Taxation is theft, but inflation may be even worse. Why? Carol Roth, financial expert and author of ‘The War On Small Business,’ tells Glenn that inflation is a PERMANENT thievery that robs you of EVERYTHING you’ve worked so hard to accomplish. Plus, today’s 9.1 percent inflation was ENTIRELY avoidable, if not for the disastrous central-planning policies enacted by today’s Federal Reserve. ‘It’s just so, so frustrating and angering,’ she says.
Below is a rush transcript that may contain errors
GLENN: Carol Roth is a friend and friend of the program. She's the author of the book, The War On Small Business. She's a -- in her words, a recovering investment banker, worked on Wall Street for quite some time. But sees things from Main Street, and can explain things to Main Street as opposed to everybody else, who I just think talks about Wall Street stuff. And that doesn't matter to the average person. Unless you can break it down, and explain it.
Carol Roth, welcome to the program. Hi, Carol.
CAROL: Hi, Glenn. How are you doing?
GLENN: Good. Good.
I am -- do you agree with me on Sri Lanka? You've been following that I'm sure.
CAROL: Yes. I don't know if you know this, but Sri Lanka has an ESG score of 98. So good for them, that really worked out super well.
GLENN: Yeah. I know. Yeah, yeah, I know. So we have a couple of things I want to go through. First of all, the CPI, this is the Consumer Price Index. The inflation number, is at 9.1.
The -- I loved your tweet the other day. Let me see if I can find it. You said, first, there will be no inflation. Then inflation is transitory. Inflation is good for you.
Inflation only hurts the rich. Inflation is the consumer's fault. Inflation is greedy business' fault. Inflation is Putin's fault.
Inflation is backward looking. And your last one, bread lines are a great way to meet people. The latest is, it's backward looking. That's what the White House came out and said, those are old numbers. But they didn't say that the new numbers would be better.
CAROL: I mean, backward-looking. Forward-looking. Up, down, and in circle. Whichever way you're looking. This is something that is affecting all of our lives. You know, I was thinking about taxation. And how taxation is a theft.
But it is a one-time theft. It's a one-time theft of your earnings. Inflation is permanent theft. It permanently steals your ability to purchase goods and services. The wealth that you created.
Everything that you worked hard to earn. And saved. To ever
And this is what we're seeing. And, you know, while the 9.1 percent, you know, wasn't necessarily a surprise, it is still really shocking to see it on paper. And as you and I have discussed before. You know, these are the manipulated numbers. These are the formula changes that have happened, a few times since the 1980s. If you looked on this.
You know, how it would have been on an Apples to Apples basis. To the 1980s. It's probably about double that. So this is theft from the American people. By central planning. That was completely avoidable.
And it is just so, so frustrating and angering.
GLENN: So they -- they said, I read an article early this morning, that talked about, there's a possibility, that by the end of the month, the fed is talking now about raising it another point. Another point.
And you gave me a stat a while back. Because people don't think this. Our debt has interest attached to it.
GLENN: And when we go out as a nation, for a trillion dollars, we have to pay interest. And you gave me a stat for every one point added, it adds to our debt and deficit, how much?
CAROL: Okay. So this is not a direct line. But basically, think about this. We have about, you know, a six to seven-year average on our debt. Which means that our national debt is constantly being refinanced. And as we take on new debt, we have to go out and pay for that at new rates. So whether you're refinancing it, or you're taking on a new debt. For every $1 trillion, that we either refinance or take on a new debt, that will be an extra 100 billion dollars. That is added to our interest service on the debt. So stuff we've always paid for.
It's not like when the fed's fund rate goes pick up. It automatically increases the debt, but it does trip through intervals through to the ten-year yields, and the three-year yields, and the two-year yields, which is the way that we have to finance our debt, and what's paid for.
GLENN: Right. So if we did -- have to redo five trillion dollars in our debt, which is not unusual.
If we had to buy and refinance another 5 trillion on our debt, that would add a trillion dollars' worth of debt. Would it not?
Because we've gone up two points. Or we will have gone up two points.
MEGAN: Yeah. That's correct. Yes.
GLENN: Yeah. Holy cow.
CAROL: Yeah. The projections.
GLENN: At what point -- at what interest rate --
CAROL: I was going to say, if you look at the CBO projections. They project out into the future. And the numbers in terms of the debt, and what we'll be paying on it in the future.
And they're using conservative numbers. They're not even expecting these fed rates, would absolutely blow your mind.
It becomes the largest item, that the government has to pay for, which obviously takes away spending from other areas. And/or increases your taxes.
GLENN: Unless you're using modern monetary theory, which we are now basically using, modern monetary theory. Which means, you can print whatever you want. The government doesn't have to worry about it.
But that's impala -- I mean, they said it in Sri Lanka. They're using modern monetary theory. And it's wiped them out. Wiped them out.
CAROL: Yeah, this is basically the concept of what's happening here, in terms of our liabilities.
They're trying to take a dollar from your left pocket, move it to your right pocket. And go, oh, look. You have a new dollar. You know, that's not the way any of this works.
And we're all feeling the effects of this fantastical buy-in to magic money tree, aka MMT, Modern Monetary Theory. The idea that just because you have the printing press, that you can keep printing money, without having a subsequent effect on the that are. You know, the money is supposed to stand for productivity. You earned this. This is a stable representation of your productivity.
If you double or triple or quadruple the amount of -- of those dollars, without increasing productivity, then each one of those, in turn, is worth less. And that is what is happening, and that's why the value of our dollar is being eroded. Go back to that 1970's Saturday Night Live skit with Dan Aykroyd, pretending to be Jimmy Carter. You know, we'll all be millionaires. And we'll be driving around in cars, that cost, you know, $20 million. So it starts great from a top line standpoint, until you kind of get into it.
GLENN: Right. Okay.
So most people put their money in their IRA, and until they get older, they don't even look at it.
And that's probably a good thing, when you're dealing with the stock market. You just leave it in. And it has its ups and downs. And you start looking at it, when you're maybe 50 or 60. And you're like wait a minute. And start to make sure that it's secure. Because there's not a long horizon, that you're looking at.
What's happening to people's 401(k)s, right now, and what can they do?
CAROL: So there was a research study that I picked up, that came out. And they said, from the beginning of the year to June of this year, people have lost $3.4 trillion in their retirement funds, between 401(k)s and IRAs. This doesn't include any other money that may have been in the market. And this is, you know, a horrendous situation, that has been, you know, completely fueled by fed policy. Really going all the way back to the fed chair Alan Greenspan, who decided, he was going to never let the market fall too much, without having some intervention. Then in the Great Recession, financial crisis, Ben Bernanke took that, put it on steroids. And Glenn Powell and his group have done, has been completely crazy. And we are living through these crazy boom-and-bust cycles. I'm sure most of you have noticed that over the last several decades, things are very different, than they were in the decades before. You know, more of these huge booms and busts. And the reality is, that the people who are already wealthy and well-connected, who have that -- that long-term staying power.
They don't mind this at all, because they benefit when everything goes up, and then when everything goes bust.
And, you know, you as -- you know, as somebody who is panicking, and not sure what to do, you take your money out of the market. Or perhaps, you know, in the great financial -- the Great Recession, financial crisis, your home is foreclosed on. You know, all these things have been, and they fall on the shoulders of the little guy.
And then these -- you know, I call them vulture capitalists, come in. Well-capitalized, buy everything up, at pennies on the dollar. And then are positioned for the next boom cycle of interference.
And this is just an epic wealth transfer. It's been happening on an accelerated basis for decades and decades, and is the outgrowth of just this just horrible central banking experiments, that have gone wrong. And has been a complete menace to society, and to the wealth creation opportunities for the average American.
GLENN: So what do people do?
CAROL: So if you can --
GLENN: I think -- I think we're losing the -- I think we're losing the idea of retirement for a lot of people.
I just -- I don't think that retirement is going to be a thing of the -- of the near future.
CAROL: Yeah. Yeah. Certainly not at the ages, that I think people perhaps were expecting. Because you don't know what's around the corner.
This is where I encourage everybody to talk to their financial adviser. Because each person's scenario is so different. And depending on your time frame, you know, because of these boom-and-bust cycles that are caused by fed and central planning, you know, timing is really important. You know, depending on when it is, you decide to change your portfolio structure.
Change everything in your life. But if you are younger, and you have that ability to have the staying power. You want to do the same thing, that the well-capitalized people are doing. And wait for those bust cycles and be able to participate, as a vulture capitalist. Even though if it's on a smaller scale. And buy low. And ride the upside to that. But you need to have that planning in place. Because we are now living in a way that is not free market. It's completely driven by this sort of externality. And that means, that, you know, timing changes. And if you're somebody who is retiring in a bad cycle, you know, you'll feel that burden on an exponential factor.
GLENN: So I have one more question for you, Carol. Let me take a one-minute break, and talk about what all of this is doing.
What's happening is the president just said, hey, you have to be able to retire. And so I believe he just guaranteed all of the union pension. So that means, I'm now paying for union pensions, if they default. Which is insanity! But, again, it's just another give away. I predicted this, I think in 2009. That the government would step in, and take all the union pensions, I guarantee it.
But that -- that means, everybody else is paying for it.
And we're struggling our own selves. I want to talk to you a bit about that. And then also, if this is what is happening here, what is all of this doing to our countries? That have to pay for things, in dollars?
Back with Carol Roth in just a second. Sixty seconds, and we're back.
Let me tell you about Car Shield. Used to be when the case was, when your car broke down. You either knew how to fix it yourself, which wasn't a lot of fun. Or you had to take a mechanic. And roll the dice. And it was going to cost you an arm and a leg. And that was even less fun. Now you can't even fix your car. Now I can't even diagnosis what is wrong with my car. You need to take it in with a guy with a computer. And the computer will diagnosis.
And God forbid, it's a chip!
Right now, you need medical insurance for your car. It's Car Shield.
The protection plan for about 100 bucks a month.
Now, it's not going to cover everything. Just like your medical insurance doesn't cover everything. All the small things. But man, when it is catastrophic, or it is a big thing, it covers more parts than ever before.
When that happens, you don't have to worry about it. You don't have to deal with the paperwork or the headaches. All you have to do is just let Car Shield know, and they'll handle all of it for you. You can count on Car Shield to help take care of you, when your car breaks down. And you're stuck on the side of the road.
Every protection plan includes coast-to-coast roadside assistance, rental car options, and trip reimbursement, at no extra cost.
So call Car Shield now. Carshield.com/Beck. Carshield.com/Beck. Or call 800-391-8888.
Save 10 percent right now. Carshield.com/Beck. 1-800-391-8888. Back in ten seconds.
GLENN: So, Carol, first of all, explain what the president did with the unions.
CAROL: So he still is running around, talking about the American rescue plan, which is, you know, hilarious. He's got absolutely nothing to hang his hat on.
So he's going back, running back, and talking about what he did in March 2021. Now, obviously, he's not talking about all the bad things that came out of that. You know, things like -- the stimulus, that caused inflation.
And raising the reporting requirements for Etsy. And e Bay. Or lowering them, excuse me, from $20,000. To $600. Because all those millionaires with $600 a pound. We need to crack down on them.
He's hanging his hat on a piece of the legislation. That was in that, that was called the (inaudible) Louis Act. And, basically, that was, we're going to -- to be the guarantor of the union pensions.
Now, we've been told that unions are very important. You know, they need to be there, in order to secure people's futures, and be there for the workers.
But apparently, they're not real good at managing the pensions. So now we need to get involved.
So he touted, this is going to impact, several million pensions. Some of the reports, I'm seeing, are downplaying that number. And saying, it's fewer.
But basically, what they did, is that there was a pension, Guaranteed Corp, and they allowed them to do some things, and change some things around, and make sure that these pensions were solvent. But what they didn't do was actually anything structural, to fix the pensions.
So just like, you know, Social Security. All of the, you know, state pensions, union pensions.
Like whatever it is, that typically has a defined benefit attached to it. It ends up being a huge drag or a huge burden on everybody. And, you know, not solvent. They just kick the can down the road. But since he had absolutely no other accomplishments to hang his hat on, this is what he was talking about. And with the part of it, that really bothered me. And why I wrote the piece from TheBlaze. Again, this is the picking of winners and losers, that we keep seeing, over and over again, with the government. And in this particular case, they're going to focus on making sure that the union folks, don't lose 40 percent of their pension. But as I just told you. You know, through June this year, they said $3.4 trillion was lost from 401(k)s and retirement funds, for other Americans who aren't affiliated with the unions. So that to me, seems again, just this government picking of winners and losers. And certainly, if you're going to do that. You would think, that wouldn't want to be one thing you want to brag about. Maybe you want to do that on the down low. But, you know, he's out there touting that as his accomplishment.
GLENN: All right. Carol, we will we have to cut you loose. I have to get back to an Ohio story in just a second. Would you come back?
I want to -- we are crippling nations all over. Especially emerging nations.
They are going to be starving to death soon. Some of them. And they have to pay their own debt back in dollars. Dollars are becoming more expensive for them. The world is going to hate us soon, I fear. We'll talk about that, when you come back. Thank you so much, Carol.