America First - Nicholas J. Fuentes - March 31, 2016


Socialized Medicine and Flat Tax | The Nicholas J. Fuentes Show Episode 5


Episode Stats


Length

39 minutes

Words per minute

184.73

Word count

7,300

Sentence count

461

Harmful content

Misogyny

2

sentences flagged

Hate speech

6

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

In this episode, Nicholas Fuentes is joined by Lars Lahnroth to discuss the need for universal health care in the United States. They discuss the problems we have with our current healthcare system and how we can fix it.

Transcript

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Misogyny classifications generated with MilaNLProc/bert-base-uncased-ear-misogyny .
Hate speech classifications generated with facebook/roberta-hate-speech-dynabench-r4-target .
00:00:05.000 I am Nicholas J. Fuentes.
00:00:07.000 You're watching the Nicholas J. Fuentes Show.
00:00:10.000 Joining me today is Lars Lahnroth to discuss universal health care.
00:00:14.000 Lars, do you want to jump in with your claim?
00:00:17.000 I certainly would, Nick.
00:00:18.000 So, America, we're one of the most rich nations in the entire world.
00:00:23.000 We have countless achievements, we have huge media empires within our borders.
00:00:28.000 But the health care system we have does not live up to our name.
00:00:34.000 We spend 18% of our GDP on health care, and we get very little in return.
00:00:39.000 When in a recent study, we placed 34th in life expectancy and we are the largest spender in healthcare by 6%.
00:00:49.000 It is an outrage that we have a system that is so expensive, but we still don't get the quality that we need to actually, we don't get the quality healthcare that we deserve for spending so much money into it.
00:01:08.000 It's just not right that we spend so much and really get so little.
00:01:13.000 Okay, well, I don't disagree with you there that our healthcare system is broken.
00:01:16.000 Where I do disagree is what is the solution to solve it?
00:01:20.000 And also, you are coming from the perspective that healthcare is a right, yes?
00:01:25.000 Yes.
00:01:26.000 Healthcare is the right of all human beings, actually.
00:01:28.000 Everybody.
00:01:28.000 Okay, I'm hearing a lot of the Bernie Sanders talking points.
00:01:31.000 Now tell me, why is healthcare a right?
00:01:33.000 Well, healthcare is a right because you need it to survive.
00:01:37.000 If your appendix bursts, then you need to go to the doctor and get that checked out, or you're going to die.
00:01:43.000 And when you have this option where, if you want to keep on breathing, that you need this service, it should be guaranteed as a right to all people.
00:01:55.000 If you are not going to be able to live if you don't get this checked out, or if you need it to be able to live a healthy life, I think you need to provide that to all human beings.
00:02:07.000 Okay.
00:02:08.000 Well, there is something that I agree with.
00:02:10.000 I think it is our Christian obligation to provide the less off, the worst off among us with health care.
00:02:16.000 I believe that.
00:02:18.000 People should not suffer without health care.
00:02:21.000 You know, there's this common argument by the left that we don't want people dying in the streets.
00:02:26.000 Nobody wants people dying in the streets.
00:02:27.000 What we do disagree with, where I come from, is that health care is not a right.
00:02:32.000 And that's because you have to separate positive and negative rights.
00:02:35.000 Nobody disputes that you need health care to live.
00:02:38.000 But you also need food to live.
00:02:39.000 You also need water to live.
00:02:41.000 You also need shelter to live.
00:02:42.000 You need a national defense to live.
00:02:44.000 You need many things to live.
00:02:46.000 And these are all positive rights.
00:02:47.000 The government doesn't provide food and water and all these things.
00:02:51.000 They insist in that.
00:02:52.000 Well, of course, they assist, but it's not a positive right.
00:02:55.000 And the reason for this is because in our Declaration of Independence, in the spirit in which our Constitution was written, was that we had negative rights, that we are endowed by our Creator with unalienable rights, that among these are life, liberty, and the pursuit of happiness.
00:03:09.000 And what negative rights mean is that we have a right essentially to be left alone, that people cannot take positive action to kill us.
00:03:16.000 And the difference between positive and negative rights is that when you have positive rights, you have to infringe on other people's negative rights.
00:03:23.000 So, you're looking at the American founding, and it's inspired by John Locke's Life, Liberty, and Property.
00:03:28.000 Now, you're looking at health care services, food, water, all things that are necessary for life, which would be positive rights in your vision.
00:03:35.000 But to deliver water, to deliver food, to deliver health care, these are services rendered.
00:03:41.000 And for you to have a right to someone else's services, that in essence makes them a slave.
00:03:47.000 If you are alone in a room and there's a doctor and you're sick, he has to treat you because it's your right.
00:03:52.000 But does that not infringe on his negative rights to?
00:03:55.000 To not save you?
00:03:56.000 But you will not be able to pursue life, liberty, and the pursuit of happiness if you're dead.
00:04:01.000 And if you are not able to get things checked out in an affordable and efficient way, then what is the point of living?
00:04:09.000 What is the point of living if it can be taken away so fast without having the ability to stand up and say, I need to get this checked out and I don't have the money.
00:04:21.000 I cannot go bankrupt for my life.
00:04:25.000 Because I think that 63% of all personal bankruptcies in the United States are caused by medical related expenses.
00:04:33.000 And I think that highlights the fact that our health care system is charging people so much that they are going bankrupt, that they are not able to support their family, and they have to become homeless.
00:04:48.000 I don't think that's right for our government not to stand up and say, these people are struggling, we've got to help them out.
00:04:55.000 Well, and here, I'm glad you brought that up.
00:04:57.000 Now, I can't tell you what the meaning of life is, what the purpose of living is.
00:05:01.000 I would point out, I would note, however, That a young idealist, similar to you, a leftist, by the name of Losev Vasarinovich Jagashvili, otherwise known as Joseph Stalin, said that if you cannot pursue happiness, he made the same argument that you just did that how could the West be the land of the free and the home of the brave?
00:05:21.000 How can they pursue happiness if they don't have health care and food provided by the state?
00:05:25.000 And that is where I disagree.
00:05:27.000 I don't think that health care is a right of all people.
00:05:29.000 I think, however, it is our obligation, our moral obligation, to help our brother.
00:05:35.000 And we can do this.
00:05:36.000 Voluntarily, not through government.
00:05:38.000 And that's something that Bastiat, Frederick Bastiat, a French economist in the 19th century, he made it a point in his book called The Law.
00:05:45.000 He said that just because we object to something being done by government, classical liberals, doesn't mean we object to it being done at all.
00:05:52.000 So that's why, in my opinion, our healthcare system is broken.
00:05:56.000 Everyone should have healthcare.
00:05:58.000 The solution is not to get government further involved.
00:06:00.000 You're looking at rising healthcare costs, and why is that?
00:06:04.000 It's because 50% of all healthcare spending in this country.
00:06:06.000 Is by the government, by a third party who doesn't know the needs of the patient and doesn't know the costs of the provider.
00:06:12.000 So, would you then argue that it is the government's place when they've been slowly eroding one of the greatest healthcare systems in the world?
00:06:21.000 Well, I think that I want to go back to your point on comparing me to Joseph Stalin.
00:06:26.000 I think that that's kind of an unfair thing to say because he's a man who murdered millions, or I'm not sure the actual number, but you're comparing me to a murderer. 0.66
00:06:36.000 And I think that even, I think he was doing that to.
00:06:41.000 Get people to support the communist cause.
00:06:44.000 But I think that we cannot let people go bankrupt for trying to take care of themselves.
00:06:51.000 It is, I think it's against our best interests not to take care of our people.
00:06:59.000 It's just one third of our healthcare spending is unnecessary.
00:07:05.000 They're unnecessary procedures because our free market healthcare system puts profits above people.
00:07:12.000 And I think that we cannot allow doctors to have.
00:07:16.000 An interest as such as profit in the business of taking care of people's lives.
00:07:21.000 Why do you think that we can't have profit in the business of taking care of people's lives?
00:07:25.000 Why do you think that health care is different than any other industry?
00:07:28.000 There's profit in providing food, there's profit in providing water.
00:07:31.000 You go, and there's an example that the left likes to use of Flint, Michigan, where the government managed the water.
00:07:37.000 But you look at private water, Ice Mountain, Aquafina, pure fresh water, readily available across the country.
00:07:44.000 That's expensive.
00:07:45.000 In 7 Eleven, Marianas. 0.99
00:07:46.000 A whole lot is more expensive than tap water.
00:07:49.000 And in most places, it is.
00:07:51.000 Just as good as the privatized version.
00:07:53.000 The point is, however, though, that I don't think you can single out the healthcare industry as something special and above other economic and market conditions as being excluded from the profit motive, that it doesn't work there.
00:08:05.000 I think the difference is that healthcare is something you need to survive.
00:08:10.000 If you have, let's go back to the appendix thing, if your appendix bursts and you need to get that taken care of, they can charge you whatever they want.
00:08:19.000 Because if you don't get that checked out, you're going to die.
00:08:22.000 So I think that, yes, They're very similar things.
00:08:26.000 You need water and food to survive.
00:08:28.000 But when you need it once, it is much more different because they have a lot of other expenses that can be narrowed down if we have a universal health care program.
00:08:40.000 They can better negotiate on the behalf of the people, not for the behalf of the doctors who want to charge more.
00:08:48.000 Now, I'm not saying all doctors want to charge more.
00:08:50.000 There are many good doctors out there, but there are some that get the degree debt to them.
00:08:55.000 Well, now you brought up that the government would be the best solution to apply universal health care to all the people because what?
00:09:02.000 Because it would be cheaper.
00:09:03.000 Now, the reason that health care costs have been rising in the past 50 years with Medicare and Medicaid is exactly because the government is involved too much.
00:09:13.000 And this is a little diagram that Milton Friedman illustrated, and he said that the most efficient economy, the best for consumers, the best for producers, and the best for the overall health of the economy, is when consumers who know their own tastes and preferences are spending their own money for themselves.
00:09:29.000 That's called spending in the first degree.
00:09:31.000 In that, if you go to Juul Osco and you have a taste for an apple, say, you're going to look for the best apple for the cheapest price.
00:09:37.000 And that way, that will drive costs down.
00:09:39.000 You have competition in the marketplace.
00:09:41.000 And overall, the maximum output will be met by the lowest price, what the market will bear according to scarce resources.
00:09:47.000 Now, when you have the government involved, government bureaucrats, government sponsored insurance agencies, insurance agencies paying for the doctors, and you involve all these other third parties spending other people's money, taxpayer money, On other people, you're not going to get the best product and you're not going to get it for the cheapest price.
00:10:06.000 Well, Nicholas, look at the nations in Scandinavia, in Europe.
00:10:10.000 Most of them have universal health care programs.
00:10:13.000 They do.
00:10:13.000 And you don't really see that problem really full out there.
00:10:16.000 They have, their health care system is way better than ours.
00:10:20.000 We have 34th in life expectancy, 44th in efficiency by Bloomberg.
00:10:29.000 Our system is plagued with inefficiencies because we have the free market system involved.
00:10:35.000 I don't think the free market system should have any place in the healthcare system.
00:10:40.000 I think weighing people's lives with a monetary figure, I don't think that is worth it.
00:10:47.000 I don't think we can judge a person's life by a set sum of money.
00:10:52.000 So I think it's, I don't know.
00:10:55.000 What do you say?
00:10:55.000 Well, you brought up Scandinavian countries, and it's interesting that you brought it up.
00:10:59.000 They actually, in the Scandinavian countries, what you see in Denmark, in Sweden, in Finland, and even in Canada, is you see Thousands of people every year that leave their country to purchase health care in countries like the United States where the health care is privatized, where they can pay for better quality.
00:11:16.000 What you see in places like Canada is wait times so extraordinarily high that people have died waiting to get health care.
00:11:23.000 There's a famous conservative, he's on YouTube, he has a podcast called Louder with Crowder, Steven Crowder.
00:11:29.000 He's from Canada, he was born and raised there, and his mom actually died waiting to get the health care that she needed.
00:11:35.000 And that's why he's so conservative on this issue, because he's seen firsthand.
00:11:39.000 What happens when the market is not allowed to function?
00:11:42.000 Because what liberals, Bernie Sanders and many others, don't seem to understand is that there is a scarce amount of resources.
00:11:49.000 Not everyone can have everything.
00:11:52.000 And when you open it up to everybody and say everyone gets this, everyone gets that, and you go back to the different degrees of spending of government bureaucrats and insurance agencies spending other people's money, taxpayer money, on other people, constituents, what you have is highly inefficient spending.
00:12:06.000 You said a third of all health care spending is unnecessary.
00:12:09.000 Why is that?
00:12:10.000 It's because of the government, because they're not looking for the best quality product for the cheapest price.
00:12:15.000 And when you have that, you have enormous waste.
00:12:17.000 You look at the Veterans Association, where people are calling the suicide hotline from the Veterans Association.
00:12:24.000 Or the Veterans Affairs Administration, they're calling the suicide hotline and they don't pick up.
00:12:28.000 And it's because that is a socialized system in action, because they don't have enough resources to meet the demand.
00:12:34.000 You cannot cancel out the laws of supply and demand because healthcare is special and everyone needs it.
00:12:39.000 Well, I think we should have a two tier system a system where they have socialized healthcare, there's also private healthcare as well.
00:12:47.000 Because that would allow the government to take care of the most expensive services.
00:12:52.000 And then the private ones can take care of the ones that are necessary and that need.
00:12:57.000 Action very fast because there will be very little wait time because it is a you spend the money and then you get the service.
00:13:04.000 So I think we should have a two tier system because that would eliminate that.
00:13:08.000 If people really are willing to put up that much money and to get the service now, I think it's just like Netflix.
00:13:14.000 Like, you can go wait till a showing of a movie or you can watch it on Netflix.
00:13:21.000 So I think that having a two tier system would be best because you get both best of both worlds.
00:13:28.000 Well, the problem I think with that is two parts.
00:13:30.000 One, because it's immoral, and two, because it's impractical.
00:13:33.000 I think it is immoral, and James Madison said this.
00:13:35.000 He said that charity will be no part of the legislative duty of this government.
00:13:39.000 And what that means is that charitable organizations are encouraged in America.
00:13:43.000 America was founded as a civil society based on strong civil institutions the church, the community, the local government, the town hall, and not the federal government.
00:13:53.000 And that's what libertarians are opposed to number one, the management from Washington, D.C., that makes it impractical, but two, that it's immoral.
00:14:01.000 Immoral, not amoral, it's immoral because to put a gun to somebody's head and demand that they give the government money so that that can subsidize someone else's health care, because that's essentially what it comes down to.
00:14:11.000 Well, you're also getting health care from them in return.
00:14:13.000 But it's not voluntary.
00:14:15.000 But it's not voluntary.
00:14:16.000 What if I don't want to?
00:14:17.000 Well, I don't want to pay my taxes.
00:14:18.000 I don't want to pay for wars in Iraq.
00:14:22.000 Well, now you're moving in my direction.
00:14:24.000 Now you're moving in my direction.
00:14:25.000 We should move towards a system of voluntary taxation.
00:14:28.000 But so long as taxation.
00:14:29.000 It's not going to work, though.
00:14:30.000 So long as taxation is involuntary.
00:14:33.000 And we'll get to the central point here.
00:14:35.000 So long as taxation is involuntary, if one cent of my paycheck is going to help someone else, and I know this is going to sound very screw gene, it's not because I'm frugal.
00:14:44.000 I would give to charity.
00:14:46.000 You know, I would support people who need health care.
00:14:48.000 I give to the church and so on.
00:14:50.000 What I oppose is the government stealing money from people to give to other people.
00:14:54.000 That by itself is immoral.
00:14:56.000 And the reason for this, and Thomas Aquinas pointed this out in the Middle Ages, he said that, I forget the exact quote, but essentially because the money is stolen, because the government has essentially stolen it from people, saying that insofar as you don't pay your taxes, We will arrest you and throw you in jail with the police.
00:15:13.000 It's stolen goods that they're redistributing.
00:15:16.000 And the fruits, the way that they got the fruits of other people's labor is immoral and it makes any application of them immoral in practice.
00:15:24.000 So if they're giving health care from money that they stole, that's not a moral practice.
00:15:29.000 And I know Bernie Sanders is the white knight that's going to keep people from dying and he's going to capitalize on the greedy Republicans who want to keep their paycheck.
00:15:36.000 But what he's doing is he's stealing money to give to other people.
00:15:40.000 If you want to be charitable, Voluntary organizations.
00:15:43.000 Quite frankly, I think that it is moral to allow people to go bankrupt and raise our taxes.
00:15:49.000 But wait, we start in the middle of the picture.
00:15:52.000 How is it my responsibility?
00:15:54.000 How did I allow a free, sovereign individual to go bankrupt?
00:15:57.000 If Joe Schmo over here doesn't have a job and he goes bankrupt, how is that my fault?
00:16:02.000 Well, I don't think it is your fault.
00:16:05.000 I think it is the fault of the government for not taking care, not standing up for people who are going bankrupt.
00:16:12.000 It's not the people who are poor who are getting hurt by this.
00:16:15.000 It is people like you and me who are in the middle class, working Americans, who are going bankrupt because they cannot afford insurance.
00:16:23.000 I think that we need to say that health care is a necessary part of our lives.
00:16:29.000 And if we don't get it, we die.
00:16:31.000 So I think we need to stand up and say that health care is a right of all people, not just those who have money.
00:16:39.000 All right.
00:16:39.000 Well, that's all the time we have now, so I guess we'll close it off with that.
00:16:44.000 Thank you for coming on the show.
00:16:52.000 I'm Nicholas J. Fuentes.
00:16:53.000 You're watching the Nicholas J. Fuentes Show.
00:16:56.000 Joining me today is Killian LaClanche to talk about progressive taxation.
00:17:00.000 Killian, do you want to start off with your claim?
00:17:02.000 Well, I think that since you have a new tax policy, it would be best for the American people to understand what the flat tax really is.
00:17:10.000 So why don't you go ahead and start?
00:17:11.000 Yeah, sure.
00:17:12.000 Well, so the flat tax is when you have an equal rate of taxation for all income brackets.
00:17:18.000 Whereas the present system, Breaks people up by how much income they earn.
00:17:21.000 For example, the top marginal tax rate is 39.6%, and it gets lower as you go down the income bracket.
00:17:29.000 Flat tax would just have the same percentage for everyone across the board.
00:17:33.000 And is there any benefits or pros and cons that you would argue with that?
00:17:37.000 I'm just curious.
00:17:38.000 I just want to make sure that when you argue the flat tax, it's not just about simplicity, it's also about the pros and the cons that come along with it.
00:17:47.000 Well, yes, no, and I'm glad that you brought that up.
00:17:50.000 The reason I support the flat tax is not simplicity at all.
00:17:53.000 I am not one of these people that argues based on practicality.
00:17:55.000 That's the previous argument we talked about health care.
00:17:58.000 And the reason that I oppose socialized medicine and progressive taxation is not because it's impractical, not because it doesn't work.
00:18:05.000 I believe that morally both are corrupt progressive taxation and socialized medicine.
00:18:10.000 I think flat tax is the only fair way to do it.
00:18:13.000 So it's not just for simplicity.
00:18:15.000 The tertiary effects are, of course, simplicity, are, of course, efficiency and economic growth.
00:18:20.000 That's been proven throughout history that low flat tax rates.
00:18:23.000 Produce higher economic growth, even in theory.
00:18:25.000 And empirically, you look at the Laffer curve, you look at Hong Kong or Liechtenstein, lower flat tax rates work.
00:18:32.000 Morally, however, I don't see a justification for someone that's making more money to pay a higher rate of taxes.
00:18:38.000 Obviously, people that make more money will pay more taxes under a flat rate system, but they should not pay a higher rate.
00:18:44.000 That's not fair.
00:18:45.000 I see what you're getting at.
00:18:47.000 But when you said that it produces an economic growth with the flat tax system, just to crunch some numbers real quick.
00:18:56.000 There are 800,000 people in America currently who are accountants and auditors, part of the IRS and part of individual firms, you know, HR Block.
00:19:05.000 And the problem with introducing that flat tax is the simplicity and the fact that you are cutting out that 800,000 people.
00:19:14.000 Now, of course, you can argue, well, these people shouldn't even have a job.
00:19:19.000 That's correct.
00:19:20.000 And I kind of disagree because part of the American economy and its growth is the fact that sometimes we put money into inefficient things.
00:19:29.000 I mean, let's take a look at the military, right?
00:19:32.000 We're putting a bit too much money into the military in current days.
00:19:37.000 We are the number one.
00:19:39.000 We're straying a little bit here from progressive tax, right?
00:19:41.000 That's true, that's true.
00:19:43.000 But I think that it does prove a good point as to why the progressive tax exists, as to maintain economic growth.
00:19:51.000 I mean, let's look at a contemporary example Latvia, okay?
00:19:55.000 Latvia introduced the flat tax in 1997 and in 2005 increased the tax to 25%, as well as in 2009 dropped it down because of economic disadvantages that came along with the flat tax.
00:20:11.000 Now, every time that they changed the flat tax, there was a sudden spike in GDP.
00:20:16.000 And as well as a sudden spike in tax revenue.
00:20:18.000 However, if you look at it in a long run situation, every single time it went back down to a lower percentage.
00:20:25.000 Now, before the flat tax, it was at about what we have right now in tax revenue, percentage wise of GDP, which is 17%.
00:20:33.000 So, when you introduce the flat tax, the problem here becomes the lack of money that goes into the government and the loss of jobs in the accountant and auditor business.
00:20:46.000 Which then requires a change in the economic system of America.
00:20:52.000 You have 800,000 people who need to change the way that they basically work for a living.
00:20:58.000 And while in the long run they can eventually adapt, but in the short run there is pain.
00:21:05.000 And sometimes that pain becomes problematic.
00:21:08.000 So, why I think that the progressive tax still should be existent is because of the fact that it keeps the economic stability with the American economy.
00:21:19.000 Society right now.
00:21:20.000 Okay, well, we bounced around a lot throughout that, so I'll try to address all of your points as they came along.
00:21:26.000 Now, for starters, the argument that we need a progressive tax rate to keep 800,000 accountants and IRS people employed, I think, is a little bit silly, especially when you consider that given that the top effective marginal tax rate throughout, I think, the past 60 years, people talk about this, Bernie Sanders talks about this, the top marginal tax rate under Eisenhower is 90%.
00:21:49.000 However, and it's changed many times throughout history.
00:21:51.000 When Reagan started, it was 70%.
00:21:53.000 When Reagan ended, it was 27%.
00:21:54.000 Right.
00:21:55.000 Now it's 39.6%.
00:21:56.000 The effective tax rate, the effective top marginal tax rate, has always leveled between 35 and 40%.
00:22:02.000 Now, if you're looking at the amount of wealth that the top four or five or the top three quintiles of income earners have and how much money would be injected into the economy, they were spending, say, 40% on taxes and suddenly they got a 20% tax cut to a 20% flat tax.
00:22:20.000 Even Ted Cruz talks about a 10% flat tax rate.
00:22:23.000 Say, just for the sake of argument, that we had a 20% revenue neutral tax rate across the board.
00:22:29.000 You're seeing that 20% of income for all the top income earners injected into the economy.
00:22:35.000 And not just spending.
00:22:36.000 Keynesians are obsessed with consumer spending, but in investment spending.
00:22:40.000 They're able to save that money.
00:22:42.000 Exactly.
00:22:42.000 They're able to save that money, to invest that money, to spend that money.
00:22:45.000 And when you look at the economic growth that would result from all this new capital being freed up for the economy, For private actors in the economy to spend and save according to their own prerogatives, it far outweighs the 800,000 people that are going to lose their jobs.
00:23:00.000 Now, secondly, you said that it was a good thing that we spent our money on something that's a waste.
00:23:05.000 Now, I would beg to differ, and you also brought up how short term pain is problematic.
00:23:10.000 These are all kind of related, and that Keynesians in general believe that there should be market inefficiencies in certain places to mitigate the business cycle, the Austrian business cycle.
00:23:21.000 Yes, of course.
00:23:22.000 And I tend to disagree only because.
00:23:25.000 The market always reconciles.
00:23:28.000 You're always going to have a correction back to equilibrium.
00:23:31.000 Right.
00:23:31.000 We see this in the Depression and the Recession.
00:23:33.000 Exactly.
00:23:33.000 But the problem here, if I may cut in, may I cut in?
00:23:36.000 Yeah, sure.
00:23:37.000 The problem here is that that takes time, and it always takes time.
00:23:42.000 It does.
00:23:43.000 And with that time frame, people don't like to deal with pain.
00:23:49.000 People don't like having a loss of revenue.
00:23:51.000 People don't like losing their jobs.
00:23:54.000 And what ends up happening is that these people get demoralized.
00:23:57.000 And demoralization, especially in a consumer based economy in America, is not what we want.
00:24:04.000 So when you argue that in the long run it does fix itself, I just want to make it clear that.
00:24:09.000 Sure, that's true.
00:24:10.000 In capitalism, it always fixes itself.
00:24:14.000 But it's not about fixing itself 10, 20 years in the future.
00:24:19.000 It's about making sure that the economy stays on track.
00:24:23.000 Okay, sorry about that.
00:24:24.000 Well, no, sure.
00:24:24.000 I'll address in two parts because I want to get to the progressive tax rate and tax schemes, not just in the pragmatic way, but in theory.
00:24:31.000 But I'll address this argument about making the economy stable in the long term.
00:24:36.000 What we've had is stability, right?
00:24:39.000 60 years, I mean, minus the 1970s where you had stagflation, minus the Great Recession, what we've had is stability.
00:24:45.000 And what is that generated by?
00:24:47.000 It's generated by a world economy that has been pumped up by fiat money and central bank policy that has lowered interest rates, that introduced quantitative easing, devalued the currency.
00:24:59.000 And what is the effect of this?
00:25:00.000 You have countries like China with a 200% debt to GDP ratio.
00:25:04.000 You have Japan with a 200% debt to GDP ratio.
00:25:07.000 You have America, $19 trillion in debt.
00:25:09.000 You have Europe, negative interest rates.
00:25:12.000 It's become so bad, the bubble that we're inflating to mitigate the short term pain.
00:25:17.000 It has become so bad that we are sitting on the biggest debt bomb in the history of the world.
00:25:22.000 And so much so that every mainstream economist projects that there will be a depression in the next five to ten years.
00:25:29.000 Almost every major economist will tell you that this bubble cannot be sustained.
00:25:33.000 You're looking at China where the growth is rapidly declining.
00:25:36.000 It's doing so for many reasons.
00:25:37.000 One is debt spending, but other reasons are because they lie about the statistics.
00:25:41.000 And when you address the short term pain by artificially pumping up The economy through all these measures that you want, through all these artificial and inefficient mechanisms, what you have, and I'm not saying that the economy always fixes itself, I'm saying the economy always corrects itself, and that you cannot trick supply and demand forever.
00:25:59.000 That this is a grand folly, and Ludwig von Mises talked about this.
00:26:03.000 He was an Austrian economist in the early 20th century.
00:26:07.000 He noted something called the crack up boom, which basically says that the Austrian business cycle goes up and down and up and down, and if you leave it alone, laissez faire, you will have a linear.
00:26:17.000 Path of upward growth.
00:26:19.000 Very slow, very flat, stable, but you're going to have short term rises and falls.
00:26:25.000 He noted, however, that if you have the involvement of the central bank and big government spending, what you induce is a much longer term boom and bust.
00:26:35.000 Now we see a smaller term boom and bust cycle.
00:26:37.000 You see that with the Great Recession, with the Great Depression.
00:26:39.000 But what you talked about was something so significant, so severe, that once you start on the road to fiat money and once you start pumping up the economy, you embark on a boom and bust cycle so severe.
00:26:50.000 That the economy will not recover.
00:26:51.000 It will correct itself, but it will set us back to the Stone Age.
00:26:54.000 When the international finance system collapses because America defaults on our debt, or the Chinese economy implodes, or the European economy implodes, all of which are set to happen in the next 25 years if we don't change our course, we might not be able to recover because the social problems that that will induce will cause civil unrest.
00:27:13.000 You have to impose martial law.
00:27:14.000 Now, to get back to progressive taxation in particular, I would ask you what is just about charging people that make more money a higher rate?
00:27:23.000 Well, in all honesty, I believe that the justness of that is, and it's a classic argument, is the fact that the people in the lower income brackets don't make as much.
00:27:36.000 And when you don't make as much, you don't have as much to spend.
00:27:40.000 It's a pretty obvious statement.
00:27:43.000 But the thing that most of us tend to forget is that $10,000, which a majority of people have to live off of, is not a very large amount.
00:27:54.000 I mean, if you make $10,000 for 50 years, that's $500,000.
00:27:58.000 That's just enough to buy one house in LaGrange at an average value.
00:28:03.000 And we have people here who buy their houses and pay them off easily.
00:28:07.000 So I think we're losing the grasp of the people who struggle at the bottom.
00:28:12.000 I'm not hearing, though, why is it just to tax the rich at a higher rate?
00:28:16.000 I understand the plight of the poor, and people make less and people make more.
00:28:19.000 But why does that give you, as a voter, the right and a politician the right to impose a higher rate of taxation on their income?
00:28:27.000 Well, why does it give the right for us to decrease their taxation as well?
00:28:31.000 Because they have the right to the fruits of their labor.
00:28:34.000 Right, of course, everyone does.
00:28:34.000 That's why.
00:28:36.000 But the thing is, is that.
00:28:37.000 Except for the rich, they owe more.
00:28:40.000 They owe about as much as everyone else because they make just as much money as any other person in their category, and as well as the fact that they live off of the middle class and the lower income class.
00:28:54.000 What do you mean they live off of them?
00:28:56.000 Well, a lot of those people in the upper classes tend to own businesses or make smart investments, and granted, they deserve a lot of money for those smart investments as well as their innovation and intuitive behavior.
00:29:08.000 However, that innovation and intuitive behavior tends to work itself with the middle class's education as well as the lower income classes' blue collar work.
00:29:21.000 And because of that extra labor that they survive off of, and while it's true that they do deserve a lot of money, They need to also make sure that the people that they are surviving off of, the reason why they have as much money, is also educated as well as able to continue to improve their quality of life.
00:29:45.000 I think you see it the wrong way.
00:29:47.000 I don't think anyone is dependent on anybody, but I think that when you look at the middle class, they're not living off of people that make more.
00:29:54.000 Those people provide them with jobs.
00:29:56.000 And the whole point of capitalism.
00:29:58.000 And not the government taking people's money through coercion is that it's voluntary exchange.
00:30:03.000 So it's not about whether rich people deserve more money and it's allocated to them or it's designated to them.
00:30:08.000 It's that people give them their money because they like the services that they provide.
00:30:13.000 And then the argument still continues why is it that people who make more money owe anybody else more of it?
00:30:20.000 And I'll point out some other statistics.
00:30:22.000 The top 40% of income earners pay 106% of the taxes.
00:30:27.000 The Congressional Budget Office did a study back in 2010 and they found that the top The top three fifths of people, the middle bracket, the second to top bracket, and the top bracket, they pay 106% of the taxes.
00:30:42.000 The lower two brackets, the 20% and 40%, they pay negative 9% in taxes, which means that they get more money from government transfers than they pay in for taxes.
00:30:51.000 So the whole argument that the rich aren't paying their fair share, even from that standpoint, it's not conducive to the facts, because the facts suggest that the rich aren't paying most of the taxes, they're paying all of the taxes, and then some.
00:31:04.000 Well, you do realize that the top 60% of the population is about $50,000 a year or more.
00:31:10.000 So, the fact that you're including such a broad amount of people is quite interesting that you had to include that all the way down to 50,000 because people who have less than 50,000 don't have much.
00:31:26.000 And when you start to include people, there are very few instances of people in this area, since we are living in LaGrange, that survive off of less than $50,000.
00:31:39.000 And I don't think you or I could imagine how much.
00:31:43.000 10,000, 20,000 is.
00:31:45.000 So that negative 9%.
00:31:46.000 But again, why is it right in our republic, and again, in the republic, because we're not a democracy, we're a republic, every individual is sovereign.
00:31:55.000 And the point of the Declaration of the Constitution was that we have the right to the fruits of our own labor.
00:32:01.000 And this goes back to the classical philosophical argument that God has given us our bodies and our faculties, and because we use our bodies and our faculties to produce goods and services, we have a right to the fruits of those.
00:32:13.000 Of course.
00:32:14.000 Again, what right does the government have to take more of that from people who produce more and give it to other people?
00:32:20.000 By saying that the top 60% pay all of the taxes, I meant to illustrate that the bottom 40% are taking money.
00:32:27.000 It's negative 9%.
00:32:29.000 So they're living off of the top 60%.
00:32:31.000 How is that right and just?
00:32:34.000 Because it's an equilibrium.
00:32:36.000 The fact of the matter is that the people who are the poorest of the poor in America have to prop up the people who are the richest of the rich.
00:32:44.000 And so it's an equilibrium that the top people who make the most, now granted, do they deserve to pay as much as they do?
00:32:52.000 That's a debate that honestly I have no right to debate in this.
00:32:56.000 This is a flat tax versus progressive tax.
00:33:00.000 But the fact of the matter is that the people at the top also need the poor to make sure that the poor live sustainable lives.
00:33:09.000 If you have the poor not educated, if you have the poor not able to do the work that the rich need them to do, the rich can't make.
00:33:17.000 Their fruits of labor, the products that they want to create.
00:33:21.000 And part of capitalism is to make sure that everyone grows.
00:33:25.000 And I think you can agree with that.
00:33:27.000 No, I don't agree with that.
00:33:28.000 You don't agree with that.
00:33:29.000 You think that the poor should decrease in quality of life and the rich should increase in quality of life to increase.
00:33:34.000 Capitalism is about freedom.
00:33:34.000 I believe it.
00:33:37.000 And what that means is that you have the right to pursue happiness.
00:33:40.000 It isn't given to you.
00:33:41.000 So just because somebody creates jobs, creates products that people want, doesn't mean that the poor.
00:33:46.000 And I don't mean to say that the poor are just too short.
00:33:48.000 Of course.
00:33:49.000 A lot of them don't pay taxes, and the statistics show this.
00:33:51.000 A lot of them are on welfare and so on.
00:33:53.000 But they don't make enough to get a good value.
00:33:55.000 Again, this is not an argument against the poor.
00:33:57.000 The argument is that it's not the rich's obligation to foot the bill.
00:34:00.000 Okay.
00:34:01.000 Well, since we were talking so much about the justness of higher income tax, by the way, they pay about 24.7% on their effective, while the middle class pays about 19.5%.
00:34:13.000 So that's pretty equal.
00:34:14.000 Now, of course, it's 5%.
00:34:15.000 How much is that equal? 0.86
00:34:17.000 Close enough, honestly.
00:34:19.000 Does 5% out of 100 million.
00:34:21.000 Well, honestly.
00:34:22.000 In practice, no.
00:34:22.000 But in principle, yes.
00:34:24.000 But practice is what we're debating.
00:34:26.000 We're debating.
00:34:26.000 We're talking about reality.
00:34:27.000 If you're ignoring fundamental governing principles of society, and Barack Obama said this last week in Argentina, he said, let's not talk about the principles of communism and of capitalism.
00:34:36.000 Let's implement what works.
00:34:38.000 The problem with that thinking is that's how you get the Soviet Union. 1.00
00:34:42.000 And that sounds like a hyperbolic argument, but it's true. 0.94
00:34:45.000 When you ignore the underlying principles that produce the economic prosperity that we have, which is the principles of the Declaration of Economic Freedom and Individual Freedom, That's what you get the Soviet Union. 0.96
00:34:59.000 You get all these societies where they are so corrupted to the very core of how they govern, of what is right in their societies, that you have a 5% that's whatever, it's not my money, it's not right. 0.91
00:35:11.000 And I'll give you the last point, we've got to wrap things up so you can close this.
00:35:14.000 Of course, of course.
00:35:15.000 Well, one thing I'd like to just throw out there is that when you bring up that we have to realize the nature of humanity, and I'm just curious here, you believe that humans are naturally inherently selfish, correct?
00:35:32.000 I believe that individual actors act in their self interest.
00:35:35.000 That's the Bayesian axiom.
00:35:36.000 So, you know that there is charity that is deductible in your own tax income, and that's how a lot of people lower their tax bracket.
00:35:43.000 Of course.
00:35:43.000 Of course, right?
00:35:44.000 Did you know that $358 billion each year goes into charity?
00:35:49.000 That's research into cancer.
00:35:50.000 That's research. 0.88
00:35:51.000 Yeah, but more of it would be freed up if the government wasn't taking money, stealing money to give charity through an immoral way.
00:35:58.000 And we had this argument with the health care debate.
00:36:00.000 There's nothing moral about involuntary charity.
00:36:03.000 Because you vote someone in to take more of other people's money to give it to poor people, that's not a moral act.
00:36:09.000 Giving your own money is.
00:36:10.000 So I have no problem with voluntary charity.
00:36:12.000 I encourage that.
00:36:13.000 When the government takes so much money to redistribute, it encourages those people.
00:36:17.000 But no, see, the thing is that what I just said was that people voluntarily give their money so that they can lower their own tax rate and that they don't have to pay as much money.
00:36:28.000 Now, if you make a flat tax, that effectively means that you're removing deductibles, you're removing every sort of loophole, and everyone gets 20%.
00:36:36.000 Including businesses, which might I add, that affects small business growth, which is the backbone of America.
00:36:42.000 But, point is.
00:36:44.000 That's a form of demagoguery.
00:36:45.000 I mean, everyone pays taxes, and if you're looking at it.
00:36:47.000 Everyone does.
00:36:47.000 But the point is, at the spot.
00:36:48.000 The point is, at the spot.
00:36:48.000 The point is, at the spot.
00:36:49.000 The way they're so high, it hurts small businesses.
00:36:50.000 We have the highest corporate income tax in the world today, and that hurts small businesses.
00:36:55.000 It doesn't hurt Walmart, who can afford the lawyers.
00:36:57.000 A low flat tax rate benefits the poorest, the middle class, and the businesses.
00:37:01.000 But the lower you.
00:37:02.000 Benefits everybody, actually.
00:37:03.000 The lower your flat tax is, the less income in the government, which means less education, less infrastructure.
00:37:10.000 Less military spending, stuff like that.
00:37:12.000 And those are all beneficial to American people.
00:37:15.000 So you have to eventually increase the flat tax to a higher rate, which means you're affecting the smaller businesses that don't make as much money.
00:37:23.000 But, anyways, the point that I was making before was that people act in a selfish manner to self interest.
00:37:31.000 And when you remove that deductible in the flat tax, you all of a sudden remove a lot of money in that $358 billion.
00:37:40.000 Now, I have no idea how many people vote because it's their religious duty or because of their moral duty, but I know that there are a lot of people who vote, or not vote, sorry about that, who they give to charity because of the fact that it gives them a lower tax rate.
00:37:55.000 And it's just simple economics.
00:37:57.000 You want to lower your tax rate so you make more money, so you give to charity.
00:38:02.000 Now, if you put a flat tax, all of a sudden, lots and lots of those billions of dollars is gone from those charities, means less jobs again.
00:38:12.000 The only way you can counteract that is for the government to pump money in because those people who were once acting in self interest all of a sudden are no longer acting in the, I suppose, the moral, just way to propagate future growth of humanity.
00:38:30.000 So the flat tax, while it seems really good, I think, in a broad spectrum, you have to look at the individual effects of that flat tax.
00:38:40.000 And I think you have, but I think you are missing some of those key elements.
00:38:46.000 Inside of the American economy that basically keep the progressive tax as an existing thing.
00:38:54.000 So, the flat tax, the reason why it's never been implemented in America in the past 70 to 80 years is because it's just not necessary.
00:39:10.000 It's a detriment to the economy.
00:39:13.000 All right, well, I'll give you the last word because we're out of time.
00:39:15.000 Thank you for coming on my show.
00:39:16.000 It was a pleasure having you on.
00:39:17.000 Thank you so much.
00:39:18.000 It was a pleasure to talk with you.
00:39:20.000 As always.
00:39:21.000 Thank you for watching.
00:39:22.000 I'm Nicholas J. Fuentes.
00:39:23.000 This is the Nicholas J. Fuentes Show.
00:39:26.000 Join us for our next episode as I debate Michael Gilger on Donald Trump.
00:39:30.000 Stay tuned.