WEBVTT 00:00:00.000 --> 00:00:02.600 Welcome to the Deep Dive. You sent us a really 00:00:02.600 --> 00:00:05.080 interesting stack of sources, articles, reports, 00:00:05.179 --> 00:00:08.580 some analysis, all giving us this snapshot of, 00:00:08.580 --> 00:00:12.359 well, right now, May 2025. Yeah, quite a moment. 00:00:12.419 --> 00:00:14.080 And we're going to unpack these together, pull 00:00:14.080 --> 00:00:16.140 out the key bits, see how they connect. Exactly. 00:00:16.260 --> 00:00:18.199 It gets you quickly informed on what's happening 00:00:18.199 --> 00:00:20.879 and maybe why it's happening. Right. And the 00:00:20.879 --> 00:00:23.019 sources, they mainly look at the US government. 00:00:23.140 --> 00:00:26.179 Big challenges there. Budget, debt. policy debates 00:00:26.179 --> 00:00:28.839 in Washington. But also some other political 00:00:28.839 --> 00:00:31.579 things bubbling up. One report called them not 00:00:31.579 --> 00:00:34.140 normal. That's the phrase they use. So yeah, 00:00:34.219 --> 00:00:37.780 a lot to dig into. OK, mission is clear. Makes 00:00:37.780 --> 00:00:39.539 sense of this material. Connect the dots for 00:00:39.539 --> 00:00:41.939 you. Let's just jump right in. OK, let's do it. 00:00:41.960 --> 00:00:44.079 So first thing that jumps out from one analysis, 00:00:44.460 --> 00:00:46.740 it's veteran analyst Jeff Bush. He's warning 00:00:46.740 --> 00:00:49.899 about what he calls a perfect fiscal policy storm 00:00:49.899 --> 00:00:53.969 brewing. A storm. OK, that sounds. Pretty serious. 00:00:54.369 --> 00:00:56.170 What are the ingredients here? He sees three 00:00:56.170 --> 00:00:58.850 main things converging. You've got interest costs 00:00:58.850 --> 00:01:01.829 on the national debt just shooting up. Then there's 00:01:01.829 --> 00:01:04.969 the sheer size of the debt itself already massive. 00:01:05.370 --> 00:01:08.349 Right. And on top of that, these really aggressive 00:01:08.349 --> 00:01:11.810 tax cut proposals that are being pushed, all 00:01:11.810 --> 00:01:14.390 hitting at once. And the numbers in these sources, 00:01:15.030 --> 00:01:18.069 they really drive home the scale, don't they? 00:01:18.189 --> 00:01:20.170 They absolutely do. I mean, just look back at 00:01:20.170 --> 00:01:23.250 2024. The government spent What, $6 .8 trillion? 00:01:23.629 --> 00:01:26.730 Yeah. But revenue is only about $5 trillion. 00:01:27.450 --> 00:01:31.609 So that's a $1 .83 trillion deficit in one year. 00:01:31.689 --> 00:01:34.129 Which just gets added to the pile. The total 00:01:34.129 --> 00:01:38.109 federal bet now pushing $37 trillion. $37 trillion. 00:01:38.390 --> 00:01:40.349 And Bush made a really interesting point about 00:01:40.349 --> 00:01:43.200 that number. What was that? just how incredibly 00:01:43.200 --> 00:01:46.140 hard it is for anyone, even financial pros, to 00:01:46.140 --> 00:01:48.760 really wrap their head around what $37 trillion 00:01:48.760 --> 00:01:51.420 mean. That's almost an abstract concept at that 00:01:51.420 --> 00:01:54.159 scale. Exactly. And he suggested maybe a bit 00:01:54.159 --> 00:01:55.719 cynically that the government kind of relies 00:01:55.719 --> 00:01:58.079 on it being this nonsensical number that people 00:01:58.079 --> 00:02:00.420 just glaze over. But the source stressed, look, 00:02:00.540 --> 00:02:02.239 if you have financial knowledge, you need to 00:02:02.239 --> 00:02:04.459 understand this debt. Absolutely critical. And 00:02:04.459 --> 00:02:06.519 this is where Bush got really blunt, you know, 00:02:06.640 --> 00:02:08.580 hitting both sides of the aisle. He just flat 00:02:08.580 --> 00:02:11.389 out said. There's not one Democrat, there's not 00:02:11.389 --> 00:02:15.009 one Republican that has a plan to pay off a dime's 00:02:15.009 --> 00:02:18.289 worth of debt. Not one of them. Wow. No punches 00:02:18.289 --> 00:02:20.550 pulled there. None. He used that old phrase, 00:02:21.050 --> 00:02:23.349 drinkin' sailors spend like drunkin' sailors. 00:02:23.710 --> 00:02:25.930 Said it applies to everyone in charge, basically. 00:02:26.189 --> 00:02:28.229 And he put the debt in historical context too, 00:02:28.349 --> 00:02:31.000 right? Yeah. comparing it to World War II. Yeah, 00:02:31.020 --> 00:02:33.000 as a share of the economy, he said, we're roughly 00:02:33.000 --> 00:02:35.560 on par with where we were at the height of World 00:02:35.560 --> 00:02:37.419 War II. But the big difference, the analysis 00:02:37.419 --> 00:02:39.840 points out, is that after the war, there was 00:02:39.840 --> 00:02:43.620 a real push to pay down that debt. Now, crickets. 00:02:44.000 --> 00:02:47.520 No plan. No plan. And speaking of plans, or lack 00:02:47.520 --> 00:02:50.599 thereof, Bush mentioned this idea of a sovereign 00:02:50.599 --> 00:02:53.599 wealth fund. He did, but the reports immediately 00:02:53.599 --> 00:02:55.719 flagged the obvious problem. Where does the money 00:02:55.719 --> 00:02:58.599 come from? Exactly. With deficits like these, 00:02:58.810 --> 00:03:01.270 Most countries set those up with budget surpluses. 00:03:01.310 --> 00:03:03.590 We don't have those. OK, so this massive debt, 00:03:03.770 --> 00:03:07.710 these ongoing deficits, that's the backdrop for 00:03:07.710 --> 00:03:09.469 everything happening in Washington right now. 00:03:09.789 --> 00:03:12.870 It absolutely shapes the landscape. And even 00:03:12.870 --> 00:03:14.949 though the president's been busy with executive 00:03:14.949 --> 00:03:17.250 orders, hundreds of them, apparently. Right. 00:03:17.550 --> 00:03:19.590 Jeff Bush's analysis stressed that you still 00:03:19.590 --> 00:03:22.050 need Congress to get a lot of that work done. 00:03:22.569 --> 00:03:25.560 Legislation is key. And Congress? Well, it has 00:03:25.560 --> 00:03:27.620 its own hurdles. The Senate filibuster being 00:03:27.620 --> 00:03:29.900 the big one. Yeah, that 60 -vote requirement. 00:03:30.240 --> 00:03:32.400 Republicans have a majority, but they'd need 00:03:32.400 --> 00:03:34.699 seven Democrats to join them for most things. 00:03:34.840 --> 00:03:37.060 Which Bush thought was unlikely. Didn't see it 00:03:37.060 --> 00:03:39.639 happening easily, you know. But there's the exception. 00:03:40.759 --> 00:03:44.180 Reconciliation. For budget and tax stuff. Exactly. 00:03:44.259 --> 00:03:46.560 That's the workaround. Simple majority needed 00:03:46.560 --> 00:03:49.580 their 50 votes plus the VP. And the analysis 00:03:49.580 --> 00:03:51.860 you sent suggests that's the main path for the 00:03:51.860 --> 00:03:54.180 administration's agenda. Seems to be. The source 00:03:54.180 --> 00:03:56.520 said the lion's share of what Donald Trump is 00:03:56.520 --> 00:03:58.840 trying to accomplish falls under that reconciliation 00:03:58.840 --> 00:04:00.939 umbrella. OK. But even within the Republican 00:04:00.939 --> 00:04:03.740 Party, the material flagged some, let's say, 00:04:03.900 --> 00:04:06.599 friction. Mentioned Senate leader John Thune. 00:04:06.979 --> 00:04:10.060 Right. Bush described Thune as not a traditional 00:04:10.060 --> 00:04:12.979 magic A type of Republican. And this feeds into 00:04:12.979 --> 00:04:16.019 one of Bush's axioms. Axiom hashtag one. That's 00:04:16.019 --> 00:04:18.860 the one. He says when one party controls everything, 00:04:19.639 --> 00:04:23.899 White House, Congress. All those little cracks 00:04:23.899 --> 00:04:28.759 within that party's ideology start to split wide 00:04:28.759 --> 00:04:30.480 open. And we're seeing that now with the tax 00:04:30.480 --> 00:04:32.899 bill. Apparently so. Hints of it earlier this 00:04:32.899 --> 00:04:35.300 year with the budget bill, but now with taxes, 00:04:35.540 --> 00:04:37.839 the source says we're really seeing those cracks 00:04:37.839 --> 00:04:40.180 split wide open. And the prime example is that 00:04:40.180 --> 00:04:43.279 salt cap debate, right? state and local tax deduction. 00:04:43.540 --> 00:04:45.240 Perfect example. You've got Republicans from 00:04:45.240 --> 00:04:47.759 low tax red states versus Republicans from high 00:04:47.759 --> 00:04:50.240 tax blue states. Totally different views on what 00:04:50.240 --> 00:04:52.399 to do there. Meanwhile, while the Republicans 00:04:52.399 --> 00:04:54.560 are dealing with their internal splits, Bush 00:04:54.560 --> 00:04:56.860 had a take on the Democrats too. He did. Called 00:04:56.860 --> 00:04:59.420 them leaderless and messageless. Said it fits 00:04:59.420 --> 00:05:02.800 his axiom number two. Which is? Basically, the 00:05:02.800 --> 00:05:05.319 worst place for a party to be is irrelevant. 00:05:05.579 --> 00:05:07.540 And he felt that's where the Democrats were at 00:05:07.540 --> 00:05:09.639 that moment. But he also thought this tax bill 00:05:09.639 --> 00:05:12.379 might actually give them something to unite against. 00:05:12.579 --> 00:05:15.040 Yeah, could be the impetus, he said. And speaking 00:05:15.040 --> 00:05:16.980 of the bill, the process in the House sounds 00:05:16.980 --> 00:05:20.079 frantic. That's putting it mildly based on the 00:05:20.079 --> 00:05:23.240 report's breakneck speed. Totally. Speaker Mike 00:05:23.240 --> 00:05:25.879 Johnson, apparently pushing super hard, wanted 00:05:25.879 --> 00:05:29.120 a big, beautiful bill passed by Friday before 00:05:29.120 --> 00:05:30.819 they went on recess. Get it done before they 00:05:30.819 --> 00:05:33.379 have to face voters back home. Seems like it. 00:05:33.720 --> 00:05:36.180 Led to this marathon 22 -hour session in the 00:05:36.180 --> 00:05:38.100 rules committee just to hash out the details. 00:05:38.439 --> 00:05:41.040 22 hours. And the bill itself is huge. Over a 00:05:41.040 --> 00:05:44.250 thousand pages, yeah. Described as cobbled together, 00:05:44.490 --> 00:05:47.269 lots of last minute changes. One source even 00:05:47.269 --> 00:05:49.470 said it was hard to know exactly what got tucked 00:05:49.470 --> 00:05:52.370 away inside. But the reports did manage to pull 00:05:52.370 --> 00:05:54.490 out some specifics that seemed to be in there. 00:05:54.709 --> 00:05:57.649 Quite a collection. It's definitely a mix. Lifting 00:05:57.649 --> 00:06:01.170 the salt cap to $40 ,000. Adding work requirements 00:06:01.170 --> 00:06:03.930 for Medicaid, though maybe delayed past the midterms. 00:06:04.110 --> 00:06:06.970 Changes to food stamps, SNA benefits. Right. 00:06:07.089 --> 00:06:10.329 No federal tax on tips. or gun silencers, but 00:06:10.329 --> 00:06:12.850 keeping the tax on tanning beds, apparently. 00:06:12.970 --> 00:06:15.810 OK. Also phasing out some of the Biden era green 00:06:15.810 --> 00:06:18.269 energy credits, but boosting support for nuclear 00:06:18.269 --> 00:06:20.689 power and a new kind of retirement account. Trump 00:06:20.689 --> 00:06:23.230 accounts. That was mentioned. Yeah. Along with 00:06:23.230 --> 00:06:25.930 a rule against federal payments for ACA plans 00:06:25.930 --> 00:06:28.350 covering abortions and the big ticket items, 00:06:28.649 --> 00:06:31.420 the overall tax cuts and the debt ceiling. Tax 00:06:31.420 --> 00:06:35.199 cuts totaling around $3 .8 trillion, mostly extending 00:06:35.199 --> 00:06:38.699 the 2017 cuts. And because of that, needing a 00:06:38.699 --> 00:06:40.939 $4 trillion increase in the debt ceiling to cover 00:06:40.939 --> 00:06:44.220 it. So with all that packed in, what were the 00:06:44.220 --> 00:06:47.019 odds in the House? Well, the report said moderates 00:06:47.019 --> 00:06:49.279 and conservatives were definitely grumbling. 00:06:49.420 --> 00:06:51.699 But not necessarily voting no. Most weren't saying 00:06:51.699 --> 00:06:54.399 they would no, except Thomas Massey, but he's 00:06:54.399 --> 00:06:57.399 described as pretty much always a no vote. So 00:06:57.399 --> 00:06:59.699 thinking was Johnson might just squeak it through. 00:06:59.839 --> 00:07:03.069 And if he does. it lands squarely in the Senate's 00:07:03.069 --> 00:07:05.509 lap. Yep. Message to Leader Thune is basically, 00:07:06.009 --> 00:07:08.110 here it is, take it or leave it. And there was 00:07:08.110 --> 00:07:10.290 still a lot of uncertainty among Senate Republicans. 00:07:10.370 --> 00:07:13.029 Didn't some senators already raise issues? Murkowski 00:07:13.029 --> 00:07:15.029 and Collins? Yeah, they specifically mentioned 00:07:15.029 --> 00:07:17.329 concerns about the Medicaid changes in the House 00:07:17.329 --> 00:07:19.509 bill, so definitely hurdles ahead in the Senate. 00:07:19.750 --> 00:07:22.889 Okay, so fiscal storm clouds, chaotic tax bill 00:07:22.889 --> 00:07:25.329 process. How are the financial markets taking 00:07:25.329 --> 00:07:26.959 all this? Well, they're definitely watching. 00:07:27.060 --> 00:07:29.920 We saw that bond market sell off recently. Yields 00:07:29.920 --> 00:07:31.959 on the 10 -year treasury, the 30 -year bond. 00:07:32.480 --> 00:07:33.939 They jumped. Highest in months, right? Yeah, 00:07:34.019 --> 00:07:36.259 10 -year highest since February, 30 -year highest 00:07:36.259 --> 00:07:38.759 since last October. Pretty significant moves. 00:07:38.980 --> 00:07:41.379 And the timing seemed directly linked to news 00:07:41.379 --> 00:07:43.800 mentioned in the sources. Absolutely. It really 00:07:43.800 --> 00:07:46.600 picked up steam right after Moody's downgraded 00:07:46.600 --> 00:07:49.300 the U .S. credit rating. They were the last major 00:07:49.300 --> 00:07:51.560 agency holding out with a perfect score. And 00:07:51.560 --> 00:07:53.399 it coincided with this House tax bill moving 00:07:53.399 --> 00:07:56.019 forward. Exactly. That combination seemed to 00:07:56.019 --> 00:07:57.980 really unnerve investors. There was that one 00:07:57.980 --> 00:08:00.800 specific bond auction mentioned too, the 20 year 00:08:00.800 --> 00:08:04.589 bond. Right. May 21st. The treasury auction investors 00:08:04.589 --> 00:08:08.370 demanded a much higher rate 5 .047 percent compared 00:08:08.370 --> 00:08:11.089 to what. The average of the previous six auctions 00:08:11.089 --> 00:08:14.410 for that same bond was 4 .613 percent. So, yeah, 00:08:14.550 --> 00:08:16.550 almost half a percent higher borrowing costs 00:08:16.550 --> 00:08:18.750 for the government just like that. And the analysis 00:08:18.750 --> 00:08:21.610 tied that jump directly to the Moody's downgrade 00:08:21.610 --> 00:08:24.730 and maybe the GOP budget plans. Or both. Yeah. 00:08:25.269 --> 00:08:29.050 And that specific result, that higher rate, apparently 00:08:29.050 --> 00:08:31.910 spooked Wall Street. Stock markets dropped pretty 00:08:31.910 --> 00:08:34.330 sharply that day, 1 .4 percent to 2 percent. 00:08:34.490 --> 00:08:36.370 OK, let's unpack this a bit for you, the listener. 00:08:36.679 --> 00:08:39.860 Why do higher bond yields actually matter? Well, 00:08:40.139 --> 00:08:42.659 two main things. For the government, it means 00:08:42.659 --> 00:08:45.259 paying more interest on all that debt, nearly 00:08:45.259 --> 00:08:49.000 $29 trillion held by the public. Which squeezes 00:08:49.000 --> 00:08:51.610 the budget for everything else. Right. Down the 00:08:51.610 --> 00:08:54.370 line, it could mean higher taxes or cuts to services. 00:08:54.590 --> 00:08:57.070 And for people personally. It usually makes borrowing 00:08:57.070 --> 00:08:59.649 more expensive for big things. Think mortgages, 00:08:59.950 --> 00:09:03.210 car loans. Lots of consumer and business loan 00:09:03.210 --> 00:09:05.509 rates are linked to these treasury yields. So 00:09:05.509 --> 00:09:07.049 if rates go up for the government, they tend 00:09:07.049 --> 00:09:09.210 to go up for everyone else too. Generally, yes. 00:09:09.309 --> 00:09:11.230 And the analysis pointed out, look, if this tax 00:09:11.230 --> 00:09:13.070 bill adds to the deficit, the government has 00:09:13.070 --> 00:09:15.210 to issue even more bonds. Which pushes rates 00:09:15.210 --> 00:09:17.889 even higher. Could lead to sustained higher rates. 00:09:17.950 --> 00:09:20.389 That was the phrase used. Now, the counter argument 00:09:20.389 --> 00:09:22.610 from the administration and supporters in Congress 00:09:22.610 --> 00:09:25.850 is that other policies like tariffs or deregulation 00:09:25.850 --> 00:09:28.389 will spark enough economic growth to pay for 00:09:28.389 --> 00:09:30.509 the tax cuts. That growth will generate more 00:09:30.509 --> 00:09:33.330 revenue. But the economists quoted in the material 00:09:33.330 --> 00:09:37.950 you sent were skeptical. Yeah, Douglas Holtzikin, 00:09:38.250 --> 00:09:40.809 former CBO director, called parts of the tax 00:09:40.809 --> 00:09:43.929 bill junk, said there's a real chance this does 00:09:43.929 --> 00:09:46.629 nothing or makes the problem worse, not exactly 00:09:46.629 --> 00:09:49.169 a ringing endorsement. and the overall market 00:09:49.169 --> 00:09:51.529 sentiment, according to the analysis. It wasn't 00:09:51.529 --> 00:09:54.149 just about this one bill. It was the bigger picture, 00:09:54.809 --> 00:09:57.549 this lack of any sustained efforts to bring spending 00:09:57.549 --> 00:10:00.889 and revenue into closer balance. One expert predicted 00:10:00.889 --> 00:10:03.769 extremely large deficits as far as the eye can 00:10:03.769 --> 00:10:06.629 see. Grim outlook. Even the real estate industry 00:10:06.629 --> 00:10:09.090 chimed in. Yeah, a commercial real estate CEO 00:10:09.090 --> 00:10:11.090 worried that higher borrowing costs could just 00:10:11.090 --> 00:10:13.429 wipe out any benefit from lower taxes, could 00:10:13.429 --> 00:10:16.419 even hurt property values. Interestingly, He 00:10:16.419 --> 00:10:18.259 thought the president understood that trade -off 00:10:18.259 --> 00:10:21.019 perfectly. He did. And another analyst was quoted 00:10:21.019 --> 00:10:23.639 saying there's basically no chance Congress changes 00:10:23.639 --> 00:10:26.320 course even if the 10 -year yield stays up around 00:10:26.320 --> 00:10:29.419 5%. They seem locked in. Remember that Department 00:10:29.419 --> 00:10:32.860 of Government efficiency idea with Elon Musk? 00:10:32.980 --> 00:10:36.559 Oh yeah, DOGE. The consensus from a policy conference 00:10:36.559 --> 00:10:40.000 mentioned in the sources. A nothing burger. Not 00:10:40.000 --> 00:10:42.500 going to deliver any real budget savings. So 00:10:42.500 --> 00:10:44.659 it all feeds into this feeling that despite the 00:10:44.659 --> 00:10:47.419 red ink, there's just no real push to tackle 00:10:47.419 --> 00:10:50.200 the big drivers of spending. Seems that way. 00:10:50.860 --> 00:10:53.559 The analysis said Trump has no appetite to tackle 00:10:53.559 --> 00:10:55.779 entitlement programs, and Republicans generally 00:10:55.779 --> 00:10:58.000 seem less worried about deficits now than in 00:10:58.000 --> 00:11:00.500 the past, even though the situation is objectively 00:11:00.500 --> 00:11:03.240 worse. OK, so with all this pressure on the budget, 00:11:03.620 --> 00:11:05.519 people naturally start wondering about programs 00:11:05.519 --> 00:11:08.659 like Social Security and Medicare. Jeff Bush 00:11:08.659 --> 00:11:10.720 mentioned hearing this a lot. Yeah, he travels 00:11:10.720 --> 00:11:13.580 around, talks to clients, said they're absolutely 00:11:13.580 --> 00:11:15.539 paranoid about benefits being cut. Even though 00:11:15.539 --> 00:11:17.879 the president campaigned on no cuts to Medicare 00:11:17.879 --> 00:11:21.539 or Social Security? Right. Now, Bush himself 00:11:21.539 --> 00:11:23.779 wasn't predicting Social Security would go bankrupt 00:11:23.779 --> 00:11:26.139 overnight, but he did point to the projections. 00:11:26.240 --> 00:11:28.080 The trust fund's running out of money around 00:11:28.080 --> 00:11:31.440 2035. Roughly, yeah. He expects some kind of 00:11:31.440 --> 00:11:33.980 reform will have to happen, probably around 2033. 00:11:34.340 --> 00:11:36.720 But could recent changes maybe speed up that 00:11:36.720 --> 00:11:39.389 timeline? That's a concern raised in the material, 00:11:39.549 --> 00:11:41.549 like the Social Security Fairness Act passed 00:11:41.549 --> 00:11:44.289 earlier. It expanded benefits to more people, 00:11:44.309 --> 00:11:47.129 but didn't add new revenue to pay for it. And 00:11:47.129 --> 00:11:49.590 the idea of eliminating the tax on Social Security 00:11:49.590 --> 00:11:52.330 benefits. That's a big one. Because that tax 00:11:52.330 --> 00:11:54.210 funds Social Security. If you get rid of it, 00:11:54.269 --> 00:11:56.809 you have to find the money somewhere else. Bush 00:11:56.809 --> 00:11:59.769 suggested maybe higher corporate taxes could 00:11:59.769 --> 00:12:03.220 fill the gap. What about Medicaid? Bush expected 00:12:03.220 --> 00:12:06.460 changes there. Yeah, he saw a lot of change coming 00:12:06.460 --> 00:12:10.019 from Medicaid, specifically cuts, and a continued 00:12:10.019 --> 00:12:13.419 push towards Medicare Advantage plans. Why Medicare 00:12:13.419 --> 00:12:15.779 Advantage? Because the analysis noted it's seen 00:12:15.779 --> 00:12:18.220 as more cost -effective for the federal government. 00:12:18.360 --> 00:12:21.120 And potential Medicaid cuts. How do they ripple 00:12:21.120 --> 00:12:23.100 outwards? It's not just people directly on Medicaid 00:12:23.100 --> 00:12:24.700 who are affected, right? No, absolutely not. 00:12:25.000 --> 00:12:27.000 The point was made that even wealthier clients 00:12:27.000 --> 00:12:29.639 might be impacted indirectly. Maybe they're helping 00:12:29.639 --> 00:12:31.919 support parents in long -term care facilities. 00:12:32.220 --> 00:12:34.779 Rely heavily on Medicaid funding. Exactly. If 00:12:34.779 --> 00:12:37.899 that funding gets cut, nursing homes, other providers, 00:12:38.460 --> 00:12:41.059 they have to make up the shortfall somehow. So 00:12:41.059 --> 00:12:44.720 it gets more expensive for everyone who is paying 00:12:44.720 --> 00:12:47.879 directly or through their long -term care policy? 00:12:48.240 --> 00:12:51.250 Precisely. costs get shifted. Were there specific 00:12:51.250 --> 00:12:54.049 concerns about Medicaid for people with disabilities? 00:12:54.529 --> 00:12:56.889 The sources didn't indicate immediate major cuts 00:12:56.889 --> 00:12:59.450 targeted specifically there, but they did raise 00:12:59.450 --> 00:13:02.250 a point about the definition of disabled. It's 00:13:02.250 --> 00:13:04.850 a huge spectrum. So the question becomes, are 00:13:04.850 --> 00:13:06.909 different levels treated differently? Could there 00:13:06.909 --> 00:13:09.629 be a bifurcation of those types of services? 00:13:09.809 --> 00:13:12.110 It wasn't clear, but it was a question raised. 00:13:12.330 --> 00:13:14.970 And the state -based nature of Medicaid adds 00:13:14.970 --> 00:13:17.950 another layer of complexity. Huge layer. Federal 00:13:17.950 --> 00:13:20.830 money, but state rules. So any changes will play 00:13:20.830 --> 00:13:23.409 out differently across all 50 states. Leading 00:13:23.409 --> 00:13:26.389 to potentially even more inconsistency. That 00:13:26.389 --> 00:13:28.730 was the worry. It could exasperate the already 00:13:28.730 --> 00:13:31.049 disparate experiences depending on what side 00:13:31.049 --> 00:13:33.590 of a river you live on. One source lamented this 00:13:33.590 --> 00:13:35.490 wasn't the original idea of the U .S. system 00:13:35.490 --> 00:13:38.690 where best ideas would bubble up. OK, let's shift 00:13:38.690 --> 00:13:41.470 gears a bit. That second major source you sent 00:13:41.470 --> 00:13:44.669 framed several recent events under the heading, 00:13:45.049 --> 00:13:47.950 this is not normal, adds more context to the 00:13:47.950 --> 00:13:50.190 political climate. Yeah, some quite striking 00:13:50.190 --> 00:13:53.389 examples. First one involved defying a judge. 00:13:53.990 --> 00:13:56.409 What happened there? A US district judge issued 00:13:56.409 --> 00:13:59.309 an order, a temporary injunction, saying, do 00:13:59.309 --> 00:14:01.570 not deport these eight people anywhere but their 00:14:01.570 --> 00:14:04.289 home country until I can rule. Pretty clear instruction. 00:14:05.029 --> 00:14:07.029 The report says the administration deported them 00:14:07.029 --> 00:14:09.710 anyway, not to their home country, directly violating 00:14:09.710 --> 00:14:12.330 the order. How did the judge react? Called it 00:14:12.330 --> 00:14:14.769 unquestionably violative of this court's order. 00:14:15.070 --> 00:14:16.950 The White House apparently insisted they follow 00:14:16.950 --> 00:14:19.409 directives, but the analysis noted, this kind 00:14:19.409 --> 00:14:21.789 of standoff raises questions about how courts 00:14:21.789 --> 00:14:24.149 respond to defiance. There was also mention of 00:14:24.149 --> 00:14:26.570 a pattern in dealing with foreign leaders, something 00:14:26.570 --> 00:14:29.340 involving South Africa's president. Yeah. Following 00:14:29.340 --> 00:14:31.440 a meeting with Zelensky that got attention, this 00:14:31.440 --> 00:14:33.840 one was with President Ramaphosa of South Africa. 00:14:34.399 --> 00:14:36.720 The report said President Trump showed a video 00:14:36.720 --> 00:14:39.100 alleging genocide against white South Africans, 00:14:39.480 --> 00:14:42.399 then lectured Ramaphosa about it. How did Ramaphosa 00:14:42.399 --> 00:14:44.860 respond? Pushed back hard. Called the claims 00:14:44.860 --> 00:14:48.100 a lie. And the source offered theories on why 00:14:48.100 --> 00:14:51.860 this happened. Two main ones. One, possible influence 00:14:51.860 --> 00:14:54.720 from Elon Musk may be tied to his own issues 00:14:54.720 --> 00:14:58.440 or views regarding South Africa. Two, maybe just 00:14:58.440 --> 00:15:00.860 political theater for the base, perhaps with 00:15:00.860 --> 00:15:02.759 Stephen Miller involved. Playing to a certain 00:15:02.759 --> 00:15:06.120 audience. Right. The analysis speculated this 00:15:06.120 --> 00:15:08.980 ambush stick might wear thin, though, as foreign 00:15:08.980 --> 00:15:11.340 leaders maybe learn to anticipate it. Another 00:15:11.340 --> 00:15:13.200 major shift highlighted was at the Department 00:15:13.200 --> 00:15:16.299 of Justice, specifically regarding police oversight. 00:15:16.509 --> 00:15:18.950 Yeah, the previous administration used consent 00:15:18.950 --> 00:15:21.830 decrees quite a bit, agreements with police departments 00:15:21.830 --> 00:15:25.269 like Minneapolis, Louisville, to force reforms 00:15:25.269 --> 00:15:28.350 after findings of misconduct, mandated training, 00:15:28.610 --> 00:15:30.850 accountability, data collection. And the current 00:15:30.850 --> 00:15:33.289 DOJ. The source described the Civil Rights Division 00:15:33.289 --> 00:15:36.330 canceling eight ongoing investigations, throwing 00:15:36.330 --> 00:15:39.289 out two completed ones, and just tearing up those 00:15:39.289 --> 00:15:41.970 existing agreements with Minneapolis and Louisville. 00:15:42.090 --> 00:15:44.230 And the source used strong language to describe 00:15:44.230 --> 00:15:47.700 this. Yeah, very strong. called the action overtly 00:15:47.700 --> 00:15:49.759 racist, even compared it to the Woodrow Wilson 00:15:49.759 --> 00:15:52.480 era. That was the framing and material provided. 00:15:52.980 --> 00:15:55.960 OK. The sources also flagged a couple of incidents 00:15:55.960 --> 00:15:59.220 framed as potential corruption. The first involved 00:15:59.220 --> 00:16:02.240 a plane from Qatar. Right. Apparently, the defense 00:16:02.240 --> 00:16:04.879 secretary accepted Qatar's offer to donate a 00:16:04.879 --> 00:16:07.720 plane. Sort of a replacement Air Force One. The 00:16:07.720 --> 00:16:10.500 catch. The U .S. Air Force pays for the upgrades. 00:16:10.740 --> 00:16:13.149 And the angle? according to the analysis, was 00:16:13.149 --> 00:16:15.809 that this might be a way around the foreign emoluments 00:16:15.809 --> 00:16:18.909 clause. That's the constitutional ban on officials 00:16:18.909 --> 00:16:21.070 taking gifts from foreign powers. How would this 00:16:21.070 --> 00:16:23.289 get around it? By having the Defense Department 00:16:23.289 --> 00:16:26.509 accept the gift, not the president directly as 00:16:26.509 --> 00:16:29.409 an officeholder, a potential loophole. And skepticism 00:16:29.409 --> 00:16:31.230 about whether he'd use it after leaving office. 00:16:31.350 --> 00:16:33.409 Yeah, the source was doubtful about that claim. 00:16:33.850 --> 00:16:36.610 Their take on the motivation was simpler. He 00:16:36.610 --> 00:16:39.370 wants nicer plane, likes deals, and maybe feels 00:16:39.370 --> 00:16:41.950 immune to political fallout. The analysis called 00:16:41.950 --> 00:16:45.870 this manna from heaven for the Democrats. Uh 00:16:45.870 --> 00:16:48.330 -huh. Because it's a relatively cleaner example 00:16:48.330 --> 00:16:51.409 of corrupt behavior to explain compared to more 00:16:51.409 --> 00:16:53.889 complex financial dealings. Raising the question 00:16:53.889 --> 00:16:55.690 of whether Republicans in Congress would defend 00:16:55.690 --> 00:16:59.240 it. Right. Could this be his Thomas Nast moment, 00:16:59.559 --> 00:17:02.279 like the cartoonist who exposed Boss Tweed's 00:17:02.279 --> 00:17:05.200 corruption by making it simple and visual? Interesting 00:17:05.200 --> 00:17:07.640 comparison. Then there was the crypto story. 00:17:07.980 --> 00:17:10.759 Less noticed, but potentially significant. Yeah, 00:17:10.859 --> 00:17:14.119 involving the Trump meme coin and family ventures. 00:17:14.380 --> 00:17:17.180 Reports suggested a possible pump and dump, but 00:17:17.180 --> 00:17:20.000 the specific event highlighted was a contest. 00:17:20.119 --> 00:17:22.799 A contest. Top holders of the Trump P coin got 00:17:22.799 --> 00:17:25.180 invited to a dinner and a White House tour. And 00:17:25.180 --> 00:17:27.700 the president attended. He did, claiming it was 00:17:27.700 --> 00:17:30.039 as a private citizen. The analysis basically 00:17:30.039 --> 00:17:32.240 said that's ridiculous. People were clearly buying 00:17:32.240 --> 00:17:34.680 FaceTime and influence. And the value involved 00:17:34.680 --> 00:17:38.279 exceeded campaign finance limits. By a huge margin. 00:17:38.500 --> 00:17:41.099 But the biggest red flag raised was who attended. 00:17:41.900 --> 00:17:44.500 Exactly. 73 % of the dinner guests, most tour 00:17:44.500 --> 00:17:47.279 participants, were foreign nationals. That's 00:17:47.279 --> 00:17:49.099 potentially illegal foreign influence buying 00:17:49.099 --> 00:17:52.660 access. And hard to trace because they used online 00:17:52.660 --> 00:17:55.619 handles. Very hard. The source used the example. 00:17:55.920 --> 00:18:00.140 One attendee, PW21, held seven million dollars 00:18:00.140 --> 00:18:02.599 in the coin. Could be anyone. Could be Putin, 00:18:02.660 --> 00:18:04.980 they speculated. And only he and Trump would 00:18:04.980 --> 00:18:07.720 know. That's quite the image. The concern being 00:18:07.720 --> 00:18:10.660 untraceable foreign money potentially influencing 00:18:10.660 --> 00:18:13.660 U .S. policy or contracts. That's the core worry. 00:18:13.839 --> 00:18:16.839 Selling access for potentially vast anonymous 00:18:16.839 --> 00:18:19.720 sums from foreign sources. But the analysis thought 00:18:19.720 --> 00:18:21.900 this was less likely to blow up politically than 00:18:21.900 --> 00:18:24.910 the plane. Why? Too complicated, basically. Too 00:18:24.910 --> 00:18:27.450 complicated to communicate easily. Too many moving 00:18:27.450 --> 00:18:29.970 parts. Crypto is confusing for many. And frankly, 00:18:30.109 --> 00:18:32.009 a lot of politicians are already influenced by 00:18:32.009 --> 00:18:34.309 the crypto lobby anyway. Back to that boss tweet 00:18:34.309 --> 00:18:36.769 idea, complexity as a shield. Seems to be the 00:18:36.769 --> 00:18:39.569 thinking. Multiple smaller, complex things are 00:18:39.569 --> 00:18:41.730 harder to pin down than one big, simple one. 00:18:42.049 --> 00:18:43.950 OK, just a couple more quick items from the sources 00:18:43.950 --> 00:18:46.109 before we wrap up. Right. The passing of Congressman 00:18:46.109 --> 00:18:49.430 Jerry Connolly of Virginia. Yeah. Sad news. Long 00:18:49.430 --> 00:18:52.000 career. Worked with Biden way back. His passing 00:18:52.000 --> 00:18:54.900 at 75 did slightly tighten the House majority 00:18:54.900 --> 00:18:58.579 for Republicans, now 220 -212. Means a tie vote, 00:18:58.940 --> 00:19:02.039 216 -216, would now kill a bill. But his seat 00:19:02.039 --> 00:19:04.700 is safe Democratic. Expected to be filled in 00:19:04.700 --> 00:19:06.940 a special election alongside the general this 00:19:06.940 --> 00:19:09.299 year. The source noted a classy statement from 00:19:09.299 --> 00:19:11.759 Republican James Comer about him. And a brief 00:19:11.759 --> 00:19:13.720 observation about recent deaths in Congress. 00:19:13.980 --> 00:19:16.559 Just noting that Democrats seem to be disproportionately 00:19:16.559 --> 00:19:19.220 affected recently. And finally, the election 00:19:19.220 --> 00:19:21.930 in Portugal. Third snap election in three years 00:19:21.930 --> 00:19:24.130 there. The center -right government failed to 00:19:24.130 --> 00:19:26.670 get a majority. Center -left lost seats. But 00:19:26.670 --> 00:19:29.950 the far -right populist party, Chiga, saw significant 00:19:29.950 --> 00:19:32.769 gains. Dominant issues were familiar. Inflation, 00:19:32.990 --> 00:19:35.789 housing, immigration. Yeah. And the analysis 00:19:35.789 --> 00:19:38.779 drew a broader conclusion. Seeing a trend. What 00:19:38.779 --> 00:19:41.779 trend? Voters reacting to rapid changes in inflation, 00:19:42.299 --> 00:19:44.019 immigration that feel like problems governments 00:19:44.019 --> 00:19:46.619 can't easily fix. So politicians get elected 00:19:46.619 --> 00:19:49.019 promising change. But they're almost bound to 00:19:49.019 --> 00:19:51.440 fail because the root causes are complex and 00:19:51.440 --> 00:19:54.000 often beyond their immediate control. The source 00:19:54.000 --> 00:19:56.779 hinted at exploring this theme more, maybe using 00:19:56.779 --> 00:20:00.190 the idea of walls. Wow. OK, we have certainly 00:20:00.190 --> 00:20:02.230 covered a lot of ground pulling all that from 00:20:02.230 --> 00:20:04.890 the sources you sent from that looming perfect 00:20:04.890 --> 00:20:08.309 fiscal storm and the debt. To the frantic tax 00:20:08.309 --> 00:20:10.730 bill debate, the internal party cracks and how 00:20:10.730 --> 00:20:13.170 it all plays out in the bond markets, potentially 00:20:13.170 --> 00:20:15.549 affecting your own finances. And then weaving 00:20:15.549 --> 00:20:18.210 in these other political threads, the judicial 00:20:18.210 --> 00:20:20.809 defiance. the interactions with foreign leaders, 00:20:20.970 --> 00:20:24.150 the DOJ shifts, those potential corruption examples 00:20:24.150 --> 00:20:26.650 with the plane and the crypto access. It really 00:20:26.650 --> 00:20:28.869 shows how all these pieces, even if they seem 00:20:28.869 --> 00:20:31.470 separate, connect. A bond auction, a line in 00:20:31.470 --> 00:20:33.890 a tax bill, a dinner party. They're all part 00:20:33.890 --> 00:20:36.430 of this bigger picture. And hopefully this deep 00:20:36.430 --> 00:20:38.529 dive drawing directly on that material gives 00:20:38.529 --> 00:20:40.809 you some specific details and perspectives to 00:20:40.809 --> 00:20:42.509 cut through the noise. Yeah, getting you quickly 00:20:42.509 --> 00:20:45.740 informed on the key dynamics at play. So. Thinking 00:20:45.740 --> 00:20:47.539 about everything we've walked through, the debt 00:20:47.539 --> 00:20:50.180 warnings, the political pressures, the seeming 00:20:50.180 --> 00:20:53.480 lack of easy answers, here's a final thought 00:20:53.480 --> 00:20:56.940 rooted in the analysis we discussed. If, as the 00:20:56.940 --> 00:20:59.380 analysts suggest, neither party really has a 00:20:59.380 --> 00:21:01.759 plan for the debt, and politicians avoid tough 00:21:01.759 --> 00:21:04.400 entitlement choices until there's a crisis, well, 00:21:04.400 --> 00:21:06.180 how might these forces we've talked about, the 00:21:06.180 --> 00:21:08.099 debt, the rising rates, the political gridlock, 00:21:08.400 --> 00:21:10.720 actually force those hard choices Jeff Bush warned 00:21:10.720 --> 00:21:13.359 about? What could that crisis, that breaking 00:21:13.359 --> 00:21:15.430 point, actually look like? Definitely something 00:21:15.430 --> 00:21:16.849 to keep watching and thinking about.