The President's Daily Brief - January 31st, 2023. The Cold War Returns?

Episode Date: January 31, 2023

It’s January 31st. You’re listening to the President’s Daily Brief. Your morning intel starts now. ------ A good day to you, ladies and gentlemen. I’ve got two big briefs for you this morning that are shaping America — and the world. First, there is a fight tomorrow at the White House, with Republicans squaring off against Joe Biden over the debt ceiling. I’ll give you a brief to help you sort through the arguments you’re going to hear — and decide who’s right. Second, get those maps and passports ready because we’re launching a new segment today called Cold War TWO. And that series is going to be focused on the global fight between China and the United States, much as there was a fight between America and the Soviet Union in decades gone by. So for today’s first episode, we’re going to travel around the world to check in on who has more friends, us or Beijing. Plus, we’ll remind ourselves of why we should care about this global competition. Later, we close out the podcast with a study on human nature — something pretty important in global affairs, actually. We look specifically at when kids can first tell that adults are telling them a fib or giving them a lame excuse. ----- Please remember to subscribe if you enjoyed this episode of the President's Daily Brief. Email: [e-mail] Learn more about your ad choices. Visit megaphone.fm/adchoices

Yamava Resort and Casino at San Manuel is California's number one entertainment destination for today's superstars. Catch the Jonas Brothers return to the Yamava Theater stage on April 30th, the powerful vocals of Demi Lovato on May 17th and the signature Southern Country Rock of Eric Church on July 19th. Tickets on sale now at Yamavat Theater.com,

only at Yamava Resort and Casino, celebrating its 40th anniversary. You in? Must be 21 to enter. It's January 31st. You're listening to the President's Daily Brief. I'm your host and former CIA officer Brian Dean Wright. Your morning intel starts now. A good day to you, ladies and gentlemen.

I've got two big briefs for you this morning that are shaping America and the world. First, there is a fight tomorrow at the White House, with Republicans squaring off against Joe Biden over the debt ceiling. I'll give you a brief to help you sort through the arguments that you're likely to hear and decide who's right. Second, get those maps and passports ready because we are launching a new segment today called Cold War II. And that series is going to be focused on the global fight between China and the United States, much as there was a fight between America and the Soviet Union and decades gone by.

So for today's first episode, we are going to travel around the world to check in on who has more friends, us or Beijing. Plus, we'll remind ourselves of why we should care about this global competition. and I promise you we should. Later, we close out the podcast with a study on human nature, something pretty important in global affairs, actually. We look specifically and quite adorably at kids, specifically when kids can first tell that adults are telling them a fib or giving them a pretty lame excuse.

But before we get to that, we got to get started with this. Tomorrow is a big day in Washington, D.C. The Republican Speaker of the House Kevin McCarthy is set to meet with Democrat Joe Biden in the White House, where the two men will be talking about debt. Now, actually, they're going to be talking about a debt ceiling. So let's talk about what the heck that is, why you should care, and how to sort through all the big arguments over the next, well, days, weeks, and months. And let's actually start with this.

America is a little quirky sometimes, aren't we? Lots of reasons for that. But one is that we have something called a debt ceiling, and we're virtually the only country in the world that does. You see, right now, the U.S. House and Senate vote on a bill authorizing the government to spend money, in other words, to incur expenses. And then that bill goes to the president for his or her signature. But did you hear that I said it authorized the government to spend money?

Well, here's the quirky part. There has to be a separate vote to actually fund those expenses. That is, if we are already maxed out with debt. It's sort of like if you said, yes, dear, you can buy that car. I'll cut you a check for it down the road. And then your sweetheart buys the car and is rather panicked when you say, you know, I'm not so sure we have the money.

Well, that's the quirkiness of the American system. Now, it wasn't always this way. Before the year 1917, Congress just, well, passed the bill. The president signed it, and that was that. But in 1917, Congress passed a law connected to World War I that basically said that if the Treasury Department needs some flexibility on what debt to issue, that's fine, so long as they don't spend over a certain amount of total debt. And thus, the debt ceiling was born, requiring that second vote when the debt limit is reached.

Now, for what's worth, the debt ceiling has always been raised, never lowered. Now, in the year since 1917, it gets a little bit more complicated, but the bottom line is that America has a pretty quirky system where our Congress has to vote twice, once to authorize federal spending, and then another to actually fund it if it surpasses the debt limit. So that takes us to the last year or so. So under the prior Democrat-led Congress, they voted to authorize a massive increase in spending on all sorts of things. Lots of money for entitlement programs like Social Security and Medicare. lots too for defense spending and other discretionary programs.

But the problem is that that blowout spending is going to take us past the debt ceiling that currently sits at, hold your hats, $31.4 trillion. And if that debt number doesn't get increased by Congress by June, give or take, or if there aren't budget cuts that prevent us from hitting that number, the U.S. government will begin to default on its debt with pretty big. disastrous consequences for the U.S. and global economy, and of course, you. Now, nobody knows for sure how bad it would get, but if we look at other countries who have defaulted, we're talking about a pretty dramatic spike in interest rates, a stock market crash,

a recession that would probably lead to a depression, just an absolute mess. Now, that type of default is pretty unlikely to happen. Both Speaker McCarthy and Mr. Biden are both saying that they promise that they won't. They'll work something out. But that assumes that one side eventually blinks, which takes us to this. What arguments are you likely to hear over the coming days and weeks and months to suggest who might blink first? And who's right about this fight? Well, let's start with Mr. Biden, his Democrats, and probably a few Republicans.

They're going to say, look, Congress has already authorized this money. So just hush already, you other Republicans, fund these. expenses with a debt ceiling increase. And if you don't, you are playing with fire, potentially causing a stock market crash and a depression, no social security checks. Well, not so fast, say Republicans. There was an election in November, and we won, even if just by a whisker. And we won because enough of the American people said, hey, Congress, get a hold of that deficit spending and the national debt. in other words, it doesn't matter what the old Congress said. The new guys have a new mandate.

And that mandate is to cut past authorized spending or work out some kind of deal for limiting future spending. Okay, those are the basic arguments that you're going to hear. I'll let you all decide who's right. But here's my own analysis and opinion on it. Folks, America is $31.4 trillion in the whole. All right, that's a lot of money. And that massive amount of debt could become a very big problem as in it could collapse the country. So here's why.

And I want us to think about our own finances. Now, I will admit that this is an imperfect analogy, but just stick with me. So let's say that you owe $100,000 on your credit card and your bank thinks that you are such a low risk that they actually don't mind letting you keep that high of a balance. In fact, they'll increase your credit limit because you have a good job and you always pay on time. And actually, you are so great that they are only going to charge you 2% interest on that debt. All right. But then the bank crunches some more numbers and the economy goes a little bit south and they decide, you know, you might be a little bit more of a risk than we thought. So they raise your interest rate to 4%, not 2%, not 2%,

Well, suddenly your interest expense just doubled on an even bigger balance. Okay, can your salary handle that increase? Or let's say that the bank has another investment that is just as safe as you are, but they can get, say, 3% interest. So they say to you, hey, look, if you want us to carry your debt, we're going to have to charge you 3.5% interest, not 3%. So here again, can your salary handle that increase? Now, it is true that this is an imperfect analogy because personal finances are not the same as government finances, but generally speaking, this gives you a key insight into the problems of having $31 trillion in debt.

And that is the more debt that you carry, the less ability and flexibility you ultimately have to carry that debt. The same is true of governments. In other words, American politicians, frankly, on both sides of the aisle, have a lot of the aisle have, spent decades gambling with our future. They've increased our nation's debt like a bunch of drunken sailors spending cash at a port call in Bangkok. And we're just hoping that our taxes or our revenue keeps going up and that international financiers don't demand more from us in, say, interest payments or let's say there aren't any other investments out there more attractive than our debt. Now, is that a smart gamble? Well, I mean, so far,

are, yeah, it's worked out. But it's gambling with the nation's future. And I don't think that that is smart. It would be much more prudent to dial back to gambling and reduce those expenses. And in turn, that gives us more ability and flexibility down the road. In other words, to the politicians, I would say, let's get out of Bangkok. Kind of dodgy anyway. Let's balance that budget.

With that, ladies and gentlemen, let's take a quick break. When we come back, I've got one more critical piece of news for you, so hang tight, and we will be right back. Welcome back to the PDB. I've got one more critical piece of news for you this morning. Folks, get out those passports and maps because we are going around the world this morning, and we're going to do so because of a new segment that I'm starting. It's called Cold War II. Now, it's a phrase that you might have heard before. It's this idea that The first Cold War ended when the Soviet Union collapsed, that is true, but there's a new one emerging, one between the United States and China. And just like the first go around, each side

will be at each other's throats globally to win the hearts and minds and power of the world. And if that fight isn't properly managed, if it spirals out of control, it'll end up not in a Cold War, but in a World War. Now before we start talking about Cold War II, some of you might be wondering why you should care about this? Or maybe you don't think that there's going to be a war, cold or otherwise, between China and the U.S. Well, I hear the point, but let me actually challenge you on both of those things with a refresh of four different briefs that I've given you previously. In fact, if you'd like write down the dates and you can go back and listen to them once we're done today. So first, on January 10th, I briefed you on how a large chunk of the U.S. Navy would be

sunk if a battle started over Taiwan in this Taiwan Strait. And that fight could start as early as this year, that's according to senior officials at the U.S. Pentagon. Or consider all those microchips that come out of Asia. I gave you a brief on that back on August 16th about how America could be frankly thrown back in time 100 years if the world's computer chip supply were destroyed and bombing runs over Taiwan or South Korea, which is where most of these advanced chip factories are located. Or, you know, consider all those minerals and the refining for dirty green energy, not just the batteries for electric vehicles, but rather batteries for all sorts of devices.

Because remember, China still has 80 plus percent control of that battery supply chain. Finally, what about the supply of America's medicines and supplements? I give you a brief on January 9th, where I shared that America imports at least three, $3.2 billion worth of prescription drugs from China, including most of our antibiotics, blood thinners, birth control pills, and drugs for chemotherapy, just to name a few. The point, folks, is that you bet we should care about a possible war, cold or otherwise, between China and the United States, and those are just four of the many ripple effects that we would all experience. Bottom line is that none of us would go unscathed. So, with that

let's get into the details about Cold War II. And today we are going to focus on the friends or the allies of both China and the United States. Because just like in the old Cold War with the Soviets, America needs our friends around the world to help us hold the line. Well, the Chinese are looking for the same. So grab those passports and come with me as we get some updates on how that fight for friends around the world is going. First, let's start with, yeah, I'm going to say it, the bad guys, China, and most especially, its partner, Russia. Yesterday, the Chinese foreign ministry attacked the United States, blaming Washington, D.C.

for the war in Ukraine. Quote, the U.S. is the one who triggered the Ukraine crisis and the biggest factor for fueling it. It has kept selling heavy assault weapons to Ukraine, which has only prolonged and intensified the conflict. In other words, folks, Russia and China still have a very strong, if occasionally uneasy relationship from trade to Ukraine. In fact, last week, the United States accused Chinese companies of sending Russia advanced computer chips, amongst other things, to help them thrive despite Western sanctions. So, yes, we are seen in real time what they promised each other last February when Beijing

and Moscow said that their friendship would have, quote, no limits, end quote. All right, so that's Russia. Let's next blast off to the South American country of Bolivia. Last week, the government there announced that they had chosen the Chinese company, C-A-T-L or cattle, to develop lithium mines. Now, lithium, of course, is critical in batteries of all kinds, especially those dirty green batteries for solar, wind, and electric vehicles. Now, for what it's worth, Bolivia chose that Chinese firm over another company from the United States.

And that's a big deal, folks, because, Bolivia has huge reserves of lithium in the salt flats of that country near the border of Argentina and Chile. Indeed, those three countries hold more than 75% of the world's lithium deposits. Bummer, we lost out. All right, from Russia to Bolivia, we now jet across the Atlantic Ocean to Africa, where we've got a new development about the alliance between China, Russia, and South Africa to talk about.

Well, in a previous brief, you might remember that I'd say, spoke about how those three countries are about to conduct joint naval exercises coming up about two or three weeks actually. Well, this brief is about another, well, naval adventure of sorts. On Saturday, the Russian research vessel Karpinski docked in Cape Town, South Africa, after spending a pretty good chunk of time conducting seismic surveys in the Antarctic Ocean. Well, they're there looking for oil and natural gas. According to the state-owned Russian exploration company Roscoe, the Antarctic Ocean has. tens of billions of tons of hydrocarbons buried under the seafloor.

And exploiting those oil and gas reserves would make Russia, China, and South Africa very happy and very rich. So the South Africans are saying this morning that they will continue that exploration with their northern friends, despite the fact that local environmentalists and the West do not approve. Okay, so that's quick update on China and some of their friends around the world. let's now pivot to the United States and our friends for a few updates. Let's start with some good news in the Southeast Asian country of the Philippines. Later this week, the U.S. Secretary of Defense will be in Manila to ink a deal,

given the U.S. military expanded access to military bases in that country. So I'm seeing two likely locations that would be especially helpful in a war over Taiwan. We're talking about two Philippine islands and the north. Now, I'm nailing down details and will bring you confirmation, later this week of exactly what we're talking about, but it appears that at least the island of Luzon is ready for American Armed Forces, fingers crossed. All right, from there we leave the Philippines and head to Guam.

Now, I know that Guam is a territory of the United States, but this update is important because of the key role that it could play in the fight with Taiwan. The U.S. Marine Corps just opened its first new base since 1952 on the island of Guam. Camp Blas is the name. It'll eventually house 5,000 Marines. Only 100 are there now. The rest should arrive in about two years time. Eventually, they'll join the 10,000 other U.S. military personnel already on the island. Next, let's head to Europe with stops in France and Germany to hear about what they have to say regarding our friends in Beijing. On January 20th,

the French finance minister said that his country does not see eye to eye with America on China and that the Europeans should instead strike a balance with Beijing during this new Cold War II. So here's what French minister Bruno Lemire at the World Economic Forum said. Quote, China cannot be ruled out. They must be brought in. This is the difference of view that we have between the United States and Europe. We don't want to oppose China. We want to engage with China. is our policy." Well, that's nice.

You can always count on the French to be absolutely spineless. Next up, the Germans. What are they saying? Well, on January 21st, the German finance minister said, you know, let's go slow on this decoupling thing from China.

Quote, decoupling our economy from the Chinese market would not be in the interest of jobs in Germany, end quote. Now, however, this same German minister, Christian Linder, added that they could eventually reduce their dependence on China. They know that they're a bad actor, but they just can't do it very quickly.

Well, for what it's worth, they're not alone. We've got some, shall I say, weak need folks here in the U.S. too. Bloomberg News is reporting that the U.S. Chamber of Commerce and a trade group that represents Apple and Amazon are demanding that the Biden administration roll back the Trump-era tariffs on China. Now, those were set to expire last year, but Biden's team actually extended them for now as they consider next steps. But that process of considering, well, that's taken too long or so says the U.S. Chamber of Commerce, plus Apple and Amazon and their folks.

So here's a couple quotes. First, quote, these tariffs undermine U.S. competitiveness and impose undue economic hardships on U.S. businesses, workers, and families, end quote. That, by the way, was from the Chamber of Commerce. The Tech Industries Association, called the Information Technology Industry Council, said, quote, there is no evidence that the tariffs have met the stated objectives. Instead, they have caused significant harm to our industry and contributed towards rising costs, end quote.

So, there you have it, my friends, around the world. It's our first episode of Cold War II, bringing together updates from all around the world as China and the United States face off. Now, in the future, I'm going to focus these briefs on specific areas or topics, like, as you may recall, the battle for the Pacific, or whether our military is ready for a fight, or perhaps China's attempts to corner the cobalt market or lithium and nickel. In the meantime, let me offer up my initial counsel and my personal opinion based on a career focused on this issue. So what I know to be true and what I will demonstrate to you with facts and data is that China is sadly in the lead when it comes to Cold War II. They have more friends than we do with stronger connections. They hold critical advantages in key industries and sectors.

And frankly, they're just hungrier than we are. If you've ever spent time in China or with Chinese officials, you know exactly what I'm talking about. they are laser focused on either making a bunch of money or beating America at all costs. At any rate, much more to come on Cold War II. If you're interested, do some internet research about that topic, Cold War II. Verify what I'm talking about. There's a lot of pretty heady academic debates about it. But on this podcast, I'm going to give you the spy version,

because I can tell you from personal experience, that this issue is real. It is happening. and we've got to get better at responding because this is a war cold or otherwise that we absolutely cannot afford to lose. And with that, ladies and gentlemen, we conclude your morning brief. But I've got one more thing before I let you go.

We will be right back. Welcome back to the PDB folks. I've got one more thing before I let you go. So this morning, we've talked about a lot of intense, pretty heavy stuff. So why not try something a little bit lighter before we say goodbye. And yet, I have to say it's still about human nature, which is pretty important when we start talking about global and national affairs. Researchers at Duke University

were wondering something. At what age do children recognize that adults are telling them a fib, or just a bad excuse? In other words, and especially for my parents, how many years do we have until the kids are on to us? Well, the folks at Duke had a group of three and five, five-year-olds were shown a series of videos where puppets promised to show these kids a pretty cool toy, and then the puppets left the scene to go get it. But when they came back, those sneaky puppets were empty-handed. To explain themselves, the puppets either gave the kids a pretty good excuse, like I had to help my friend with his homework and I just forgot. Or they gave the kids a bad excuse, like, you know, I wanted to watch TV and I just didn't care to bring it back. Or

sometimes the puppets offered no explanation at all. They just pretended like the promise was never made. Well, the children were then asked whether they thought that the puppet's actions were wrong or not and why. Well, no matter what the excuse was, the children agreed, even as young as three years old, that it was generally wrong to break a promise. But they were more understanding when the puppets offered a good excuse, like they had to help somebody, versus a, well, a lame excuse. And that's pretty fascinating. The kids at the age of three have this largely figured out. So parents, you've got to age three at most, and then you are, well, in trouble. But I'll tell you, here's the sweetest darn thing. The kids were then asked which puppets that they would still like

to play with. And bless their little hearts, they said that even the lousy puppets, well, they'd be all right. They'd still invite them to play. Ah, to be innocent. You know, When do we lose that spirit of forgiveness and kindness? I don't know. For me, it was kindergarten. Yeah, a doggone kid named Gabe. He took my rug. You know the ones that we napped on?

He just took it. What kind of kid does that? By the way, Gabe, if you're listening, I haven't forgotten. Put that guy in a secret no-fly list. Teach him a lesson. And that, ladies and gentlemen, concludes your morning brief. As always, we close out the show, reminding each other of why we are here, talking about our country and our world.

It's the creed of every good spy and every smart American. It's from John chapter 8, verse 32. And you shall know the truth, and the truth shall make you free. Good day.