96. Trump vs. the Dollar: A Battle He Can’t Win

0:28This episode is brought to you by Progressive Insurance.

0:35Welcome to The Rest is Politics US. On this eve of July the 4th, happy Independence Day. Anthony, how's it going, that independence thing, by the way? Going good? You know, I need to call the king, okay? I got to ask him if we're going to be okay. If we'll have you back. You remember that scene in Hamilton? Who was it, Charles III? Charles III, you'll be back. So he's like, you know, now that you did this to yourself, Charles, you're in trouble. You don't have me. Let me give Charles a call and say, hey, how do you think it's going so far? And the good news is it's still Charles. So there you go.

1:07You can ask him again. Anyway, I'm very excited for July the 4th. We have big fireworks here in Washington, D.C., which is always kind of fun. I can see them from the roof of my house. I'm going to be doing that tomorrow. And you're going to be grilling hot dogs, right? Well, no, I am a diva. I mean, listen, we're a year into the podcast. I've exposed my full personality to everybody. So, no, I'm a full diva. I'm going to some beach club here in Southampton to eat grilled hot dogs that someone's grilling because that's just the diva nature of me you know and by the way as you know because you've met my mom I'm an Italian mama's boy I don't cook you've never cooked in your life I know you can't even make a cup of coffee these people cook for me and uh yes so if you're listening and it's like nails scratching a blackboard I'm very sorry about that but I would rather just be me Katty Yeah.

1:55Fireworks. Fireworks and pasta in my house, I think, being a good non-American so far. But you never know. By this time next year, I may have joined your ranks. Right. Today, we are going to get into the big drama up on Capitol Hill. As we are recording this, Antony, on Thursday morning, it looks like the House is about to vote on it. No surprises. President Trump has managed to wrangle all of the holdouts in both the Senate and the House to get his bill passed. And this bill is going to, it's a massive, the big, beautiful bill. Some people are calling it the big ugly bill. It's enormous. It's 900 pages this long and it's got permanent tax cuts for the rich, a lot more money to deportation efforts.

2:42It also cuts some people's access to food stamps, which is the food security program in America, and to Medicaid, which is the health care for poor people in this country. and Democrats are trying to do as much as they can to say the politics of this are political suicide for Republicans when they run in the midterms in 2026. So we're going to talk about that bill. Then after the break, we're going to discuss President Trump's big Supreme Court win. The court has ruled that lower courts can't block his national policies, his executive orders anymore. And that is a huge deal, especially it's being seen as a win for his push to end birthright citizenship, but we can see whether we think that is actually going to end up passing.

3:26We'll unpack what all of that means, why legal experts are freaking out and what happens next. So I think the reason I wanted to talk about the big, beautiful bill, not just because I've been on television every morning talking about this damn thing and nobody has left Capitol Hill for days and they're all exhausted because they've been voting all through the night and talking about it all through the night and being coerced all through the night. But I want to set the sort of broader picture of this week. And it seems to me, Antony, that President Trump has just had like a string of wins. This has been a very good week for the White House.

4:02They've got the Iran strikes and there hasn't been much blowback from them yet. And the caveat there that we have to say yet. He's got the big, beautiful bill, which we're going to talk about in more detail, which had a lot of fiscal conservatives saying, we don't like this because it's going to increase the American deficit. He looks like he's managed to wrangle all of those holdouts. Canada has backed down on a Canadian tax in order to get trade talks restarted with the Americans. And he's had that win at the Supreme Court that we're going to talk about in the second half. And it just feels to me like Donald Trump this week, if we had to take a snapshot of this week, as he wrote on Truth Social this week, said, I hold all the levers and I have all the cards.

4:47And it turns out that if you have total control of your party and your party has control of government and you're pretty shameless and you don't really care about the future health of your party, you can get a heck of a lot done. And that's what it feels like this week. I don't think Donald Trump has been in a more powerful, successful position in his presidency ever since he was inaugurated. This is a high point for him this week. Am I wrong? No, you're not wrong. I guess, let me just play devil's hand. Let me play Hakeem Jeffries for a second. He's the minority leader now, but could potentially be the Speaker of the House should the Democrats win the majority.

5:28Let me just play him for one second, get you to respond. He, yes, having a good week, but he's gone against a lot of things that he said he was going to do for you, Mr. and Mrs. MAGA. He said no more forever wars. He's dropping bunker buster bombs. He said we're going to get the deficit under control. He's now extended the deficit,$3.3 trillion of more deficit spending over the next decade. MAGA doesn't care about the deficit. Well, we know that, right? So that's a very important thing to tell people on this podcast. Not only does MAGA not care about the deficit, Trump will tell you privately that his base is socially conservative and fiscally liberal.

6:10But I'm just telling you what he campaigned on. He's doing things very, very differently than he campaigned on. So what is your reaction to that? That's okay because it's popular? So the Iran strike so far, I think he's got away with it. We don't have American boots on the ground. We don't know how much they've set back Iran's nuclear program, and we still don't know where that missing uranium is. But in terms of the American public. Are you seeing Iran on the front pages anywhere? Zero. Iran is not on cable news. Nobody's talking about it, which in political terms for Donald Trump is a huge win because we would be talking about it if there was retaliation against American soldiers in the Middle East.

6:49Now, I'm not saying that that is over. The Iranians are patient and that could well happen. We have to remember the invasion of Iraq here and how it looked like it was going well until it looked like it was not going so well. And that could happen again. But in this moment, there is no retaliation on Iran. And I think MAGA has more or less decided, I'm hearing crickets from those MAGA people who didn't like the strikes. You're not hearing Steve Bannon up in arms about them still. You're not hearing Joe Rogan up in arms about them still. You're not Marjorie Taylor Greene a little bit, but even she has been quiet this last week about Iran because they've moved on to something else.

7:24You know, Trump is the master of the art of distraction. So you have Iran, that happens, no fallout. So far, he can count that as a win, both tactically and politically. On the deficit spending, Donald Trump's genius back in 2016 when he ran and upended decades of Republican orthodoxy, economic orthodoxy, was that actually Republican working class voters don't give a shit about the deficit and they do really like social welfare programs and they don't want them to be cut. So I would say actually the risk for Donald Trump in what's happening right now on Capitol Hill is not the deficit exploding, although that could lead to interest rate increases, which could lead to more inflation, which people don't like.

8:09It's the cuts to Medicaid. And because we've had this shift in the demographics of who votes for what party, rural Republican voters actually like Medicaid. A half of American children are on Medicaid, and many of those families may well be Republican. I think that's the bigger political risk for him rather than the deficit. I may be wrong. Comment on the following. We have this woman, Lisa Murkowski. She's an Alaskan senator. She votes for it, and then she says, please in the House, don't vote for it. So somebody please explain that to me. Profiling courage. What do we think? Yeah, profiles and courage.

8:48Exactly. And then we have Ron Johnson, who basically says under no circumstances is he going to vote for it. I'm a deficit hawk under no circumstances am I voting for it. Blink, blink, he votes for it. So go ahead. Yeah, look, I mean, Donald Trump manages to get to these people. And what happened with Lisa Mikowski is that she was, as is the kind of old tradition of, you know, American politics. You have a bill, a budget bill that you don't like. And you end up saying, okay, I will vote to expand the deficit, which I don't like. I will vote to cut Medicaid, healthcare to some poor people, which I don't like.

9:27But you know what we could really do within Alaska is more support for whalers. So in those 900 pages, there is a provision slipped in with help and assistance for people who are in the whaling industry. How many states in America have whalers, Anthony, I wonder? Okay, but that's Washington. what you just described. Yeah, this is how she got it. And what did she say? She said, I realized this is going to be painful for the other 49 states, but Alaska is my state and I have to watch out for Alaska. So she sold out millions of Americans to get relief for whalers in Alaska. I mean, I guess good for her, right?

10:08That's the way politics works. How many Americans have been taken off Medicaid? How many women are now going to give birth to a baby. And then the day after, they're not going to have the Medicaid and they're going to have to pay the hospital bill. Oh, but by the way, they can't pay the hospital bill. And so what's going to happen is the hospital and the insurance companies around the country are going to absorb the expense of that. And so it's going to end up on the consumer of the insurance. It's going to end up on America's businesses. It's going to end up on our insurance premiums. We'll pay more, right?

10:40Yes, exactly. But what I'm saying is there's a hidden tax to all of this. So let me say this to our viewers and listeners. A, deficit spending, a lot of people in our society, the MAGA people feel, hey, no problem. It's not my money. Borrow the money, blow it out, give it to me. Deficit spending is unfunded tax liability and it's going to get paid. And if you're not going to tax the people what you're spending, no problem. You're going to inflate and destroy the money. And inflation, Caddy, is the worst form of taxation because it's the most regressive form of taxation. The wealthy don't care about the inflation because they own the assets.

11:24And so the$10 house goes to$1 ,000, no problem. And this is an interesting thing because I was trying to explain this to people. If you bought my parents' house for$16 ,000 and gold was$35 an ounce, you had, I don't know, we could do the math, it's probably 700 ounces of gold. Today on Zillow, my parents' house is worth$700 ,000, but gold is at$3 ,000 an ounce. It's 450 ounces of gold. It's actually gone down in value - Compared to other assets. Caddy because it's an older house. It was built and purchased in 1962. But people see inflation and they don't understand it. So my net worth just went from 100 ,000 to 1 million.

12:11I'm rich. No, no, you don't have any purchasing power. And this is the big crime that's happening in these societies right now. So yes, we're going to spend an extra$3.3 trillion in deficit spending. and you are 100 % correct, MAGA does not care, but you're going to feel it in your cost of living. You're going to feel it in your insurance premiums. You're going to feel it in terms of how you are going to reach or your children are going to reach escape velocity in an economy like this. It's going to be very, very hard. It makes it harder for people, Kat. Easier for the politicians, harder for the people.

12:47And I'm not sure it is easier for the politicians, not for Republican politicians trying to defend the Medicaid cuts in 2026 anyway. Before the podcast this morning, I reached out to somebody who's very senior in MAGA economic circles and advises the president. And I asked him what he thought of the bill. And this is the argument, just to put the kind of case for this bill, and we've heard Donald Trump make this case, which is that basically this bill will stimulate so much economic growth that that will grow America out of its deficit problems. And they say that is the only way to do it. And what they like about this bill is that there's no more spending.

13:31And that's what the real fiscal conservatives, what they hate is the spending. Now, other people could argue that these tax cuts are a form of spending. That is not the argument they buy. And what he said to me is that there are significant private sector investment incentives in this bill. You can get full tax deductions, for example, on property, on plants, factories, on equipment, on land improvement. And their calculation is that that leads to higher growth and to a productivity surge, something like for every one percentage point of growth above the baseline, you actually get about$4.5 trillion in revenue.

14:13Now, that's their calculation. We know that the historical model for growth, managing to grow America out of its deficit and rise all boats, which is what this guy says, is slim to non-existent. But that is the argument that Donald Trump has been making, partly because of advisors like this one, is that what this does is it massively stimulates growth and America is on a verge of a huge productivity boom fueled by this, but also fueled by AI, which will make the deficit something that Americans don't have to worry about. What do you make of that case? I mean, I hear the case, but up against that, I feel the people.

14:55And by the way, I'm giving that because that's the case, you know, I wanted to give there. I think it's an important, listen, I think it's important. I was, if you didn't give it, I was going to give it. And so it's important, But there are people now below$50 ,000 in income that are losing$690 worth of credits or value to themselves. And there are people that are making more than a million dollars in income that are getting a$6 ,900 benefit from this. So I don't know. Does that sound right? Let's reincarnate Teddy Roosevelt and let's ask Teddy, the father of progressivism. Does that sound right?

15:32The poor are going to pay more money as a result of the BBB, and the rich are going to pay less money as a result of it. So I don't know. Does that sound right? The other thing is, and I want to ask you this, because we talk about Elon Musk a lot, you and I. We had a great mini-series on Elon Musk for our founding people. Elon Musk is like, why have a debt ceiling? If you're going to, all you do is every time you have a debt ceiling, you raise the debt ceiling. There's no spending control. We had a group of politicians 30 years ago that were like, whoa, we have to be responsible. Dick Gephardt lost the speakership, the opportunity, because he voted for the pay-as-you-go legislation, which tightened the guardrails on the House, which George Herbert Walker Bush put in place.

16:23And a result of adhering to that, Bill Clinton and Newt Gindrich ran a budget surplus at the end of the year 2000. Today, bye-bye. Caddy, I'm not a catastrophizer, but we could be 25 years out with an$80 trillion deficit and the money will be, I don't know, I'm not going to say it's Zimbabwe, but you're going to have to print the money. remember my buddy Ray Dalio said the debt crisis starts when you're borrowing the money to pay the interest on the money that you borrowed that's when the acceleration starts so so to me I hear you and I understand it and by the way this is another terrible thing for me to say so people don't turn off your radio or don't switch off your your iPhone the idea that you think they're listening on radio that's so sweet oh well whatever it is i mean you just like dated yourself by about no i listened to you in the car not on the radio i'm the only person on this podcast i just want to make this public service announcement i'm the only person on this podcast that listens back to the podcast i okay don't that is a total deflection you're not actually answering the question this is what politicians do all the time i asked you about the radio and how that dated you And then you go in with, oh, well, you don't even listen.

17:46That's Bluetooth, but you're not on the radio. You're on a podcast stream. Let me get the gun back on the bird here. Let me just say this to you. You got an$80 trillion deficit coming. You're going to liquidate the dollar. The dollar has lost 10 % of its value since the tariff nonsense started and the BBB started. Tell me, Europe's expensive at the moment. So tell me, guys, what you want to do. because this is not going to work for the country. And by the way, this is what your old country did. Your country did this. They inflated and they lost their currency standing and then their empire weakened and then had the fiscal collapse that they had to dig themselves out from under.

18:30And guess what? America has already had its credit rating downgraded this year, right? We've already seen the rest of the world say, you guys, American politicians are simply not serious about dealing with this thing that is a ticking time bomb, which is why you've got this phrase, anything but USA, abuser, going around. But the other thing that I think is interesting, two quick things I wanted to say, and then we should take a break. One is that I don't really understand what the upside is for the Republican Party on this, because there's a lot in it that's unpopular. Polls are already showing us that even though people don't really know, they have got the headline that people are going to lose their Medicaid.

19:07But it doesn't actually even really give people a tax cut because all it does is stop them from getting a tax raise. And it reminds me of Barack Obama back in 2008 when he had to try to prove the negative, which is that the economy might really have fallen off the fiscal cliff if he hadn't done what he had done in terms of bailout. It's very hard to prove a negative to voters. They're not going to really feel the benefits of this because they're going to be in the same position that they were in six months ago. It's not like the Republicans have actually given them something massive if they're middle class.

19:38At the same time, they've actually taken away something for them. I think the other thing that's worth pointing out is that to our friends around the world, America is not actually a country that is completely heartless and lets people bleed out on the street or die of flu outside a hospital because they can't afford to pay. That is not the way this country works. What's going to happen now is that people who have lost their Medicaid health insurance are still going to get treated. But guess where they're going to get treated? They're going to get treated in a hospital emergency room. So they have a sore throat.

20:11They're going to go to the hospital emergency room. They've got a sprained wrist. They're going to go to the hospital emergency room. And where is the single most expensive place to treat people? It's in the hospital emergency room. There's a provision in this bill that is a bailout for rural hospitals to make sure they don't go under. So they're going to give money to rural hospitals in order not to treat people. It'd be far better to give those patients Medicaid and let them be treated because you're still funding the rural hospitals. I mean, I think the kind of maths of this is pretty nonsensical, but I'm not even sure that the politics of this.

20:42Maybe Trump just wanted... Why did Trump want this bill, Anthony? Answer me. You know Trump. Why did he want this bill? He doesn't even know what's in it. He said as much. He said, you know, oh, I'm not sure what the numbers are. It's going to be smaller than that. I don't know. Trump wants to make money for himself and his family, and he knows if he can get this bill in place that it is a long-lasting bill that's going to guide the government into the midterms, basically. And then he can focus on getting attention for himself, producing reality television in the Oval Office, and making money for his family.

21:14And that's basically why he wants the bill. But you brought up such an important point. I just want to remind people of this. in 1986, Reagan socialized medicine in the country. And he did it by exactly what you said. He basically said, if you go walk into the emergency room with a strep throat, the doctors in the emergency room have an obligation to give you treatment. You walk in the emergency room with a broken arm, the doctors have an obligation to give you treatment. And it was a way of socializing medicine in the country at the most expensive possible way to do it. And so we've never really 100 % still figured it out because of the politics like the gun control.

21:57But before we go to the break, I have to ask you this. Is America capable of tough medicine? Meaning could a person, you see you're shaking your head, so you say no, but could a person get to the podium and say, okay, listen, this is what we got to do. Here's the growth of our economy. Our economy doubled in size relative to Europe, the GDP relative to Europe over the last 15 years. We can use these incentives, market-based incentives to double the economy again, but we have to, at the governmental level, slow down the growth. The BBB sucks, Caddy, because it's outpacing the spending, is outpacing the growth and a result of which it's going to have a bigger percentage of the GDP in terms of deficit spending.

22:46And you're saying, if an American president or American politician said, listen, we can get there, it's a couple of nicks and cuts here and a couple of nicks and cuts there. Oh, by the way, if I don't do this, you're going to pay for it anyway in inflation and all this invisible stuff that you can't see day one, but you're going to feel pain from. And you're saying, no, nobody would accept that. I think you'd have to go back can ask Bob Rubin, who was Clinton's Treasury Secretary, who's the last person who managed to do this. But he would probably say the politics are so much more divided. There's really very little room for cooperation.

23:22I mean, that's the craziness of America right now, right? You have the system that was built on and for cooperation. It's not a parliamentary system. But no one can cooperate because the moment they do, they get primaried. And the gerrymandering is such to go back to what you always talk about, Anthony, the structural thing of gerrymandering, how votes are cast and the way districts are drawn up make it really difficult. I think there's just almost no room. All we're doing is incentivizing extremes and those extremes never want to be caught reaching out to the center to do something that is difficult.

23:54And doing something that is difficult like reducing spending requires political cover. You can't have the opposition party then run out and run campaign ads saying the Democrats are killing seniors or the Republicans are taking away your social security because then you can't make the cuts. Right? You can't make the cuts unless you have political cover from the other side and we live in a world where they don't. Okay, we're going to take a break. But before that, Anthony, I have a present for you. I mean, that was a brutal reality what you just said in such an English accent. It was fantastic.

24:27I mean, if you listen to this and you're an American, you got to be bummed out by what Katty just said. A little bit bummed out maybe. Okay, go ahead. What's your surprise? I have a gift for you. So Donald Trump, God bless him, has produced a new perfume called Victory 4547 and it comes for men and for women. And the men's perfume, apparently the scent, costed a mere$250 by the way, which is a bit more expensive than Chanel. I looked it up. um the for men it's a blend of rich masculine notes so i thought you might like that what do you think i i thought the sub title of the cologne was beta male but here's what i'm going to do caddy if you give me that cologne on stage at the indigo theater i'm going to torture you by spraying it on myself so that you will have to smell that cologne okay while you're trying to concentrate on entertaining your delegation.

25:28Well,$250. I think rich masculine notes, who doesn't want them? And you get a statuette of Donald Trump. So that's nice. I thought the bottle was fantastic because it makes Trump look like he's 180 pounds. I need a bottle like that for myself. Anyway, I thought you'd like that. I'm going to order one for you. We're going to take a quick break. And I'm going to use it, Katty, in front of you. Thank you.

25:54Hello everyone, it's Gary Lineker here from The Rest Is Football. Just a quick message to tell you all about the Club World Cup tournament that's taking place in the US at the moment. It's 32 of the best teams from all around the world battling it out to be crowned the best side on the planet. We've reached the knockout stages of the competition, which means all the big guns will be going head-to-head. Manchester City, Real Madrid, PSG, Chelsea and Bayern Munich are just some of the sides vying to lift the trophy. Join myself, Alan Shearer, Micah Richardson, our expert out in America, Alex Aljo, as we guide you through the explosive final stages of the tournament.

26:33To make things even better, if you're watching the video version of the show on Spotify or YouTube, you can also watch all the goals and the best bits of the action as we discuss the games. A first for podcasting. Just search The Rest is Football wherever you get your podcasts.