Full Transcript for Adam Michel, Ludovic Hood, Gary Marx & Gary Gygi on $200T DSA, Iran, Ukraine & the Fed

about pre pre-taping. ⁓ so when you were a young lad, did you decide you wanted to be a out of tax policy studies for Cato or how did you end up there? Well tell us tell us your path, your your career journey. speaker-3: Well, I guess tax runs in the family. Both of my parents are ⁓ are accountants by training. ⁓ but I never thought that I would I would end up here. I fell in love with economics as a as a way of understanding the world in ⁓ in school. ⁓ I think the I've got my PhD in economics and it's just a way of understanding human behavior and the world we see around us. And ⁓ I just and then I fell into tax because ⁓ Congress was working on a big ta big ⁓ the predecessor of the twenty twenty-five tax bill in the lead up to twenty, what, ⁓ seventeen was the first Trump tax reform. And someone needed to work on the topic and I just dug in and ⁓ sort of fell into this line of work. speaker-1: What's been your biggest surprise becoming an expert on tax policy? speaker-3: That's a great question. ⁓ I've never been asked that. I guess my it the surprise is how much ⁓ how much of the economy the tax code touches. It's not just that we are the government taxes your income or businesses and changes behavior, but it's all the stuff people don't think about that ⁓ that's under the surface. Like the largest dist one of the largest distortions in the healthcare market. comes from the tax code. It's the employer exclusion for ⁓ the exclusion for employer provided healthcare. And this means that your employer does a lot of your compensation in the form of healthcare. It's why healthcare is attached to your employer. And it that creates all sorts of problems in healthcare markets. And that's ultimately starts with the tax code. So I think it's people don't fully understand how taxes impact everything you see around you. speaker-2: Well and a I would add the time it takes at every level. So having been a small business owner and Chuck, you've dealt with this, it's just one labyrinth after another, one government after another. It becomes this what, ten, fifteen percent of your time if you don't have an accountant? speaker-1: Yes, absolutely. Okay, so Adam, you did a great public service here. You went up, read through the TS DSA platform, which I'm sure was quite a thrill, and you gave us a range that everything their goodie list, if everything passed, it would cost the US economy seventy trillion to two hundred trillion. With the T guys, not an ⁓ not a B. Elon Musk T, right? Elon Musk T, trillion. Explain to us how you got there, what each program does for our audience. And just you you know this, you talk to people all the time, I I imagine outside DC. They don't really understand how the federal budget works. They think we don't spend enough on welfare, they think we spent too much on foreign policy, it's you know, they they just don't understand it. So take some time, play professor, and tell our audience how you came to these numbers and what does that

mean for the economy? speaker-3: So you're right. I went, I I was reading through the the DSA platform ⁓ when it when it came out, it was circulating. I I and they they go through, they have a quite an extensive list of all the things they want to do. And so my first thought was, huh, I wonder what all of this would actually cost. And so I ⁓ I I didn't catalog everything that they're talking about, but they I took the sort of nine largest, ⁓ most expensive proposals. that they that they have in their ⁓ on their agenda. And I tried to find reasonable estimates for what these things might cost. A lot of the the proposals started ⁓ are started during the Green New Deal ⁓ sort of era when AOC was a big proponent of that in Congress. And so these these estimates have for various types of pro programs, whether it be universal health care or federal jobs guarantee or free housing for all are have been out there. And so I I went and tried to collect what I thought were reasonable lower bound and higher bound estimates and and then added them all up. And this is obviously an imperfect exercise because the the at the high end the the they're talking about the government spending ninety two percent of the economy. And ⁓ and and that is a fanciful number. It's something that I don't think is is reasonably going to happen anytime soon. But it tells you how ⁓ how How absolutely insane a lot of these ideas actually. speaker-1: Well, y you make a good point here and think Sam wants to jump on this point here. I I don't know anymore. I mean I I I mean I just literally don't know anymore. speaker-2: They might try to do this, but the point is you're gonna crash the economy long before you get to that ninety two percent. But your your revenue's gonna crater before you get there. speaker-1: Well and this goes my point with Adam though. So Adam explain to your audience what these programs are and what's that mean and I like to know how they think we're gonna pay for them. And then is there money left to pay for anything else, like food for yourself or a car payment or something like that? speaker-3: Well ⁓ maybe to put the numbers in context first, the the federal government, ⁓ the Congressional Budget Office projects that the federal government will spend ⁓ something like ninety trillion dollars over the next ten years. These are these are ten year numbers that that I that I've been using. Okay. And ⁓ and so the at the at the low end, an additional seventy two, seventy one trillion dollars of spending is ⁓ is not an insignificant increase in federal spending. At the high end, $200 trillion. You're just piling on a a s a much, much larger government, a lot more spending than than we currently see. And a lot more spending than we see around the world. You have to compare these numbers to some of the European welfare states. The highest European the largest European welfare states, F Finland, France ⁓ come in at that lower bound estimate. The the that $70 trillion translates to ⁓ to like high 50% of GDP spending by the government. And in France and Finland, things aren't free. People still have to pay some for healthcare. They certainly pay for housing and electricity. And so the the the lower bound of these numbers I think are just very generous ⁓ estimates and and not actually what the DSA is proposing when they say they want a world where people don't have bills. The you asked how we're how we're gonna pay for this. The DSA doesn't really talk about that other than saying this is just going to be paid for with higher taxes on rich people. And so part of the the work that I did was go through how that math also doesn't work out. That if you were to confiscate all the wealth of the of the the Forbes 400 list, you were to raise top marginal income tax rates, tax every dollar of corporate profits and assume those people don't change their behavior, ⁓ an assumption we can come back to, you still are only covering a a small fraction of what's being proposed here. speaker-1: W let me ask you this. ⁓ how much money is it if you ta tax a top one percent like they're talking about? How much money would that gather and how short would we be on their wish list? speaker-3: So the if you d depends on how you defined ⁓ wealth ⁓ and and or rich, right? So if you just confiscate all of the wealth, the entire stock of wealth on the Forbes four hundred list, that gets you about six point six trillion dollars, which is less than one year of the additional spending that they are proposing at my low end estimate. So speaker-1: Dude, what if you taxed the top ⁓ just the top one, two percent? So the top four or five hundred is, you know, they're they're in their own world, right? So top one, two percent, Sam and I are probably in that what i what is that? How much how much would they still be short? speaker-3: The so the numbers actually get worse from there. If you go to the the ⁓ the the the congressional ⁓ office that does tax analysis, they came up with an estimate that if you raise the top marginal income tax rate, this is for people earning sort of just over ⁓ half a million dollars, if you were to raise that to the revenue maximizing ⁓ rate, you could bring in maybe four hundred billion dollars over the next ten years. That is less than one percent of the new ⁓ of the new spending that they're proposing. speaker-1: Have you ever talked to anybody who's a DSA policy expert and presented these numbers to them? What did they say? What's their what's their counter? Well, I'm interested in speaker-2: Is there such a thing? speaker-3: I haven't ⁓ I I haven't had the opportunity to sort of directly present these numbers to ⁓ to to the advocates of this, but the y I hear one of two pushbacks. One is well, they don't actually want all of this. They're just trying to set a ⁓ sort of North Star and set a a positive agenda, which I think is is is selling them short. I think they really do want to nationalize all these industries.

speaker-1: A hundred percent. Yeah. speaker-3: And ⁓ and and a and they actually believe that all these programs need to go go forward. But on the on the other side, I just don't think that they're engaged in the in the math in the mathematics of this. They they just see a list of nice things that they want and they think the government is there to provide them all. And they they haven't done the work to actually look at what each of these things would cost and how they stack on top of each other. speaker-2: Well, in in thirty five years of political engagement, the one thing that is really consistent is wherever the left base has gone, they're gonna keep pushing to get there and never stop. Like they may be backed up a few steps, but they take that very it ver it's a very socialist trained approach. You get pushback a couple of steps, but then you make three forward. speaker-1: Well, that's ⁓ this is why Marx and others always supported socialism. It's the foot in the door. Right. It's you know, we call it a slippery slope, but you know, ⁓ my you don't you know, ⁓ leopard tiger doesn't change the spots, right? And that's what this is here. What else what else caught your surprise with this wish list that got up to two hundred trillion dollars? speaker-3: The I think part of the story is how wide my range is, right? It really depends on the assumptions that you make. So I look at the speaker-1: By the way, I by the way, I view that as very honest. I hate when people just say this is the number. It's a range. And it may be even look, they may be successful and cost us forty trillion dollars. It's not forty trillion dollars we can afford, but that's maybe what it be. So we have two minutes here, so go ahead to that comment. speaker-3: So something like the like the Federal Jobs Guarantee, depending on how you assume people take up the program and how it impacts people's actual drive to work and to find jobs that are not federally subsidized, could range somewhere between four trillion dollars and sixty trillion dollars. And that is that tells you the how ⁓ the the just the difficulty with a lot of these propo these programs. They're so massive. ⁓ understanding how people will change their behavior once they're implemented is is really just like throwing darts at ⁓ at a board. And we know the impacts will be negative for the economy, but the actual cost ha depends on so many different variables and how people interact with the program. speaker-2: I we have only a minute left here, so I don't want to get into it a deep question because we we have a obviously a lot more we want to chat with you about. ⁓ but fundamentally, as you're looking at this platform, does it seem like they've thought about the economics at all, or is this just absolutely being driven by people who have no understanding of this? speaker-3: I think it's very clear they haven't thought about the economics that underlies basically any of these proposals. It is it is just a bunch of

slogans that have been ⁓ have sort of packaged together. And those slogans are powerful, but they are they don't have sort of implementable po ⁓ concrete speaker-2: Powerful but hollow. I yeah, absolutely nowhere to go with that type of thing. Breaking Battlegrounds, however, will be coming right back. speaker-0: Mm-hmm. speaker-2: Welcome back to Breaking Battlegrounds. Before we continue on with our interview with Adam Michelle of the Cato Institute, this word from our sponsor. speaker-1: Folks, did you know there's three hundred billion dollars in private student loans in the United States out right now? And basically 45 billion of that is distressed. Well, we have an answer. If you have a student loan that's private and distressed or you're close to defaulting, call YReFi at 877-400-9989. They don't care what your credit score is. They'll sit down with you, they'll find a payment that works and get you back on track so you can get your financial house on order. So if you're having problems with your private student loan, this isn't public or federal guarantee, private student loan, contact YReFi at 877-400-9989 or visit them at YREFY.com. Town Sam and Chuck sent you. You'll thank us later. Sam? speaker-2: One hundred percent. We're continuing on with Adam Michelle, folks. He is the director for tax policy studies at the Cato Institute. They do amazing work really across a wide range of policy areas. We always love to have their experts on our program. Follow him on X at Adam and Michelle. ⁓ Adam, you mentioned the federal jobs program before that that the DSA has been pushing for. One thing that kind of crossed my mind, you have according to different numbers right now, seven, seven point five ish. million working age, able bodied adults in the United States who have given up looking for jobs. These are not looking for work. And that's that is frankly a huge drag on our economy from the inside. ⁓ would a federal jobs program in place of welfare make sense versus what they're talking about? For these individuals at least. speaker-3: Yeah, so so ⁓ probably not because what they're what what a federal jobs program really just means is is sending people checks, right? Like if if everyone is guaranteed a job then the then then you don't you're you're not guaranteeing a productive job or one that is making things that other Americans want or speaker-2: See, I'm I'm old school. I wanna I wanna put ⁓ out in the field again like we did during the Great Society and have ⁓ building trails and roads, man. Break out the picture. speaker-3: I think that vision is ⁓ is is probably not what ⁓ the DSA is is thinking here. No, I think So it would it I think it would draw more people into more unproductive types of employment, employment used sort of broadly here, and that that would be a drag on the economy itself. It would increase a number similar to what you're quoting there, people in ⁓ in sort of lower ⁓ in jobs that are not ⁓ that are not actually producing anything of value. Well it speaker-1: What you do with the well, first of all, I I think the DSA they know this, but I'll submit to you a lot of the people there's a lot of people who don't wanna work really. I mean, I have a bunch of businesses, I can tell you that firsthand, right? But speaker-2: I visited the Soviet Union in eighty six and they had a saying, They pretend to pay us, we pretend to work. speaker-1: But I I think what they're missing on that for a an ideology that says they value humans, that a policy like that makes people stagnant. They don't reach their true potential life, which by definition means you're not truly happy. And that's the concern with all these policies. They're they're trying to be this nanny state does not allow people to find out their talent, their joy, what motivates them. And that is b the money is one thing as well, but that is really bad for sighty. It's like a bunch of walking zombies on Skid Row in LA. It's what you're gonna create. speaker-3: And it's not just happiness, it's j it's material welfare. Sure. Go back to look at the ⁓ the like nineteen nineties welfare reforms, we now have decades of of evidence that shows that people that were encouraged to work to go f to get off the federal roles and find a job, not only do were those are those people better off because they climbed the economic ladder, but their children are better off because they were in a household that was demonstrating work, the they had a steady paycheck that was increasing over time. And so we know that that that work in a productive career that gives you meaning, that gives you a steady paycheck, is the is the way to to better your life and better your kids' life. And so all of these government programs that pull people out of those those types of jobs are are ways of actually making people worse off in in the short run and and most certainly the long run. speaker-2: Adam, I've told this story on the program before, but it's been a probably a few years. When I first moved back to Phoenix, I I had to grab an apartment real quick and I ended up in accidentally a very low income apartment thing. I I rented it online. And ⁓ I had two neighbors. One right next to me was a Section Eight family. The one beneath me were actually here in the country illegally. They weren't able to access the welfare programs. They all worked, they pulled together when they hit struggles. They found a way through it. The family next to me that was on section eight never made progress. I I I lived there for a year and I watched them their situation get worse and worse while this other family rose and rose. speaker-1: They're It's incredible. speaker-3: I think that that that's what we that's what we see when the government gets more and more involved. It messes up the ⁓ in incentives ⁓ for people to better their lives and and can actually make them worse off, even if the slogan is everyone is gonna be better off. I think you often see the

option. speaker-1: All right, I'm gonna throw a curveball here with our final four minutes. there's a report out today that seniors will outnumber young kids worldwide. ⁓ you know, currently in by 2060, we will have two billion people over the age of sixty-five. Seventy one percent of humanity now lives in countries with birth rates below replacement, up forty-five percent a decade ago. I want you to explain to our audience, if you can, I'm sure if you look at a little bit, it's not tax policy. What does this mean for the US economy? What does this mean for our social security system? What what does this mean? And how does this play? I'm a touch the touchy subject, but you're kato, so you don't care. Immigration. Why we need probably a vibrant immigration legal immigration. Vibrant legal immigration system. Can you take some time and talk about that? speaker-2: Legal. speaker-3: Yeah, so at all of the margins that you you mentioned are are important. ⁓ the as the the ⁓ as as a fiscal picture, as ⁓ as we age, there is more there are gonna be more and more people on government programs, on healthcare and retirement benefits that will have to be funded from ⁓ taxes on young people who are trying to support families, and ⁓ that makes it harder. ⁓ we are in the middle of one of the largest intergenerational wealth transfers from relatively young poor people to relatively older wealthy people. And that's only going to get worse over time. That's what's driving our federal budget pressures. The we're move gonna moving from $2 trillion a year to $3 trillion a year deficits. Almost all of that is driven by pressure in the from the old age programs. The while it's not a solution to this problem, a a or the only or it can't fix all of this problem. One way to take some of the pressure off of that is more immigration. Immigrants both tend to be younger, they tend to have more children, ⁓ but the but that can't solve all the problem. The real solution is to fix these underlying ⁓ these underlying programs that are driven by sort of these demographic pressures. If instead we had people saving for themselves in private accounts, for example, they ⁓ then we wouldn't have this. this transfer. People would be would be have saved for their the life they wanted to live in retirement, rather than relying on a government that is quite chronically bad at saving for anyone, let alone let alone senior. speaker-2: For those who remember all the dire warnings when George Bush proposed a partial privatization of social security, the numbers since then have proven him out. The pr program would be fully solvent and people would be taking more money back from it right now. speaker-1: due respect, if they had listened to George Bush on the entitlement reform he had and the immigration thing, we would have a lot less to talk about right now as a country. speaker-2: Hundred percent. Adam Michelle, thank you so much for joining us today. We really appreciate you coming on the program. ⁓ folks, follow him on X at Adam and Michelle and you can always check in with the Cato Institute. I believe it's Kato.org, Adam, right? speaker-3: That's correct. Yes. Thanks for having me on. speaker-2: Fantastic. Thank you so much for joining us. Breaking Battlegrounds. We'll be coming back with more here in just a few moments. You don't want to miss our next interview up today. ⁓ We have, obviously, we got B, but then we got Ludovic Hood with the Hudson Institute. You don't want to miss it. speaker-1: To run a successful business, you need one thing, customers. And how do you get customers? You get them through advertising. You get them through lead generation. But what happens if the leads don't exist or they don't have valid contact information? This is a familiar story all businesses deal with. Then they call these leads who don't exist, or they're bad numbers, or they're not in their service area. Argus 101 verifies every lead before your team picks up the phone. It's a real person in your area and a neighborhood that matches your ideal customer. Your team only calls people worth calling, thus saving you money. Free trial at Argus101.com. That's arguing.com. Help your business expand today. to argus101.com A-R-G-U-S-101.com. Hello Breaking Battlegrounds listeners. Did you know that private student loan debt in the United States totals about $300 billion? That's with a B. About $45 billion of that is labeled as distressed, which means people are behind on payments. Why ReFi, who is a proud sponsor of our show, refinances this distress or defaulted private student loans that others won't touch. They don't even care what your credit score is, they provide you with a custom loan payment. Based on your ability to pay, YReFi is not a debt settlement company. They work with each borrower individually to tailor a loan that meets your specific financial situation and helps you pay this loan off. So, folks, if you would like to learn more how to put your mind at ease and your budget back on track, call YReFi at 877-400-9989 and tell them Sam and Chuck sent you. You can go and look into them at YReFi. refy.com to get more information. They will help you reduce your monthly payment and guarantee interest rates under six percent, ensuring financial relief to you as you pay off your private student loan. Jump on that website or call them today. speaker-0: Dear political candidate, listen up. I'm talking to you. 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It's clear, impactful, and establishes a lasting presence for your campaign. Don't wait, head to godaddy.com or name.com. Type in your name.boat and get started today. Because after all, every pet deserves a web address that's as special as they are. Murder, mystery, secrets untold. The truth gets sets free when bee gets a hold. Crimes where killers from all free. There even ones where they get caught in the scene. From co-case files to headline news, she's breaking it all down just for you. So come take a seat, don't miss a bee. ⁓ yeah. I'm overwhelmed now. speaker-1: By the way, they're declaring a mistrial. Yeah. J just came across the wire. Wow. Plans to he the judge plans to declare a mistrial. Which my guess is I don't think prosecution does this again. I think they try to reach a s a a s settlement. Well not a settlement, a plea deal. speaker-2: They're declaring a mistrial and they claim Yeah, I think if I was prosecution I'd really want a trial by you know, a judge trial. And you're not gonna get it. The defense is gonna fight like crazy, but what we've just seen speaker-1: This is an odd case. Yeah. speaker-0: It's giving me a headache. Yeah. Yeah. There's been a couple of cases too that have been like copycat cases coming out about it. Like it th and just things about too, like w what's gonna happen if i this the trial were to continue through for women, it's just speaker-1: Do you follow Do you follow it a lot? speaker-2: Well the argument they're making and we touched on this before we we launched the formal program, but the argument they're making is that women who have hormonal issues at any given time are effectively incompetent. That's the argument that speaker-0: It's gonna end up on job resumes. It could end up when purchasing, you know, any type of speaker-2: It it would be listen, i as ⁓ it it's it would be an interesting HR case to say no I'm firing you because you're dangerous because you're hormonal speaker-1: Well it's all gonna be tried. But I mean how how does this handle transgender issues now? speaker-2: ⁓ my goodness. With with all the drugs? speaker-1: Yeah. Look, I think the defense attorney's been very good. But the long term ramifications of this are horrible. And I I I had a friend, and B we'll let you get to your moment here, but I had a friend who thinks the husband did it. And she ⁓ she's followed this closely, right? And I I have not followed it real close and I know it's really got people up in arms, but I asked this friend this question. So what do you view as justice for the three murdered children? In I didn't get an answer. speaker-0: Yeah. speaker-1: Matter of fact, not at all. And I don't even hear people really talking. speaker-0: I'm with the protesters that are on the sides of the courthouse talking about the kids. And say we're fighting for them. speaker-2: Just like with Tyler Robinson, the Charlie Kirk shooter, the defense is not even trying to argue that she did not do it. So if your defense which has been a a remarkably effective and everyone has a right to an effective defense, they've been really good. But if the defense can't even argue that you didn't do it, stop with this. speaker-1: No. And she was a medical professional, right? Yeah. Well so here's the I remember these. I remember years ago I knew a woman, she's a politician, she got in a lot of trouble because her her husband did some money schemes, had to resign from office, and you know, she swore to me up and down I didn't know about it. And I said, The problem is you're too smart. People don't believe it. Yeah. And so I look at someone who's a medical professional. Now I know, look, postpartum's real. speaker-2: Yes. speaker-0: She was a labor and delivery nurse. speaker-1: folks. If you don't think r if you're a guy you don't think you don't think postpartum's real and you're a guy, you're a jackass. Okay? But it's real, right? But at the end of the day she's still a medical professional a true medical professional. speaker-2: For sure. speaker-0: The one that's by these women going through that, my sister's labor and delivery nurse that helped her a month ago now was by her side emotionally there, like, you okay, you okay? Every time she was in that room checking in on her mental state as well. speaker-2: In from everything like to to try to accuse the father of having done this, like this guy was doing everything he possibly speaker-1: Yeah, I just don't know. I don't know enough about it, but they there just seems to be people want to toss him aside on it. And I a good friend of mine who's the head of the psychiatric wing for Scripps Hospitals in California, she says, You can be a a a an aloof husband doesn't make you a killer. Right. Yeah. Yeah. You know, and I asked her how's this trial affecting? She goes, ⁓ we're having all new protocols now because of it. Wow. Really? Yeah. They're changing ⁓ right on on the move. Yeah. But she said speaker-2: Interesting. speaker-1: Look, the guy could be a jerk, it doesn't mean he's a killer. And and she

goes and we always tell people, by the way, that if you're having a problem at home or a kid or there's something like that, walk away. Right. So people say he walked away. We don't know what's been going on in the house. No one's asked. speaker-2: Well, it certainly hasn't touched on their relationship how that was playing out. speaker-1: By the way, my friends are feminists and we took all B's time today. speaker-0: Okay. For this case it's worth it. There's so much to speaker-1: She my my friend's a feminist and she just said we're t we tell people all the time if you have an emotional tense situation home, walk away. Right. What he he can't go get away for an hour because she says everything's okay? I mean I speaker-0: She literally asked him to get away too, that's what baffles me. Well on a good note, a hundred and sixty three kids were recovered in f in ⁓ Florida. speaker-1: Florida's pretty good at that stuff though. I think DeSantis and folks really go out. speaker-0: Great. speaker-2: I I'm very curious to see you know, we we gotta go to break here, but I was I'm very curious to see where the state goes post DeSantis. He's such an extraordinary governor. speaker-1: Yeah, I I agree. speaker-2: Folks breaking battlegrounds coming back in one moment. All right, welcome back to Breaking Battlegrounds. Our next guest up today, Ludovic Hood, is a senior fellow at with the Hudson Institute's Center for Peace and Security in the Middle East. His research focuses on US Middle Eastern policy, Gulf Regional Security, Israel, the Arab states, Iran, and Lebanon. He's had f twenty years of experience as a foreign service officer and deep, ⁓ deep ties throughout that region. Ludovic Hood, welcome to the program. speaker-4: Great to be here. Thanks guys. So what speaker-1: First question so our audience gets to know you. You had a very distinguished career traversing the world. What made you want to get into the State Department foreign policy career officer? I mean I'm sure this I'm sure you just have stories beyond glore, but what made you want to get into this? speaker-4: ⁓ wow, what a question. Look, ⁓ as you can probably tell from the accent, ⁓ I grew up overseas, specifically in the UK. And it was ⁓ when I was about ten years old, ⁓ I just started becoming kind of interested in current affairs. And the reason for that is ⁓ back in nineteen eighty-three, ⁓ Maggie Thatcher, then the Prime Minister, ⁓ launched this ⁓ incredibly ambitious operation to liberate the Falkland Islands from the Argentinians. Which happens to be an issue that's got some airtime right now in D C speaker-1: It's popping up it's popping up now, I saw. Yeah. speaker-4: Yep. But that that actually got me thinking, ⁓ at that surprisingly young, precocious age about going into public service or maybe working for what I thought would be the British government. But eight years later my life took me to the States and ⁓ we know, within weeks I was ⁓ sold on on on on this being my new

adopted home country, and thirty six years later I'm still here and I just spent twenty years serving Uncle Sam overseas. speaker-1: Well, we thank you for your service. So you have a piece about as a diplomat for twenty years, a US diplomat. You see how we can win the war in Iran. How can we win it? I mean it seems like some things Trump is doing are really working, people did not see around the corner, but tell us how you think we win it. speaker-4: So I think the way in which we get to an overall net strategic outcome is putting it generally is is through strategic patience. And what I mean by that is I think what Trump bler ⁓ gave Scott Bassent to do, ⁓ this this blank check he gave him three weeks ago, I I think that's the best way of of of achieving a good outcome, you know, based on all the obvious constraints that American presidents have. ⁓ you know The notion of using overwhelming force in a column pal kind of way obviously is is is off the table here. And you know, obviously it it might not even work. It didn't work for us ⁓ for many years in Iraq. So I think I think diplomatic and economic warfare is is the right approach here. I think if if as we saw today with an announcement from Treasury about going after a bank even in a NATO ally, right, i.e. Turkey, if if Bassent is is given this long leash by the president. ⁓ to really strangle all the various sources of revenue for that awful regime. There's a chance that we could see either real behavior change or possibly the beginnings of ⁓ a shuffle in that government, a shuffle in that regime, a shuffle in the regular army that could lead potentially to a new government. speaker-1: ⁓ I have a question about, you know, when we go and do these new measures like the Turkey Bank did the sanctions. Why do we wait so long? Why don't we just do it right away? I mean the minute we start bombing saying these sanctions, everything we have is happening now. Why do we wait? Tell me that as a diplomat. I don't understand it. speaker-4: So putting out press releases announcing that we're going after XYZ targets doesn't actually do much on the ground in terms of actual affecting outcomes. It's all about the enforcement. And you know, we've obviously had ⁓ this like like a four dimensional spiders web of sanctions on all kinds of Iranian targets for many years now. But if you're not if if it it it comes down to actual enforcement, like going after the the facilitators and the facilitating governments of those facilitators who are allowing illicit sales of Iranian oil and other products to happen. And even in Trump One, I served in that White House on the vice president staff. Even then there were there were there were very sound diplomatic reasons why we, you know, didn't go after ⁓ Chinese targets, for example. Or Emirati targets. The UAE is an incredibly important close ally for us, but Dubai obviously, you know, has been a major center of illicit finance, benefiting the regime for many years. Ditto for Turkey, you know, an important NATO ally. So it's it's it's less about you know the one-off announcements of XYZ targets and more about ⁓ you know being absolutely deadly serious about enforcement and that what that part of what that means. Chuck and Sam is is the the private diplomacy that goes with it. You know, we we probably had conversations with senior Turkish officials in the lead up to this morning's announcement saying, hey guys, this is what we're gonna do. And we're doing it because we want you to get a lot more serious about other, you know, yet to be publicly announced banks who may or may not be, you know, participating in in illicit ⁓ trade vis-a-vis Iran. speaker-2: Is financial deterrence of these institutions and and maybe some of the individual stakeholders in those institutions so that there are for instance the the people running this bank in Turkey, if are we able to put sanctions on them individually or you know, restrictions on them in some way that makes would make others who would consider setting up these type of arrangements in a different bank hesitate? speaker-4: ⁓ yeah, absolutely. That that potential exists. ⁓ you know, Treasury has a very high evidentiary threshold for designating individuals. You know, they need to be able to survive a preliminary ⁓ US court hearing, as it were. ⁓ so if need be, yes. But I think I think today's announcement was meant to be a shot across the bow. You know, it was exactly that kind of public ⁓ you know, sort of signaling that you were asking about in your previous question. I think that's going to be a signal to other Turkish banks and to the Turkish authorities and regulators that, you know, Treasury is, after many years of sort of not turning a blind eye, but allowing other considerations to get in the way, we're now going to actually start, you know, squeezing other Turkish banks and facilitators and maybe individuals who are involved in this illicit stuff. And they speaker-2: They're doing the same thing to Cuba too. speaker-1: Exactly. Okay, I had two questions I wanna ask. First I'm gonna go back to Iran for one minute. So forty seven years, Iran's been a pain in our keyster. Are they a clear and present danger to the world if left just alone? speaker-4: They are they they were increasingly becoming more and more of a danger to ⁓ global commerce flows and to the security ⁓ and stability of the wider Middle East. The the longer that they were allowed to build up these proxy militias in in the so called Shear Crescent, you know, whereby essentially their, you know, ⁓ Terrorist, or if if you don't like that terminology, their heavily armed militias were holding Lebanon hostage, Iraq hostage, ⁓ Yemen hostage. ⁓ they if if they'd been allowed to keep doing that, that would have, you know, eventually come to, you know, become more and more of a headache. And ⁓ you know, for key allies of ours, key economic and energy partners of ours, whether it's the Saudis, the Emiratis, the

Qataris, the Kuwaitis, and others. ⁓ and more importantly, If their ballistic missile program and not to mention the nukes had been allowed to to continue, they the they were they were always going to pull out that Hormuz card at some stage. That one day things would come to roost on on that front. And it all exploded this year. And you know, I guess, you know, there was an assumption that our bases would somehow be ⁓ a significant deterrence. In the end, our bases became targets for that. And we're gonna have to rethink really carefully how we pre-position forces and re-establish that kind of deterrence. ⁓ but yes, I I do think that, you know, I mean the Qatari gas, in a manner of speaking, keeps the lights on in Shanghai and Tokyo, if you know, to some extent. Right. And you know, those are those are two critical ⁓ trading partners for us. And obviously Japan is a major, you know, is one of our most important allies in the world, hands down. So that all this stuff is is connected. And I just, you know, I, you know, as you saw in that op-ed, I talked about what I've seen Iran do in the region over 20 years, published by the Washington Post earlier this week. And I think that, you know, this regime, just by its very nature, its founding history, its radical revolutionary, ⁓ you know, raise on dettre, you know, was was looking to increasingly hold the whole Middle East hostage and in so doing have a big impact on on global commerce. Not to mention the terrorism that they have been, you know, you know, proudly sponsoring, whether it's the parts of South America, ⁓ Jewish communities all over the world, ⁓ you know, this dec permanent declaration of war on the state of Israel, again another important US ally. ⁓ so I, you know, maybe clear and present danger, you know, to you know you use a a Reagan esque or a Harrison Ford movie s you know, phrase isn't quite the right term, but but they they they were increasingly dangerous ⁓ to the international community. speaker-1: Sorry, so I I imagine because of Iran too you had this Mecca joint defense agreement between Pakistan, Saudi Arabia and Turkey. What does this mean for the Middle East? speaker-4: ⁓ bluntly I'm still trying to figure that out in my own head. A lot of my DC think tank colleagues have different views on that. ⁓ it feels to me like it's it's largely symbolic at best. speaker-1: It's like the NATO it's like the NATO guarantee, isn't it? Is that what they're saying at least. It's an you attack one of us, you attack us all. speaker-4: That's what they're saying. ⁓ the next time an Iranian drone hits a Saudi oil facility, I will personally be shocked if all three countries lash out at Iran. speaker-1: It'd be pretty amazing if they did though. speaker-4: Yeah, it would be. And maybe there's an intent to sort of ⁓ show to to to to sort of signal to Iran a common front. But I'm I'm personally very disappointed that countries in the region, including our very important ⁓ close allies in the in the Gulf, the G C C countries, they're I I still feel they're sitting on the fence and hedging an awful lot. Yes. And I I fault our diplomacy on that a little bit. I I I wish Rubio had had had a longer leash here to to to to have a team ⁓ engaging with our with our Gulf allies and the Jordanians and and you know getting them to be a little bit more just ⁓ committed and unified vis a vis Iran. speaker-2: How is this ongoing conflict changing the relationships of those countries you were just talking about with Israel? Because it does it did seem ahead of it like they were making progress towards real peace in the region, at least among the the Gulf states and Israel. speaker-4: Yeah, if you if you go back to ⁓ September of ⁓ twenty twenty three, not only were the Israelis obviously talking to the to the Saudis about some kind of you know potential diplomatic normalization, but even the Israelis and Turks were ⁓ having ⁓ engaging in some real rapprochement ⁓ after a nasty patch. Netanyahu met with ⁓ Erdogan ⁓ on the sidelines of the UN General Assembly that that that that September for ⁓ for hours ⁓ at at Turkey House there on the Upper East Side of New York. ⁓ all of that got blown up by ⁓ by the the the the Hamas attack on October 7th a month later. ⁓ for what I consider to be pretty understandable reasons, you know, most Arab leaders now ⁓ know that their populations have have you know very ⁓ strident emotional views about images out of Gaza and it's really hard right now for for the Saudis and others to to to to play footsie let alone go further with the Israelis. you know we'll see what the Israeli elections bring. ⁓ some people speculate that a different ruling coalition there, you know, could be an opening for someone like MBS to say, all right, let's let's start some at least discrete conversations again and and see what we can figure out. I think MBS ⁓ you know, who I believe has been a very useful, ⁓ almost sort of revolutionary figure for the for the for the for for in in in a Saudi historical concept. I think, you know, he understands that his vision for a prosperous Middle East, you know, necessitates Israel being integrated into that. Is it possible? Is it I I think I I think on a five, ten year time frame, he really wants to make that happen. If we can accelerate that in into one, two, three years, that that would be terrific. speaker-1: Twenty years in the Middle East is a prosperous and peaceful Middle East possible? speaker-4: I think so. I I I think ⁓ I mean a lot of things need to line up. Yeah. speaker-1: It's it's speaker-2: Yeah. It it's the trickiest puzzle in the world, right? U it speaker-4: The the the region felt really good back in in the in the summer and fall of twenty twenty ⁓ three before the the Hamas attack. ⁓ you know, and ⁓ I I was working I speaker-2: It it's all s sort of changed since then. Ludovic Hood, very much appreciate you joining us. Folks, follow him on X at Ludo underscore Hood. ⁓ and always follow

the Hudson Institute. ⁓ Ludovic, is that Hudson Institute dot org or Hudson INST dot org, something like that? speaker-4: Our website is Hudson.org. speaker-2: Hudson.org. Fantastic folks. Check that out. Breaking Battlegrounds obviously back on the air next week. But if you're not downloading the podcast, you're missing more grass and great content. Talk to you soon. speaker-1: Sam and I are always talking about being prepared, whether it's hurricanes in Florida, earthquakes in California, flooding in Arizona, or supply chains disruptions. speaker-2: Exactly, Chuck. When pharmacies shut down, it does not matter how tough you are, you still need access to critical medicine. speaker-1: That's why we trust Jace Medical. The Jace case comes with five life saving antibiotics and key over-the-counter meds so you're covered when things get disrupted. speaker-2: And Jace goes beyond just the Jace case. They also offer first aid kits, daily prescriptions, and long term nutrition with Jace Pantry. Don't wait for the next hurricane warning or natural disaster. Take control of your health and peace of mind today. speaker-1: Visit jace.com and use code FUTURE at checkout for ten dollars off your order. That's FUTURE at J A-S E dot com. speaker-0: Dear political candidate, listen up, I'm talking to you. Having an exact match domain, like your name.vote, isn't a luxury, it's campaign basics. It's easy to print on yard signs and mailers, easy for voters to remember, helps people find you directly, and gives AI tools like ChatGPT a clear source for campaign information. So why settle for a long patchwork website address when you can own your actual name with a.vote domain? Visit name.com today and claim your personalized.vote website address. speaker-1: Hello Breaking Battlegrounds listeners. Did you know that private student loan debt in the United States totals about $300 billion? That's with a B. About $45 billion of that is labeled as distressed, which means people are behind on payments. Why ReFi, who is a proud sponsor of our show, refinances this distress or defaulted private student loans that others won't touch. They don't even care what your credit score is. They provide you with a custom loan payment based on your ability to pay. YREFI is not a debt settlement company. They work with each borrower individually to tailor a loan that meets your specific financial situation and helps you pay this loan off. So, folks, if you would like to learn more how to put your mind at ease and your budget back on track, call YReFi at 877-400-9989 and tell them Sam and Chuck sent you. You can go and look into them at Y ReFi. Y-R-E-E-N-E-E-N- FY.com to get more information. They will help you reduce your monthly payment and guarantee interest rates under 6%, ensuring financial relief to you as you pay off your private student loan. Jump on that website or call them today. speaker-2: Mm-hmm. Welcome back to Breaking Battlegrounds. Our next guest up today, Gary Marks, is

president of Madison Strategies and currently serves as president of the Concord Fund and senior advisor to the Judicial Crisis Network. He's also the host of Peace and Power Ukraine podcast. Follow him on X at Gary Marks. Gary, welcome to the program. speaker-5: Hey, it's always great to be with you guys. speaker-1: How you doing, Gary? So Gary, tell us about Ukraine. How you got involved with it. I've known you for years, you're a dear friend. How you got involved with it? I'm sure you've been over there. What do people not understand about this war that Russia started? speaker-5: Sure. Yeah, probably about three years ago I got involved with a group ⁓ defending religious freedom in Ukraine and ⁓ focused on also the issue of the abducted children. I've taken five trips there and going back again in November. ⁓ so yeah, been been to Kyiv and ⁓ starting to you know work through this podcast to tell the story of Ukraine to Americans and also explain to Ukrainians the perspective. ⁓ that we have here in the States. So they can ⁓ deeply understand, especially, you know, this administration and what they can do and what they don't do. But, you know, top line, I just want everybody to know that Putin is not winning this war. There is no strategic path for him to achieve victory ⁓ at this point. It's just a question of how this ends. It can end very badly for him. Or he can ⁓ find a way to come to maybe a a a South North Korea type of armistice. ⁓ so that's really the question. ⁓ this war is now hitting both capitals in a deep and profound and damaging way. This is not just a battle that's impacting Kyiv, it's now impacting Moscow and St. Petersburg. speaker-1: As you traveled back to Ukraine five times going again in November, what would our audience not understand about Ukraine and what's really going on on the ground there? You know, I know when the war the war first started you had these social media people show people the nightclubs and so forth, but it's a country truly under attack day in, day out, innocent people being targeted. What do people not understand what's going on on the ground in Ukraine? speaker-5: Yeah, this is a very family-oriented culture, a culture full of people of faith. 80% of the country attends church on a regular basis. ⁓ they are ⁓ a people that we would be comfortable, you know, meeting in Kansas, ⁓ meeting across the Midwest. That's who Ukrainians are, but they are westward oriented ⁓ in in every way, shape, and form. And they are being impacted by this war in every area of the country. Obviously on the front lines, you have ⁓ a relatively static situation where there's about a 30 kilometer ⁓ kill zone where nobody can go in or out comfortably because of drones. ⁓ so what Putin can't achieve on the battlefield in ground advances, ⁓ he's decided to take his his his missiles and ⁓ drones and use them to attack civilians indiscriminately in cities across the country. So that's the reality. In the last ⁓ three months, you

know, there's been some some small exchange of ground. The Ukrainians have actually gained a little bit more ground than the Russians in the last ⁓ three months. ⁓ so we are now to ⁓ just primarily a very deadly air war. And ⁓ the truth is Kiev is getting hit like never before in terms of ⁓ missile strikes. ⁓ they don't have the the Patriot interceptors ⁓ to take out the ballistic missiles. And now the Russians are are putting jet propulsion on even some of their Shaheed drones. ⁓ so that's that's a major ⁓ damaging thing. ⁓ you know, when I've been to Kiev in the past, I didn't sleep overnight in the bomb shelters. ⁓ to me, I I I looked at the risk and and made a calculation that ⁓ at my hotel I probably wasn't likely gonna be targeted, but that'll change in November. I'll spend each night sleeping in the bunker. Yeah, some of your listeners may have seen that, you know, L Laura Loomer, one of Trump's confants, she went to Kiev recently. She had a change of heart in in how she views this war. And you know, she did a lot of interviews from the bunker in the hotel because that's really what you have to do. And even in the daytime now, there are some drone attacks. And ⁓ this is just the way of life. It's very difficult, but the Ukrainians are resilient through it all. speaker-2: That seems to make unfortunate sense because in terms of outcomes, if Russia is able to effectively drive the Ukrainian people out of their country, they win, right? Yes. I mean i i they're y you know, th they don't care about the Ukrainian people, they care about the territory. speaker-5: Yeah, they they they ultimately want to bring back Putin has this vision of Ruskimir, the Russian world, ⁓ bringing back all the Soviet satellites back together again. cr in and the ideology of Ruskimir, the the the Russian world doesn't have a border. ⁓ a lot of your listeners might be familiar with kind of this idea of the Ma imam and caliphate, ⁓ Islamo fascism. They don't have borders in that ideology either. ⁓ so so it has that idea to it. They want ground and this is an effort. Yes, they would hope to to push out civilian populace from being able to willing willingly live in ⁓ these major cities, but it hasn't worked on the frontline cities in Kharkiv, in Zaporizhia. You know, the the the the citizenry that's there has continued to maintain life and stay there ⁓ despite all the hardships. ⁓ there's an amazing stubbornness and resiliency amongst the Ukrainian people. And ⁓ you know, a a a dark humor that you have to have to to live through that life. speaker-1: So two questions. First of all, you do the pronunciations in Russian and Ukraine quite well. How long did it take you to truly master the accent and the pronunciation of these Russian names? speaker-5: Well well Chuck, I like to think with a name like Marks it just came naturally. speaker-1: Let me ask you this. You said they're a religious country. How has their faith sustained them? I mean and they seem to be a yo yo. ⁓ you

know, Europe says they do X, ⁓ the United States could do more, I want to talk to you about that. But how has their faith sustained them through this war of yeah ⁓ you know, this this hubal horrible war? speaker-5: They just celebrated their thirty-fifth anniversary of independence from the Soviet Union. And when that happened in nineteen ninety-one, they became a bastion of religious freedom. Every sect, every faith was invited ⁓ and allowed to practice. ⁓ whether, you know, even though that they were a majority Orthodox, Ukrainian Orthodox Church is the majority, ⁓ there's a strong Catholic contingent. There was, you know, this is million plus evangelicals. ⁓ Baha'i and Latter day Saints and a Hindu. Everyone was invited to be part of that multicultural place. And and I like all of us, when we are people of faith, if we're challenged, ⁓ I always think that, you know, your faith becomes ⁓ stronger in most cases. ⁓ because you have no other solution sometimes but to pray. And ⁓ I I see that when I've gone there. ⁓ so yeah, I'd I'd encourage people to continue to go to the power of prayer, but you know, they do need ⁓ weapons as well. They need to have ⁓ you know, ideally our South Korean ⁓ friends provide the Patriot missile systems they're not using right now, maybe send those to Ukraine. They need to have ⁓ blueprints for some of the the middle range interceptor technology like the SAMS that they could build on their own. ⁓ Providing Patriots would be great in terms of allowing them to build them there, but it's still gonna take a lot of years of ramp up. They need an immediate solution. The Patriots is not an immediate solution. And ⁓ they need to be ready to deal with a difficult winter that's that's coming. speaker-2: But being honest, is there an immediate solution? I mean, this has kind of been the ongoing nature of this thing, is that we can make little enhancements to the weapons we're giving them, but fundamentally the US is short of weapons itself at this point. We don't have the resources to just hand over a victory, so how does this play out? speaker-5: Yeah. The the the pipeline of weapons can be now restocked. Everybody after this Iran burst c conflict realizes all right, those assembly lines have to get moving. ⁓ Europe has been paying for our weapons to the Pearl Initiative and then sending them on to Ukraine. ⁓ so a ramp up there will help. ⁓ some of the European ⁓ allies in NATO have more interceptors that they could share. Spain doesn't need what they have. ⁓ they need to be sending them along. ⁓ but but you know, you make you make a good point. They don't have enough immediate solutions. One of the things I know that they are working on is hitting deeper into Russia. ⁓ they have not been able to use Starlink to do targeting into Russia, which would allow ⁓ for their drone. drones to go a lot farther, hit some of those missile platforms. Maybe that change will ⁓ occur. We've seen a number of changes with the use of Starlink over time that has benefited the the Ukrainians. ⁓ so so there are some significant things. But in the meantime, we are in a new phase because only in these last two and a half months has Ukraine finally begun to hit deep into Moscow and St. Petersburg. And ⁓ It looks like the next phase will be such a significant amount of drone and missile strikes by the Ukrainians that the Russians will have to shut down their airports. They've always already had interspersed ⁓ shutdown of the major international airports in Moscow and St. Petersburg. But that's probably the next, as the Ukrainians say, long-range sanction that's going to happen. ⁓ as you you may know, but maybe your listeners don't know, you can't fly to Ukraine because of the daily missile and you ⁓ and and drone strikes, you have to fly into, you know, Warsaw or Krakow, Poland, or go to Moldova, and then drive to the border and then take the overnight train, whatever it it is. So ⁓ we just got word that Witkoff and Kushner are gonna be finally going to Kiev for meetings. Well they will have to travel like I do. They will have to fly into Poland, you know, and then ⁓ get on an overnight train. That's how most of the the leaders and diplomats ⁓ make that trip. It's not an easy one, ⁓ but that's the world they live in. Well, guess what? That may be the world that Russia now begins to start to live in. And the the the the Russian generals and diplomats, they don't just get to fly in and out of Moscow and St. Petersburg. They're gonna be on on trains like everyone else. speaker-1: Going back about how this war eventually ends, if it does, ⁓ w Thomas w Sam and I were on this issue earlier in our show when we had some conservatives in our orbits, you know, you have as well, for some reason sided with Russia, which is still an odd thing. To this day I don't understand it because Russia's our enemy. I there's no other way to put it. speaker-2: There are enemy, but there there are the the Ukrainian government has a nothing. speaker-1: Great history last 30 years. But my question is this we asked Thomas Grove for Wall Street Journal, who's the Russian ⁓ bureau chief. And he now lives in Poland because he couldn't stay in Russia when they attacked. And we said, How does this end? And on his question, remember his answer I've always remembered, he says, Someone has to win. There's no truce on this. Someone has to win. So what has to happen as the people you've talked to for Russia just to cry uncle? speaker-2: Possible Putin has to die. It's my speaker-1: Is Putin dead? I mean what what happens? speaker-5: So first, I've always said that every day that Ukrainians breathe the air of freedom is a victory. That's the reality. Just surviving is the victory as the the defender. That you know, in the face of the aggressor not achieving their domination of Ukraine, that's a victory. ⁓ but the reality is most people tend to talk about this as what happened in Korea. in the nineteen fifties, there was just an

armistice signed, the the lines froze at the thirty-eighth parallel, and that war has never ended. On paper, it is still going, nothing's been determined. There's a swap of prisoners, there's a swap of of of remains in some cases. Some of those things were done. But that conflict's never ended. That's that's one way, if Putin chose an earlier exit ramp. But traditionally what has happened, you both alluded to that Oftentimes, especially in Russian regimes, it ends with the the the dictator not realizing they need to end, and then either the generals and the military there's a coup, or you know, someone pushes someone off of a a a tall building. that's often what happens in that very ⁓ bloodied history in in Russia. Yeah. Yeah, yeah. We we we may never know how exactly it happens and speaker-2: Night single car crash. speaker-5: You know, they use poisons and political assassination and you know Putin is a Soviet KGB trained operative. He survived a very long time. I don't think it's going to be easy for some internal power play to take him out, but it can happen and that might be the the other way this this this goes. speaker-4: Yeah. speaker-1: Down. Well, maybe that's the prayers for all the Ukrainian people. Last question here. So you mentioned this dead zone, 30 kilometers. For those of you who are refused to get on the kilometer spree, that's 18 miles. Gary, what describe this dead zone? I mean, I think people get their foreign policy now from the Lioness on Paramount Plus or something like that. ⁓ but what is this dead zone? As we all should. But 18 miles, what is a dead zone for 18 miles look like? speaker-2: Best place I get my my foreign policy. speaker-5: Yeah. So I I have not been there, but I've interviewed a number of people recently on Peace and Power Ukraine. Great ⁓ podcast. I recommend it. But it it it can be ⁓ best described as the the place where no our ⁓ car or vehicle of any type can actually go in and out because it's the the drone coverage on both sides is too deadly. ⁓ so you will see the way in and out is typically too A road that has netting over it for this, you know, 18, 20 mile period. And and whatever troops come in have to walk in and know that a drone would explode above their head but hit the netting and they would likely survive. So that's that's one option. You walk in for 20 miles carrying everything, whatever you need. The the other option, and this is more and more the way that anything goes in and out, is ⁓ the the UGVs, the unmanned ground vehicles, taking in supplies and evacuating the wounded. So if you are wounded on the front lines, it's very difficult to get out. They've got to send this to you. You would be placed on this unmanned, you know, vehicle, put a a heat, a blanket over top of you, and then hope that it can drive you to safety and a drone doesn't hit you. So it it is a horrible existence. It is very difficult. You can't You can't even rotate men in and and and soldiers in and off the front lines ⁓ if you're the Ukrainian side which values life, the Russian side doesn't care about life. ⁓ their average life expectancy for any ⁓ soldier on the front lines is less than a day. speaker-1: Gary Marks, thank you for joining us, folks. You can follow Gary at GaryMarks, ⁓ A R X, just like you think it is. And also, we ask you to subscribe to his podcast, Peace and Power Ukraine Podcast. You can get up to date. I know there's lots going on in the world, folks, but this Russian Ukraine war is important to the world, important to the United States, important to people who love freedom. So pay attention to Gary and Gary, keep us up to date and let's have you on soon, buddy. speaker-5: Absolutely. Thank guys. speaker-1: Thank you very much. This is Breaking Battlegrounds. We'll be right back. Welcome back to Breaking Battlegrounds. ⁓ our final interview with the great Gary Geige. He is president and CEO of Geeky Capital, and you can find Gary on X at Geege Capital.com. And that Capital has an A, folks, it's not an O. So remember your spelling. Gary, how are you, buddy? speaker-3: I'm good, Chuck. How are you? speaker-1: Good. So our new Fed Reserve Chairman, Mr. Walsh, seems he's got a lot on his plate, but with the job report today, does that make it more likely or less likely to increase or decrease interest rates? speaker-3: Yeah, I think he's in a bit of a pickle here, Chuck. And I think that over the next let's just say week or so, we're gonna find out, you know, how strong of a person he is, and what the courage of what the courage of his convic convictions are, because he said back when he was interviewing for the job that he thought that inflation was created as a monetary policy, meaning government spending too much money. And so now Inflation is is is still elevated. I think it's because of the war, but at the same time, he's talking hawkish, which means that he's talking it sounds like he's saying I need to raise interest rate. And so we had a good jobs report today. Market had somewhat of a muted reaction, and President Trump promptly came out and said the Fed should lower interest rates. So that's why I think that ⁓ speaker-1: ⁓ Yes. Yes. speaker-3: Mr. Walsh, who I think is a smart guy, he's in a bit of a pickle right now. ⁓ because the president clearly wants ⁓ interest rates slowered. All of the journalists, which tend to lean to the left, by the way, are are all screaming every day, raise interest rates, raise interest rates. And, you know, ⁓ he's getting a little bit of help though from a couple of a couple of his members who seem to be open to the idea of not doing anything. So I I Next week there is ⁓ the ⁓ inflation report that kind that comes in for consumers. Super important. I can't emphasize that enough. And that's gonna influence what the Fed does at their next meeting. So if the inflation report is ⁓ soft or it is a little bit downward, because if you go back to last two months, inflation came down a little bit. And so

if it comes down again, that's three months. I think you can call that a trend and If that's the case, worse I think and comfortably sit still without raising interest rates and wait to see how the data plays out for the next few months. speaker-4: Yeah. speaker-1: Well I think the best th thing he could do is not do anything, frankly. I I I I I raised speaker-3: totally I to I totally agree. Justification. No, no. Raise interest rates. Two lower interest rates or raise interest rates. speaker-1: I mean, you know, we really gotta get mortgages back down to at least the high fives. It's just not moving, you know. That's true. ⁓ bank loans, everything. And so it it's very con it's very concerning. this tariff war with Canada, how does that affect inflation? speaker-3: So I think that this ⁓ could affect inflation. I say could because I I'm somewhat of a believer in what Milton Friedman said when he said that all inflation comes from the government spending too much money. So tariffs is not the government spending too much money, but clearly somebody has to pay for the higher prices that come with tariffs. And so I read an article in the journal recently that said it's the Canadian small business owners. That are going to be eating the cost of the tariffs. Makes sense. I think that's what Trump was hoping all along is that c countries that want to do business with America are going to eat the cost of the tariffs rather than the American consumers. That sometimes has played out, sometimes it hasn't played out, because American consumers are still ⁓ absorbing some of that cost. So ⁓ if this trade war with Canada continues, and I hope it does not. ⁓ if you go back, Chuck, to Trump's first term, he said to all of the world leaders at a G twenty meeting, why don't we just lower all of our tariffs to zero? Right. Everybody. So he said that. And so I think he believes that, but I think he believes that tariffs are a way of getting other countries to do what he wants them to do. And so and so if that's the case, then I really hope that this ⁓ this ⁓ tariff battle with speaker-1: Yes. speaker-3: Canada gets resolved quickly because they are a big trading partner of ours, as is Mexico. It's not helpful for any of the countries ⁓ to be in a battle. But Canada's prime minister ⁓ have a trunk der Trump derangement syndrome going on. And I think that it's it's possible that he's trying to answer to his base by having this fight, but I don't think it's gonna serve him well at all. speaker-1: No, I I I don't as well. I d it does a b benefit Canada. I mean this is not something they win. ⁓ and I do believe Trump I do believe Trump would want zero percent. I also think Trump thought, besides using this as a bully pulpit, I do believe he thought this was a way to ⁓ help reduce or stabilize our federal spending annually. ⁓ I r I really do believe he thought that. ⁓ which leads to the question of Interest rates probably drop a point or two if we just get our defic annual deficit under control. speaker-3: You're right. And and and so I think that the biggest concern that I have and a and a lot of us that are in the financial markets is we're deficit spending, which means we're spending more than we bring in and have done for more than a decade. And so ⁓ if we can get our deficit spending on under control, if we can start to pay down our our debt, then that's gonna be helpful. And I last time I was on with Sam, he asked, Can we grow our where our way out of this? I don't think we can grow our w way out of it by itself. We need to cut spending as well. And if we can cut spending, then I think we can grow our way out of this and start paying down the debt. I don't think that that there's that we can just grow out of it by itself. We really have a spending problem, Chuck. It's it's a big problem. Well speaker-1: Well, i I I was talking to a couple of congressmen and I said, Let's say we just went right now and reformed Social Security. You know? What would that mean? And they all said, interest rates drop a point because it shows the markets were serious about reform. And so with the you know, forty trillion dollar debt is huge. We owe ourselves what, nine, ten billion of that? So it's really thirty billion to outside creditors. Country has assets of 160 trillion. If you and I were doing bank loans, that's a pretty good ratio. But what we have to do is we have to stop deficit spending. Someone's gotta come and say, this is my five year plan that we start do if they gave a real five year plan, start following it, get it down where we're balanced every year, maybe once or you know, one or two percent difference depending on the year. But get that down, reform these entitlements, it's a boom. It's just a boom because of our size and our entrepreneurship and all those other things. speaker-3: that the the problem is is that so many congressmen and senators don't want to touch social social security but somebody has to touch it. I mean it is such a big problem Medicare such a big problem that if ⁓ if in if Social Security is not fixed within the next seven years there's a mandatory twenty percent reduction in benefits and it and if you want to see a revolution in the country you will see see one If you t if you try and have a twenty percent reduction on seniors that are already receiving this money, it will it will be massive. speaker-1: Folks, ⁓ Gary Gigee, president of Gary Gigee Capital. You can reach him at ⁓ on X at GaryGeige or at Gige Capital. G-Y G-I-C-A-P-I-T-L-A.com. Gary, thanks for joining us, buddy. ⁓ Take care. Folks, this is Breaking Battlegrounds on behalf of Sam and I and Brennan and Jeremy and Jadir who missed today. You can catch us at breaking battlegrounds.vote. speaker-3: Have a good week, yeah. speaker-1: Go to our Substack. I write lots of great things. No patting myself on the back here, Brennan. Thank you very much. And wherever you get your podcast, ⁓ Spotify, Apple, blah, blah, blah. So anyway, join us, have a great weekend. We'll see you next week. Bye.