so a storied career you're one of the first employees of Microsoft you become a CEO of Microsoft you own the Los Angeles Clippers you have this uh uh dream life that that as a kid you probably never even thought those were the heights that you might be able to attain and in that moment you turn your attention to creating a fact website exactly I retired from Microsoft and I have nothing to do except to die deep dark into government numbers seriously it feels like an anti- midlife crisis it feels like a man who's decided Well
I'm just going to give up well my wife kind of got after me to start helping with the family philanthropy and I kept saying no no no no government takes care of all those things and they don't and she said you're coming with me and I snuck in the back and said but I'm going to look up the numbers and you did look up the numbers and and so what you've done is and it's a phenomenal site and I make jokes but it is so necessary in this world to provide the data from reputable sources
how do you even how do you decide what to put in there how do you decide what are the rep sources we have a guy here Adam chatov in Chads We Trust he is a researcher extraordinaire he is the one who aligns us with that's kind of a part is Insight you might want to stay away from that that's kind of a thing is that how you operate it or is this an algorithm how is this done no it's we started with the concept that said let's look at government in its totality M because if
you look at little pieces boom I grab a number and I can make it sound large I can make it sound small so let's put things in context let's put them in context with history let's only use government numbers we go to 100 different government databases and then we said what does government do we turn to the prologue of the con Preamble to the Constitution it lays out 4 we took everything government spends money on Boom how much taxes are we raising and other money how much are we spending and what kind of outcomes are
we getting because government's not like a lot like a business so that so that to me is is the crucial aspect you know when Democrats talk about we need to tax billionaires more no offense and uh when we need to uh do these things I think the one place where it falls short is I don't think people feel feel that more money is necessarily the answer but maybe efficacy the way we're it's not like we don't spend money on anti-poverty it just the efficacy might not be there did you discover programs that seem to be
really effective and other areas where that money seems to be squandered what what were some of the the data points that you found that gave you a clear picture let me start with 86% of all federal I can talk separate about state and local spending but 86% of all federal spending is in a few simple areas okay let's go number one paying our debts got to pay the interest on our debt how much goes to the debt I've seen breakdown of taxes I've heard that the third largest or second largest portion of our tax money
goes to pay down the interest on the debt it's creeping up there it's like number five right now we go Social Securities number one okay Medicare number two okay so two things that we pay into but don't get till we're older correct okay correct number three uh number three is the military okay Medicaid part of is four Medicaid is four exactly sorry the Deb is four oh Medicaid is five okay veterans benefits okay let me see if I forgot anything you know what though so let's let's stop right there because I stop right there because
there's no inefficiency so far well so I I would disagree with that okay go ahead so if I'm a if I'm thinking about this country and I'm looking out into the audience and I'm saying so what is the tension in their Liv and I don't necessarily know that because we've only worked together as an audience once before but I would say it's the squeeze it's people that had some college debt but now they're in their 40s or 50s and just as they're clearing out all those things and getting into a decent uh earning Place their
kids are getting ready to go to college and the costs of that have exploded and just as that's happening their parents who they thought were going to be fine with their social security and their Medicare and all those other things are are now needing real elder care and assisted living care so now all the equity that they have built up over that time is now dissipating between those two groups so Child Care Health Care Elder Care all those things the first six tranches of where our tax money goes doesn't seem like it's spent efficiently on
relieving that pressure on families now that might be the the wrong way to look at it let me let me push back let me push back I give you well not you you can give me I'm 68 you give me a social security check I take money from you you take money from me that's just my premise okay fine probably a good Prem probably a good premise your premise is fine probably a good premise anyway a family gets a social security check right that's going to help that senior who may need care may need this
may need that may need something else but designed mostly by the government because they thought we would all be dead by 65 like we've all out we've lived the government thought we would the promise yeah the promise of FDR days we've outlived it nobody's quite sure what to do about it we do know that people are doing less of their own elder care more of that's getting paid for uh in the by the government in the market right through third you do see a lot of people who uh their Elder Care is paid for by
whatever Equity they had left so they can't leave anything to their kids they mortgage uh their house or they go through those things where they convert it into liquidity and and they use that money hopefully and it's there till they till they pass it's a little bit of whack-a-mole though yes we can increase taxes we can borrow more money right or we can live with the kind of spending profile we have today we I mean something gives in that equation and me personally I will confess nonpartisan view for USA facts we just give you the
data you make up your own mind I'm a businessman balancing the budget seems good to me and so I I look at it and said simple we probably need some more taxes probably and we probably need less spending probably less spending or more efficient spending is it is it a question of are we using for instance so Mark cubin was on and you guys I'm sure go to the Billionaire's brunch um which by the way I never understood why do they do that at Waffle House it feels like you could get a better I'll forget
it it's Billionaire's basketball lunch in that case goad billionaire bask lunch so he finds out that these pharmaceutical benefit managers uh are jacking up and Hiking all these pharmaceutical prices the government is not really allowed to negotiate with them so he creates this business uh in which he does that is too much of our money that we spend on poverty programs or Elder programs going through these middlemen that are enriching themselves even the ACA right you think about Obamacare what what it really is is a boon for insurance companies to jump into another marketplace where
the government says well we'll keep this same inefficient system where you get to deny care when you want to and the the pricing isn't transparent and it's not really a free market system because Healthcare isn't a free market system and we're just going to subsidize that insurance policy it doesn't really change the dynamic of how healthc care is is given isn't that inefficient yes and you put son of a [ __ ] yeah son of a [ __ ] you put in it a little bit of cont text okay it's inefficient but if I tell
you it's less than 1% of Total Health Care spending in the US less than 1% you can say it's inefficient I won't disagree with you I can say it's 1% and so even if we crushed the issue you're talking about down to nothing okay down to Absolute nothing we still have a problem with Healthcare spending right we still are he the need to deliver Healthcare but isn't some of the problem we have with healthare spending because the largest tranch of customers are unable to really negotiate effectively because it's not we have a for-profit healthare system
when you can't comparison shop for heart attack doctors you basically get driven to wherever is closest there are three people basically who insure almost everybody 92% of Americans are not sure let's just talk about who are the three Medicare where they can negotiate some things but not others right for example prescription benefits except for the new caveats Medicaid right where government negotiates really hard really hard I'm really impressed by what the government negotiates on behalf of the Medicaid patient okay and then private insurance for private insurance companies and they're Grinders baby uh you know they're
delivering Health Care $6,000 a person now they're younger Medicaid the most vulnerable people in our population $10,000 a person harder to take care of and then Senior 16,000 who do you think is most satisfied with their with their care in those three tranches uh private insurance no question private insurance over I mean I again I don't have data from the US government but I'm going to guess private insurance right is there any qualm in your mind of you know they say that the biggest reason people go bankrupt is medical bankruptcy is is there any reason
in your mind that a country like ours with the wealth that we have should ever have a situation where people who are sick so they might be more satisfied but is it at the cost of the percentage of them that will go bankrupt because there's no government back stop on it well do I think it's a good thing no I don't think anybody should go bankrupt right for their health I don't now how do we get from where we are to there yes is important it is important I have no prescription for that but me
personally and emotionally I agree with you a th% right but to solve that problem what other changes are we going to make what are the things that we're going to give up what are the things that we're going to get it seems like a much smaller fix to fix that problem than to try to reinvent the Health Care System again uh when when health care right look we have problems in our Healthcare System but the inefficiency I think right now tends to be if you if you just compare us to Europe we do about twice
as many procedures as they do in Europe and our medical professionals get paid about twice as much as European medical professionals so that's doesn't that sound like it's a system incentivized to that it is it and it is and it is absolutely except Medicaid right so they don't do twice as many except Medicaid because Medicaid is uh essentially it's on an HMO model right and things get negotiated differently do you think that a public option you know the one that everybody shouts is the death of it all is the thing that blows up the system
because in some ways I always look at it like what do I think government's purpose is like I love the fact that we're a checks and balances system right and it seems like within the government there is okay judicial Congressional executive and they're all pushing and pulling uh they weren't expecting the kind of partisan battles that we get but we get them but it does seem like corporate power transnational multinational corporate power also needs a check and a balance because capitalism is at its heart like destructive there's collateral it generates wealth but it's destructive why
do we fight so hard against the government being a proper check on that against that exploitation whether it be in the medical field or in the college education field or or any of those other things it seems like in European countries I'm not saying it's a Panacea they pay more money but they seem to get the services that connect more directly with their lives sort of back to the earlier conversation that we were having I think if you read these tranches out to European Social Democrat whatever they would think well that's crazy you haven't gotten
anything you haven't gotten any child care you haven't gotten any of the things you haven't gotten free education um why is it that we have so much trouble we generate so much wealth why do we distribute it so inefficiently it would seem well I let me let me give a perspective please I think the Twin Towers of America are democracy and capitalism okay I really believe that wholeheartedly cap I don't want to tell you how that story ends but go ahead good point no but you so you're killing me here you're killing me here it's
tomorrow for [ __ ] sake Jesus what are you doing to me I'm in New York I walk right into it I'm sorry I apologize what do you think I'm doing all day tomorrow all right go allism and democ two pillars go back pillers pillar thank you much better capitalism is the predictable one actually really that's interesting you you give capitalism set of rules people are going to compete they're going to try to make as much money as they can and that's what's going to happen it's predictable but you don't think it's it's by its
nature exploitative though like the monopolies the the rigging of the system that seems all built into I'm going to get to the second part I'm sorry democracy so the fact that capitalism is predictable is actually a great tool for government okay government needs to then train this highly predictable tool to do what Society wants it to do that's the role of democracy is to in not it is a role of democracy is to inform where you want to point this highly predictable um capitalist motive and look if the world needs more regulations put them in
but you're going to get I don't know if it's more regulations but it certainly needs to be something that helps protect us against capitalism's baser Instinct in some respect just let me give base Instinct okay okay let's say my base instinct is to um I want to destroy the habitat of a set of birds by building a windmill okay let's say that's that's that's the topic can I just say something very Qui quickly yeah you bastard why you son of a [ __ ] okay Mr democracy let's take it on the birds yes the the
capitalist is going to try to get that windmill built sure if you want it built capitalist will get it built if you want to protect the birds the capitalist will stop trying to build that windmill I talked to a guy who's actually trying to build one of the largest wind arms in the world I'm going to give you a different example give me a different example capitalists want to find the cheapest labor they can possibly find so they offshore all the jobs in manufacturing and all these other things to Vietnam and Bangladesh and India and
China and places where worker protections don't exist undercutting American workers and the de democratic system fails its own workers and not only allows it encourages it and then decides well you're doing so well on labor costs why don't we cut your taxes as well so that's in my mind I view it as the pendulum has swung completely and we are at the mercy of those instincts and democracy is failing in whatever its directive is it doesn't sound to me like democracy points capitalism it sounds to me like capitalism points democracy I'll speak now I would
think I'll speak now as a former CEO capitalism responds I mean look people are generally good people they'll respond to you give us an incentive we'll go do it you give us a regulation we're going to obey it you you that's what that's what h no it's what happens it really is all right to the 99% jeez you won't let me get anywhere here I give you 2008 but no I so so all I'm saying is if somebody let's take your labor labor cost issue okay perfectly good issue yes businesses are going to try to
reduce labor costs if you don't want those jobs to move then government needs to put a tax or an incentive they're sort of kissing cousins if you will to keep the jobs on Shore what about now and take the consequences though but but then we're competing for their love what about this they get the benefit of our stability of our capital of all the things that make us a a free market stable democracy and they have no responsibility they get all of the infrastructure and none of the toll and that's the part that I don't
understand you know we have States competing with each other for who can [ __ ] over workers the best you know when everybody talks about globalization and you know uh Mexico and India are stealing our jobs well South Carolina is stealing them from New York so they're all competing to see who can give the sweetest deal and and that feels like where the balance is off where the pendulum has to swing I personally have no problem with government providing more direction to capitalism I don't right but then there sometimes are untour consequences let's just take
the offshoring sure sure okay let's just say whatever the policy is it gets more jobs onshore at higher wages right prices will go up prices will go up and as long as that tradeoff is the tradeoff that people want less buying power but more people have higher paying jobs how that actually shakes out for the American I'm not an economist I'm not going to make predictions but there is a tradeoff on most of possibility though that there's a renegotiation of what normal is in terms of profit margin and in terms of capitalization and in terms
of corporatization and in terms of uh taxation is there is there a new normal that can be achieved you know saw it in the pandemic where of course there were supply chain you know crunches and that drove up prices but there's no question that a lot of companies took advantage of a difficult moment to set a new bar of expectation for people and now that the supply chain has eased that expectation still exists since the start of the pandemic yep CPI price index is up about 19% right okay we still have inflation those prices are
not going to come back down they're just going to grow more slowly wages were up 21% right wages were actually up more than prices right you know and so if you take a look at it the buying power it's not much but the buying power of Americans increased slightly slightly so nobody likes inflation it's too disorienting Etc but it wasn't a net negative trade it feels bad people feel bad I know that do you think though that as complex as inflation is and all the different avenues that go into it do you think a portion
of it at least because I listened to some of those earnings calls in the pandemic and people were like we're killing it our profits have never been higher and everybody's like yay so isn't isn't that a part of it then I would say if I was to make a suggestion yeah go increase corporate income taxes just increase corporate income taxes that reduces profit I just don't that's you want I just don't know if it's it's want the bus regulating individual decisions just just my point of view right bad you you want to take my profits
as a company you think there is a transaction to be had between government and corporate leaders where they come to an understanding that it's a more symbiotic relationship and not an exploitative relationship the invisible hand so to speak of Adam Smith yes there there is no master planning you can't say be nice but not free Mark there is though there's subsidies that they get there is no subsidies and there's regulations There are rules and I love that I love look there's some regulations if I'm running a company I might like or not like we just
built an arena for our basketball team why we had to have our own home K so we can beat the Knicks when they come to town let me just explain very quickly that was P shot uh no I I it makes sense it's listen man it's it's an incredibly uh complex conversation and I really do appreciate your patience with me on it and all that it's just uh I think the frustrations have been with what I love about your site and let's bring it back to that is that you've brought together all the data and
context necessary to have these conversations because these conversations feel like they don't occur all that occurs on the news is how do you think that's going to play in Wisconsin like nobody seems to want to get into the Weeds on what you're talking about well that's what we're trying to do we we have very conscious nonpartisan here's the data we're going to make it digestable for you we're not going to try to tell funny stories we're not going to make forecasts about the future right uh there's a quote that's very motivating to me as we
started this thing from James Madison you go all the way back to the founding of the country go ahead no I'm just kid he said something like a popular government without popular information or the means of acquiring it is a prologue to a farce or a tragedy or perhaps both and as I sit here and I observe Lots in American politics I believe that right and our site is trying to combat that by making popular information available to our populist we make videos we make who's the star of the videos Steve B I'm just going
to say something real quick not for nothing you live in Los Angeles you couldn't grab Hanks come on you know what I'm talking about throw them out there to give some facts uh it's a fabulous site and you're doing uh great work there and I so appreciate you uh coming on and giving us uh such interesting perspective on on business and government and Regulation and all those different things it's really helpful so thank you for doing that check out usafacts.org Mr Steve B [Music]
