Inflation is still up, prices are still high, GDP is now predicted to decrease, and the Legacy Media is, of course, blaming President Trump and his tariffs. But financial expert Carol Roth makes the case that they KNEW this was coming. The economy is still reeling from Biden-era spending. That’s why Glenn advises Trump to demand in his first Address to Congress that Congress pass a budget with a bare minimum of a trillion dollars in cuts. But Carol also gives a warning: she believes that DOGE’s cutting and Trump’s tariffs could “explode the deficit” and alienate our allies if they are not done surgically.
Transcript
Below is a rush transcript that may contain errors
GLENN: All right let me go to Carol Roth. Hello, Carol. How are you?
CAROL: Yeah. Glenn, I've just found that we've only been in this administration for a month and a halfish, and I feel like it's been 16 years.
GLENN: Yeah. I know. I know.
CAROL: There's so much going on. I'm trying to process it now. When somebody said, it's only been a month and a half. I went -- you know, my mind was blown.
GLENN: Yeah, we're 40 days into this administration. You're looking into this. And it's breathtaking at what has been done. Last -- last month, we had I think 1800 encounters at the borders.
A year ago, last February, it was 1009000 encounters.
That's how much of an impact he has made on that. We have all these things that he has done. But when it comes to the economy, Congress has to move on some of his things. He hasn't really done anything with the economy. Except, perhaps, for DOGE. Which you've been warning about on this program, for a while now.
What's happened?
CAROL: Yeah. Yeah. So we've talked about before, that the economic situation, is not really what it was presented to be. You know, we heard under Biden and certainly during election season. What a wonderful economy we had. All of these really great statistics, on employment and growth.
And it's become very clear. Well, it was very clear to all of us, before. We've talked about it. Something that Secretary of the Treasury, Scott Bessent talked about a couple of weeks ago. Is that really, the economic foundation is incredibly fragile. And what we've had the Biden administration do, which was exceptionally nefarious. Is that they decided that they were going to spend to paper over the weakness of the economy.
So if you remember, I think it was back in 2022, we had those two down powers of GDP. Which is a technical recession.
For some reason, by the way, they said, was not a recession. I'm sure if Trump had to down quarters, they would say it was.
GLENN: Right. Depression.
CAROL: But it had a D in front of it, so it wasn't. Then we came out of it. Then it was pretty clear that we were going to go into this double dip recession.
So what did they do to increase government spending, which is very inefficient spending, and we have been running deficits as a percentage of GDP. That are at wartime levels.
We're talking six to 7 percent of GDP, the historical average is somewhere around three, or three and I half percent.
So about double, you know, what you might see, on average. Not -- well, you have a good economy. You would actually expect that to be much lower. Because you're getting more receipts.
That's what happened. We had more receipts. We were taking $5 trillion. And they're spending even more. They're spending almost $7 trillion. So that was done to mask the weakness in the economy. Now that we don't have the ability to continue to kick up even more and more to show growth, the consumer continues to be tapped out from all the Biden Arab policies. And the fact that we have DOGE. Which is trying to cut down government spending. We're at a situation where things could get uglier. Before they get better. Or they could get uglier. And they could take away the political will to make them better.
That's this delegate dance that we've been talking about. Why we need this careful choreography.
The craziest thing that has happened over the past several days. Is that the Atlanta Fed. One of the branches of the Federal Reserve. Has a tool that predicts GDP each quarter.
They went over the last four weeks. Okay. Four weeks time. From predicting we would have almost 4 percent GDP growth in the first quarter. To now negative 3 percent, in the first quarter.
GLENN: That's impossible.
CAROL: A seven percentage point difference in four weeks! Which, A, just goes to show what a joke any of this reporting. And these tools and this data are.
But I think also shows, hey. We've got, you know, somebody else at the helm here.
So now we don't need to doctor these numbers in a way that seem a bit more friendly.
And it's so -- we potentially could be seeing something ugly. Which is something that we've talked about many, many times.
And this has been a setup, that they knew was come.
If you go back to the middle of last year, you had a bunch of, quote, unquote, noble economists. That put out a piece that said, Trump was going to create inflation. He was going to do all these things to the economy. And I called it right out, there is will it. This is a setup. They know this is coming, right then. They are setting the groundwork to blame this on Trump.
Get ready for the talking points.
Trump has been in there for only six weeks.
He hasn't even really had a chance to do anything about the economy. Congress certainly isn't helping. And yet, we're already getting the rhetoric that, oh, look what he did to our really great economy.
GLENN: Correct me if I'm wrong here, Carol. But the Biden administration, while they spent a lot of money, they did it in ways to cover things up, et cetera, et cetera.
But that -- that big 2021, you know, $1.2 trillion bill. And then the 836 billion for roads and bridges. And broadband. And then the 144 in the Inflation Reduction Act. It's well over a trillion dollars.
And it's my understanding, that only 17 percent of that money has been sent. Spent. So what happens if we don't stop the spending, of just the stuff that is already on the books from Biden. Wouldn't that cause our inflation to go through the roof.
CAROL: Yeah. It absolutely would cause our inflation to go through the roof. Because even with the cash in and cash out that we have. As you said, we're running these wartime deficits. And, by the way, we're financing those at high interest rates. Not necessarily in the historical context. But in the context of the last 15 years. And in a way that we have now made the interest expense, on our debt, you know, what we're paying for stuff we've already bought.
Exceed, the financing charges exceed what we're spending on defense. Nile Ferguson has a great sort of maxim, if you will. That basically, I'm paraphrasing here.
But, you know, nations that spend more on interest, versus debt, don't, you know, remain great nations for very long. That seems to be pretty obviously, something that everybody can wrap their heads around. That we've -- we don't want to be spending all of our money paying for stuff that we, quote, unquote, already bought. And we certainly, at these levels, cannot afford to do that. If we continue to do that, and, you know, this kind of goes into another conversation that we've had before, Glenn, too. That central banks around the world who used to be our friends in support of the US being the world's reserve currency, used to just buy Treasuries, as kind of part of the deal here on an ongoing basis. Over the past 11 or so years, they have been net sellers of Treasuries. They have actually replaced that with gold on their balance sheet. So if we don't have central banks that will just buy Treasuries, whenever, because that's part of the geopolitical deal, that means you have to find people, who are, you know -- looking at the price. They're looking at the price of the treasuries. And basically, you know, at these levels, of even though, they've come off a little bit. And we can talk about that too.
But they're saying. Overall, they're saying, yeah, we're not going to do that. You know, we need to have a reprice here.
And, you know, when you don't have enough demand. You end up seeing our yields go higher. To the extent, they add you up too high. Which we were dangerously close to a few years ago. We've come off now.
If you hit that. That could end up causing a debt spiral.
End up causing a mismanagement.
Or not a mismanagement.
A throwing up, if you will, of the Treasury market. And have global implications. Let me explain this, so the average person understands what you just said.
You are -- you are wanting to buy a new house.
And the interest rates are up at 8 percent.
You say, honey, I don't think we should buy a new house.
The interest rate is too high.
And somebody says, historically not. Yeah. Historically, you might be right. But we're not buying in the 1980s right now. We're buying today, with our financial situation. So I don't think we're going to buy the house.
That's what a normal person would do. And you can start saving known buy a house later.
That's not what the government is doing. They're saying, let's buy the house at the high interest rates anyway.
But when you have poor credit, really good banks are going to say, no. I'm not going to take your loan.
That's what she's talking about with the central banks. They're like, I don't want it. I would rather buy gold.
Because I don't trust that you guys are ever going to get out of debt.
And so what happens? Loan sharks step in.
This is what she's saying about the yield going up. The loan sharks step in.
And they say, I can make this deal for you. It will cost you 12 percent.
You're like, 12 percent. That's outrageous.
You're going to do it, or you're not going to do it. What do you want?
So we're bigger ourselves with lone sharks. That's why, I believe, the president needs to say, tonight. Congress must pass a budget.
It must have cuts. I would love him to say, it must have a trillion dollars, bare minimum, of cuts. To show the rest of the world, that we're serious.
I don't know why Javier Milei can do these things, but we can't.
CAROL: However. However, however, Glenn, if we cut as we talked about, a trillion dollars. And we cut it up very carefully. And we don't choreograph it like Fred Astaire and Ginger Rogers, and then we don't have that in our GDP, then we have a shrunken economy. We're taking in less receipts, and we actually explode the deficit, which could end up in a debt spiral.
GLENN: Right.
CAROL: So, yes. Congress needs to do their part. But it needs to be done very surgically, and that's the ultimate challenge.
That's the mess that the Biden administration left for Trump.
GLENN: If I were king of the world today, and I could go in and say, Congress, this is what you're going to do.
I would say to them, you're going to cut a trillion dollars. Plus, you're going to pass a flat tax. Or 15-15-15. What the president has talked about. And you're going to cut 15 percent of all regulations. Cut them right now. And you're going to pass the REINS Act. That would change the dynamics of the economy.
Yes. We would have all of that spending going away from our GDP. From the government.
Good, but money would flow into our country, and jobs would be created.
And we would he go night the engine at the same time. That's what has to happen! But that's not going to be the president's fault, if it doesn't happen. What a surprise! It will be the lame ass G.O.P. that will screw this up.
He has to get them back on path. Back in just a second with Carol Roth with some good news.
GLENN: Okay. Is there anything else that we need to hit here, on the economy, before we get to some good news?
CAROL: I mean, this was probably going to be a whole other segment, at some point we need to have a discussion about the tariffs. It's probably not the time now.
GLENN: No. Okay.
CAROL: But we need to have a discussion about these tariffs.
GLENN: Okay. Let's do that now. Let's start there.
CAROL: All right. So basically, what did the American people hire Trump to do? Right?
They hired Trump to stabilize prices. To get things more normalized.
And, yes. We have these issues around the world. In terms of where we stand by trade.
However, as we have been talking about, we just talked about, this needs to be very surgical. We need to have Fred Astaire and Ginger Rogers doing choreography. We don't need to have a bull in a China shop.
And the tariffs situation, given the precarious economic situation that Biden has left us. And the fact that the citizens of the United States want priced ability is absolutely maddening.
I understood Art of the Deal. I understood the first time around, that we're trying to put some pressure. Show who is the big dog, and people to come to the table. But now, we're going after our allies.
We're trying to kind of separate ourselves from China. Well, we have country. Companies who decided to move manufacturing from China to Mexico.
So that they could be more aligned with the United States and North America. And now we're putting these crazy tariffs on it. This is -- this is something that, frankly, nobody in any economic circle, that I know, understands the strategy.
GLENN: Okay. So here's. And it does not seem to be consistent with what I have been talking about.
GLENN: Okay. Donald Trump has been playing many different games all at once. And the strategy that comes with Canada and Mexico.
I don't think really has anything to do with the economy.
It has everything to do with the border.
He is saying, help us with the border.
Help stop the flow of illegals. Stop fentanyl. And recognize that your cartels are terror organizations. Work with us. If you don't want to. That's fine!
You will get a tariff. He's not saying, you know, we -- you're charging us too much for our milk. And not enough for your milk.
Or whatever. That is part of it. But that's not really what he's after, I believe, on the tariffs with Canada and Mexico!
CAROL: I agree. That was the first time, we tried this.
And he got them to the table. And now we need to have sort of a different situation. Because the reality is that, as you said, he's made huge strides.
We have a tiny fraction of the encounters at the border.
So that is moving in the right direction. But things like pricing ability. Is not necessarily moving in the right direction.
And to throw this into the mix, at a time that is so precarious from an economic situation. Even if that is the ultimate outcome, it seems like the wrong tactic to take, because the situation on the economic front is so volatile. Find another path to do that! That's all I'll have to say on that.
STU: Yeah. And just to back up Carol's point on the border, I mean, we're down -- this is the lowest month we've had in at least 25 years of border crossings.
GLENN: Since 1968 or something crazy like that.
STU: Yeah. The only other close month was April 2017. Right? After Trump came in the first time. But that was much more about just tone, and it did slow things down.
This seems to be backing up with action.
And, you know, I -- I tend to agree on the tariffs with Carol here.
GLENN: Yeah, I'm against tariffs. I'm for even playing field tariffs.
STU: But, again, and that is defensible logically. Not what's happening with Canada, with being in agreement. There's no tariffs.
It was his agreement. He designed it. And now he's putting the tariffs on.
GLENN: I know.
CAROL: That's going back with the surgical part, if it was something very specific, I could understand. But across-the-board, at these levels, seems really insane at this point.
