Inflation eases slightly and social security insolvency | Hour 1

What's going on? Thank you so much for listening to this podcast. It is heard live every day from noon to three on WBT Radio and Charlotte. And if you want exclusive content like invitations to events, the weekly live stream, my daily show prep with all of the links, become a patron, go to dpeakclendarshow dot com. Make sure you hit the subscribe button. Get every episode for free right to your smartphone or tablet. And again, thank you so much for your support. I want to welcome to the program, Cush Desai. He is the Special Assistant to the President and Deputy Press Secretary, Mister Desaiah. How are you, Sarah, Welcome, Thanks for having me on. I'm doing well good. So today we got an inflation report. Basically that everybody's looking at this consumer price index. Labor Department put it out and I guess the top line is that inflation eased a little bit. When you're looking at last July to this July. Is is that the message that everybody is running with today on this That's exactly right. Inflation cooled over the past year, and if you take a little look a little closer, inflation is also in the last three months cool to an annualize rate that's well below defense two percent target rate. And in particular, we saw lots of meaningful price decreases on a lot of essentials. We saw prescription drug prices continue to come down. We actually saw beef prices actually come down in the month of July after coming up over the past year or so thanks to this administration's targeted policies on beef. We continue to see prices of other essentials like eggs, like dairy, like poultry stay low lower than they were a year ago. So overall we're seeing we're seeing positive impacts here of the President and the Trumpet registration's agenda, which is delivering economic relief. And it's certainly taken the possibility of an interest rate hike by the Federal Reserve off the table. Yeah, I do want to come back to that because that's sort of the looking forward. What kind of impact does this report have? So the core CPI first though, does not include energy and food prices, which is a criticism I think that got taken out of the basket or something right years ago. And so energy prices they also came down by about one and a half percent, and grocery prices I've got say they've wrot. All grocery prices rose point one percent, the slowest pace of gains since March. Meat, fish, eggs, fruit all went down. What you saw rise was airline fares, medical care rose point four percent. Used car and truck prices increased point four percent. So kind of a mixed bag. But overall, I guess you guys, I mean because this has been I'm sure you're aware of the great Burrito Debate of twenty twenty six that occurred. It seems like years ago, but it was actually last week and about about the price of groceries. And CPI is a lagging indicator, no like, So this is we're into August now, but this is for July. That's exactly right. And I'm let me make a couple of points there on COREVPI. Look, the thing with energy and food is that these are highly volatile sectors or components of the CPI consumer basket of goods that people buy. Energy prices have obviously seen some volatility here with with the Iran situation, but remember just just a couple of months ago when the administration signed, when the President signed his MoU with Iran, we saw oil prices plummeted precipitously like a rock, as the President like to say, from around you know, well over one hundred dollars a barrel to you know, around sixty five or so dollars, which is where oil was before the startup operation etpic Fury. So I think the point here is that we're very confident that as we as we get the President works towards a final resolution here with RAN, that we will get energy prices back down to where they were just a few short months ago. And that's precisely because of this adminstration's pro drilling, drill, baby drill agenda. As it relates to food, as I said, again, you know, we're very cognizant of the fact that food prices have gone up, especially during the Bay and era, and the administrations has taken a lot of targeted policy intervention. We saw the success with chicken and eggs, which prices of which are down precipitously over the past year, and we're seeing that, for instance, with beef, which actually went down to the past month after going up significantly in recent months. So again, I think there's a lot of work to be done, but I think this report shows that our policy agenda is paying off, and we'll continue to pay off as we continue to implement our policies here and these policies continue taking effect. Yeah, and one of the things I talked about this the last week during the burrito debate, about the price of beef. And you know, people aren't aware that the cattle herds had to be thin because of drought conditions, so they had no they couldn't graze enough head of cattle, and so like there were, like you said, it's a volatile commodities markets, and you got to all these externalities that affect these prices. Same thing with the chicken issue, with the bird flu a couple of years ago as well. And you know, we saw the rapid inflation, what was at nine percent in one year under Biden, and like the prices don't just come all the way back down after you saw all of the spending and the inflation. It all just kind of gets baked in there. So like we're I guess we're kind of waiting on wages to and and by the way, the data shows this, I'm sure you know, the data shows that wages are now growing faster than inflation, and so like that's that's how people make up that difference. That's exactly right on to your point of my beef a cow herd size, they're actually at a multi decade low, and this illustration hasn't focused on helping American cattlemen and ranchers to grow that hurt size back to where it should be, to get those beef prices back down. But you're right on real wages. I think we're very focused on accelerating economic growth. The President is obvious secure trillions of dollars in investment into in particular in American manufacturing, across pharmaceuticals, across metals, across semiconductors. We're slashing taxes, we're slashing regulations, and so we're very focused on ensuring that that wage piece continues going up. And remember, uh, you know, prior to the start of operation Epic Theory. I mean again, like gas prices are just such a big part of the consumer basket here. But Americans that recovered almost half of the real wage losses that been experienced under Biden, and even now uh with workers in key sectors like manufacturing, have actually seen their wages rise dramatically, well above the the The overall average, And so this is a big priority for the President and for the administration. And again and just look at what the president complished is first term. He has a proven track record here. His policies do work. All right, Let's talk about the Federal Reserve. So this inflation data is one of the pieces of data that the that the Fed looks at to determine whether or not to raise interest rates. And in the past, the President has been opposed to rate hikes. In fact, he's been you know, lobbing for decreases in the interest rates. So how does this in your mind and in the mind of the administration, Like, how does this impact the federal reserves? I guess next meeting that they're having. For sure. I think today today's CPR report, I think confirms that, you know, there are no broad spill or effects. Obviously, energy and gas prices are such a big part of American spending that when you see price increases in those for those products, it drags down or drags inflation up. But we're not seeing this affect the rest of the economy at large. And so I think today's today's CPR report is really I think it knocks down any any need for the Federal Reserve to even consider further interest rate hikes. I think if anything, it makes it, it gives more solid proof that the President is right that the Federal Reserve should cut interest rates, that Federal that interest rate should match, the should complement the rest of the administration's policy making, which is all intended to accelerate economic growth. So the Federal Reserve Chairman Kevin Walsh, he is he has said higher rates could well be part of the solution if inflation remains elevated. But then there's this other sort of mission that the Fed is supposed to look at, which is, you know, employment, So what are you looking at on that side of the equation for sure? I mean, I like you said, I if the Chairman said that, if if that's a big gift, if inflation remains elevated, in which were obviously we're not seeing that unemployment again, I think we're seeing we continue to see very solid and robust private sector job creation. But obviously it's never enough for either the President or the administration. And so again we have been focused on cutting getting government out of the way, a bitiness of slashing pointless red tape, of cutting tax is and we think that in the President's made it very clear that interestrate should compliment this. We are trying to, you know, create an industrial resurgence in America, and so when companies are trying to build new manufacturing facilities and factories across America, interestrate should help support this by being lower and lower the cost of borrowing for America's economy. Anything else you want to add you think is important or interesting that I haven't asked you on this, I. Just want to. I just want to highlight one one big takeaway continue to takeaway is that prescription drug prices continue to fall precipitously under President Trump. And that's thanks to his most favorite nation deals with the pharmaceutical companies, thanks the Trump bar Racks. And this is the only president in modern history that has delivered lower drug prices for American patients. And we are just getting started. We're working on more and most favorite nation deals. We're working on adding more drugs to Trump bar Racks. And so this is a huge historic paradigm shift for Americans that this president said he would get prescription drug prices down and he's actually delivering in a way no other president and has even been able to promise being able to. Do pushed aside. The Special Assistant to the President and Deputy Press Secretary. Thanks for your time today, sir. We appreciate it. Of course. Thanks. I'myall take care all right. For over a year now you've heard me talking about Create a video. Great local company in mint Hill that has helped more than two million families preserve their memories by turning old photos, VHS tapes, film reels and slides into lasting keepsakes. Now creative videos helping families and groups create brand new memories while they're traveling. Introducing group travel videos perfect for family reunions, church mission trips, group vacations, destination weddings, student trips, senior adult groups, sports teams. I mean, really, any gathering of people that you care about that's traveling together. Group travel Videos gives your traveling pack a private app where everyone can share photos during the trip, send messages, share schedules and important documents. Even a traveler safety locator feature that works only during the trip, and family members and friends back home can follow along and enjoy the experience in real time. No social media, no ads, It's totally private. No emails, phone numbers, account setups or hassles. With group travel videos, you'll capture today's moments on your special trip while they're happening. Then after the trip we're gathering, they'll professionally turn your shared moments into a beautiful storytelling video that your whole group can stream and download and treasure for years. Check out group travel Videos dot com. That's group travel Videos dot com. Or call seven oh four eight four six seventy eight seventy extension two o six. And when you do that, ask for Katie. But Pete, can I just email? Well, yes you can. You can email Katie Katie at group travel videos dot com. Group travel videos from old memories to new adventures, preserving life's moments for a lifetime. From the text line, Eric says, inflation is consistently over three percent. This guy is in a dreamland. Okay, So I'm just looking at the At the report of the data, core CPI gained two point five percent in the year ending in July. So it's sort of a it's a rolling twelve month look back period. And so from July of last year through July of this year, core CPI two point five percent. If you go back from June to June. That rolling period it was two point six. So those are the last two months twelve yeah, one year lookback periods, the last two months core CPI two point six and now most recently through the end of July two point five. As I mentioned, energy prices fell. Remember that's core CPI. That does not include energy and food prices. That's so there are other things in that basket, and people debate and complain about what should be in and what isn't and all of that. I'm not here to debate like how they build the stat I'm just telling you what the stat is. The total consumer Price Index is up three point four percent from July through July for the twelve month look back. That's the total CPI is three point four The core CPI, which he's that was the number he said, was around what the FED looks at, which is two percent the Federal Reserve like their target rate is always two percent. So again, like you can, you can disagree about what goes into the core CPI versus the CPI, that's fine, but like those are the stats. I don't know what to tell you otherwise, right, And then here's the same thing this has to do with like unemployment Pete, the current employment rate isn't a true reflection of employment in the US when factoring the participation rate is at a fifty year low of sixty one point four percent excluding COVID. I'm not black pilling. It's just that awareness encourages preparation on the individual level. My grammar and spelling is much better this time. I think, Yeah, you did a good job on that one. Kevin Kevin notorious fat fingering the text or the texting here. Yeah. See. So this is the same thing because there are different unemployment measurements that are used. And what is it? The U six, I think is what it's called, And that's one formula. There's another formula that has used in one one of them is just like they call up like a thousand employers and they say did you hire or did you not? Are you at full employment or not? Whatever? Then they extrapolated out from there. That's one formula, and I think it's the U six that does not incline. It hasn't since like the Clinton era when he was trying to juice the stats and he removed the people who had given up looking for work, right, So when you don't count those people. Well, then yes, your employment number is going to look higher, right, So that's the employment And this is again why you want to look at different statistics based on you know, what the inputs are. So with the CPI, you've got core CPI and then you have the larger CPI. So there's that. What will keep this is by the way, from Jeff Cox at CNBC. While that will keep annual infration inflation rates well above the FEDS two percent goal. Two straight muted monthly readings could help buy the Federal Open Market Committee poly makers a little time before making a move on interest rates. At its meeting in July, the Open Market Committee split nine to three to hold the borrowing rate unchanged at three and a half to three and three quarter percent. But you got three votes there that wanted to raise interest rates. So now they've got because of this CPI report, which is the whole point of why I'm doing this, is that the CPI report comes in and it shows the inflation rate is flat basically as to where it is, it's not you know, it hasn't accelerated. Some areas have dropped core CPI two and a half percent. So like you've got these numbers that, as is described in this CNBC story as muted, and so that will give the Fed a little bit more time to not raise interest rates. Okay, that's the key here. The Central Bank skipped an August meeting as the Kansas City Fed hosts its annual symposium in Jackson Hole, Wyoming. So like, that's so, I guess September is going to be their first meeting for where they could raise interest rates. And why is all of this important? Well, in case you haven't noticed, there's an election season, and as with the Great Burrito Debate of twenty twenty six, right people are trying to tie the administration to economic pain. Right, so anything the administration. And I'm under no allusion as to why. The White House, Like they reached out to me and said, hey, can we come on to talk about the CPI report. I said, sure, it's the White House. Hey, yeah, we'll have you on. Well, they want to reinforce this message that things are improving because a lot of people are blackpilling you. They are demoralizing you for various reasons. If it's democrats in media, it's to help democrats win. If it's people on the right, if they're not horseshoe, right, there's just a lot of doomerism and you know, we want this to go faster, or it's economic illiteracy, you know, thinking that inflation is we need deflation. It's like, well, okay, well that's an economic crisis of sorts. So I don't know if we want that, right, So I understand the implication here for the election. Let's talk about some some other economic numbers here. Not so great. Trustees of both the trust funds for Social Security and Medicare, they put out their annual reports in late June, and not good, not good the reports. These funds finance the retirement benefits under Social Security and part A of Medicare, which covers seniors' hospital bills, and it's really just bad news. So Social Securities Trust Fund is set to run out of money by twenty thirty two, which may sound like a very long way away, but in fact is just six years. Medicare's insolvency is expected twenty thirty three, so the next year. So basically, the people that we are electing to the US Senate this year will be in office when the crisis hits. So keep that in mind when you're voting for whom will you vote, knowing that they are going to be part of the peace built, part of the body that has to solve this problem or kick the can further down the road or whatever. To be sure, the program's trust funds are essentially an accounting fiction rather than an actual savings account from which they draw upon. During the past century, when the programs were taking in more in payroll taxes than they were paying out in benefits, the resulting surpluses were used for other government spending. Surprise, surprise, remember Al Gore promising to put it all into a lock box, going to make a Social Security lock box. Remember that. The money that was used for general spending was considered to be owed to Medicare and Social Security, hence the trust fund convention. So basically, it's just like this bag that they stuff a bunch of IOUs into, like, Hey, we know you were making all of this extra money, and so we spent it on stuff, and so we totally owe you. In recent decades, the programs have been bleeding more in benefits than they've been taking in, and so that then dwindles the trust funds. The trust fund's always been a mirage a vehicle for the government to borrow from one pocket to put it in. Another editorial at the National Review says, once insolvent, current law prevents the programs from paying benefits beyond what is taken in from payroll taxes. Did you catch that? You're they're not going to be legally allowed to pay out more than they're taking in. This will mean sudden and significant cuts for seniors twenty thirty two. This is coming. Absent any action from Congress, social Security recipients would see their benefits slashed overnight by twenty two percent across the board. Congress most certainly probably would not accept this right, this would be electoral poison for them. So if they want to avert these cuts, they could, in theory do something, but it's Congress, So yeah, For example, they could amend the law to continue to pay out promise to benefits in excess of payroll taxes. Right. I suspect that would be the easiest thing to do, is to just cut out that one part of the law that says we have to, you know, stay within our budget, and so then they'll just keep borrowing more and more and more money. It's except now at a much faster rate than we already are. That would represent a significant change in the promise of social secuscurity, which is more popular than other government programs because it is perceived as a system in which seniors get out what they put in while working, rather than a typical welfare program. Reality check on that one, though, folks. Is that it's actually more like a Ponzi scheme than a savings account, right, or an investment vehicle. In reality, young workers are paying for current retirees, and the current retirees often receive more than what they contributed during their working years, especially now that people are living longer. Right. The editors over at National Review go on to say, the true entitlement crisis is not the looming trust fund insolvency of Social Security and Medicare. It is the enormous public debt resulting from both programs that's already drawing from our resources and that will only become more explicit once their trust funds are exhausted. Long term fiscal deficits are driven almost entirely by projected shortfalls in these two programs. At a certain point, financial markets will balk at buying further debt that forces lawmakers with painful trade offs, among which would be high inflation, excessive interest rates, and or austerity that would crush the economy. Otherwise, the government will have to default on its debt, either explicitly by failing to make bond payments or implicitly through. Printing lots of more money. Say, if you thought that there was going to be like, oh, well, here's some good news out of that, there isn't any. All of this is bad. This is all coming down the pike in six years. If lawmakers wait around until the trust funds are exhausted or worse, for a fiscal emergency, they're going to make rash decisions with harsh and immediate consequences. It would be much more sensible to enact changes now, which could be implemented much more gradually, than to govern from a crisis mindset. But the problem with this approach is that it says it would be more sensible, And once again, Congress, what could they do? They could raise the retirement age, make future benefits grow more slowly. It would have been far easier to have done this a decade ago. Two decades ago. I remember when George W. Bush first floated the idea of allowing people to take a small portion of the money that's already being drafted out of your accounts for social security. Just take half of it and put it into a private investment vehicle, so it would grow faster, get larger, it would make more money than doing the gov co investment route. And that got killed. It was he called it at the time. He said, oh, the third rail of politics. But at least he tried. At least he brought it up. He offered some kind of potential fix, and it went nowhere. But you know, you've got a political party and their allies in the media that make political hay off of demagoguing this issue, and so Republicans quit talking about it and quit trying. And here we. Are from the text line to Jeff says, I've been hearing social Security and Medicare will run out of money for thirty plus years. It's the same with global warming. Yeah, Jeff, you can ignore it. Go right ahead. I mean, I would not advise that I've worked my entire life under the expectation that I will not have any social security. That's been my expectation. So all the money that I invest for retirement is to supplant social security. And if there's any left by the time I retire, then awesome. But I haven't been counting on it. But if you want to think that it's not going to go bankrupt when it already really. Basically is that's fine. Like I'm not telling you how to live your life. Rick, Welcome to the show. Hello, Rick, how you doing, Brett. It's Pete. I'm doing well. Yeah, No, it's right. I got a way we can think that. So security problem. At least put the mid chunk of it anyway, Okay, the way to do it would be right now, everything over two hundred and fifty thousand dollars is not tax bill under Social Security. Remove the cap, make every dime everybody makes taxable under it. The second thing is to set it up where Congress can't touch it or have a problem with it. Requires that they get went after any if they went after it to borrow it for whatever purpose, it require a seventy five percent or three quarters of both houses of Congress, and the president's signature is a standalone mill. To get it right. So that well they don't touch it. It gets to grow right. So the first, uh, the first suggestion there is one that's long been considered the issue, there is always that in the meantime, you're going to be you're going to have to charge more people more taxes. Right, that's going to be an immediate, massive jumped in taxes for a nons portion of the tax paying public. And when you take more of their income away in taxes, which is what this would do, right, when you take more of their income, then it slows economic growth. To a certain extent, it could, But what is going to happen and to let those security go bailly up? Well, yeah, I mean, like I said, there are. No good options here the economy. No, I agree that we are in for a very difficult ride regardless of what they do, because people have ignored this for so long and Democrats were highly successful in demagoguing it, so nobody would do anything. So that's true. Yeah, all right, Rick, I appreciate the call. It's an intriguing idea about the standalone legislation as well. Seven oh four number says benefits won't get cut, payroll taxes will spike. Yeah, they'll get you on both sides. That'll be a massive increase in your in the income taxes, because that's what these are, income taxes. That's it like it's taxes on your income. It's going to Social Security, sure, but your income is reduced. Rodney says peed a problem with more money out than coming in is because less money are working and already living off the government, and those who did or do work are retiring. Unfortunately, I'm one of those who will retire around twenty thirty two. Yeah, so if you were to so. And this is what the austerity component is is that when they say austerity, they mean a slashing of. All sorts of other government programs. Danny says the trust fund scenario taking place in the country should be the stark example used to convince these knuckleheads that socialism and free stuff paid for by the government is a nightmare in practice. What could be a great idea is to take the billions in tariffs the country could potentially produce to replace unish the trust funds. But alas tariffs are the boogeyman and they've been overturned the way it's been they're actually doing rebates or refunds now to all of these companies. They're having to pay back all of the tariffs because they. Were not done correctly. Perhaps we should do away with social Security and do like Trump accounts where every individual has a dedicated four to one K and what they contribute to it is what they retire on quick giving handouts to people don't contribute. Yeah, well that was basically George W. Bush's plan. Back in two thousand and five, he proposed allowing workers to divert just four percent of their payroll taxes into personal retirement investment accounts, and that was deemed to. Be privatizing social Security. They're going to cut your social security. Democrats still run on this slogan that Republicans want to cut your social Security. So this is why we are where we are because they've been allowed by the media to demagogue the issue and the Republicans over it, and so now it's just not going to get fixed until it collapses. All right, that'll do it for this episode. Thank you so much for listening. I could not do the show without your support and the support of the businesses that advertise on the podcast, So if you'd like, please support them too and tell them you heard it here. You can also become a patron at my Patreon page or go to thepetecleanershow dot com. Again. Thank you so much for listening, and don't break anything while I'm gone.