terms of understanding this is going to be a regulated industry. It's going to be like steel. It's going to be like cars. Not in the same way. I'm not advocating for it. I am merely reporting the fact,

which means that you need to think like a regulated industry. You need to have a lot of people on this building relationships with Washington, explaining your product. But that said, like, they can get it explained to them if they want it and if they are prepared put in the work it will take to understand the explanation. But they don't need to own the company for that.

Again, these guys will be happy. They're bringing their senior VPs of development to talk to, like, meet. They'll definitely talk to a senator if the senator wants it. Yeah, and I think that's also, that goes back to what you were saying earlier, Steve, that now we have a bunch of libertarians being pro-regulation. Just to be clear, I think we can reasonably differ on the level of taxation and regulation of the rest. But I think we can agree with our more leftist friends out there

that, okay, that's a debate worth having. That's fine. We're going to be at different ends of the spectrum. But an equity stake is a different animal. It's really, it's like it's not even apples and oranges. I mean, it's like apples and cars. I mean, it's just a totally different universe. And it opens up a whole different set of very bad issues.

And that's, I think, the difference, right? And that's why when I say, well, there's all these other levers, well, yeah, and I'm going to disagree with you about exactly where those levers should be set. But at least we're agreeing on, okay, that's the toolkit. When you start going down this road, I mean, look, we're already at 20-something companies, and a year ago we were at one. I wrote my, oh, no, U.S. steel piece a year ago in the dispatch, and now we're at 20-something, and we can't even keep track, right?

And of course, when a Democratic president wins the next presidential election, whenever that might be, then we're going to get a whole other set of these industries that are getting targeted. So the box is wide open. And that's, I think, a huge problem because, again, we've moved away from the standard government regulatory taxation toolkit. Yeah, it'll be banks and financial firms next. Yeah. That's what they really want. I mean, that's the golden views.

Yeah, I think that's right. And the fact that you have prominent Republicans, including and especially the president of the United States, now making these arguments openly and publicly with virtually no pushback from inside the putatively small government, low regulation, anti-statist political party, you know, collaborating with the big government. We've always wanted to take stakes in companies, I think, portends bad things for the future. I want to turn real quickly to the national debt to pick this conversation up and turn us in a positive direction. One of the arguments you hear people making in connection with the government taking ownership is, hey, shouldn't the taxpayers benefit from this? I mean, Elon Musk, SpaceX went public. Elon Musk is in AI.

He became a trillionaire. There are going to be lots of other trillionaires at some point in the future. Shouldn't the American public share this wealth? And one way to have the American public share this wealth is to have the taxpayers take a cut. This is an argument that you hear directly from Donald Trump regularly. Yeah. And, you know, he talks about and Elon Musk has talked about the ability of private industry to help the U.S. government wipe away this $38 trillion in debt. Let's just set aside that part of the argument for now because I want to focus just for the next five minutes or so on the problem.

Kevin, you had a piece a couple weeks ago. And I'm not going to read the whole thing, tempting as it is, to read the whole thing. but I will summarize, in teeing you up for you to make your own argument, I will summarize one of the many great lines from this piece. You wrote, the bosses here at the dispatch have asked me to keep the profanity to a minimum. So I'm not going to write in plain English what it is that we are. Let's just say that it is a problem we have not ducked. What's the problem?

What's the threshold we have crossed? And what does it mean? Yeah, so there are different ways of looking at this. You know, there's the formal debt, there's the, you know, portion of the dead held by the public. Different people talk about different things. You can look at it in terms of the total unfunded liabilities of the government once you're looking at, you know, Social Security, Medicare, and other entitlements. And if you take the biggest picture of obligation, you know, including all the unfunded liabilities and all that stuff, then the, the obligations that the U.S. government has that it doesn't know how to pay for, like exceed the annual economic output of the human species. literally all than more than all the money in the world. Like if you take a really broad measure of money,

you know, currency checking account, savings accounts, CDs and all that stuff, it's more than that. So yeah, we're kind of, there's a word there that I wasn't allowed to use in the dispatch. I assume I'm not allowed to use on the podcast, but that's sort of where we are. Kind of ducked. Yeah, kind of ducked. Kind of duck. And it's a big duck. And it's going to be a real ruthless duck, I think. You know, on the trillionaire thing, though, you know, the best thing that ever happened to millionaires was billionaires, because the conversation went from talking about, we need to tax these millionaires, and we need to tax these billionaires.

And other billionaires all over the world just breathing a sigh of relief saying, thank God for these trillionaires, because Bernie Sanders can be asking, why can't we at least tax these trillionaires and the billionaires are going to be like, hey, I'm just living in my house in Aspen, and I'm great.

And you know, I'm just a mere billionaire. And your millionaires are going to be, like, getting, you know, checks or something. So that's going to be great. Social security checks. You know, the problem, of course, with this is you could turn around and seize 100% of Elon Musk's notional wealth tomorrow. and not solve the problem or even get close to solving the problem.

You'd pay for like a year of Social Security spending if you had all that. It would be a year? Yeah, I guess roughly that trillion-ish dollars. And so the problem isn't just the amount of debt that's been accrued. It's the structure of our spending and our income. So as long as we have entitlement structured the way they are, as long as the debt continues to pile up the way it is and increases the cost to financing the debt that we already have, it's just going to be a really, really hard problem to solve.

So if, you know, the federal government won the government version of the powerball and it got $40 trillion tomorrow and it could pay off all its debts, it wouldn't solve the problem. Because we have this huge problem going forward just because of the structure of our government, the entitlement system, and these permanently undeliverable promises we've made. You know, and the real conversation going forward is not about, you know, how do we go about making good on these obligations? It's what are we going to do in the course of not making good on them? because when it is more than all the money in the world,

when it is more than the economic output of the human race, you're not going to make good on those promises. There are Social Security checks that are not going to happen, at least at the rate they've been promised. There are other sorts of promises that have been made that are not going to be kept. The bondholders probably will get paid first over the entitlement holders because bondholders can stop lending you money. And government is a pay-on-you-go system.

It's just no fund at all for anybody. You know, democracies that can't borrow money are just no fun to run. So it's going to be, it's going to be ugly. But the one thing that has to happen, of course, is the one thing that everyone refuses to talk about, which is entitlement reform. And you've got a Republican president and now a Republican Party that is frankly, flatly refuses to talk about the issue and is at least as demagogic on it as the Democrats used to be. So, you know, in five years, when the Democrats come up with some kind of, you know, fiscal reform program, it's going to be the Republicans running ads of some Democrat pushing grandma over the cliff in a wheelchair. You know, that's how it's going to be. And there's no one there who takes the problem seriously, and it's a serious problem that deserves to be taken seriously.

Before we take an ad break, we're recording a special live episode of the dispatch podcast on Tuesday, June 23rd in New York City. And you don't want to miss it. We're bringing the roundtable together to discuss what's left of the right. Jonah and I will be joined by dispatch contributors Megan McCartle and Chris Steyerwalt in Manhattan to discuss the biggest news stories of the day and the evolving identity of conservatism. in the Trump era and beyond. What does the war in Iran mean for Trump's coalition ahead of the midterm elections? Is MAGA a conservative movement? Who is the future of the Republican Party?

The show starts at 7 p.m. on June 23rd in New York City. Head to the events page at 929.org. That's 92nd Street, Street, Y, and purchase your tickets today. Okay, we'll be right back. This episode is brought to you by Activia. You might already be eating yogurt, but not all yogurts are created equal. Activia contains over one billion probiotics per serving to survive and reach the gut alive. When it comes to gut health, Activia is the number one family doctor-recommended probiotic yogurt brand.

Choose Activia, feel good from the inside out. Visitactivia.ca for more details. Welcome back. Let's return to our discussion. Megan, this past week, for the first time, Kevin is, of course, right, that be either of the major political parties is taking entitlement reform seriously. Entitements are what's driving our debt, along with higher interest rates. The Republicans tried to tackle this in 2011-2016 timeframe. They even included it in their actual budgets in Congress.

Paul Ryan pushed. And for the most part, with very rare exceptions, neither party's talking about it seriously, neither party's proposing it. But last week, there was a moment. House Speaker Mike Johnson, who does not come in for Mike. much praise on this podcast, gave an interview at a radio station and said, entitlements are a problem. We can't keep ignoring this debt. And we Republicans have a plan to address entitlements, to reform entitlements. And we'll share it with you after the election.

And he was immediately savaged by Democrats. I mean, if you Google Mike Johnson and entitlements, you'll see every Democratic entity in the country has put out a statement on this. amygogging it as one might expect. And Mike Johnson himself, sadly, quickly walked it back and said, you know, really what I'm talking about is waste for und abuse. We're going to get at waste for und abuse, which we understand is not the problem. Is there any hope here? Megan, you had a terrific piece. You call it America's most boring crisis or something to that effect. Most boring nightmare. Yes. Most boring nightmare. And we will link all of these articles that we are referring to in our show notes. Does Kevin

overstated? How screwed are we? And is there any prospect of addressing this in a serious way in the near future, which I think is what needs to happen? I am doubtful. Look, I have been writing about this since I started writing, which is now 25 years,

which is itself kind of terrifying. And when I started writing, the national debt was not that big. It was like a third of GDP, are definitely, were not tiny, but they were manageable. So one thing that's somewhat hard to explain to people is that a healthy country can basically run a deficit forever. Because unlike a household where eventually you're going to die

and everything else to, all the books have to be balanced, right? If you just keep running a small, sustainable deficit, economic growth and inflation will just erode the value of your past debt relative to GDP, and you can just keep going. The United States is not in that position. And we are not in that position because we accumulated a ton—most of the debt, by the way, before people want to complain about, like, spending or tax cuts. Most of the debt was accumulated not on wars, not even on Obamacare.

It was accumulated by spending on the pandemic and on the global financial crisis. Obamacare did sort of beef it up a bit, in part because it took—they were scraping to make it to say that it wasn't going to increase the budget deficit. And what they did was they scraped basically any conceivable savings from Medicare that was not going to cause some lobby to descend on Washington with their hair on fire and pitched forks in hand. And they used that to pay for Obamacare. And I complained about this at the time.

And I was like, look, there is a fixed amount of savings that you can do without really either hurting people or just making them super mad. And they've used all of it. And as a result, we have not done future reforms. we're now fighting over whether we're going to reform Medicare advantage to make the payments less generous. But, like, people really...

Budget wonks, and I consider myself a budget hawk. But budget hawks just act as if, like, we can just claw back these payments painlessly. You cannot claw back these payments painlessly. Those are going into extra benefits for senior citizens who have Medicare advantage. If you take them back, those seniors will be super friggin mad. And so now debt is 100% in GDP.

That's not even counting... You know, I've been talking about let's do something about entitlements. And I remember, like, I remember Paul Grugman saying, like, well, nothing's going to even happen until 2037. And I was like, well, that sounds very fine for you, sir, but that's the year I'm supposed to retire. But also, actually, the year has moved up five years. It's down 2032 when the trust fund runs out. And the other thing is the trust fund is meaningless.

Right? The trust fund is an IOU from the government to itself. We are already closing Social Security's budget gap and Medicare's budget gap with general revenue, general fund revenue. And that means we're borrowing our deficits now almost 6% of GDP. And that's not just running up future debts for future generations to pay. It's raising the cost of capital right now. It is one reason that we are struggling to get inflation under control. Yeah.

Because having a fiscal policy that's this expansionary, it's like having expansionary monetary policy. When you are spending more than you got, it's got to go somewhere. and what it goes into is driving up prices. And it's also raising interest rates for households. So anything that you buy on debt, whether it's a house or a car, those costs have already gone up and it's going to get worse.

And it's also compressing capital to firms. Now, we're very lucky that people seem willing to invest essentially any amount of money in an AI company. But there are other kinds of companies that should be expanding, investing, you know, upping their innovating. And they're not because the government is crowding that out. they are soaking up so much debt that there's less left over

to make the economy more productive and make us richer in the future. And this is all really bad. And the problem, like the worst thing, though, is the reason this is happening is that voters do not... It's not... Yes, our politicians are feckless, they're terrible. But it's also that voters aren't demanding it.

Yeah, yeah. When you poll voters, they routinely say, do not cut entitlements, which is the bulk of our spending other than interest on the national debt and defense. Do not cut entitlements. Maybe they want to cut defense, but only if they're Democrats,

and then they don't want to cut things like VA benefits, which are a part of defense and a big part of our spending. Also, don't raise taxes on anyone except billionaires or, like, really, really rich people. And also, I want the budget deficit balanced. And so I was talking to a pollster about 10 years ago, this is a perennial problem. And the only thing you're allowed to cut is foreign aid,

which is, like, nothing. It's a trivial part of our budget. And so a pollster basically forced people to confront this. They basically pulled them, they got the same response everyone gets. And then they said, okay, here's the math. Now what would you like to do? And they came back with the same answer, right? This is mathematically impossible.

You cannot do that, but that's what they want. And they get super mad if anyone says, well, we're going to have to do some of this stuff, right? And there are ways to do this. You could cap Social Security benefits at $100,000. Right? And that would actually free up some real money to help Social Security. And that's a lot of money, right? That's enough money to keep the wolf away from the door, as my grandmother used to say.

But people are insane on this topic. They want to make the benefits. They want to make Social Security and Medicare more generous. And in part, I think it's because they don't have an idea of scale, right? They understand line items that are big. Like you paid $58 billion for a plane or something. I have no idea what a plane costs. What they don't understand is that smaller lines,

line items that are for like 100 million people are bigger than like a very, very, very expensive plane in the context of the U.S. budget. And so they're like, well, Social Security benefits, it's not even really that much money. My grandmother's really struggling. Surely we can increase that. But when you increase it over a whole lot of people, it really adds up fast. And people, they can't. Like, people don't even really understand any number that ends in Iliven is the same

number to most people. Yeah. And so it's a really difficult problem. I actually wrote a column on that for the dispatch many years ago. Everybody's enumerate. It's a huge problem, particularly when it comes to budget entitlement stuff. Just to add to Megan's discussion and analysis. Impassioned rant is, I think, what you meant to say.

Well, look, I mean, it really is important to understand the political problem and the bottom-up voter resistance. You don't have to be a Twitter addict addict like me that any time I mention entitlements, I get lots of vitriol. But the most basic reform we could do for Social Security is simply having Social Security benefits track actual inflation. Because they don't track actual inflation. They actually adjust above inflation, very wonky reasons. My colleagues at Cato have done the math on this, this alone would be a huge budget helper, right? It's not going to fix the problem, but it would be, oh, no.

Heaven forbid you actually have benefits that simply track real inflation instead of this fake, formula that gives over-generous adjustments every year, that alone is politically toxic. I mean, doing anything like capping benefits? Are you kidding, Megan? Come on. You're immediately impeached. So it's a huge, huge issue. The one thing I did want to add before we go on, the other, I think, economic thing that's critically important here is that, you know, the United States is and remains a kind of a global safe haven for capital. And this has been, as they call it, an exorbitant privilege over the years, right? And at some point, the gravy trains, is going to end, probably, right? And there was actually a brand new paper today published on what would be

the economic effects of the United States losing this exorbitant privilege. So other way, we're just another country. Our debt isn't that attractive. An entire year of US GDP will be lost. That's 32 trillion dollars, poof gone because we just simply can't get our own fiscal house in order. That's not in one year, to be clear, because that would, I mean, it's not like literally we're going to have to, like, give everything we've made to creditors. I apologize, yes. Thanks for that optimism, Megan. We appreciate that.

And it previews where I want to go with this. We have a very few moments left. And I wanted, I had a feeling that this discussion was going to take the turn and the tone that it has over the course of this hour. So my not worth your time today is a very simple one. I'll start with you, Megan. What are you optimistic about? I'm optimistic about America. Look, you know, honestly, like, this is a great country with tons of energy and people who are way better than they behave online.

You know, like when I go out in the world, I don't see people behaving like they do to each other online. They like each other. They're nice to each other. They're polite. They're decent. But just the fact of the incredible creativity of America. the generativity, the ability to take smart people from all over the world who don't speak English and be like, in 10 years, we've turned them to Americans, they're wearing their baseball caps,

they're eating brisket at a gas station in Texas. Like, this is a great, amazing country. And look, you know, we're having some issues. But as Adam Smith like to say, there's a lot of ruin in a nation. And I think America's best years are still ahead of it. Okay, Kevin, what are you optimistic? about. I know that my Redeemer live. I mean, it's a good thing to be optimistic about. That in Canada, I guess. I'm not going to even ask you to walk us through by your optimistic about

Canada, although I am curious. Scott, what are you optimistic about? Well, I thought Megan was going to steal mine for a second, but I'm glad she didn't. Yeah, I'm going to stick with the Americana theme. I, too, am optimistic about large parts of real America. And I've been thrilled. to watch it play out on the much-hated social media. If you have been watching over the last week as the World Cup has been kicking up, not only is the World Cup this wonderful spectacle of global sport, but also we have a lot of foreigners

are visiting the United States for the first time. And they are traveling across the country and seeing all of these things that we Americans take for granted, but that are part of our everyday prosperity, Costco, of course, Bucke's, bottomless chips at the Mexican food restaurant. So there are these, all of these things, and they are delighting online as to these hallmarks of American abundance that we, of course, all totally take for granted. And so I'm very thankful for not just that abundance, but also those folks reminding us that, yes, we have our problems, but we also have a lot of really awesome things, too, in the real world. Did you happen to see that New York Times story on Japanese soccer fans and their particular tradition?

Yes. Yeah. And they did it yesterday, cleaning up the garbage after. Right, yeah. And this, you know, honestly, I am a soccer fan generally, of course, you know, globalist soccer fan, of course. But it's really been fun to see it up close. When the World Cup came to the United States in 94, I was a high schooler, got to go to a game in Dallas. but I didn't, you know, you didn't have the kind of smartphone cameras and this kind of omnipresent media, which we, of course, we denigrate all the time, but in this case it's great, because you're getting all of these firsthand accounts of the fans' experiences. You know, the Dutch arriving in giant orange buses, the Japanese with their little blue trash bags.

It's very, very cool and a really optimistic American and global experience. And in 100 years, when there are six Japanese people, left. Steve can ask him what they're optimistic about. Well, the robots, the Japanese robots will clean up the stadium. Can we give them all citizenship? It's interesting, Scott. First of all, I'm glad to have a fellow soccer fan on the podcast. We talked briefly about the World Cup last week. And not briefly enough. Nobody else was, nobody else was going to be watching. And I was very glad to have watched the U.S. triumph over Paraguay. Great game. Fantastic. Paraguay. I don't think is very good, but I'll be optimistic about the U.S. team, see how far we can, how far we can go.

And I'll, my bit of optimism, I think, there's a theme that we're seeing here. And my bit of optimism, this is really hard to capture. I don't have any way of quantifying this, but I do get the sense just in conversations that I've been having with people, including dispatch members, non-dispatch members, folks at church, folks sort of beyond Washington, that the people that David French had long argued were the exhausted majority, people in communities around the country are, I think, increasingly coming to the realization that they have to act in their own communities, that we're not going to solve these problems at once with sort of a swift, positive movement at a national level led by our politicians and elected officials that if people want to make

these kinds of changes, they're going to have to make them on a community by community level and by getting involved rather than watching. And I know that sounds in some ways like the most horrible cliche, but I do get the sense in talking to people that people are sort of waking up to that fact and returning to sort of the Alexis of the Doakville power of association and community activity. Here's hoping at the very least, because these are these are big challenges. Thank you to both of you for joining. Thank you to Megan who had to leave early. This was a good conversation if a sobering one. So maybe now everybody go and get a beer. It's 10 a.m. Steve. See you next time. Before we end today's show, I wanted to let our listeners know about an upcoming

live SCOTUS blog event. On Wednesday, July 8th, 2026 at the Johns Hopkins University Bloomberg Center in Washington, D.C., the SCOTUS blog crew and a cast of brilliant legal minds will come together to explore this blockbuster Supreme Court term. If you'd like to register your interest, you can find the link at the top of the SCOTUS blog homepage or in the advisory opinion's newsletter, and we'll pop that link in our show notes here at the Dispatch podcast. Finally, if you like what we're doing here, you can rate, review, and subscribe to the show on your podcast player of choice to help new listeners find us. As always, if you've got questions, comments, concerns or corrections, you can email us at Roundtable at the Dispatch.com.

We read everything, even the ones from people who aren't optimistic at all. That's going to do it for today's show. Thanks so much for tuning in. And thank you to the folks behind the scenes who made this episode possible, Noah Hickey and Peter Bonaventure. Thanks again for listening. Please join us next time.