00:00:44.000Our bond markets are right now in a state of total disarray.
00:00:47.000As PBS reports, interest rates on government bonds are rising again around the world, making borrowing more expensive for consumers and businesses, and heightening concerns about whether governments are issuing more debt than financial markets can handle.
00:00:58.000On Tuesday, the yield on the 10 year treasury, which strongly influences mortgage rates, reached 4.8%.
00:01:07.000The five-year treasury, which is a benchmark for auto loans, touched its highest level since October 2025 at 4.55%.
00:01:13.000So, for those who don't know the bond markets, basically the way that it works is: let us say that you buy a bond and the bond returns 10% year on year.
00:01:21.000That'd be like an amazing bond, but just make the math really, really simple.
00:01:38.000So typically, that means the price that you pay for the bond and the facial interest rate on the bond, that is the bond yield.
00:01:43.000So when we say that bond yields are rising, we mean typically that the price for bonds is falling, meaning that there's not a lot of demand for bonds.
00:01:50.000You're paying a lower price for bonds, and the facial rate of interest is exactly the same.
00:01:56.000It means if there's no market for bonds, people don't want to buy bonds.
00:01:59.000Now, sometimes that's happening because people would rather invest in the stock market because things are just going awesome.
00:02:04.000Sometimes what it means is that people don't want to buy bonds because they are very nervous.
00:02:09.000That anyone is ever going to be able to pay that off except in inflated currency.
00:02:13.000It is the latter thing that seems to be happening right now.
00:02:15.000And this is having some broad spillover effect in the American economy.
00:02:19.000Mortgage rates have now hit their highest level in over a year.
00:02:22.000According to Yahoo, the average 30 year fixed mortgage rate was 6.71% this week through Wednesday.
00:02:27.000That is the highest since June of 2025.
00:02:31.000And again, all of this is happening because people, central banks, other governments, they are realizing that we in the United States are never going to stop spending.
00:02:42.000Now, I'm old enough to remember when people actually cared about this topic.
00:02:44.000In 2010, the Tea Party was very, very into this topic.
00:02:48.000But since then, we've decided the American people are either too stupid or too greedy to actually handle the reality, which is that we spend way too much money in this year's United States.
00:02:57.000Here is a chart showing the U.S. national debt as a percentage of GDP.
00:03:02.000As you can see, the actual extraordinary explosion in the U.S. national debt really begins around not the Bush administration, but the advent of the Obama administration.
00:04:05.000Both parties now agree the government is generally the solution to our problems.
00:04:09.000Neither party seems truly committed to the reality that free markets not only are fairer and better, not only do they create prosperity and innovation, but if you do the reverse, if you regulate and you tax and you welfare everything, you destroy your own country.
00:04:23.000And again, this is a sea change in the nature of American politics that has happened over the course of the last couple of decades.
00:04:29.000I'm old enough to remember when this was not the case.
00:04:31.000President Trump back in 2016 pretty famously changed the nature of the game in politics on the right side of the aisle by saying he would never touch the entitlement programs.
00:04:39.000Again, he was doing that because he was a populist, meaning it is always popular to tell people you're not going to touch the entitlement programs because people like their government checks.
00:05:09.000So, again, that was a case he made back in 2016.
00:05:12.000And now this is large scale embraced by most of the Republican Party.
00:05:15.000So much so that Alexandra Ocasio Cortez, who wants to run for president in 2028 and is, in fact, a socialist, she is looking forward to the Democrats taking Congress in this upcoming midterm election.
00:05:26.000And she was asked what she thinks Democrats would be able to do with Trump.
00:05:29.000And her first answer was maybe we can spend more on Medicaid.
00:05:34.000Is there anything you got you would think that Democrats could work with President Trump on these next two years?
00:05:39.000I know defiance is a big priority, but is there anything you think that you and that Democrats, a Democratic majority could work with President Trump on?
00:05:47.000Well, you know, maybe there's a world where we're able to restore a lot of the devastating cuts to Medicaid.
00:05:56.000And I know that many people who consider themselves MAGA rely on Medicaid and they don't deserve to suffer because of the horror.
00:06:07.000Cuts, trillion dollar cuts in health care.
00:06:10.000And so I know that the House is more than willing, should we take the majority, to pass a reconciliation bill that fixes a lot of that.
00:06:18.000Again, the reason that she's pushing that is because she believes there will be serious pressure brought to bear on Republicans to spend more money on welfarism.
00:06:25.000It's why back in the 1990s, Republicans and Democrats agreed we need to rein in the welfare state by doing some welfare reform.
00:06:31.000And now you're not even supposed to touch that stuff.
00:07:41.000If you're a business owner, would you consider a larger donation to claim a write off?
00:07:44.000A donation of a grand, 2,000 bucks, 10 grand, 15 grand that sponsors an ultrasound machine for a needy clinic, helping save countless babies' lives for years to come.
00:07:51.000Gifts are tax deductible and will reach eternity.
00:08:20.000There's tremendous corruption in our current government, not just at the top levels for years and years and years, from the Biden crime family to the Trump circle.
00:08:28.000Again, lots of people clearing the bag in those circles.
00:08:31.000But it is rampant throughout the system.
00:08:33.000I'm going to talk with Chris Ruffo later from Manhattan Institute about the kinds of welfare fraud that are occurring in places like California.
00:08:42.000When you turn the federal government into the most powerful entity on planet Earth, capable of making people rich or poor, of regulating and taxing you into submission and poverty, or of subsidizing and regulatory capturing you into great wealth.
00:09:03.000John Dillinger robbed banks because that's where the money was, and people do corruption because that's where the money is.
00:09:08.000Of course, people believe the government is corrupt because it is corrupt.
00:09:11.000No one in human history has ever worried about the corruption of a small, powerless government.
00:09:16.000Because, again, if it's small and powerless, it can't do much.
00:09:19.000When you have an overweening government that is spending $7 trillion a year, it turns out there's an awful lot of corruption.
00:09:26.000And the American people know that, but they don't want to recognize the correlation between the size of government and the size of corruption.
00:09:32.000This brings us to our third story Bernie Sanders trying to destroy AI.
00:09:36.000So let's assume that the national debt is baked into the cake, which at this point it is.
00:09:41.000Let's assume that we are very soon going to be paying more on the interest on the national debt than we are paying for our military, which is true.
00:09:47.000Let's assume that there is no desire on the part of the American public to radically inflate the currency or radically increase its own taxes or radically cut, which are usually the three ways out of a massive fiscal disaster.
00:09:59.000You either have to inflate the currency and pay people back in meaningless dollars, or you have to radically cut austerity measures, which we don't want to do.
00:10:06.000Or you have to somehow grow your way out of it.
00:10:12.000You could theoretically grow your way out of it.
00:10:14.000And this is a case that the GOP is making.
00:10:16.000You can have your cake and eat it too because we have this thing called the AI boom.
00:10:20.000And the AI boom is going to allow our economy to grow so fast that tax expenditures will go up even faster than the amount of government spending.
00:10:30.000And it's not a totally implausible case.
00:10:31.000Here's the Treasury Secretary, Scott Besant, at the G20 talking about growing our way out of this and avoiding global financial crisis.
00:10:40.000To reiterate that our message of growth, the world is awash in debt post GFC, post COVID.
00:10:49.000And the only way for us to get out of this is to grow our way out of this.
00:10:55.000And I'm confident that a lot of the leaders are very receptive to this.
00:11:02.000And again, this is the case being made by most of the smart people inside the Trump administration AI is going to radically increase productivity and efficiency.
00:11:11.000And that itself is going to allow for radical increases in the rates of GDP growth.
00:11:15.000And so, if you're talking about government spend as a percentage of GDP, you can either reduce the government spend or you can radically increase the GDP.
00:11:23.000So, the idea would be you radically increase growth rates.
00:11:25.000Kevin Walsh, who is the Fed chair, he said the same thing back in April 2026.
00:11:31.000What we call AI in a couple of years, we'll just call business.
00:11:35.000And AI is going to make almost everything cost less.
00:11:43.000If I were to step back for a minute, if I were the president, what I'd be worried about is a central bank that doesn't see any of that.
00:11:50.000A central bank that is stuck with models from 1978, governance from a prior period, and don't recognize we could be at the front end of a productivity boom.
00:12:00.000And if I were the president, I'd be worried that they might not see it.
00:13:23.000Beliefs in the immediate takeover of AI, that it's going to be better than you at everything, and that you will have nothing to add to the process.
00:15:17.000Put all of your questions about AI to the side.
00:15:18.000Just on an economic level for a second, AI is the only thing, the only thing that is currently on the horizon that allows us to, at least theoretically, outgrow the massive debt problems that we are currently incurring.
00:15:29.000Which means that Bernie Sanders, communist, immediately wants to, just like China, quash AI.
00:16:17.000I mean, I literally travel with Bowl and Branch product because I sleep better if I've got, for example, the waffle blanket from Bowl and Branch.
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00:17:38.000An old man who doesn't know what a computer is, explaining that the government should stop all of this.
00:17:44.000If the leaders of the major AI companies acknowledge that they are losing control of their extremely dangerous technology, to my mind, it is irresponsible for society to allow them to move forward and make these products even more advanced and even more dangerous.
00:18:12.000On advanced AI development and a permanent ban on super intelligence, an artificial mind smarter than any human, capable of operating independently beyond our control.
00:18:27.000Okay, so what he is actually proposing, apparently, is a ban on what he calls so-called artificial super intelligence, saying that a summer hacking spree by rogue open AI agents had revealed the dangers of the technology getting out of control.
00:18:38.000Well, again, it was then brought under control.
00:18:41.000And he said, I understand that people will call me a luggage.
00:18:44.000That they will call me an alarmist, but I would rather be called an alarmist than somebody who fell asleep at the switch.
00:18:49.000Dude, you're falling asleep in the middle of your oatmeal.
00:18:52.000The idea that Bernie Sanders is going to restrict innovation, this person who has not developed a useful thing his entire life and has been, as I have said one million times at this point, a leech on the ass of American society is astonishing.
00:19:27.000But what you are seeing is Republicans who are trying to do a routine where they both support data centers, but also are trying to find ways to rhetorically oppose data centers.
00:19:35.000Because again, populism is the idea that the people are always right.
00:19:38.000When in reality, it turns out the people made tub thumping by Chumbawamba a hit.
00:20:18.000But again, The, the kind of, we have to, we have to humor everybody in their opposition to data centers is a bad idea because what you're actually doing is you're incentivizing people to stop the development of the technologies that theoretically could save the economy.
00:20:31.000So our politicians keep telling us that actually the way to fix the economy is not through deregulation or through innovation, but through government subsidization and regulation.
00:20:40.000And then politicians, again, on all sides of the aisle, this is a bipartisan issue.
00:20:45.000Erect straw men in order to argue in favor of government involvement in the economy when in reality innovation and free markets are in fact the only way out.
00:20:52.000Yes, that does not mean That capitalism is all pure joy.
00:20:56.000Because again, Joseph Schumpeter, the economist, he's correct when he says there is creative destruction, that when you build something new, the old thing basically falls apart, that when you build the car, then all the wheelwrights go unemployed.
00:21:08.000But that is also the only road to productivity and future growth and better things and better lifestyles.
00:21:14.000And yes, supporting gigantic welfare states.
00:21:17.000So instead, we have politicians who are basically just pandering and claiming that free markets are an elephant that you can ride and you can direct those free markets.
00:21:25.000And again, this is not unique to the left.
00:21:29.000And I like Secretary of State Marco Rubio quite a lot, as I've made clear.
00:21:33.000But when Marco Rubio says that democratic capitalism deindustrialized America, what deindustrialized America was actually the machines.
00:21:41.000The vast majority of jobs that were lost in the United States in the industrial sector were technologied away.
00:21:49.000The reason that factories relocated was not because the worker in Bangladesh is better than the worker in the United States, it's because we unionized.
00:21:57.000Capitalism, in other words, was not the problem.
00:21:59.000It was the anti capitalism that was the problem.
00:22:05.000There was this fantasy, really, that the whole world would become a free enterprise democracies and that everyone would look like us.
00:22:12.000That ran into reality, the reality that that is not how human events have ever worked, that the nation state still does matter, nationalism is still real, national borders still matter, and that countries are going to always act in their best interest.
00:22:24.000But the result of it is that it deindustrialized America.
00:22:27.000We lost our ability and our capacity to make things.
00:22:30.000And not just big things, not just the kinds of big machinery and things that we normally identify with industry.
00:22:37.000But even some of the most basic components that are necessary that underpin economic life, especially in the 21st century.
00:22:45.000Again, one of the big lies that you hear about deindustrialization yes, we deindustrialize in terms of fewer jobs in heavy manufacturing, but we still make things.
00:22:54.000We have an extraordinary productivity growth, right?
00:22:56.000The productivity growth in manufacturing is quite real.
00:22:59.000Manufacturing output from 1990 to 2024 grew at an average of 1.2% per year.
00:23:05.000Manufacturing hours worked, declined 0.9%. Per year, which means that manufacturing labor productivity grew 2.1% annually.
00:23:14.000So, fewer workers, more things is actually what happened.
00:23:19.000But again, if you keep saying that the government is the solution and that capitalism is the problem, you end up in a position where you end up regulating away the innovation in the name of your preferred factory rebuilt in your dying industrial town or whatever.
00:23:34.000This is what JD Vance was promoting yesterday.
00:23:36.000Again, JD Vance and Marco Rubio are very much on the same page economically, actually, in some ways.
00:23:42.000You need, of course, a healthy financial sector to get investments into the right industries, into the right companies, to support the amazing entrepreneurs, some of whom we have here today.
00:23:51.000But you cannot run an economy entirely on services and finance.
00:23:57.000You have to have a foundation, and that foundation is always going to be making stuff.
00:24:02.000And that's, of course, what manufacturing is.
00:24:04.000That principle has really underlined, I would say, all of the Trump administration's economic policies.
00:24:13.000Okay, but when you keep saying that sort of stuff, you know what's not making stuff in the way that, like, people not working with their hands, not people not working with their hands, data centers, right?
00:24:21.000So basically, our fiscal house is on fire, and we've already decided that we as a country are not going to put out that fire by restructuring our entitlements, right?
00:24:28.000We are not going to put water on that fire, no way.
00:24:31.000And now we are going to lock all the doors and bar all the windows and burn alive in the house because we know that if we open the windows or open the doors, that might mean technological developments that we can't control.
00:24:43.000What an amazing video you just watched.
00:24:46.000Well, you know, if you think so, head on over to dailywire.comslash subscribe to watch the full show ad free or check out this crazy story here.
00:24:54.000Every significant movement in history has started with protesting.