Debt is about to crush America | Ep 012 Lemonade Stand 🍋

So

you guys have anything you want to say to me or

so many topics today?

So many topics?

I mean, one comes to mind.

I can't wrap my head around it.

We were really busy yesterday.

Really busy?

Oh,

I didn't couldn't prep as much for the pod.

There's a big meeting.

A lot of stuff happening.

A lot of stuff.

We don't talk about everything in our lives.

No, we don't share.

We sort of shared things.

Something between

I kind of want your work and your personal life separate.

In the personal life, what we like to do is talk to Governor Gavin Newsom of California, and that's kind of like on our own time.

And I feel like we can keep that separated.

It doesn't feel like everything has to be a pod thing, Aiden.

I don't feel like everything has to be a pod, not even when they introduce you as the hosts of Lemonade Stand.

Yeah,

they did not introduce and outro.

They didn't mention that we were YouTubers or streamers, trust the podcast hosts of Lemonade Stand.

Well, yeah,

it was a recent experience.

This screenshot is real.

Brandon, this is a real screenshot I took on my phone when I was trying to connect it.

I saw that there was waiting room five in the Discord.

It was the only two people in it were Patriarch and Gavin.

Me and Gavin, waiting room five.

We're Discord buddies, right?

We chop it up.

Chopping it up with Gavin.

We're going to play Valorant later.

We're fucking.

We're going to play Valorant with Gavin.

And what do I get?

What do we?

I tune in?

I tune in.

This is what happened.

This is what happened.

I want to be clear.

This is not a joke.

I had no clue this was happening.

I had no idea any of this was going on.

And I get a phone call.

I'm just at work working at my desk.

And I get a phone call from Brandon and I pick up.

And he sounds concerned.

He's like,

I was stressed.

Do you have Doug's phone number?

It's actually kind of urgent.

I'm like, maybe.

And I made a joke, like I think I have Doug's social security number, but not his phone number.

Yeah.

And which is true.

Which is true.

But and then I did some digging.

I did find his phone number.

Atriok, very concerned on the phone, tells I need to get a hold of Doug, find a way to get a hold of him.

He doesn't have his phone number.

I'm like, okay, like,

you know, whatever.

Hang up, go looking for Doug's number, give him a call.

Don't, nobody picks up.

And then I send Doug the first text I've ever sent him, which is, yo, this is Aiden.

Brandon really needs to get a hold of you.

He said it's urgent.

Ha ha.

I don't know what's going on.

And then, and then I decided to tune into Atriarch's stream because he had prefaced the call with the fact that he was alive.

And I tune in.

I hear Atriok looks concerned.

It's only him in the frame, and I can hear someone talking in the background that I don't recognize that is clearly like a tech person who is getting them into a show.

And then all of a sudden, I read the stream title as they enter the show and call on Gavin Newsome.

Brandon is interviewing Gavin Newsome on Twitch and I

watch I'm watching a flurry of Twitch chat messages that all say the word boomer in all caps because of the tech issues that you're experiencing.

And my guess because Doug isn't on the call yet, I'm guessing that you need Doug's help with something like OBS or tech tech-related, and that's why you needed to get a hold of it.

That's fair.

So, that's just my guess as to the situation.

But then, a couple minutes later, Doug joins the fucking call.

And then they intro you two as the host of Lemonade Stand.

And then the interview with Gavin Newsom starts.

And I'm sitting in my office, staring at the screen, dumbfounded.

That I'm watching my two co-hosts interview the governor of California, and I'm finding out right now.

We were sure we had mentioned that

we really thought we had mentioned that that's so funny because as I was calling so I'll give you a little context on my side is I should talk to Aiden like every day about at least something

we've hung out with you in person the whole week we've known about this uh my context is I am two minutes from the interview with Gavin Newsom where Doug is supposed to be there and he's not on the call and they keep asking me about him And then one minute before he's supposed to go live, he joins, but he's dead silent.

And the tech guy is asking Doug point blank, hey, can we get a mic check or something?

Says nothing.

He said, we're about to go live.

Anything you can say, Doug?

Any words at all?

Nothing.

Okay, now we're going in with Gavin Newsom.

That was my context.

Well, I was not nervous going in, but I'm starting to freak out.

Hold on, Perry, can you pull this up?

Yeah, so this is the actual, this is what it looked like.

Aiden, Aiden opened it up and just saw us just chopping.

I think they just got like a different.

You know what's crazy?

I wish I saw this because Atriox OBS is so fucked up.

Why did you show the cover?

All I could see was your face.

Why did did you not show?

Why did the governor to my OBS?

Yeah, and then in the stream, there's a many governor.

Why did you do that?

I gave him a picture and picture of himself on his own stream so that my stream would be better.

That way all the viewers came to my stream.

Just show, just screen grab the whole stream that they were broadcasting.

No, no, no, because my display on Discord is my OBS.

So if I show the whole stream and he would see a picture and picture of every, it would be infinite loop.

So we're not getting the tech issues here.

You could have done a screen share.

Also, this is fixable.

This is an actual boomer thing that

in an interview with the governor of California, you didn't show him, but put a million dollars.

We don't worry about tech.

We worry about progress.

We learn about future forward solutions

for California's problems.

What I also couldn't believe is that after all of these tech issues, Gavin's team doesn't have an internet connection, apparently.

His voice just kept cutting out.

The audio was terrible.

I was like, you podcast.

You're the governor.

Can we not get a couple guys in a, and a, not even, not even our governor can get five.

Dude, I, I wanted to make a joke about Spectrum's monopoly

in California so many times.

I was like, I'm going to blow up this whole interview, but because his tech was bad.

It was terrible.

Do you think maybe they just thought that was you?

They just got a different like clean-shaven zoomer.

Okay, here's, here's what you have to answer.

We should at some point give context for how this happened.

It wasn't malicious, but it is funny to not give that for a while.

So you can just imagine the worst.

I mean, I had my guess.

Okay, what do you think?

This is my guess.

You got reached out to by people on Gavin's team to do this like group interview, and they wanted people who stream, and you two are like your co-hosts on a political podcast, but

you are Twitch streamers, and they wanted people to live stream this interview.

I do not have that platform.

That would be a safe guess.

But here's because we have no idea.

No, I mean, the truth is that Gavin Newsom is biphobic.

And he, you know, it's funny, he's okay with gays.

Like, gays are fine.

He said, make up your fucking mind.

He said, pick a side, it's not a fucking buffet.

And I thought that was weird, but that was why you weren't invited.

The actual origin of this is that I guess an old co-worker of both of ours messaged us, what, like five days ago and was like, like, hey, we're doing this, this stream.

It's this like,

I win the fight for Democrats type thing.

Would you guys be interested in interviewing Newsome?

Or it's like, what?

And so then we got on a call.

We didn't think to include you.

Now that I've been talking about

it.

Now that I look back on it,

and I was like, this sounds cool, but this is clearly like, I'm not really interested in just like glazing.

having Newsome non-stop.

That would feel bad.

And you mentioned the same thing.

So we were like, okay, let's mention that we're interested, but we want to be able to ask like, you know, harder questions, not like be assholes, but, you know, not just be like, push back.

So why?

Like, I love all the things about the Democrats.

And

so they were like, yeah.

And so then that progressed.

Then we had a call with them two days ago.

And with like, including the person on Gavin's team who was helping coordinate this.

And she was like, oh, yeah, that's totally great.

Like, it's not just about Trump.

We want you guys to ask about like what the Democrats can do better.

And we were like, that's exactly what we're interested in in talking about.

That's really interesting.

That's when they're like, oh, you'll be

not super clear what's going on.

It'll be like 30 to 40 minutes, and then Harry Sisson will be there moderating.

And we're like, is it a debate?

Like, what I wasn't

the graphic looked like a debate.

It was Louis Eve versus Gavin New.

I was just fighting Gavin Newsome.

Yeah.

Moderated by

Smith.

And it's no point.

Did they mention...

Did anybody?

I'm sorry.

Well, they did.

They said they, listen, here's my top level view: is that Democratic Party is freaking out about not having a Joe Rogan, not having a, like, my understanding is they are top to bottom looking for podcast streamer, anything that can hit a young man.

Yeah.

And so, this is like a,

I don't know if a desperation play, but they're like trying to do more outreach things.

Their team contacted someone that we both used to know that is a coworker of ours, uh, Jordan Tayer, and he picked us as streamers.

And then, yeah, that's what happened.

I mean, very cool opportunity.

Could I levy a critique?

No, no.

Next topic.

All right,

what's your critique?

What's your softball city, dude?

Bro,

it was softball city.

Okay, and I'll be honest.

We could clarify.

Let's clarify.

I'll clarify the critique.

Other guy led the charge on this.

I don't know that guy.

I'm not trying to be, but that was quite softball as an opener.

It was a tough thing to be there as the first question was like, so why are you so great?

And everything that Trump is doing is terrible.

And there's no...

And it was like,

that was exactly.

I was like wading through the first two questions and I was like, what are we doing here?

We're like, we're asking Gavin about like, Gavin, how do you get your dick sucked so much?

How do you do it?

And

I was like, this is not an interview.

It's not an interview.

What I hate about those questions more than that they're glazing is I think they don't produce the answer is also nothing.

There's nothing.

You're not asking the person anything.

So the whole interaction, not only are you not providing me anything valuable, you've also straight up wasted my time.

Well, even worse than that, I think if that's the first question, it tunes out a lot of people who are opening.

You know what I'm saying?

They're like, oh, well, this is going to be, and they just, they just don't even listen.

Yeah, our questions were, I mean, not critical, but it was like, what do the Democrats need to do better?

You know, it was more like constructive and grounded, which is like what we wanted to do.

And then he actually gave like moderate, you know, I think decent responses to it.

Like, I, I wish both of us talked about it afterwards.

Like, deeply wish this was like a two-hour longer form.

We actually talked to him because this was, this is again, this is 30 minutes.

They're saying like five to ten minutes, minutes of it.

Harry gets to talk with questions and then it's QA.

So us combined, Brandon and I get 10 minutes.

Yeah, and I stole the QA.

I didn't even read a chat question.

I just gave you a question.

Really?

Yeah, let's go.

So, yeah, it was like, we knew going in, it was like, okay, we're each going to have like two questions.

And it was, you know, it was like a bummer.

It's like somebody on Newsom's team was like, oh, he loves to talk about policy.

So we just got to make sure he doesn't dive too deep.

And I was like, dude, that's all I would want.

Like, I would love to go like an hour and a half into just like specific housing policy stuff.

Because the more I was like looking into some of the stuff he's done, I actually really like a lot of what he's done around housing.

I was like, damn, I want to talk to him about this, even though I have a lot of you know frustrations with all of it.

Um, yeah, yeah, I agree.

I mean, and also, it's worth mentioning that I plugged our podcast twice, yeah, and I plugged the yard, and you give me no credit for that.

I'm literally like funneling Gavin Newsome money straight to you.

I, it's you, plugging the yard is so funny because it almost undoubtedly burns the bridge.

Yeah, I want you, you plugged a podcast where we talk about

it's every other week,

and we'll have to mute that out right now.

But that doesn't hurt our chances, right?

On Lemonade Stand, now they're like, okay, well, we've got two options.

Let's go for Lemonade Stand.

It makes us look better.

Yeah.

I do think, I'm not saying that people need to press the person in the way where you like blow up the spot and blow up the interview.

You don't need to be like cruel to the person you're asking questions to.

But I do think like Harry leading the charge in the way that he did like softens the whole setting for the interview.

I thought the questions that you asked, uh, that you guys asked, uh, were better, and then I was excited for you guys to get to keep asking things, and then it just ended.

Yeah, so

I was like, oh, and then I couldn't help myself.

I started formulating what my questions would have been.

I wrote them down here

into the fucking mirror.

So, Gavin, what do you

wrote them down?

I wrote down three questions,

just tears down his face.

So, what do you think, Gavin?

And I.

Thanks, Kevin.

I'd like to appreciate the question.

Yes, that was a better question than you'd draw and talk.

I am so glad you said that.

Look, I'm happy for you.

Boat, you've asked.

Okay,

so here's the scenario.

We were approached.

Literally, like the pitch was almost like, yeah, we want you guys to get on stream and like talk about how to fight back against Trump.

And like, that is literally, this is like a, this is like a Democratic event, right?

It's like a Democrat event.

This is, this is very, like, partisan.

And we were are trying to inject a more nuanced conversation.

What, and then literally, we're like, we have 10, 15 minutes.

What would you have said?

Okay, on the spot question

that I thought of while he was answering one of his was

he had a lot of this vocal support for this abundance movement and the the book itself shouted out Ezra Klein.

Yeah, he's super supportive of it.

With that in mind, I was curious when you look into the support of like the larger corporate benefactors or like philanthropic things behind the abundance movement, There is some questionable big corporate donors,

namely some like

political think groups that are funded by like the Koch brothers or like Koch brothers funded organizations.

So when you look in the background of the funding of the movement, and I say this as somebody who read the book, enjoyed it, and agrees with a lot of the things in the book.

When you look at that and then say you're a fan of the movement and what it stands for,

how do you balance that with the fact that it's funded by these big corporate interests?

Harry would have cut you off mid-sentence and said, God, I love your hair.

The thing about it is he is so answerable.

He is so answering.

I thought you were going to ask cut or uncut.

That was a way better question.

That was a way better question.

We don't need to dance.

He's cut, obviously.

It's a fair, you know, it's a timing thing.

I tried to turn off the, you know, Harry opened with the glaze and I said, yeah, okay, you know, we agree Trump's chaotic and not doing well, but Democrats are pulling worse.

So I tried to, yeah, I tried to.

Yeah, no, no,

I thought it was fine.

And then the other couple of things I've wanted to ask him about is he gets kind of railed on because there was a bill in California for universal health care to exist within just the state a few, I think like a couple years ago.

And he's often faulted for like the failure of that bill.

I think if you look into it, it doesn't like rest.

so nearly solely as on him as like the narrative suggests.

But I was curious of like what he thinks of universal health care being an effort at like a state level in the United States, especially a state as big as California that seems capable of having the negotiating power, more negotiating power than a smaller country like Norway, for example.

And whether or not those laws that we talked about that limit the U.S.'s ability to negotiate health care costs

that we talked about like

is that one of the reasons why this wouldn't work?

What's his opinion on that?

And then the last thing I was just asking about structural, like he keeps talking about the changes to housing he wants to make, but when we're talking about lowering the value of housing in California, which has like exploded so much, lowering the value of housing is so against the interests of all the people that own the houses already, especially with how high home values are in California already.

How can you, you know, how can you provide and make all these efforts in regards to housing that you say you want to

when the interests of all the existing owners stand against that?

And I think he talked about that was starting to ask that, and then I got cut off because it's like, we're going to do QA.

Like, that's literally what I was going to say.

It's like, you're describing these things.

This feels politically untenable as a politician who loses their job if they piss off their constituents.

How do you, and then, but I was cut off.

And he partially, he even gave me a partial answer to my own question, which was they were talking about how they sued like the city of Huntington Beach regarding their zoning laws and stuff.

So it's not, I think, genuinely, he seems like a guy.

It's like as much of a politician as he is, and I understand that.

And

he's going to answer things in like that political way that I've seen him do many times.

He also

digs into the details of a few things you ask him about, and it's like worth a shot to ask these things.

So it's too bad that it was just cut so short because I feel like as soon as we got to your guys's questions, it was like, okay, we're finally going somewhere.

And then it.

I sent him an email afterwards and I said, hey, look, that was fun.

Thanks for the opportunity.

I think people nowadays.

will not trust anything a politician says in a soundbite no matter how good his answers were good but no matter how good yeah and we would really appreciate a longer form format where we can kind of dive in and see human answers to human questions we'll see i mean they they said they would love to have a follow-up call maybe you come on to that and we can talk about we we got good feedback from the folks involved and and i think they appreciated that we were bringing that perspective that was not just like yeah aren't we awesome you know like it was it didn't work in the last election it's not going to work now it's right and and like i what what is makes me hopeful is like i think the democratic party does realize how bad bad of a position they're in.

And so I think they're receptive to that.

At least he does.

He kept saying it.

He does.

That was the core.

He's got to him.

Like, he is aware and making strides with his podcast.

He's like interviewing Charlie Kirk and stuff like that.

Right.

So he's at least aware of it.

And the folks we spoke to on their team seem like aware of it and very thoughtful.

So I'm hopeful that this is, you know, I don't think that this 30 minutes was anything super impactful, but it could be something that leads to more in-depth, you know, impactful conversations, whether that's with us or other people.

Because

man, that'd be so, it'd be so sick to really dive into these details.

Can you show us one meme just to close out this discussion?

What are you pulling up right now?

This in the show links is the latest thing.

Do you mind?

Is this going to make me feel good or sad?

Also, I just want to reiterate:

what you're saying, like we're both streamers, and they said, oh, you guys are able to co-stream the event if you want.

And Atriach was like, yeah, I'll co-stream.

I was like, nah, I don't want to.

Which just really reinforces why it was us two that we need to be there, not you, Aiden.

But I mean, my.

They couldn't have given twitch.tv/slash Calvin Aiden a chance.

Not even a Twitch affiliate.

Picture it while playing Mario Kart, dude.

That's barely.

I think I forgot something.

If you forgot, it wasn't important.

Yeah, you're right.

Soccer practice crying.

I've seen the fat Aiden version of that photo of me so many times that I thought it just was that.

It's just funny because when I called you, I forgot if we'd told you or not, and I didn't want to bring it up because I didn't want you to fight with me on the internet.

I know.

I know.

I figured.

I figured.

And that's what I told my child.

I was like, I think I told him, and I was wrong.

So I felt bad.

Anyway, other stories this week.

Lots of stuff going on.

I think our main topic today is the national debt.

Aiden has a presentation.

We're going to go into that.

But before that, I just had a couple, you know, little things I wanted to bring up.

Or if you guys have anything, you know what he's talking about?

At some point, I'm going to jam in a quick review of what's going on between Apple and Epic.

Cool-ass fight, but marketplace of ideas.

Okay.

If you guys don't let me jam it in, I can't.

Oh, oh we can jam it in i mean i don't know we'll do that at the end can you pull us up

everybody wants to talk about the debt okay yeah i think the debt's the big thing i think

we should frame it too it's like

i think the debt sounds boring to some people but i think most people have this question of like what the fuck does sorry what the what the hell gavin was cursing a lot too by the way picking up his habits

yeah gavin's affecting your language what the hell does this massive 30 plus trillion national debt mean what does it mean to me as a a citizen?

What's the problem?

So I think we'll get to that.

No, it's the latest thing in show links, Perry.

It's

just a couple of funny AI stories.

I'll bring the AI stories this time, Doug.

Okay, cool.

I'll villain share it.

I think AI is actually bad for society.

Okay, we need to, well, that's not villain share.

That's just reverse of view.

The Chicago Sun Times, which is where Richard Roper wrote for a while.

I used to read his movie reviews there.

They put an AI-generated summer reading list.

They didn't tell him it was AI-generated, but it printed a bunch of books that do not exist.

So awesome.

So it was like, check out, but it had real authors.

So it was like, check out this new book from, you know, J.K.

Rowling, Harry Potter 12.

It's like, not a real book.

This reminds me, there's a, there's this board game called Blockbuster, where you have to like name movie titles based off of a set topic.

And you go back and forth with two teams.

And if somebody misses, you can call them out.

But then if they check and the movie exists, then you can, then you like lose more points for doing that.

We play this game all the time with Nick Yingling.

He just makes movie names up.

Oh, he's just because if they're neutral enough, chances are the movie has been made at that time.

And it reminds me of this.

You're just like throwing stuff at the wall,

just like deep blue.

And it's like, yeah, it's a book.

Anyway, I thought this was pretty funny.

It is so ballsy to write this.

It is.

To use AI to have it generate the list of books and then just publish it.

And then publish it.

That's like, you know, we've talked a bunch about AI integration type stuff and like how, for example, in healthcare, I think, at least for the foreseeable future, the use case is going to be an expert, somebody who knows healthcare, then using AI to help cover certain amounts of the work.

And this is the equivalent of a surgeon coming in, just like being like, robot, you got this.

Just what I just said it, man.

Like, it's like, no.

So, is there no review?

This is insane.

This is some guys.

Have you guys seen season five of The Wire?

And this also happened with lawyers.

So there's a couple lawyers who submitted case review that, you know, it made up cases that don't exist.

And the judge got furious, obviously, and they didn't get disbarred, but they got a big fine.

You know, you can't come in and be like, I'm citing the case of XVX, and it's not a real concept.

So interesting things.

And then one more AI news that we'll move on pretty quickly, but Google had their big Google IO announcement where they revealed a ton of new stuff.

A lot of it was AI-related.

And one of it kind of blew my mind.

And it was the VO

video generating AI model.

I don't know if Perry, if you can pull up some of these examples.

Here, we'll watch this one first and just in full with sound, because it really explains my thoughts.

By the way, this is all AI generated from a prompt.

You can't control something that thinks faster than her.

So

everything you're seeing, background, character, and voice, is all from people just typing and

disheveled guy

rants about.

It's like they don't understand that it's coming for all of us.

They're making these things smarter, and they think they can control it, but they can't.

You can't control something that thinks faster than her it's like they don't understand that it's so

you know it's not that i didn't know this technology was coming or being worked on it's that this is the first time i've seen it where it didn't look like complete slop and it the you know the voice matches the mouth and it it all just kind of like shocked me uh it reminds me of when i first saw chat gt just a few years ago when i was like this feels like

uh

wizardry

you know it feels like it's such a big jump um and again i don't know

I haven't tested this program myself.

But like, look, you can see the prompt up top.

If you scroll up, Perry, like, this is what he typed.

A dialogue with muffins baking in oven says what it is.

And then you watch it and it's like, it's not, it's not Pixar good, but it's, it's way better than I thought you could get from a prompt.

And the stuff I'd seen before, like Will Smith eating spaghetti and stuff, looked like slop.

So this is like kind of spooky.

And I assume anyone that works in Hollywood, this is like extremely spooky.

You know, it just,

I don't have a thought on it.

I don't have a flip form take.

In some ways, it's it's kind of cool.

In some ways, it's extremely scary.

I don't know.

It definitely makes me worried about like misinformation and stuff as it as.

Yeah, I don't know if I could evaluate it with any new take from what we've talked about with AI in the past.

Like, it's just, it's just moving further in the direction of, oh, my God, this is so

convincing.

This gameplay footage of a fake game is generated.

Let me tie it to a business angle.

Okay.

So this is VO, and it's from Google.

The door?

The door is open, but you can still see the side of the car.

That's funny.

Oh, yeah.

Yeah, it's going to miss things like that.

That's funny.

So this is from Google.

And this model, VO2, which is the version before this, which was out, I want to say six, seven, eight months ago, but not even broadly publicly available, was already way better than everybody else's.

And now this came out and this is just like blowing it out of the water, particularly with realistic looking video, right?

Like this is really cool, but the guy's, the one of the guy running or yelling in the street it's like shockingly accurate so one of the one the the one of the guy running yeah

i don't like if i just saw this i don't think like if this is an ad on tv for like uh

you know medical something a pill or something that i would believe that's real yeah so the big differentiator here is that google owns or alphabet owns youtube And that is an absolutely unfathomably large amount of video data.

So if you think about most AI stuff so far, it's been images and text.

Those are both really, really, really easy to copy.

It's easy to copy books.

It's easy to grab images from all over the internet, right?

It's very hard to enforce the kind of like containment of images and text.

Whereas with video, it's much easier to be, let's say, restrictive with other people accessing it.

So like movies, there's an, you know, there's whole industries have invested decades of time into protecting movies from being streamed illegally or shared illegally.

YouTube has their whole copyright system.

So if you imagine an AI company that enters the space and wants to create a video generator, right?

They,

the most important thing arguably is data getting a vast vast vast amount of video data because there are so many different pieces and elements that you need to consider that you know it's like that that car door it's like tiny things like that it's like the more data you can get to just cover all the edge cases yeah the amount of video data that YouTube has is unfathomable compared to anybody else.

If you compare it to like Netflix, Netflix has a great library, but I don't know what percentage it would be, but Google's got, I don't know, how many if people start auto-generating marketing Mondays, I'm gonna kill myself

if they're training on my shit, or they literally are

training on a podcast, yeah, generate where it stands.

We're playing into it.

So, what's interesting about video AI specifically is my theory has been for a while, and this to me makes me more confident in it, is that Google is going to absolutely dominate everybody else in terms of video generation because the amount of data and resources they have every day.

People are posting videos of themselves all over the place, even on something like you know, X, the Everything app, or Facebook, there's just a lot less of that.

And so this is going to be

like House of Cards.

They've got me at the zoo.

They've got lemonade stands.

And you'd rather have 1 billion images of people like doing makeup tutorials than having one season of House of Cards on Netflix, right?

So I think that Google and Alphabet will be positioned in terms of like this specific area of AI to just be like just so incredibly dominant compared to anyone else, which I think is pretty interesting.

Yeah, it's, it's, I mean, the technology is very cool.

Obviously, I'm spooked by it at first glance.

Dude, I saw someone typed in the prompt.

It was just like, guy on stage at a comedy club gives a funny joke.

Didn't even say what the joke was.

And it generates a realistic looking guy on stage.

And he goes, yeah, I went to a zoo recently.

It only has one small dog.

It was a shit zoo.

And the crowd laughs.

And I was like, bro, that's not like the greatest joke in the world, but it fucking...

That's pretty good.

I wouldn't blame that joke on the spot.

And it generated that and it looked real.

And I was was like, it was like, that's crazy.

That's so far beyond what I thought it could do off a prompt.

You type that in, it spits out a clip of Kramer at the Laugh Factory when

Google.

Whoa, dude.

I have a little class attacked.

Oh, we're pulling from all the videos.

That's me.

Not everything's trading, dude.

I would love to see a model based off Twitch, right?

It's just like, it's just like slurs and barriers and musty people.

Anyway, you know, small little story.

We'll probably follow up on that more.

I do agree with you that, you know, what I've heard business side of AI right now is that Google is leading in all of the models, but hasn't quite broken into the consumer the way that Chat GPT has.

So like, it's this weird battle where, will the best technology win or the guy that has the advantage early win?

In this case, I think when it comes to video, they are just going to absolutely dominate.

I mean, if you compare the VO videos to anything else on the market, like everything else has that weird, uncanny valley AI feel.

This stuff is shockingly close to just

the government will regulate.

I mean, you know, if this gets good enough, it feels like the government may mandate Google have to include a tag or something on it.

A watermark.

A watermark that you know it's AI because this is going to fuck with people.

I mean, people on Facebook are already falling for AI brain rotten.

It looks like trash.

But this looks real, and it's like a video of Gavin Newsom saying, I hate, you know, X race of people or something.

Bisexual.

Bisexual.

He did say that.

So that's a real video.

YouTube Shorts is feeding me videos of weirdly animated cats with like remixed version of Katy Perry songs that go, meow, meow, meow, meow, meow, meow, meow.

It's just, I already live in hell world.

I'm getting gorgeous country singers, all AI generated, who are like badly singing to songs and it has one view.

And I'm like, why are you giving this to me?

What is this problem?

I have basketball, guys.

You guys are weird ass fucking.

Our rhythm reflects you, buddy.

Anyway, that's that story.

I I don't know if you,

yeah, okay.

Is there.

And it costs so much to train these things.

It's putting these companies into debt.

Okay.

Whoa.

Let me set one more story then.

We said that.

That's the big buck stuff.

You wouldn't get it.

So today, as we're recording this, this is Wednesday.

It'll be live on Thursday.

The stock market, which has been on a bit of a rally recently, had a big drop.

And it was because the United States went out to the bond market, tried to borrow money for its many, many debts, and there was almost no bid.

And they had to spike up how much the borrowing costs.

So we broke, I don't know, 4.5% to 5% today, which is like a really, really high number.

And we have things like this where the IMF is now talking to us like we're a developing country.

IMF is like, hey, you have to watch your deficit.

You can't afford your debt.

This is how they talk to like, for example, Greece.

This is how they've talked to like...

the the poor countries for a long time and they're talking to america this way because we have literally gone off the rails with the amount of debt the amount of spending and zero effort i don't care what the you say about doge we've made zero real effort to uh balance it in any way and we're in fact proposing a massive tax cut for the rich which is going to decrease our income you know we

we we ended that study about transgender mice that was saved a few trillion

no that was eight million so we're working

it's finally yeah that was what's holding us back maybe the i'm that's fine so anyway that that kicks off a large discussion about the debt but that story is happening now today.

Uh, that like our borrowing costs are getting higher and higher than other developed countries because people don't trust us to pay it back.

They're like asking for more return when they give us money, and uh, which leads us to Aiden's discussion on the national Aiden.

I asked the Discord, what do you guys think about the debt?

And the most common sentiment is

the debt.

It doesn't, what does it even mean?

These are big numbers, they don't actually mean anything, they're so big that they're out of reality and like, whatever, let's just keep ignoring it.

I mean, I think that wasn't a question.

I feel that way.

It's not a question, but I think it's how people feel.

Yeah.

And that was, that was the baseline for what I wanted to talk about because I think we spent a lot of time on the show talking about how the debt exists, what the U.S.

debt specifically is made of, efforts to cut it, you know, whether or not those efforts have been genuine or successful.

But I think that conversation often skips over why this actually matters at all.

I think

I thought it was it.

Maybe I should go up today.

Get up.

Let's go.

Aiden on the presentation, bro.

This is a big day, dude.

You know what it is?

He's feeling bad about the Gavin thing.

He's trying to step up.

He wants Gavin to notice him.

And I've seen some good solutions in Discord.

I hope you incorporate.

Gavin, Gavin, I'll be in Castro on Thursday night at 10 p.m.

Okay.

This is Greece.

Greece.

Beautiful country.

What do you guys know about Greece?

Any thoughts?

They lost the Peloponnesian War.

The Civil War kind of.

So they did lose

as well.

They also won.

It's beautiful.

It has a big debt problem is my understanding.

And they

have good food and nice islands.

And rich people use their islands.

I think all of those things are pretty true.

Well, the thing is, you're right about the debt.

greece famously had a debt crisis after the 2008 financial crisis you know in the united states the whole world and their debt crisis really hit the fan in 2009 okay and there's a few numbers and stats behind that uh as to like how they got there in the first place, you know, what that actually built up into.

I think the short version of how they got there is they ran extraordinary deficits through the good times.

Before 2008, Greece was like a pretty nice place to live for the average person.

There was a lot of like support that the average person had

through the government.

But they also had a lot of issues with taxes not being paid, not just by the wealthy and like richest companies, but also small businesses and average citizens finding a lot of ways to dodge taxes and accountability, all the while spending going crazy throughout that whole time.

And, you know, times remaining good through all of that.

And then the

starting in 2009, this debt crisis really starts to build.

They've been deficit spending for years.

And even before the debt crisis, their debt to GDP ratio was already past 100%.

They were already at 103%

before this crisis really started.

Before 08.

Before, sorry, this is in 2007.

Yeah.

The unemployment rate in 2007, 8.4%.

The debt to GDP ratio, 103%.

The way we qualify debt to GDP in a general sense is if you're past 90%, like if you're in that 90 to like 120 range, you're considered to be like pretty high risk already.

Professor Aiden, I have a question.

Why does that matter?

Why does the GDP related to your debt matter?

Well, well, well.

Doug, great question, because we're actually just about to answer.

Because I hear that all the time.

I don't really get it.

We talk about debt to GDP all the time.

So why does that actually matter?

Before we talk about why it matters, I just want to give you an outlook on that specific stat as it builds over the years.

And just focus on the number for now.

So, in 2007, it was 103%.

2009, at the beginning of the debt crisis, the debt to GDP ratio is 128%.

In 2013, it's 175%.

Jesus.

And then in 2020, it peaked at 253%.

So,

why does debt to GDP?

Did you ask that question knowing?

No.

Why set them up?

To answer Doug's question, why does debt to GDP actually matter?

Basically, this number boils down to a signifier

to other people in the world, investors, how

likely you are to be able to pay your debt back in the future.

Your GDP sort of represents your country's capacity to generate payments on the debt that it owes, because that's basically the peak amount of movable money in your economy.

So how your debt compares to that total represents how likely you are to be able to pay that debt actually.

Are you going to default?

As that number climbs, people that invest in your country buy the bonds that are the debt that your country is accumulating.

They're more worried about the likelihood of actually getting a return on the money invested into that country.

So if we go back a little bit through this crisis, the other thing that you can watch is the interest rate on Greece's bonds.

So, we've talked a lot about treasury bonds in general and on the show and how the U.S.

raises money by issuing treasury bonds with interest rates on those loans, right?

Greece does the same thing.

All these countries release their own bonds to raise money

that has interest rates on it.

And over the years before the debt crisis started, the interest rates were relatively low, 4.5% on the 10-year, the 10-year bonds that Greece would issue.

And then right at the beginning of the crisis, they climbed to 5.5 slowly, but by 2011, it's 15%.

And then by 2012, they peaked at a rate of 29% of February in that year, a 29% return on a 10-year bond.

Keep in mind, when we're looking at like U.S.

Treasury bonds, when U.S.

bonds, like you just said, climbed to like 5%.

It's a panic.

That's crazy.

So Greece hit a scale where they had almost 30% return on these bonds.

So if I live desperately trying to get people to buy

to pay me 300 grand every year.

That's right.

That's so sick.

That's correct.

Damn.

And you know, just to be clear, to give context, I think Ukraine war bonds right now, which are the worst in the world, are like 40%.

So it's like, and people don't even know if that country will exist.

Like, that's incredibly high risk.

And they, so to get to this high, I mean, I didn't know this, but like, this is end of country type.

I mean, that's, that's when you get to that high, you can't afford your government.

You're spending so much on interest.

That's what they climbed up to, right?

So, through all of this, we, you know,

Greece, you know, as far as I know, is still here.

Yeah.

It's still.

Imagine it wasn't.

It's still a country.

I don't know.

If anybody has a crazy correction for the comments, like, Greece has not existed for 10 years.

Starting next week's episode with the most insane correction.

But so, what actually happened in Greece, like through this crisis?

What do these numbers actually mean for the country and for the people that lived there during that time?

So unemployment

skyrocketed.

I already talked about that.

And there was a massive loss in the GDP of the country, which is part of the reason why the debt to GDP ratio got so crazy.

Right.

Is because the GDP was actually declining.

And it

poverty just greatly increased.

There's people with less jobs, less money to spend.

And then in turn, all those people who are impoverished now start to turn to social services.

There's more people who who need those services, but also less of a funding mechanism for those services to even exist.

So the services that people would rely on in times of crisis no longer function,

which is a big

government is collecting fewer taxes, but has to spend more on social services.

That's bad.

They want.

They don't have the money.

They want to.

They want to, but

they had to end up making concessions.

This is kind of the catch-22, and I think is what the thesis of the problem of debt is when you choose to spend money in the good times, when the bad times finally come, you cannot use the tools to get yourself out of the bad times anymore.

You can't weather the storm.

And that's kind of what happened to Greece is because everything was so good while they were running these deficits up, but they weren't saving and had like a proper financial approach.

prior to when a crisis finally hit.

And then when it did hit, all of the options that they had to get out of the crisis were exhausted.

So when you're in a crisis, or maybe in general, you basically have three ways to create money that you could spend, right?

One way is you could raise taxes.

You could collect taxes like the sheriff in Nottingham right here.

And

in crisis, the problem is this puts an additional stress on the average person.

Instead of giving them money that they might need to spend in these critical times, you're taking money away from them and putting strain on the average person that's being affected by the crisis to begin with.

The other problem with taxation is that it's slow.

It takes a while to collect taxes, and you also need a mechanism to enforce and collect them in the first place, which is something that Greece was having trouble with.

And then on the other hand, you could issue debt.

You could sell more debt to continue spending your way out of the crisis and keep building on top of that.

And the other thing, which Greece could not do, was you could print your own money if you control it.

If you could choose to hit the printing press, make more money and then throw that in the system and hope that works out.

All three of these things have their own different constraints.

Right.

And why couldn't Greece print their own?

Is it because of the EU?

Yeah, because they're a part of the EU.

They don't have control over.

They only have the Euro and they don't have control over issuing that amount of money.

So they have to turn to the rest of the EU for loans with austerity measures.

And as a result, one of the other consequences that Grace has faced over the last 10 years is they've lost a lot of their sovereignty.

They can't make a lot of the decisions that an average country can on their own because they have to comply with whatever the restrictions of the loans are from the rest of the EU.

I mean, there's benefits to that, though.

There's a reason they didn't just leave the EU, make their own currency and print it.

Hello, Atria.

You mentioned that there's benefits that they didn't leave the EU and that they didn't choose to print their own money.

They got to participate in the system.

What would you say the benefits are?

Well, it's sound currency.

People trust the currency and are willing to loan in it.

Like Argentina printed their own money in a similar situation and they got hyperinflation.

They got, you know,

print a bunch of money, solve the problem.

It doesn't solve the problem.

The price of everything goes up.

Your country can no longer get loans because no one trusts the value of your money.

You know,

there's a reason people want to be in a stable thing like the EU because it gives their currency.

Each of these two things has their own set of consequences, right?

If you print too much, you create inflation.

Also, if you do print money, you ideally want to fit within like the industrial capacity of your nation.

If you can like print money while your economy is still growing and you're throwing money into a system that basically can accommodate for that additional money to exist, you're not going to create inflation.

An example of this is like after a crisis starts and

a bunch of businesses start to crumble and fail, when you give that money to people to spend on things, if all the things that they would have spent the money on have already gone away, in the short term, all of that money is getting spent on the remaining industries that do exist, and it's more likely to create inflation.

So there's an additional risk there, depending on the timing of when you choose to print the money.

There, this is also part of like why having like a really strong, diversified economy is important so that when you finally do hit a crisis, that money that you insert back into the system has a lot of different places to be spent on things so that the recovery is stronger.

And then the major, major issue that is most likely to hit

the US

and that Greece was dealing with is when you choose to continue issuing debt for your spending, we encounter this problem where you need to keep raising interest rates to get people to buy it.

This compounds with the fact that if a bunch of people own your debt already and they're losing faith, they start to offload the debt that they owe from your, or that they own already and sell it into a market that forces the remaining country that's issuing the debt to keep raising interest rates even higher.

So these things are building on top of each other.

It's like a negative feedback loop.

The key thing here is that

raising money through debt or printing money can be worth it if the economy grows alongside with the spend.

You want basically

whatever you're spending to contribute enough to GDP that GDP starts to outpace the debt.

People have more confidence in your economy again.

You can bring the interest rates back down.

And then the average person has an economy they can actually participate, live, and benefit from.

That makes sense.

And then this kind of

brings us to America.

Oh, shit.

We got the Poland ball.

We got the...

The United States.

There are things that are the same for the U.S.

as Greece, and also things that are different that are really critical.

And I just wanted to lay that groundwork of, you know, what went wrong for Greece to give you an idea of the direction that the U.S.

could be heading in, but also

how we're going to deal with the difference.

One way to get out of it is to look cool as hell, dude.

Yeah, I do think.

So, actually, a question for either one of you guys.

So, what you just described with Greece sounds horrific.

I've heard about this from the onset, but never looked into the details of it.

Like, are they okay as a country?

Are they able to do anything?

I mean, that seems like literally country ruining from what we were just looking at.

So it kind of was.

Like

they are recovering now.

The GDP has recovered to a point finally as of 2022 where they were before

the 2008 crisis.

And that's accounting for inflation as well.

The other thing is they didn't really reduce the debt through this time period.

There have been like one year sections where the debt has gone down nominally, but mostly the debt has actually grown over that time.

And it's been about recovering GDP to get back to a better ratio.

They're just trying to outgrow it, basically.

Yeah, they're trying to outpace the debt.

They're just trying to grow faster than our debt.

Okay.

Exactly.

That's their way out of this because the level of debt that they have, it's the realistic outcome of being able to pay all of that off anytime in the near future is really low.

It will have to be paid off and dealt with eventually, and it is something that's being mitigated now.

But the burden of the austerity and paying off the debt is something that will saddle Greeks for generations.

Like, it will be the Greeks of future generations who will have to deal with the consequences of that debt.

And, uh, because that's the thing, like, right now, like, presumably, living, and actually, if people live in Greece, I would love to hear your thoughts on this.

Uh, uh, presumably, it's like you have access to way less government resources and opportunities and all this stuff because the government can't generate money to fund things, right?

I mean, just at its core.

My understanding is since you can tell me if I'm wrong,

but since 2022, in recent years, they've been on a bit of an upswing.

There's a lot of tourism to Greece bringing in new money.

And so they've finally weathered some of the really super high unemployment, super high the GDP era.

But it still feels like they're incredibly restricted in their ability to invest in their own country, right?

They are hamstrung in that way, yes.

I mean, they get these big bailout loans from the rest of the EU who doesn't want them to fail because it'll bring down their whole currency.

They've gotten these bailout loans that allow them to fund the government and keep things going.

And they have slowly gotten into a more balanced

deficit thing where the deficit spending is mostly going to productive.

They had to make the hard choices.

They'd make hard choices of like, what are we going to spend on that actually grows GDP?

So, is that maybe an option for the U.S.?

We asked the EU for a big bailout.

There we go.

Wow.

And to be honest, Doug, that's not in this presentation.

And I hadn't even thought of that.

And so that's called outside the box.

Problems doesn't again.

Eliminate State doesn't again.

Why haven't we done that?

You're exactly right, though.

Please.

The trajectory for Greece is getting better.

But I think the key thing here is with all of that help from the European Union, they're still in a spot where the road to recovery has been extremely long and is still ongoing now.

And the real world consequences of this is like the suicide rate almost doubling within that time, going from like,

I think it was like...

a little less than three deaths per like 100,000 people to more than five at the peak.

Like those are the real life consequences for average people and uh you know the average greek has a less uh

less access to like social services and government money and a change in their day-to-day lifestyle uh than than they used to there's a bunch of historical context behind like what led up to the crisis

i think is interesting

peloponnesian war we're so if you really did

uh but i i think it's a huge change of lifestyle for the average greek person like within that time.

And the recovery will still take a long time from now.

Things have been good in like the, or better in the last couple of years specifically.

Not awful anymore.

Okay.

Yeah.

So when we look,

basically,

keep in mind, debt to GDP is the signifier to the rest of the world of like how good you are to invest in.

That's why it's important.

It's like this alarm bell that signifies where you generally stand with your debt and how likely you are to pay it off in in the future.

So, when we look at the debt to GDP of us, of America, in 2000, it was only 55%, which below 60% is like you're fine, baby.

That's so awesome, my kids.

I believe that was in my life.

That's beast mode.

And then by 2007, it actually had risen, but it hadn't risen by that much.

It was 62% in 2007.

But then here's where the number changes rather significantly: 2009, it's 82%.

In 2015, it's 100%.

And in 2020, it's 124%.

Wait, right now we're at 124%?

Yeah.

So I thought we were under 100%.

Also, post-COVID.

We're at 120%.

We did go down.

Like in COVID, it spiked to 124, right?

And we went down a little bit in the next couple of years.

But now, as of 2024 and into 2025, we're back at that 124% mark.

What is that?

There's no hard rules about this debt to GDP number, but once you pass 120%,

you're past the range that's considered high risk.

You're above high risk as far as loaning or purchasing your debt goes.

Just to make and just to ground it, make sure.

So, our GDP, the amount of economic activity that we have a given year, our debt is now 120% of that.

Yes.

It is that much higher.

It's horrendous.

Can I call it a couple of years action?

You know, year 2000, that is the year right before the end of the tech bubble.

And that is when Bill Clinton is still president.

They have about, it's the last time in my lifetime, in any of our lifetimes, we've had a budget surplus in America.

That was the last time we spent less than we raised in taxes.

And we hand that off to George Bush in 2000, 2001.

The election in 2000, he gets in 2001.

And obviously, he didn't make 9-11 happen.

I'm not going to make that.

But ever since, you know,

his idea of what to do with this surplus is we're going to do a massive tax cut because we have money to give back, and we're going to get into two wars.

And those cost a lot of money.

And even through all that, we only got the 62% DGP.

And then we get the financial crisis, and then it goes crazy.

But it is choices that we made with a relatively low debt and budget surplus that have now put us on a spiral towards a fifth of all our taxes going to interest debt.

Okay, I just.

you know, and it's and it's climbing and building on it's it's spiraling out of control.

And right now, we haven't hit an insane crisis again yet.

But I think the important part to keep in mind from earlier is the problem is when you spend money, when times are good, when the shit really hits the fan, you're not able to make the decisions you want to to be able to get your way out of the crisis.

And

so how is the U.S.

a little different than Greece?

For one, we can print our own money.

We control the U.S.

dollar, but there's an additional layer to that.

The dollar is the world's reserve currency, which means when people are making foreign good trades or foreign exchange trades, the dollar is frequently involved.

In almost 90% of all foreign exchange trades, the U.S.

dollar is one of the items being exchanged, which is crazy.

And that's like if, that's like two non-American companies, right?

You're saying like if some European country is trading with a South American country, they're going to use dollars.

Exactly.

Exactly.

And that's why the reserve currency part is so important.

It's not just when the U.S.

is trading with other people, because we obviously import a ton of things and we export a lot of stuff as well.

But it's when two countries that are totally different than us are trading with each other.

The thing or the idea here that separates us from Greece is GDP might not be the marker that it is for so many other countries.

The argument is that we could push a lot further with our debt than most other people could safely.

It depends on what the other countries in the world actually believe.

And And I'm sure you have some thoughts on this.

Yeah, I disagree.

We have.

And I'm kind of touching on this idea of modern monetary theory, which is,

I don't want to dig into too much.

But the base idea is that because we're the world reserve currency and so much of the US dollar is used and spent and accounted for outside of our GDP, we have way more leeway to take on debt than any other country could, even if they can print their own money.

But, you know, that all depends on the rest of the world's faith in your position.

And so Moody's, as we talked about last week, recently downgraded us from triple A to AA, U.S.

government bonds, from

discouraging people's investment in them.

And I do think this is a good point.

Like this all depends on like what other people's faith in buying our debt actually is.

And you brought up how recently we had to up the interest rates to 5% because we had no buyers at a lower rate than that.

But I think something important to keep in mind when I looked at the credit ratings of all the countries in the world right now, us getting downgraded to AA is like us falling to like seventh in standing on Moody's list.

We're still incredibly high as far as credit rating goes among the entire world.

And although it's a reflection of some of that faith declining, we're still in a position that it was much higher than Greece is going into the crisis.

Part of the reason why the 2008 crisis hit Greece so hard was they were already considered to be so fragile and risky to invest in prior to that crisis hitting.

And then when all of this, you know, when the global economy collapsed, people pulled their money out of a risky Greece, and then it triggers a bunch of things there.

The main thing here is that eventually you will reach a breaking point.

We don't know what the breaking point is in the US.

The idea that you could push it further than most other countries could go may or may not be true.

But whether you agree with that or not, eventually there is a tipping point with the debt where we will face the consequences of it, most likely when some sort of inflection point or crisis hits.

I wanted to come back to Greece at the end of this because in the buildup to their crisis, there's something that I found particularly scary.

So if you go back like decades ago into the 50s, 60s,

they had a

right-wing, a popular like liberal right-wing party that set up a lot of or furthered a lot of the institutions within Greece that allowed like taxes to go by,

non-meritocratic like government positions,

all of these things that like compounded and built.

And then eventually in the 70s,

this socialist party comes into power, a socialist Democrat Party comes

in in Greece.

And they

rather than changing anything super significantly at an institutional level, they start a bunch of programs that give a ton of money and jobs out to the average person rather than just helping corporations and private interests.

So the lifestyle of the average Greek during that time period does get better.

But the

deficit spending to do that and the lack of taxation to do that never stopped.

So the deficit through this whole period.

They didn't raise taxes?

They didn't.

Sorry, they did on paper, but a big problem.

Oh, but nobody paid them.

But a big problem in Greece is that nobody actually paid their taxes.

Not just corporations and like really rich people, but average people too.

There's some crazy stat.

It's like a third.

There's like a third of Greek businesses existed in this shadow economy that just refused to pay taxes.

Or

a different

anecdote of water is

really limited in Greece or in Athens specifically.

And if you had a private pool on your property, you have to register that and pay a tax to use water in that way.

And if you look at an overhead view of all of Athens, you can see pools everywhere.

And before 2008, only three pools in Athens were registered on latest.

And because people just didn't want to pay the tax and there was no enforcement mechanism for this.

So they're not collecting taxes.

They're spending a bunch of money on really cool, nice social programs that go to people.

And a lot of people got jobs with the government that they

did not necessarily have to work.

There is this big problem in Greece with these things called ghost jobs in the government, where people would collect a paycheck and not actually do anything.

This,

during the crisis,

one in every three people that got laid off was a private sector employee.

The other two were public sector employees.

Oh, damn.

Which is a crazy, crazy ratio.

And

do you know what percent of their

jobs were public versus private in Greece before the crisis?

Do you have that?

You may not know.

I'm I'm just.

Yeah, I don't have the percentage breakdown, but there's in a population of like 10 million people in 2007, 700,000 jobs were in the public sector.

Okay, that seems low.

Which is, I think that's pretty significant.

Yeah, but percentage-wise, like in America, for example, I think something like 25, 30% of all jobs are public.

Oh, for real?

Yeah, I think, yeah,

I know that like in China, it's 80, 20.

It's higher in America than republic jobs.

So a good number of jobs are.

I think the ratio of people in public sector jobs wasn't necessarily crazy compared to private sector employment, but the layoffs in the two were like very disproportionate.

Okay.

And

the

main concerning thing here is that no matter who was politically in power, whether it be a more left-leaning party that had a ton of these social programs that benefited the average person, or whether it was the liberal right-wing party that was supposedly more concerned about budgets and like spending less and being more conservative, neither of them ever addressed the debt issue.

They never wanted to get ahead of it.

They continue to be able to do it.

Luckily in America, we all period.

Luckily in America, we all take it real seriously.

We're very proactive about it.

People make the hard choices.

They rode the debt train into the sunset.

And then this, and then eventually they paid the consequences for it.

And all of the future Greeks.

And they're like, one of those old-timey Hollywood sets and they just crash into the wall.

It's just chasing the roadrunner.

Without the LiDAR, dude.

But

basically, we, I feel that is the most damning similarity where no matter who is in power, no matter what the like day-to-day benefit of the spending is, we are on track to continue spending money in the fashion that we are with no real solution to stop the growth of the debt.

Yeah, the exponential growth.

I I think

that's what's so scary about it to me in America and at the end of Greece's life cycle is like the, even if you're the same amount of bad as a previous one, the problem is now worse, previous administration, because it gets exponential.

The more you spend on interest, the more you have to borrow to keep up to put your normal payments.

And then you're spending more on interest.

And then eventually half your government budget's going to interest, and you're borrowing at super high costs.

And it just eats up your entire

economy.

It's end of cycle stuff.

Here,

I'm going to turn off presentation voice for a second.

Okay.

On this last point, and something that I had been thinking about a lot, is I think when people view policy

through the dichotomy of right versus left, how money should be spent by the government on social programs, how it should benefit the average person.

I think in a general sense, we could make strong arguments for why the government supporting people is really, really good, right?

But regardless of where you stand on how that government money should be spent, in this situation in Greece, it didn't matter what the political or ideological direction of the country was if they didn't address the underlying mechanism of the debt growing.

It doesn't matter what sort of political sheen you place on top of a system that is dependent on you borrowing money for it to function.

Eventually, you have to

take ownership of the debt.

And I think another example I could think of was Venezuela, where socialist country,

why can I not think of the word?

It starts with an A.

Patriot.

Avan Newsome.

Argentina?

No,

dictatorship.

Why can I not think of the word right now?

Authoritarian.

Authoritarian.

Don't soak.

Socialist, but authoritarian.

But Venezuela was a very successful country in South America for like large segments of time because they used the oil money that they collected from their nationalized oil company, spread it around the country, used it to benefit a bunch of social programs and corrupt government officials, but they benefited the people along the way.

And a lot of people were happy when that was happening.

But all of that was dependent.

Whether you agree with the ideological aspect of spreading that money around, which I think in principle is a good thing, the underlying mechanism of it all being dependent on one commodity is bad.

And whether or not you believe that there was foreign interference from other people that exacerbated the problem in the first place,

CIA men jokes,

incoming, whether you believe that or not, the idea that your whole fiscal policy rests on the value of one commodity is an issue no matter what.

And the same thing goes here is like the issue of your debt is an no matter what.

You have to address it regardless of the political ideology you're spitting, bro.

I agree.

It's frustrating me.

It's for even people that like

there's people who have gotten such a reputation.

Someone like Ronald Reagan, people think of him as like he was this austerity neoliberal guy who like cut our shit to help our debt or to balance the budget.

He did cut shit, but he did not, he blew the budget out.

He spent more than anybody before him just on shit like the military and police states.

Like, it doesn't, these people who get this reputation on either side of the political spectrum are lying.

They've all been, except for maybe Bill Fucking Clinton.

But outside of them, everyone has lied about reducing the deficit.

And he had like easy mode Dark Souls.

He played a magic caster in Dark Souls.

He had a tech boom in his economy.

It was really easy to raise a lot of taxes.

But like.

Nobody has ever done the hard choice of like, all right, we either have to raise taxes or cut spit.

We have to find some way of like, and by the way, you know, it's not like it's impossible because if you look at America in like 50s, 60s, and 70s, we run basically flat debt, like no deficit.

So there, I think that's an important part to stress here.

And what I was hoping to get across is during, if you go back to like the Great Depression, right?

We ran huge deficits to accomplish the New Deal spending that came alongside at the time, right?

Yeah, and the war.

But the point of the New Deal spending, even before the war, we were on a recovery trajectory.

I think that's really important to emphasize is the New Deal came into place before the war was happening for America, or we had made significant deals with the UK to like mobilize for them.

And during that time, we were running deficits to fuel the recovery.

And that is fine when you have the room to continue spending or creating those deficits.

We had super low debt to GDP and before.

And that's the problem is like during these really good economic times that we've had during periods of time in like the last decades, right?

We've chosen to continue running the deficits no matter what.

So when you're faced with the next Great Depression scenario, you can't just spend as much money as you want to get out of it anymore because you're more likely to hit the ceiling.

I think that's the part I want to stress so much is like spending and running deficits for periods of time to deal with crises is important.

It's like how you navigate those things.

And countries that save and manage their finances well navigate crises by doing that because they've saved for those moments.

But we haven't saved.

We've done the opposite.

So when the shit finally hits the fan, we don't have the room to just turn on the money printer anymore.

Can I summarize this for my understanding?

And please, the business majors, tell me if I have this correct.

So I feel like we all talk about the debt and the deficit and it's big and scary, but we can kind of ignore it right now because our credit rating is still good enough and we're the reserve currency.

So everybody in the world, world, or almost everybody in the world, was still willing to give us money.

Even though we spend more than we make every year, we need to get that money somewhere.

Everybody's willing to give it to us.

But at some point, there is a breaking point at which suddenly they don't want to do that.

And then the only ways that we get out of it are by raising taxes a lot or by printing money and potentially doing inflation.

Is that the correct understanding?

Like, it's kind of okay right now because we just keep borrowing more to deal with it, but there will be a turning point at which the rest of the world is like, we're not fucking lending you money anymore.

My answer to that would be, I think that point is very close to right now.

Right.

In that, but like, am I correct in understanding that the reason it's so easy to ignore is because it'll probably happen all at once, right?

Like there'll be this sudden transition of the rest of the world going like, hold on, no.

And the instant a couple people say we're not buying this stuff anymore, the rest of the people will.

Like it's not as gradual as the numbers look gradual, but in practice, we will just hit this point that is suddenly catastrophic.

I think the reason it's easy to ignore is because any move, any movement in the opposite trend especially because you we the exponential build that you're talking about any turning it around is has become increasingly hard over time and all of the actions that start to turn it around are politically unpopular for the average person so someone to actually come out and substantially approach tackling the debt is saying like let me make these really unpopular decisions before the really really bad thing happens right but the really bad thing could happen at any moment now any moment Okay.

So we're just hoping that that doesn't happen.

And I want to say, like you said, it happens all at once.

I do think it'll appear that way, but it's happening gradually right now in that.

Sure, to the average person, it would be like, whoa, what the fuck just happened?

Yes, for sure.

Okay, this is where I want to ask you a question.

Okay.

Because you are the most...

I think you are more doomer about this than I am.

And as I grazed modern monetary theory, this idea that the U.S.

has the ability to spend and take on way more debt than other countries because of the unique unique position that we're in, albeit

with some changes that Trump has started to make in his administration, that he's pulling away the value of like the U.S.

dollar as the reserve currency.

Right.

With that in mind, why do you think we don't have much more room to go?

Because countries like Japan have like a way higher debt to GDP ratio, and Japan hasn't collapsed yet.

I think Japan is the canary in the coal mine of where we're going.

Japan is not collapsed, but they're having the problems right.

Like Japan's borrowing costs are spiking right now, and they have 200, 240% dead GDP.

So they spend way more every year than they make.

They have completely run out of room.

In fact, nobody will buy their debt.

So they print their own money to buy their debt from themselves to keep

the borrowing cost down.

It's called quantitative easing.

They're at the end of the cycle.

They have run out of options.

And as Japan goes, we'll be able to see what's sort of happening.

But what I want to say is the things that we're talking about, the negative impacts of the debt, like people are not going to want to buy it, are happening as we speak.

China used to be the second, actually, I think the largest holder of our debt, then became the second, is now the third behind the UK.

Every time we trade with China, we get their stuff.

They get dollars.

They used to take those dollars and buy our debt with them.

And it was a perfect cycle for us.

We got goods and they got IOUs.

It was great.

They have now realized this system sucks for them.

They don't want it.

So they've taken those dollars and they buy other things.

They are now building trade networks with other bricks currencies where they trade in their own local currencies, and they are buying gold and other things with the extra money.

So they are slowly reducing their holdings of their debt.

It's happening slowly, but eventually, you know, that every time a country does that, like China is doing and many countries are doing, we go out to the market and go, hey, we have debt.

Who wants to buy it?

Less and less people are showing up.

China used to show up in big numbers.

They don't show up at all now.

They barely.

So

we're hitting these constraints right now where we can no longer fund the exorbitant spending we are doing.

And

we have so much privilege.

We have such a good economy.

We have the world reserve currency that we can make this last longer, as you said.

But getting downgraded is the world saying that this is not trustworthy.

They're looking at how much we're spending and they're looking at us planning to cut taxes.

And they're like, wait a minute, there's no realistic chance we get paid back.

And they're demanding more and more.

It's happening as we speak.

So, you know, when you're below 120% dead GDP, it's something you can ignore.

It's something you can just keep pushing off.

But I think when you hit that 120 mark, generally historically, in a lot of countries, that's when it starts to become a real problem.

That's when it starts to become so much of what you're raising in taxes is going toward interest.

And when you're spending more on interest than your military, and that's just money being burnt, you've now hit a part where it's like really negative compounding effects.

So

that's why I talk about it so, I don't want to say doomer, but I just think I'm more, the more I read about it, the more I study it, the more it's like, it's a crisis that is just ignored.

It's complete blinders on.

Because as you say, anyone that tries to fix it is going to make unpopular choices.

They have to do things that are unpopular.

They have to cut military spending or they have to find a way to make Medicare and Social Security more efficient or cut them.

I don't think you should cut them, but find some way to, because that's all the money's going.

We're raising all these taxes and we're spending these things and we don't have enough money in taxes to spend them.

So we have to keep borrowing.

And that's unsustainable.

It's just not, of course, that doesn't make sense long term.

I don't.

trust any system that tells you that it can do that.

Historically, that has never worked out that way.

You know, Rome tried this.

Every country has tried this, and they've all ended up in hyperinflation, or default, or disaster.

There's nobody who's pulled this off.

The closest example is possibly Japan, and they are in the end of their cycle.

They are seeing problems, they're constrained.

People in Japan are getting more upset at inflation

they can't deal with.

Wages are not rising in pace of inflation.

Japan hasn't had inflation for 30 years.

They didn't know about it.

Now it's happening, and they have no way to deal with it.

They can't stop printing.

They can't stop.

So I just want to, that's why

I talk about it.

Because they're forced to print because they can't get it.

Because no one will loan the money anymore.

Nobody loans Japan money.

It is inside DeGPD.

So they print their own money to buy their own debt to make it look like they're above board and working.

But nobody's loaning them money.

And

it's inflating their currency.

I'm sorry.

They're making their currency more and more weak.

So people are, regular Japanese people are noticing that like foreigners coming in have a lot more to spend than they do.

that their currency is getting weaker and foreigners are getting stronger and they're overflowed with tourism.

They're falling behind.

It's happening as we speak.

Like they have good societal structure in a way that we don't.

They're less likely to

riot and have problems, but they're having economic problems.

I have people that live in Japan, friends that live in Japan.

They are dealing with it.

Their wages are not keeping up with other countries.

And that's where we're headed in a worse way because we don't have the social stability of Japan.

We have chaos in America.

We're more likely to get really angry about it.

elect a strong man or or something we're going to do some crazy policy in my opinion this is all you know where i'm standing but that's i think this is like the biggest issue of our day and it is so difficult to tackle and no one wants to discuss it but i think it it's it's dangerous i think i think we've let it go for so long that we're now at the part where it matters

i put together some numbers about how we're spending money oh i want to see this yeah yeah so i because i also when hearing about debt stuff it's often easy for me to glaze over or the numbers are so big that it's just it just feels like it doesn't even mean anything anymore so i feel like a really simple way to to put it down, we owe $36 trillion in debt.

The U.S., we're $36 trillion in debt.

We owe that much money to other people.

And then every year, we are adding about two, I mean, it's technically more, but simply about $2 trillion.

So if you pull this up, yeah, cool.

So

this is super simple.

Every year, like in 2024, we spent $6,800, so $6.8 trillion and we took in $4.9 trillion.

It's about a $2 trillion difference.

And so we had to borrow that, which made our debt go up.

Okay, so I wanted to just look at like really simply so we're spending about 6.8 trillion a year these are the categories this is based off of there's a really source down there a really great chart that shows the income and outcome in all the different categories of the u.s budget so if you're wondering like where are we spending all this money here it is social security 1.5 trillion medicare

870 billion transfers to states this is all the money that the us the federal government sends out to states for various programs that includes medicaid which is like 600 billion or something so most of that's just medicaid again healthcare for people defense which is both military and thing like things like veterans affairs, which is like 300 billion.

So in terms of the military, it's like 900 billion, I believe, a year.

But if you talk about the total amount that the Defense Department is spending.

Trump's rebudge is $1 trillion flat for military.

They increased it by $100.

Okay, cool.

So it was like a...

close to $900 billion, and I guess we're going up to $1 trillion.

Got up it.

Interest on debt is $878 billion.

So if you're wondering, like, why does the debt matter?

This is what we spend every year.

Like, it's, I think, what like 15 or 10 like of our entire budget of all the money that we could have to do all the programs for anything around the world and we're putting that much not on building or doing anything but just paying people back it's stupid and then everything else like department of education every other federal thing you can think of is in this everything else so these are crazy right and you might look at this and be like okay if we need to basically if we're going to stop losing money every year we need to find two trillion dollars that's the super simple version the easiest is cut down social security right but then i was looking into this and my understanding, please correct me if I'm wrong, you guys or anything else.

Social Security is not actually a big problem because if you go to our income, this is our income every year.

We make a bunch of money on Social Security.

Payroll taxes, income tax is like the biggest thing, which Trump admin wants to cut, which I don't know how that's going to work out.

Corporate income tax, 500 kills.

Everything else is 207.

So this is like the, this is where our income comes from.

It's, you know, it's basically taxes, right?

And so something that's interesting about Social Security is if you match these up, right?

The program, the way it works is everybody who's currently working pays taxes every year for Social Security.

We all pay 6% or 12% based on your employment.

And so it's actually covering the vast majority of the Social Security expenditure.

We're not actually losing that much on Social Security.

Still like 200 billion.

That's not a good, that's not good.

But there's actually less to save with Social Security than it maybe looks like.

Because again, on that spenditure page, it's like we're spending $1.5 trillion on Social Security, but that doesn't account for what we make from Social Security taxes.

Whereas the other categories of spending, we don't make money on Medicare, right?

That's pure loss.

So, as I was looking at this, I'm curious your guys's thoughts.

I want to give a quick pitch on how, if you were the government, would you stop losing money every year?

And you basically have these categories to go off.

If you can stop spending so much on the military, I would be down for that, but that doesn't feel super tenable.

Interest on the debt, that is not something you can really change unless we pay down the debt.

That doesn't seem particularly feasible right now.

You can try to hack apart the everything else category, which is what what Doge is mostly doing.

But then the two big ones are Medicare and Medicaid.

This is healthcare.

It's healthcare for retired people and for low-income or disabled people.

Of the 6.8 trillion we spend in a given year, Medicare Medicaid is like a quarter of it.

It's a huge, huge expenditure.

And I believe it's one of the areas where by far we could save the most money.

And you can make a lot of changes right now.

So here's my thesis, and I'll keep it succinct.

Medicare and Medicaid are the area to me that I feel like of all of our money that we spend in a given year feels the easiest to save on.

And there's things that we talked about last week where Medicare is now able to, thanks to the Inflation Reduction Act, actually negotiate for its own prices with health insurance.

Just to reiterate that for people who are not aware, the giant Medicare, medical insurance provider, the U.S.

government, wasn't able to talk to drug manufacturers and negotiate prices.

They just had to like pay whatever was on the open market, which is insane.

And so that did change with the Inflation Reduction Act that Joe Biden put out.

Now, Medicare is negotiating.

That's 2026, I think.

Yes, Medicare in 2023, they negotiated prices.

So this is for the first time Medicare can go to the drug companies and say, we're not paying that much.

That is too much.

We want less.

Otherwise, you don't get to be a part of our system at all.

You don't get, I mean, just Medicare is 60 million people in the U.S.?

Something crazy.

Yeah, it's a huge percentage of the people.

And it's also the amount of money that is spent on health insurance broadly.

Old people are sick more.

They need more help, right?

Most of your medical costs come when you're really old.

So Medicare is just wildly expensive.

And so, again, they've been paying these obscene drug prices.

And so they were able to negotiate new prices.

And this is a little chart of what the prices look like now.

So the green bar is what it cost in 2023, two years ago.

The green, or sorry, the blue bar and the green one is what we're going to be paying starting in 2026.

As you can see, some of the savings are 80%.

We are going to be paying

a fifth of what we were paying in the past.

And I can list out some of the things.

And that is just with basic negotiation in a pretty much

pharmaceutical controlled system.

Like they still have so much incredible influence.

Yes.

And just the basic negotiation, like these are still higher than drug costs in other countries.

But

it just goes to show you how captured it's become.

Can you scroll up to just see your all things?

I agree with what you're saying,

but I just want to say like, you know, the broader story here is that Medicare, Medicaid, and defense are all situations where we pool our money and we give it to corporations who set the prices.

We're giving it to Raytheon in defense.

We're giving it to Pfizer in Medicare and Medicaid.

And we are not getting efficient use of this.

That's what I was going to say is I 100% agree with Doug that.

But throwing defense in there because it's basically the same thing is you have to audit.

Defense is being abused in the same exact way and it has to be audited and it's something that has escaped uh audit criticism really criticism

so wild that doge talked about this stuff and didn't touch uh medicare negotiation defense negotiation which is like the area where the government is getting ripped off completely just completely which again look at this graph i mean if you're if you're listening on if you're listening it is like we were paying the government which is going into deficit and debt and putting all of us at risk because of it, was paying, on average, over twice as much as they could if they were just able to actually negotiate.

You know why they couldn't negotiate?

Because in 2003, when plan, when part D of Medicare, basically when the government started these plans where they would pay for Americans, retired people's pharmacy, like drug subscriptions, right?

They said, okay, we're going to cover this.

As part of the act that established this, the insurance and drug manufacturers lobbied with the politicians and said it would be a better free market if the government doesn't negotiate prices.

It should be left up to the private insurers.

So, a caveat here, this is actually less egregious than it looks because the way Medicare works with drugs is that they actually have private insurance companies cover people and then the government pays them back.

So, the private insurance companies are the ones actually going out to the drug companies and negotiating and saying, hey, we want to lower price.

Which they do have an incentive to lower that price still.

There's still an effectiveness there.

But I think the

issue is that because these companies, when you break all these companies up as individual negotiators, they don't have as much power as if

the government was just negotiating on behalf of everyone, which is where the true negotiating power comes from when you're talking about whole country systems.

That's why the prices are so much lower than even this on a lot of, like the percentage drop on a lot of drugs in other countries is so much further because they negotiate on behalf of everyone.

Yeah.

Right.

Specific numbers, because I looked into this, at least a few years ago, it's consolidated recently.

There were 11 private insurers that were offering healthcare coverage.

So that was 11 different companies that had to go to every drug manufacturer and try to negotiate deals individually.

Starting now, Medicare, not even with all of them.

This is only with some of them, by the way.

And this is going to save like $6 billion in 2026 just off this and save patients 1.5 billion, by the way.

So just this, it's like going from 11 people, individual companies that had to go negotiate to Medicare, a single government entity saying, we're going to negotiate broadly, caused this much of a reduction.

It is.

It's also just fucking crazy because it's a mismatch.

The private negotiators are not negotiating for themselves.

Like the person paying at the end of the day is the government.

That's where the money eventually comes back to them paying it.

So if they're not negotiating, they're not,

the people are not.

It's the principal agent problem where those people don't have their own money at risk.

They're incentivized to try to negotiate prices down, but it's not life or death because it's not their money.

It's all coming from our tax dollars.

So there's one more thing I wanted to talk about here, too.

Right.

Is that interest payment and how it grows, right?

You're talking about how in Greece's case, the only realistic option they have is they need growth to outpace their debt.

They just need to grow.

Their economy needs to grow enough that the ratio gets smaller and smaller over time because you're not realistically talking about a short-term plan of paying all that debt down.

And the U.S.

isn't really looking at that either.

We want there to be enough economic growth to outpace our debt, which also involves us lowering our deficit, right?

We want that deficit to come further and further down, and we don't want our debt to grow.

But the other side of this is we want our GDP to grow and outpace it.

That is part of this.

One thing that when you're talking about GDP growth is you spend government money on things and programs that emphasize the growth of your economy, right?

Right, you get a return.

You can make an argument that a lot of these things, like Social Security, for example, Social Security payments go to people and they use them and spend them back into the economy, right?

That is a part, it's part of what fuels the economy for older people that aren't able to work as much.

When you look at the interest, the interest has no impact on GDP.

It doesn't help anybody.

It's more akin to setting the money on fire.

And

because that problem is compounding and that interest is like building more and more and more, you have to account for this spending that has no impact on that GDP at all.

And it's taking up more and more of what you have to do.

We're taking your tax money,

878 billion of it, and spending it on nothing.

Just burnt, you know, it's that's a lot of money that could have gone a lot of things.

And you can't even spend it now because I took it from you.

Yeah.

You know, yeah, I agree.

If you, yeah,

yeah, if you look at this chart, the thing I'm, I'm, let's say not hopeful, because I'm not, about government spending, but at least I feel like there is a path, kind of, which is Medicare, Medicaid.

And you guys are completely right, defense.

I really hadn't been thinking.

It feels like it's so politically untenable to be like, let's chop the military down, even though all people want that.

But you're right about the government contracting.

And then what gives me hope is this, which is Medicare negotiating and it being so obscenely less expensive, like just criminal what Medicare has been paying that hopefully this can start to be applied across multiple.

industries.

It can be applied in the defense industry.

It can be applied across Medicaid as well, across all of Medicare.

And hopefully that brings things down.

And then, even if you, like me, were hopeful that Doge would actually result in, like, hey, let's make the government more efficient and bring stuff down.

This, again, is the chart.

Like, it's Doge is doing nothing.

It's saved $170 billion according to their website.

That's the most generous interpretation.

There's a lot of arguments that it's cost more money than that.

If you look at the amount we need to make up, it's almost nothing.

So, Doge, after five months, whatever it's been, has accomplished a tiny fraction.

And those are one-time savings.

That's not happening constantly, right?

So as much as I wish, like I want there to be.

No patience from Doug.

Dude, that's what Elon said.

Freelon's grand plan to come on time

and Qatar.

I would love for them.

Look, hate Elon, all you want, but like this is fucking fantastic that we are auditing sections of the government and being like, how do we become more efficient?

Yeah, but the way you do it matters.

And they're doing it shitty and that sucks.

But so that's what I'm saying.

Like in concept, this is like, holy shit.

Yes.

We are heading towards a cliff.

We need to save money.

This should be, Doe should be one part of many different things to try to increase the economy, bring down spending.

And it's not doing that.

Dude, one of the first things Trump said was like, I'm going to have Elon, when he's done with this stuff, go look at the military.

We're going to get some of that more efficient and cut it down.

I was like, damn, I fucking agree.

Wait, that happened.

It didn't happen.

And then we increased military spending by another $150 billion.

We're at a trillion now.

Like, it's so frustrating to hear that.

And then the action is the exact opposite because that is what we don't need right now is $150 billion more than the military.

Like we already spend so much and it's so inefficient.

You know,

my dad works at Raytheon, bro.

I know they just overcharge.

Like they'll do these jet programs that just cost, they can just charge whatever the, it's a syndics medicine.

Dude, it took me one conversation, one conversation with my girlfriend's.

friend's dad who works at one of these defense companies.

We talked for maybe 20 minutes and I was like, you guys are robbing us.

This is crazy.

And he's like, he's like making jokes about it.

And

I couldn't believe it.

I was

hoping that those industries are like, you guys are single-handedly robbing the government.

It's like the reason we run a deficit in many ways.

They lobby the shit out of politicians to stop this from changing.

And we're heading towards a fucking cliff that could ruin the country.

And it's like, what the fuck?

Why are we changing anything?

It's insane.

On the topic of big companies using their money to ignore laws.

We had, I wanted to talk about Apple just full out.

I can charge this in if we want.

I'm fired up about this.

We have like 10 more minutes to go.

I think.

Yeah, yeah, yeah.

I wanted to fit this in because I know this story has been going on for a while, but it sounded like there were updates of Apple basically outright ignoring this court order to allow apps in their marketplace

to

off-site their payments.

Like this came through Fortnite and Epic, right?

Fortnite wanted to send people to a web page to purchase like V-Bucks and things in the store so that Apple didn't get to take their cut.

And this has been ongoing.

Yeah, I mean, just super high level, and then you tuck it away, but just like super high level is like, if you buy a Fortnite skin through Fortnite on the App Store, Apple gets 30%.

30% is a lot of money.

It's a huge fucking cut.

They didn't really earn it.

They didn't make the game.

They're just doing payments.

So some companies, like Epic, were really pissed at this, try to make a web store.

Sometimes when you're like on Spotify or you're on Patreon, you go to the web store to subscribe to Limited State or whatever.

And the reason is because those companies don't want to give Apple 30%.

And Apple was doing a lot of shady, underhanded shit to stop you from doing this.

They were like preventing you from updating your app.

If you had an off-site web store, they were like deprioritizing you.

They were just finding ways to make this not possible.

And a judge finally said, this is fucking whack.

You can't do that.

You're violating the spirit of the law.

And that was the recent ruling.

And I don't know what happened since then.

Maybe, Doug, you're going to give it up today.

And that is what I was going to talk about.

Thank you, Aiden, for

Aiden.

Yeah.

You said said new updates.

You said new updates.

I mean, a little bit.

All right.

So that's that's the summary.

Um, for

no, it's fine.

Apple is this.

Is a you we've already talked about this.

This is old news.

So again, Apple's had this monopoly.

I thought what was interesting, a few pieces that maybe you aren't aware of if you've heard about this.

First off, Fortnite's back, I got on my iPhone right now.

It's back on.

Oh, that's new, right?

Because that was not

yesterday.

Oh, hasn't it been off the App Store for like five years?

Yeah, so after five years, we're fucking back.

Okay, Fortnite's right here.

And look at how good that looks.

I don't know if the camera can zoom in on that.

How about that?

Oh, it's because it's vertical, right?

Yeah, a little vertical Fortnite, baby.

Yeah.

Oh, it says

use cellular data.

I don't know if that's visible.

And this is what was gone for five years.

Can you believe that?

Thank God we enter all the time.

I'll just take a screenshot.

Can I say it's kind of base they fought it for this long because they lost so much money by doing it?

Like they were printing money on Fortnite.

I mean Epic, yeah.

Epic lost so much money from what they could have done by just making it.

We were just talking about like USA ruining debt, and so I'm going to try to take this to the same levels to make the emotional impact of the same.

Yeah, dude, Epic makes ungodly amounts of money on Fortnite.

And basically, Tim Sweeney has the leader of Epic, the owner of the company, who, as far as I can tell, I had a friend who worked there, really good guy who's very principled.

He basically was like, we as a company are going to take the fact that we're influential with Fortnite and we have an ungodly amount of money because of Fortnite, and we are going to try to stop what Apple's doing, which is this anti-competitive shit where they don't allow anybody else to sell anything on their stores.

And it's interesting, this chart here, Apple revenue, as you can maybe tell, I learned how to make charts this morning on

Google Sheets.

They're good.

So if you look at Apple's revenue, like 50% of it is selling iPhones.

That's their main thing.

200 billion a year selling iPhones.

It's crazy.

And then they make 96 billion on top of that from services.

So this is things like the App Store, but subscription services or whatever else.

And you can see Mac, iPad, wearables, those are all big, but the big thing that drives Apple is the iPhone.

That's half their money every year.

And the services, which is money around like services that they sell, including the App Store.

And the estimates we don't know are like 60% of that services is the App Store.

So if you're Apple, something like, I don't know, 10, 15% of your overall company is based on the money you make.

Again, not really doing anything, but just taking 30% of everybody else's money.

It's just a tax that you're putting on.

So everybody hates the tax except Apple.

They love it because it just gives them 50 billion or

it's a money printer and they don't have to do anything.

And then I am

just heads up biased.

I dislike Apple's a company.

I dislike that they do things like this.

Can a maiden?

I dislike that they put these taxes on developers and then watching the Mac and they don't do anything with it.

They're not investing this into like

to be clear though, to be fair, Google is the same thing, right?

There's a duopoly like

Play Store, it's 30%.

They do the same thing, but there's so much that Google does.

Like, I can look at what Google does and be like, they're funding DeepMind, right?

And making these incredible breakthroughs with like Alpha Fold.

Whereas God, you fucking forgot about the fucking Vision Pro, dude.

Yeah, and then the only R D Apple hasn't done

anything since Steve Jobs passed.

It's been Vision Pro, which is a complete fucking flop, and AirPods.

Great.

Did you know that if AirPods would have broken out into their own company, they'd be bigger than Nike Projects?

They'd be bigger than Nike.

Yes, as you can see in the graph, that's under wearables and accessories.

It's 30%.

Wow, it's a huge bar.

A big, beautiful bar.

So it makes sense that Apple has basically had this monopoly on the system and said, look, it's our phones.

We should do whatever we want.

They make an ungodly amount of money from it, but it's a massive, massive tax on everybody else.

30%.

I mean, for anybody who's run a business, or government, like, okay, grocery stores, what are their margins?

It's like 1.5%, right?

2%.

Right.

They barely make any money and they just have to make enough volume to barely get by.

Most companies do not have a 30% margin, and the idea that Apple charges this, digital ones have higher margins, is fucking insane because they aren't doing anything other than processing transactions.

I worked on mobile devices doing the code at EA that managed this.

I've seen the actual mechanics that go into managing this stuff.

It's complex.

It's not 30% complex.

It's like 3%.

So I have a question.

With the way this lawsuit has played out,

more energy.

We got to match the debt.

The way this layout of this has played out,

this problem affects us.

uh we have a patreon page and people may have noticed and we gave out a warning about this too if you try to subscribe to our patreon on ios you might wonder holy shit they're charging me a lot for this patreon it's because apple tax the fee on to i in ios purchases for patreon and what's more that patreon patreon patreon is adding it on

because patreon's like we can't afford 30 of our revenue for you doing literally nothing apple Yeah, so Patreon is doing that, right?

And we've encouraged people, by the way, if you're listening and want to subscribe to our Patreon at patreon.com slash lemonade stand, do it on desktop or

Android and make sure you don't pay Apple these fees.

But what I was wondering from the way this lawsuit played out, does that mean they don't get to do that anymore?

Or does it mean within the Patreon app,

they're allowed to link you into a browser to pay for it instead?

So in 2020,

2021, I believe.

No, 2020, epic sues apple and they're like we are going to try to stop this apple fights back they win the lawsuit mostly they still get to be the only app store yeah but the ruling was that they have to allow other apps to link to an external payment so that for example fortnite could say hey go click a button it's going to pull up the fortnite browser you can buy it there you get to avoid apple's fees because that would that otherwise is anti-competitive that they aren't allowing any competition at all and then apple has basically done it like a comical amount to make it impossible for anybody to do that in good faith.

Not only did they make you put all of these warnings and shit that was like, you can't make the link to go buy something on a different page very fun to look at or notable.

I heard of that.

Yeah, there's all these like warning signs that has to get approved, all this crazy stuff.

Not only that, they then announced in 2024.

We also, Apple, even if, for example, somebody clicks the link in Patreon in the app, goes to Patreon's website, Patreon manages the entire thing, does all the work, all the tech, all the fees, and then comes back.

Apple charges them a 27% commission for the recommendation of having gone through the apps right now.

That's like a

honey scam.

That's like honey, the browser apps.

It's baffling.

It's boss boss.

It's truly like, I mean, I hesitate to say evil.

It's, it's, it's unbelievable.

And so finally, with a lot of pushback from, this is what they've been doing for three or four years.

They were supposed to allow developers to basically manage payments themselves through their apps, apps through apps saying hey go do my thing over here and that way they could dodge this ridiculous fee and they did the most like technically we're following it and we're completely fucking you over and it's no different i'm not touching you

i'm not touching you i just want to so recently and this is a few weeks ago i i just want to read out the quote from the judge who followed up on this case Apple willfully chose not to comply with this court's injunction.

It did so with the express intent to create new anti-competitive barriers that would, by design and in effect, maintain a valued revenue stream, a revenue stream previously found to be anti-competitive.

That they thought this court would tolerate such insubordination was a gross miscalculation.

As always, the cover-up made it worse.

For this court, there is no second bite at the apple.

It's so bad.

Bring shit.

It is so ordered.

What a fucking

giga chad from Judge Yvonne Gonzalez-Rodgers.

She saw it.

I saw that or bent over.

God, dude, what a fucking chad.

And then this continued.

So then with the recent update, okay, this refresh.

That you might not have seen is that they then were stalling allowing Fortnite back on.

So the judge a couple weeks ago was like, this shit needs to stop.

Not only do you have to stop it right now, you're not allowed to have any tax.

That 27% commission has to be zero now.

You have to remove the restrictions on the links people could have in their apps.

You can't do that shit anymore.

She's basically being way more aggressive because they were so aggressively going against the spirit of the ruling.

And she recommended them for a criminal proceeding because the CFO went and lied about how they came up with a 27%.

And it turns out he was purging himself, purguring himself.

And so they also, the past two weeks, even after that, have been stalling putting Fortnite back onto the app store and having all these things.

So then there needed to be yet another.

It looks like the link.

Oh, yeah, here.

So then the same judge had to issue another thing saying, you need to prove immediately and bring somebody to court to prove why you can't put Fortnite back on the App Store immediately.

And if this isn't filed by May 21st on Wednesday,

it's going to escalate even more.

So even after pissing off the judge, lying in court, going through all this stuff, which is now they're potentially going to have to do a criminal proceeding because of the way they've been acting, they also have gotten another reprimand from the same judge for not putting up Fortnite.

And all that resulted in finally yesterday, about 20 hours ago, Fortnite is back on the App Store after five years.

Hey, system works.

This takes

him

to the business.

One of the things that I just wanted to quickly, if you go to, so Tim Sweeney is very passionate, Twitter.

He's obviously very biased in one direction on this.

But what I think is great is that as he, you can go through his Twitter and he's showing all these examples of other companies who are now saying, because of this ruling, we are now able to add other features.

The Spotify people are saying they're now going to add features that weren't sold on the iOS before because it was not tenable for Spotify to offer this.

They now can.

And so all of these companies that have been absolutely shafted, if you think about like Uber and how expensive, I know Uber is not a likable company, but it is extremely expensive to run a

ride-sharing service.

Wait, was it adding the Apple fee to an Uber run?

No, they just had to pay Apple.

This insane fee.

Apple isn't doing shit.

They aren't providing the maps.

They aren't providing the, it's nothing.

I mean, again, technically they are.

It should be like a 3% fee, but this has been unbelievably egregious and really hurt the people who make products.

And if we're talking about the economy growing out of the debt, getting it back to the high-level stakes, like you have to have people making things and growing.

And if Apple is just taking a 30% tax on everybody and hoarding it for no goddamn reason,

I am so happy about this.

And Google is also following suit.

They're also having to do a similar thing.

Yeah,

it's not like a full breakup of their monopoly on the app stores, but it in many ways is effectively that.

Other ad developers can actually do payments themselves.

So one more thing.

I'll just say sign up for the Patreon on any platform.

Well, actually, no.

Sign up on iOS.

Click the link that takes you to the Patreon site and do it on the Patreon site because you will pay way less.

One last interesting thing with this that I learned from you was that this is a rare moment where U.S.

regulation is ahead of places like the EU.

Because the EU famously, you know, switched the iPhone to USB-C, like

other changes to Apple that they have required.

But with this,

this is a U.S.

only change right now.

In Europe, this does not apply if you use these apps.

Quick correction.

That is exactly wrong.

Oh, damn.

Yeah, that's super wrong.

Oh, I trusted you.

Wait, tell me because I.

Digital, I forget the name of it, Digital Rights Act, 2022, there was a act by the EU that basically enforced this and said companies on the app store have to be able to link to other things.

So this has been in the EU for like two years.

Wow.

Some change of this is not.

being done in the EU because Apple, in true Apple fashion, literally changed their TOS to say, now you can do this, but only if you're within the United States.

Yeah, so

EU has had their own set of rules, but it has been looser.

They have, I don't know exactly the restrictions, but the EU in 2022 basically forced iOS to do this.

So in Tim Sweeney, in his responses, he was like, this now, the process in the United States is now going to match what the EU is.

It might be slightly different because technically they're going to have different, you know, this is an American injunction by an American judge, but they're now roughly on parity.

Okay.

Okay.

I I mean, I did see all the things on Sweeney's channel.

It felt like the end of Star Wars when the Death Star explodes and they go to every planet.

Everyone's shit.

Dude, it fucking

crap.

It's unfathomable to just take money forever.

It's just crazy to me.

So subscribe to us without giving Apple their cuts.

Join the Patreon.

And if you want to see more of this content, we're going to have a bonus Patreon episode coming up on Lemonade Stand.

Patreon takes very, very little money.

We get all of it, which we then get to put into the national debt.

We're going to solve today.

Yeah, we should have all our cash debt.

We'll pay it off.

Hey, next Raytheon.

We'll take care of it.

The next Raytheon jet, we'll cover it.

Yeah, we'll cover that one.

All Patreon for the next year goes to a single F-37.

Dude, like 10 nuts and bullshit.

Thanks guys for watching.

Thanks, everybody.

See you next week.