WBD595 Audio Transcription

The Death Spiral of Western Economies with Dan Tubb

Release date: Monday 19th December

Note: the following is a transcription of my interview with Dan Tubb. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.

Dan Tubb is a podcaster and former venture capitalist. In this interview, we discuss the unprecedented levels of debt within the US and UK. Dan goes through one by one the various options open to the state to bring debt levels back down to manageable levels; tl;dr “none of those options is going to be viable.”

“It’s not like you can just evaporate the UK from the system; if you did this, if you knocked out UK sovereign debt, you would cause a domino effect that took out the entire western financial system.”

— Dan Tubb

Interview Transcription

Peter McCormack: Morning, Dan, welcome to What Bitcoin Did.  How are you?

Dan Tubb: Yeah, I'm not doing bad.  How are you?

Peter McCormack: Good, very glad to get you on the show.  You put out a tweet thread a while back.  The first time I read it, I actually read it wrong.  I read about the developing world, "The financial sector of the developing world is about to collapse", and I was like, "Yeah, of course we know that".  Then I started reading it and then I realised I'd read it wrong and actually you were talking about the imminent, not imminent, but potential eventual collapse of the economic system of the developed world, which obviously is quite concerning, because that would impact the developing world anyway. 

But it's very concerning, because I've been making this show for five years, it's become more of a macro show than a Bitcoin show.  Bitcoin is now really one of the tools of safety we talk about, but really it's become a macro show and a lot of the macro stuff is always pointing in a continually worse direction.  So I read the thread, reached out to you, said to Danny we need to get you on the show, and here we are.  So, welcome, thanks for giving us the time.

Dan Tubb: Thank you very much.

Peter McCormack: For people who don't know you, I know a lot of people read that thread, it went a bit viral, but for the people who don't know you, can you just give a brief background who you are and what you do?

Dan Tubb: Yeah, sure.  So, I actually started in politics, that was my first move.  Do you remember the Portillo campaign when he tried to go for leader?

Peter McCormack: Yes, I remember that.

Dan Tubb: So, I was part of that, and that was kind of my exit point, because he wasn't successful in that.  So I then pivoted and went into finance and spent the next 20 years in asset management and venture capital.  More latterly, that was in developing technologies and emerging trends.  That took me through to about 2019-ish, when the fund I was working on started to wrap up, because they tend to have a ten-year life, and I was looking to make a bit of a break then.  I had young children, wanted to get out of London, provide them an upbringing a bit more like the one I had.  So, I made that move and then of course lockdowns happened.

Now, lockdowns for me changed everything and I thought it was an enormous overreach on behalf of the government.  I mean, just on a macro scale, what lockdowns did, I think the UN put out a report saying it put 100 million people into poverty; 283,000 children starved as a direct result of lockdown; and I think 6.7 million entered malnourishment as a result of it, and that's just the global effects.  The effects on the UK also were absolutely enormous.  We had a health crisis, so family-run businesses had to shut down, but of course it's a health crisis so McDonald's has to stay open.  Whether it was done for the best intentions or not, it had the effect of basically pushing the country in the direction of larger businesses and squeezing out smaller ones.

The effects of that I don't think have been properly understood even yet, but very early on in that process, because I was so outraged by what was happening, even though personally for me it was fine, I mean I've got a nice big house, so that summer lockdown I spent floating in my pool; but the good thing of course is I recognised the effects of the money printing when I saw it, because I was a finance guy and more than that, I was a bit of a gold bug.  I'd spent a long time looking at the effects of what was going to happen to our money system.

So when that happened, started ringing up friends and family and saying, "You've got to get your money into the market now, these are the best conditions I've ever seen", and of course everybody thought I was completely and utterly mad.  In fact, I had one guy, he turned to his wife and said, "He wants us to put money into the market now" and she said, "He's off his tree.  Isn't he watching the TV?"  But that money printing was going to go, it was going to get flushed into assets.  But I also know the longer-term effect was that it was going to impoverish wage earners, it was going to cause a hell of a lot of inflation, sort of 18 months out.

I started these threads on the only outlet that I had, which was Twitter, and I started talking about a whole number of things that I thought was wrong with the lockdown approach.  But probably where my competitive advantage was on that finance side was on that money side, and those are the ones that really got the traction.  And people like yourselves and other people who've been on this show, they kindly amplified those and pushed those out as well.  So, I've had a whole series of threads now on what I've seen coming a couple of years down the line.

The one that triggered you to get in touch this time, of course, was that one that I did more recently on US debt collapse.  So, shall we pick up on that one?

Peter McCormack: Yeah, but I just want to say, this podcast for me has been a journey of being largely wrong about things and learning about where I'm wrong and evolving from that.  On the lockdown thing, I was pro lockdown at the start, and it's been a really hard thing to admit you're wrong about.  I saw the data coming in from China, then saw the data come in from Italy, saw the news reports in Italy, did an interview with a doctor in London, who talked about over a three-day period, went from a trickle to overrun, and agreed with the lockdown without having any clear idea of the consequences, and was pro lockdown.  Coming to terms with being wrong and admitting you're wrong is a very hard thing.

Dan Tubb: So, when government wants to do something, it doesn't do it halfway.  It has overwhelming media firepower when it wants to make a big change, and I don't think lockdown is the last of those sorts of things you're going to see.  Maybe this is something we can touch on later in this talk, but I think at some point we're going to have a very similar narrative push come with central bank digital currencies.

Peter McCormack: Yes.  So, it pushes us into a really interesting area, because this is the type of show where if I put out to my friends online, on Facebook, and say, "Listen…", they'll be like, "You're a conspiracy theorist nutter", not just you, me as well.  I have this pinned tweet of mine which says, "How Americans see me.  How the Brits see me".  The Americans see me as some crazy, screaming liberal, and the Brits see me as Alex Jones, right, and I'm always conscious about how do I --

Dan Tubb: So, if it helps, I'm British and I see you as a screaming liberal!

Peter McCormack: Yeah, but I see you as Alex Jones.  You're one of those rare types!

Dan Tubb: Yeah, it's a safe dynamic, shifted one unit to the other!

Peter McCormack: Yeah, but you're rare out here.  But so I'm always thinking, how do I best get these ideas in front of people so they don't think I'm crazy and this is real.  The CBDC thing is relevant, because I put a thing on Facebook once, talked about it; I got blocked by a friend's mum who said she's bored of my conspiracy nonsense.  In my head I'm like, "I know you are wrong about this".

Dan Tubb: Yeah.  Well, you're not going to save everybody.  The only thing you can do is save the people who want to be saved.

Peter McCormack: Profound, man!

Dan Tubb: Yeah, that's as close as you're going to get, I'm afraid.  And it's frustrating when you see these things happening.  I mean, it was intensely frustrating for me dealing with people over the lockdown period, people who were very emotionally attached to it, because it became a thing as this becomes your identity as a good person.  I had it thrown at me all the time, "Oh, you just want to kill as many grannies as possible".  That's the sort of line that comes back to it, and you will get exactly the same thing in a few years' time when it comes to the central bank digital currency stuff.

Peter McCormack: Which is why the narrative's important, threading it in the right way.  So, let's talk about this thread then.

Dan Tubb: Yes, okay.  So, a bit like your show, I've got lots of American followers, so I did it based on the US and I did it based on that US Debt Clock.  So, if we want to call that up, if we want to have a look at the US Debt Clock.

Peter McCormack: That's the one I had out in the Lavish/Foss show?

Dan Tubb: Yeah, exactly.  So actually, this whole talk that we're going to do is a bit of a theme that you've touched on on a whole number of topics, especially with Greg, because whenever Greg comes on, he always pulls up the US Debt Clock, and you always start to look at it and you start to pull on that thread a bit, but it's not the main theme of what you're there to talk about.  So you tend to say, "That doesn't look good", and then you kind of move on again.

Peter McCormack: I think you're being charitable there.  I look and think, "This looks fucking insane and there's no way back"!

Dan Tubb: Okay, well let's see if we can make you more concerned then over the course of this conversation.  So, quick look at the US Debt Clock, total US debt is $31 trillion.  What does that mean?  Well, it's $94,000 per citizen.  So, you could buy everyone in the US a Porsche 911 if you didn't have that debt, if you wanted to get back to that same debt point.

Peter McCormack: So, if people were looking at this now and they see $31 trillion, $31.4 trillion of debt, who do they owe that money to?

Dan Tubb: Oh, well, themselves, each other, pension funds, foreign corporations, the Chinese Government.  The whole thing with the modern monetary system is, the base layer of debt is sovereign debt and that is then owed to everybody everywhere else.  It's like a spiderweb of nodes of debt lending money to each other, and then it's all sort of netted off.  So, everybody, is the answer.

Peter McCormack: So, a little bit like the crypto contagion we've just been through, where everyone seemed to own --

Dan Tubb: Yeah, well the whole crypto contagion is just recreating the fiat system on a blockchain.  So, yeah, it's that same dynamic.

Peter McCormack: Okay.

Dan Tubb: But yeah, let's take it forward.  It's $0.25 million per US tax payer, is the current level of the debt.  So, that's enough to give everybody in Texas $1 million, including the children.  So, this US debt is quite significant.  And that's only if you look at the on-the-books national debt.  If you start adding in the personal debt, the corporate debt, and then if you start adding in the unfunded liabilities, the way that a corporation would have to show these things, so social security and Medicare and stuff like that, you're now well over $200 trillion of debt. 

Now, is that a big number?  Well, it's enough to give every US adult $1 million, so this is a significant debt pile that they accumulated at this point, and that's what that thread was about, sort of spelling that out and giving those numbers.  I didn't want to make this podcast about that though, because we're three Brits here, and if you're going to talk about solutions, I don't have an intuitive understanding as to the relative value of military spending versus Medicare, or some other aspect like that, and there's probably things I've missed.

Peter McCormack: Would you say though, because this is a global problem; the US has too much debt, the UK has too much debt, China has too much debt, everyone has too much debt.

Dan Tubb: Oh yeah, we all do.

Peter McCormack: I don't know if there are any countries out there who don't have too much debt, but the majority of the developed countries of the world --

Dan Tubb: Russia doesn't!

Peter McCormack: Well, yeah!  But the majority of the developed countries in the world have too much debt, and they're all facing a debt crisis of some kind, and they've all got similar levers to pull.  So, if we use the UK as the lens, it's still probably applicable to other countries; you could still use that to understand it.

Dan Tubb: Oh yeah, absolutely.  I mean, I'm going to focus on the UK, because the three of us can have a more sensible conversation about it, especially when we start getting into the solutions, because we will be able to say, "It's clearly ridiculous, we clearly cannot do that".  But yeah, if you're French, condolences, but it's going to be exactly the same situation in your case; if you're -- well actually, the Italians, they've got bigger debt.  But if you're Japanese or US, it's all the same story, it's just the details change.

But the story we're about to go on applies to absolutely everybody, because all western economies are in a mess and we're going to talk through and try and make sense of it.  So, let's have a look at this slide.  This is UK Government spending, revenues, and the national debt. 

Peter McCormack: Okay, so we've got people listening, let's talk through the numbers quick.  So, 2016, revenue was £716 billion, spending --

Dan Tubb: The key point if you're listening, don't worry if you can't see the numbers because they don't mean anything anyway.  I mean, take a look at that.  So, 2018, the UK Government had revenues of £810 billion.  Do you know what £810 billion is because I haven't got a clue.

Peter McCormack: No, but the number I'm looking at here is the deficit, £32 billion.  So it's like, okay, there is a deficit, but it doesn't feel like that big a gap to close.  If you wanted to reduce spending by £32 billion, I'm sure there's a way of finding it.  It's when we get here to 2021.

Dan Tubb: Yeah, it's the cost of lockdown crisis that change everything.  We would have got there anyway, but it did accelerate it, it did knock it up that extra level.

Peter McCormack: If you go back and look at the history of UK Government debt, there are periods of surplus and there are periods of deficit.  Why do we no longer have periods of surplus?

Dan Tubb: That's a very good question.  We might come to that!

Peter McCormack: Okay, good.  Do we know what 2022 is looking like?

Dan Tubb: Well, we've got government projections, but the key thing is going to be what happens on the revenue side, and we know what's happening on the deficit side.  But the point of this slide is, and I know 70% of your viewers are not viewers, they're listeners, but it doesn't matter if you can't see this table because these numbers don't mean anything to anyone anyway.  I mean, I kind of know what £1,000 is and I even kind of know what £1 million is, because £1 million, it's like double your house or three times your house, or something like that.  Or, if you're a professional person, if you work really well, you might have £1 million in your pension pot at the end of a period.  So, we kind of know what £1 million is, but we've got no idea what £1 billion is and any of these numbers.  So, it's no good to us.

What we really need to do is we need to bring all of this stuff back to the human scale.  All economic activity ultimately comes back down to individuals.  There are 67 million people in the UK, so if we want to bring these numbers down to the human scale, you can divide it by that.  But I don't think that really works, because that includes children, retired people, people who are sick and can't work.

Peter McCormack: Not productive people.

Dan Tubb: Yeah.  Ultimately, it's going to be the 33 million people who are economically active; that's where the burden of paying for government, paying for the debt, it all falls on the economically active people, and that's going to be the same in every country.  So, you want to basically bring it back to them.

So, this is basically the same information, except now we've divided it by the number of economically active people.  So, you can see that the government is collecting £25,000 per economically active person in the UK.  They're not collecting all of that from the economically active people, because of course if your kids buy something from the shop, they're paying VAT; your retired parents, they're going to be paying council tax, they're going to be paying VAT fuel duty.  So, there's a whole bunch of things that non-economically active people do.  But ultimately, it comes from, one way or another, the economically active people, even if they've now retired, it's from prior savings.

Now, if you look at this, how does that strike you?  The government is spending £32,000 for every economically active people.

Peter McCormack: Well, they're spending more than they're getting from each person, is the obvious point; it's about £7,000.

Dan Tubb: Well, there's that as well.

Peter McCormack: So, they need to spend, on average, £7,120 just to be level.

Dan Tubb: Yeah, but just on the sheer scale of it, £32,000 per person who works, that's a hell of a lot of money that the government has accumulated.

Peter McCormack: But that always leads me to other questions.  I want to know what they were doing ten years ago.  And I also want to know, and it's going to sound like I've seen these slides, I also want to know the breakdown of what that is spent.  But I don't want to know £32,000, I want to see the billions, I want to see £10 billion on this, £100 billion on that, I just want to know in my head because like I said, when I see £32 billion deficit and I look, the government spent £850 billion, I'm like, "Okay, it might be painful, but surely there's £100 billion somewhere you can knock off?"

Dan Tubb: Well, we're not getting back to that anyway because of the interest payments.  But the point I'm making here is this just doesn't look right, this is way out of kilter with what -- and this is divided per person.  There is no way that we can be maintaining this level.  And the other key thing is, there's a deficit of £7,000 per person.  Now, that's not investment, that's credit card debt effectively, that's keeping the lights on in the NHS and your local school and the rest of it. 

The other thing of course is the national debt.  So, each person has a national debt share themselves of about £70,000.  Now, you might think that that debt number isn't too bad because you might think, "I've got a mortgage and that's bigger than that".  But with your mortgage, you've got an asset against it.  So, if you ever wanted to, you could pay off your mortgage debt by selling the assets.  You might even have enough left over to buy a little bungalow somewhere.

Peter McCormack: I think your point here is that it is like a credit card debt.  Anyone I know who's got credit card debt, they haven't got it because they bought something useful; they've gone to Vegas or they've gone to Ibiza, or they've bought clothes, it's always bullshit.

Dan Tubb: It's consumption, yeah, and that's exactly what it is here.  So, if you knew somebody who had credit card debt of £70,000, they've got a problem.

Peter McCormack: Well, they're fucked!

Dan Tubb: But let's ask you a question because you asked what it used to be like.  I didn't pick ten years ago, I actually picked 2000.

Peter McCormack: Okay.

Dan Tubb: So, this is what the same picture was in 2000.  Now, there it looks a bit high, but it's not that bad.  So, government revenues per worker, £13,500; government spending per worker, £13,500.

Peter McCormack: Just a quick question on this.  So, that means the government revenue's doubled in 20 years, because the previous slide was, what, £26,000, £24,000?

Dan Tubb: Yeah.

Peter McCormack: Yeah, so it's about doubled.  So that, I would say, is quite productive in terms of their revenue.  But their spending's like, what's that, 2.5X?

Dan Tubb: Bit more, yeah, about that.

Peter McCormack: Okay, and they're servicing their debt at that time?

Dan Tubb: Yeah.

Peter McCormack: Okay, interesting.

Dan Tubb: And they're not adding to their debt.  And again, bring this back to the human scale.  If you knew somebody back in 2000 who had credit card debt of £14,000, you'd be like, "Mate, you've got a problem.  You're a bit of a moron, but you can sort that out".

Peter McCormack: Yeah, just stop spending.

Dan Tubb: But the key question you'd ask is, "Are you adding to that every year?" and if the answer is, "No, it's flat at £14,000".

Peter McCormack: You'd be like, "Look, fucker, cut that shit up, put it in the bin.  You don't need to wear Gucci.  Sort it out".

Dan Tubb: You can recover from that no problem.  Now, average salaries were lower back then.  I put the average salary back on there, just shy of £20,000.  So, if you had a mate who was earning £20,000 a year with £14,000 of debt, like you say, "Sort it out, you can get there".  And that was sort of the choice that we had back then.  We could have gone either way.  We could have said, "Look, this is starting to get out of control, we're going to nip it in the bud"; we actually went the other way and we pushed the spending up and the deficit up considerably, so we took a turn.

But the reason I wanted to talk about 2000 is because I remember 2000.  It was fine, we had roads, we had hospitals.

Peter McCormack: How old was I?  Just got out of uni, just got a house with my best mate, we were on the piss every night.  Yeah, I got into credit card…!

Dan Tubb: And we might be viewing it through rose-tinted goggles, because we were like 21, 22 back then.  But the country was all right, wasn't it, it wasn't falling apart?

Peter McCormack: No, you know what, and this is one of the things, I was talking to Danny, we were driving down on the way and it's like, the NHS has never had more money and it's never been more fucked, and I can't understand why all these things are crumbling.  Well, I have my suspicions, but let's carry on.  We'll come to that.

Dan Tubb: Yeah, I mean something has clearly gone wrong between now and then.  Depending on where you are on the political spectrum I suppose will describe what you think has gone wrong.  So, if you're on the left, you're going to say, "Well, what's happened since then is that corporations have become greedier".  If you're on the political right, you might say, "Well, there's been 5 million-plus in immigration since then".  If you're a bitcoiner, you're going to say, "Well, the money system itself is flawed, which has resulted in governments always spending more than they can collect.  And because the money is generated at the nexus between government and finance, those two areas have ballooned disproportionately compared to the rest of the economy, therefore wages have got squeezed out".

Peter McCormack: And if you're a centrist like I am --

Dan Tubb: Oh, yeah, go on then.

Peter McCormack: -- I would say, this is the result of successive governments using spending as a tool to win votes and maintain their position in government, and being irresponsible.  My analogy is, if I had a printer in my bedroom and I could switch it on when I wanted and print some cash and go and buy whatever I wanted and never had to pay it back, I would use that fucking machine.

Dan Tubb: And that's what they did.  And the only reason they didn't do it more is because it used to be taboo.  But I mean they've been doing that since, whatever it is, 1973 in this country we went off the gold standard, we did it two years slower than the Americans.

Peter McCormack: I thought we came off the gold standard before the Americans?

Dan Tubb: Did we?

Danny Knowles: I thought it was in the 1940s, but I could be wrong.

Dan Tubb: There was that residual link, because there was a time where you could walk into a bank and you could change your £10 note for £10 worth of gold, and I think that was still the case in the late 1960s.

Peter McCormack: Maybe.  I always thought we were the first to come off, but Danny will factcheck us on that.  Anyway…

Dan Tubb: So, we know that the government has a bit of an eating problem.  So bring it back to today, again we need to come back.  Let's say you went back to Bedford and you saw a schoolmate you hadn't seen for a few years, his name's Bob, and you meet up with Bob and Bob's earning £50,000 a year now.  So, that sounds pretty good, right?  £50,000, perfectly reasonable salary for a man in this country to earn. 

But what does that mean in terms of tax?  Well, first thing to remember is that before Bob gets paid his £50,000, the corporate entity that he works for, that's already paid a whole bunch of tax.  So, they would have paid VAT, Corporation Tax, Employers' National Insurance, fuel duty, and a whole bunch of other taxes would have come out before it even got to him.  Then, when it hits his payslip, you're going to take out £12,500 for tax and national insurance.  So, your mate, Bob, is now left with about £38,000. 

It doesn't stop there though, because then he's got to pay -- I mean, it depends where in the country he lives, but he's going to pay £2,000 in council tax, he's going to pay fuel duty of about another £1,000, he's going to pay VAT, depending on how much he buys, of maybe another £4,000, and then other taxes, let's call it £2,000.  It would be more than that if he drinks and smokes a lot, but you're down to £29,000 before you've actually done anything.

On top of that, I would make the argument you probably want to treat inflation as a tax as well.  You could say maybe it's not, but it's basically coming out of your --

Peter McCormack: Oh no, it is, it is a tax because we know what causes it, which is government spending expanding the money supply; and we know it is essentially a hidden tax, a way to fund more things they can't afford.

Dan Tubb: Agree, so let's treat that as a tax.  The current official inflation rate, which is obviously wrong, it's obviously higher than the official rate, but let's just go with the official rate, it's at 10% at the moment.  So, let's take another 10% of his salary off and treat that as a tax, so that's another £5,000.  So, we're now down to £24,000, less than half what he started with, and the only thing that we have bought at this point is our government, he hasn't bought anything else at this point.  I mean, I know we subbed off the VAT, but now feed yourself, pay the mortgage, feed and clothe the kids and save for retirement so you can pay half those taxes all over again, because even when you retire, you're still going to be paying VAT and council tax and fuel duty and all the rest of it.

Peter McCormack: I think there is a lag between what we believe is a good salary and what a good salary actually is, because I still think people think £50,000 is a good salary.  And for a lot of people, it is.  Don't get me wrong, I'm not being disrespectful here; for a lot of people it is.  But you're so heavily taxed and things have got so expensive, especially on energy now, that actually at £50,000 a year, you've still got to be very considerate about how and where you spend your money.  And the problem we've got is that most people, it's not just what they earn.  They want a car and they probably want a BMW or a Merc or something, they want to live in a nice house, they want at least one holiday a year, they've got to pay for Christmas, they want to go out for dinner occasionally.

Dan Tubb: Well, there is that as well, but then I mean their money's getting taken off them so fast that you might as well spend it while you can.

Peter McCormack: Well, I think there's two things going on here.  The money's being taken off them; and then there's been this societal shift with pressure to spend in ways --

Dan Tubb: Consumption, yeah.

Peter McCormack: Yeah, consumption.

Dan Tubb: But you say that £50,000 is not what it used to be, so let's go back to the other time period we talked about, 2000, to give that comparison.  Do you want to guess how much you would have to be earning in the year 2000 so that you've got the purchasing power of £50,000 today?

Peter McCormack: Well, I've got to account for 20 years of inflation and changes in tax; £35,000?

Dan Tubb: No, I'm thinking the other way; how much you'd have to earn today?

Peter McCormack: Oh, to have what you had then?

Dan Tubb: Yeah.

Peter McCormack: Gosh; £75,000?

Dan Tubb: According to the Bank of England, it's £82,000.

Peter McCormack: Wow.

Dan Tubb: And that's the Bank of England which again is using the CPI, which we know is a dodgy measure which undercounts inflation.  So, it is at least £82,000 to hold steady with somebody from 20 years ago.  So, inflation has definitely been eating over this period. 

Now, let's get onto the question you asked earlier, "Where actually is the government money going?"  I'll throw this up, and for the people listening, this is a big table of all current UK Government spending, and I'm using the numbers here from the last budget for the previous year.  The only change I've made is I've used the current number for the debt interest, because I thought that was more accurate because that is actually what we're going to be paying.

Peter McCormack: Okay.  So the biggest spend is the NHS, which I'm a fan of.

Dan Tubb: I'm less of a fan.

Peter McCormack: But I'm very conscious that I'm in the luxury position that I can afford private healthcare and my kids have private healthcare, and there was a time when I couldn't and there was a time when my parents didn't have it and we relied on the NHS and my mum worked for the NHS, and it's a whole other podcast to talk about the NHS.

Dan Tubb: We're going to have to touch on it briefly, so we might as well touch on it very briefly here.  But my take on that is what people like about the NHS is that it's provided for, that the government pays for it.  That doesn't mean that the government needs to also provide it.

Peter McCormack: So, our country's relationship with the NHS is like my relationship with my son, in that whenever they need more money, they get given it, whatever the consequence.

Dan Tubb: Oh, in this country, it's a religion.

Peter McCormack: Yeah, and my son's at university.  Literally, Danny heard me on the phone to him yesterday.  He wants to go out with his mates and he wants some money and it's like, "For fuck's sake, but will you get a job?"  So, it's that similar kind of relationship.

Dan Tubb: Oh, yeah!

Peter McCormack: So, for people listening, the total spending of the government is £1.1 trillion, the NHS is £211 billion, so it's about 20%, 18%.

Dan Tubb: Yeah.  So, the NHS is the biggest item on there.  Then you've got pensions.

Peter McCormack: Public Pensions, so just explain what that means to people on here.

Dan Tubb: So, when you get old, you get some money.

Peter McCormack: It's the government pension.

Dan Tubb: Yeah, it's the government pension provision.  It's a big item.

Peter McCormack: Can you do the percentages, Danny?  Is that about 15%.

Dan Tubb: Yeah, I didn't do percentages. 

Danny Knowles: A bit higher.

Dan Tubb: But yeah.  And then after that is Welfare, and then after that, the numbers start to tail off quite quickly.

Peter McCormack: So, Education's about 10%; Defence about 6%; what's State Protection?

Dan Tubb: That is literally protecting the state, so police, courts.  So, protecting the state from dangerous people like Julian Assange, who otherwise could do all sorts of damage to the state.

Peter McCormack: Do you know, I interviewed his wife.

Dan Tubb: I saw that, yeah.

Peter McCormack: Right here, in this studio.

Dan Tubb: Oh, right, okay.  Honestly, the Julian Assange thing more than anything else is what made me realise that the state is, even if it's unconsciously, is functionally our enemy in almost every way, the way that he's been treated.

Peter McCormack: Well, yeah.  I've got certain words I'd like to use for Priti Patel, but my brother tells me off for that.  Okay, Transport, what part of transport is that?

Dan Tubb: I mean, all of it, roads, railways, anything transport related.

Peter McCormack: Does that cover, say, OAPs' free bus pass, or does that go under Social Security?

Dan Tubb: I have no idea.

Peter McCormack: Okay, fine, but about 5%.

Dan Tubb: But the point is, once you get down to there, it starts to tail off quite quickly.  Let me tell you some interesting stuff about this table.  So, Debt Interest I put down there at the bottom at £120 billion.  So, that looks big compared to any of these.  But let me tell you that actually, most of these numbers, they're including a whole bunch of non-cash items, accounting entries, depreciation, that kind of stuff.  If you strip those out, the only one that's bigger than the Debt Interest is the NHS, because what the NHS actually has at its disposal to spend is about £144 billion.  So, when you compare that to an interest line of £120 billion, that's the second biggest item.  And it won't take long for the Debt Interest to overtake the NHS.

Peter McCormack: Other Public Services, does that just wrap everything in that you can't --

Dan Tubb: Yeah.

Peter McCormack: I still want to know what other stuff is in there at some point, but that's fine.

Dan Tubb: I got this from the budget, so you can just download a copy of the budget, and you can go in to get all the details if you want, but these are sort of the headline numbers.

Peter McCormack: So, the interesting thing, Debt Interest £120 billion.  We saw those deficit figures, let's forget COVID for now, we'll just park it for now because that year was an anomaly year, okay.  But generally speaking, the deficit was between £30 billion and £60 billion most of those years.  If we had no debt, we would be able to fund our spending based on our income, as a country.

Dan Tubb: No, we're still --

Peter McCormack: But hold on, those years we were between £30 billion and £60 billion.  If we're spending £120 billion a year on Debt Interest…?

Dan Tubb: Yeah, the deficit is bigger than that, it's like £200 billion, or something.

Peter McCormack: No, hold on, let me explain myself in a different way.  Is that debt interest that's going on to the national debt, or is that repayments per year?

Dan Tubb: No, that's having to pay bondholders right now, so that's money out the door.

Peter McCormack: So, that's servicing debt?

Dan Tubb: Yeah.

Peter McCormack: Okay, what I'm saying is, if we had no debt, our spending would drop by £120 billion.

Dan Tubb: But the deficit is bigger than £120 billion.

Peter McCormack: No, on an annualised basis.  Go back to the chart.

Dan Tubb: Which one?

Peter McCormack: Keep going, keep going.  Okay, here.  See?

Dan Tubb: Yeah, deficit £230 billion.

Peter McCormack: Yeah, so that's year 2021, which is COVID.  So, let's forget that because that's an anomaly year for now.  2020, our deficit was £55 billion.

Dan Tubb: Well no, it's maintaining at those levels.

Peter McCormack: What are you on about?

Dan Tubb: So the deficit is still large.  In its future projections, I mean yes, it has it coming down a bit, but it's still over the budget line, over the debt line.

Peter McCormack: Sorry, I think you're missing the point I'm saying.  Between 2016 and 2020, if we had no debt to service, our revenue would have been higher than our spending.

Dan Tubb: Yeah, I'm not sure what the interest expense was, I'd have to go back and check that.  But remember, the interest expense was a lot lower only a few years ago.

Peter McCormack: Yeah, but even there, if you look from 2020 to 2021, we've gone up by 25%, okay.  So, even with that we would know, take that £120 billion down, that's say £90 billion.  What I'm saying is --

Dan Tubb: Oh, it was a lot lower than that.  I wish I had the budget thing to open in front of me now.  But the Debt Interest line has gone up significantly in the last year or so as interest rates have gone up.

Peter McCormack: But I think our problem here is successive overspending, that if we hadn't have done, if we hadn't have borrowed money, lived within our budget, our economy would be fine.

Dan Tubb: In the alternative situation where we didn't overspend, then yes.

Peter McCormack: It's the accumulation of debt.  It's like when you've got the credit card and you keep spending, even though you've got your credit card, you get to the point when you're bankrupt.

Dan Tubb: Yeah, and it becomes a habit.

Peter McCormack: If they'd never taken out the credit card, they could have always -- we'd go back to the years of surplus and deficit, surplus and deficit.

Dan Tubb: Yeah, that's why I like showing the slide with 2000 on there; because if government at that point had realised, "Yeah, we've got a bit of a national debt and from now on, what we need to do is we really need to tightly constrain this, make sure that we don't grow the revenue line", then yeah, we would be in a completely different place now.

Peter McCormack: The cancer here is there's no short-term consequence to pressing the money-printing button.  There is a long term, because it's a lag.

Dan Tubb: Well if anything, it's the opposite, isn't it?  There is a short-term cost to not pressing the button, because then you don't win the next election.  So, every election is always a question of, "How can I bid for votes through public spending, which is going to be paid for by your kids?"

Peter McCormack: But you can't push it too much, because Corbyn tried and people aren't stupid and they're like, "Hold on, how are you going to fund free broadband for everyone in the country?"  The people knew.

Dan Tubb: Yeah, it catches up with you eventually.

Peter McCormack: Yeah, people knew that.  But now we're at a point where you can do a little bit, and you kind of have to.  The conservatives, well they're fucked anyway, but even if they weren't fucked, they're not going to stay in power by going, "Look, we need austerity, we need to reduce spending, we're going to cut our spending, we're going to cut these services", because Labour will come in and say, "We're not going to cut them".

Dan Tubb: Oh, the situation's hopeless at this point.

Peter McCormack: The problem with debt is the political cycle.  The problem with managing the money is the political cycle.  That is the fucking cancer of this.

Dan Tubb: Well, the political timescale does not line up with the economic timescale; that much is clear.

Peter McCormack: I asked this question on Twitter once and it sounded dumb, but I think if a government overspends, it should trigger an election.

Dan Tubb: Yeah, exactly.  If we get a chance at the end to talk about what I would do differently politically, I would elect a government with a budget.  And as soon as that budget is -- yeah, they immediately then have to go back to voters.

Peter McCormack: I'm literally having these fucking conversations with my son at the moment.  He's gone to university, he's 18 years old, sorry if you're listening, Connor, sorry you're a case study.  He's 18, he's gone to university.  I gave him some money at the start to enjoy his first couple of months and I've given him a budget.  And he's finally got to a month where ten days before he's like, "Can I have my money early next month?" and I'm like, "No.  But what I will do is I will fund you to the end of the month what you need.  Send me a budget.  I want a line-by-line budget".  He did it.  He did a shit job, but he did it.

Then anyway, he gets back in touch, he's like, "Dad, can I have Christmas money early?"  I'm like, "Why?"  "All my mates are going out".  I'm like, "Have you got a job?  Have you done a budget?"  So now what I've done, I've moved him to weekly; he doesn't get his money monthly now, it's weekly, "All you have to think about is the next seven days".  I'm teaching him to budget and understand money.  Why the fuck does our government not do the same?

Dan Tubb: Well, if you could do the same exercise with your MP, then that would be great!

Peter McCormack: I would love to do that, and I would love people to understand this.  If people understand this, they would know that the cancer is government, not the left, not the right, it's government.  I sound very un-statist like, don't I?!

Dan Tubb: Well, I was kind of walking us towards that, but --

Peter McCormack: I get angry!

Dan Tubb: Yeah, you got us exactly there; that is ultimately the problem.  So, look, we know that we've got a government problem, spending too much.  It's trying to collect as much tax as it can; but typically, the amount of tax that a government can take tends to get stuck between 34% and 36% of GDP.  You can push it above that for a very short time, and it almost always then collapses down on the other side, because behaviours change, incentives change, people move work offshore, they go to four days a week, they do all that kind of stuff.  So, we know we've got a problem; let's talk about what solutions there might be, and I've come up here with four solutions.

Peter McCormack: This is a solution to prevent us going bankrupt, yeah?

Dan Tubb: Well, this is to save the system effectively.

Peter McCormack: And when you say, "Save the system", if we don't, what is the TL;DR on that?

Dan Tubb: A messy financial collapse.  It's bondholder revolt, the whole thing comes down.

Peter McCormack: Okay.

Dan Tubb: So, saving the system is good.  What are the four solutions?  The four I've come up with is (1) default on the national debt; (2) cut the spending; (3) tax the rich; (4) raise growth.

Peter McCormack: Or a mix?

Dan Tubb: Yeah, possibly, yeah, we can look at that as well.  The reason I picked those four is because those are the four that you hear all the time, you know, man in the pub, economist on Twitter; every solution ultimately comes back down to these, with the exception of the first one, the default on debt; I don't hear anyone ever talk about defaulting on the debt.

Peter McCormack: Because that's what Brazil and Argentina and Cyprus does, not the United Kingdom.

Dan Tubb: Yeah, nobody is up for this.  But here's the crazy thing, okay.

Peter McCormack: I think default on debt comes at a time when there is literally no other option.

Dan Tubb: It's crazier than that, because let's say that we default on the debt.  We wipe it all out, we say, "Sorry, bondholders, you're not getting paid, it sucks to be you, it's just gone, forget about it and move on", here's the crazy thing.  Because of the deficit that we're still running, so that £120 billion that you talked about, you knock that out, you're still running a deficit and you get back where we are here in 15 years.

Peter McCormack: Do we know what the difference is this year?

Dan Tubb: Yes, so it's £146 billion if you knock out the interest payments.

Peter McCormack: So it's £260 billion?

Dan Tubb: This year, yeah.

Peter McCormack: I want to know what the increase in spending was in 2021 because of COVID, and I want to know why that hasn't come back in 2022.

Dan Tubb: Well, it's thought the lockdowns cost us about £500 billion.

Peter McCormack: Okay.  But are we seeing a spike that will come back down; will it naturally?

Dan Tubb: Well, there are certain items in there that won't be repeated.  Well, they say they won't be repeated.  I mean, what was it, like £37 billion was spent on Track and Trace, something like that?

Danny Knowles: Yeah, something like that.

Peter McCormack: Well, they're talking about £100 billion on energy subsidies.

Dan Tubb: There are new problems now.  So, yes, we're probably not going to do track and trace again, but there's a whole bunch of other things we are going to do.  But that's the crazy thing.  Even if you wiped out that debt, we would still be back at the same £2.3 trillion debt in 15 years just by letting the current deficit run.

Peter McCormack: So you have to get rid of it and you have to cut spend, you have to do the two?

Dan Tubb: Well, yeah, if you wanted to do it that way, yeah.

Peter McCormack: But is there also another risk, if you did that, the pound value will collapse?

Dan Tubb: Yeah, so we're on line item 1 at the moment.  So, all I'm saying is is that even if you did it, it wouldn't solve your problem, because all you would do is kick the can down the road 15 years and then you'd be back here, and that's assuming that government doesn't increase its spending, which it has shown a clear propensity to do, so you'd probably be back here before 15 years.

So, here are some more problems with this idea.  You also wipe out basically the pension system, because pensions hold a lot of gilts.  So all of those pensioners who thought they were going to be independent, suddenly they're not because you've taken away their pensions, and all of the taxes that you thought you were going to get from them, you're now not going to get and so that deficit is going to go up even more.

Peter McCormack: Can you stagger it?  Can you prepare for a future where --

Dan Tubb: So, what I'm doing in each of these scenarios is taking the extreme position.  And the reason I'm doing that is because I'm going to demonstrate that even that extreme position does not solve the problem.  But because it's an extreme position, it is politically unviable.  So, that's the way to think about that.

You do more than that.  Because you've wiped out the sovereign debt layer, you've just wiped out the financial system, because since 2008, we moved the problems from the banks to the sovereign and then gave the banks a whole load of sovereign debt to be their collateral layer for everything that they do.

Peter McCormack: So, you're going to need to explain that in simpler terms.

Dan Tubb: Level 1 for everything the banks do and the financial system does, it all starts from sovereign debt.  That's their basic collateral from which they then go off and they make other actions, other things that they do, other investments that they make or other loans that they make.  So, if you knock out the base layer collateral, you sort of domino-collapse the entire system.  And the UK is not a closed loop.  UK debt will be owned by many other foreign institutions, foreign governments, foreign banks.  So, it's not like you can just evaporate the UK from the system.  If you did this, if you knocked out sovereign debt, you would cause a domino effect that took out the entire western financial system. 

That's why, if you remember, back in 2008 we pushed so hard against Greece failing.  We weren't actually desperately worried about the Greek banks failing and the Greek sovereign debt going --

Peter McCormack: It's the knock-on.

Dan Tubb: -- but it could have been sufficient to perhaps cause the Italian banks to start to fail.  And that would then cause the Spanish and the French and the German and before you know it, the whole system has gone.

Peter McCormack: This is like the thing that keeps coming up about the US defending the euro.  They won't let the euro collapse.

Dan Tubb: Yes.  I think you did a show with Lyn Alden where she took the entire monetary system at a really zoomed-out level and said, "Basically, look, it's just a series of banks owing other banks money".  And then the Bank for International Settlement, I think she said, basically just nets it all off and says, "Okay, at the end of each day, you need to move money to here and here".  But the whole system is leaning on each other, it's just a series of nodes pushing against each other.

So the thing in 2008 was, well if the Greek node goes dark and we were worried about the contagion collapse that that could have, if you took out an economy the size of the UK, obviously the whole thing is just going to go, domino effect would kick in.  So, not only does defaulting on the debt not solve our problem, it would cause a complete collapse of the financial system, which would cause a complete collapse of supply chains, global famine and death.  Because, what's the incentive for the farmer to deliver food to the wholesaler, or the wholesaler to the shop?  In fact, how is the wholesaler going to get a diesel delivery to do it.

The whole chain, our entire system, is a series of transactions, and half of each of those transactions is money.  So, if you knock out money, I mean it all goes.  Now, maybe in ten years' time, there will be some sort of permissionless money system which is widely adopted, everybody knows how to use, the user interface is great, all the custody issues have been solved, everyone's comfortable with it and at that point, you could let this system collapse and move on to this alternative system.

Peter McCormack: What kind of crazy system would that be?!

Dan Tubb: I don't know, somebody might come up with one!

Peter McCormack: OneCoin!

Dan Tubb: But we're probably not there yet at the moment.

Peter McCormack: All right, okay.

Dan Tubb: So, this doesn't work and you can see why nobody talks about this, so this isn't a great solution.

Peter McCormack: Okay.

Dan Tubb: Right, what about cut spending?

Peter McCormack: That's crazy talk, man!

Dan Tubb: Yeah.  And here I've calculated what you need to do in order to get the -- first of all, I'm wiping out the deficit, so I'm cutting spending by that much.  And then I'm going to say, "Okay, let's repay the national debt over 20 years", which basically means you turn that debt interest payment of £120 billion, you flip it the other way and you do a repayment of that much as well.

Peter McCormack: So, it's basically a £0.25 trillion flip.

Dan Tubb: Yeah.  This is what it means for those numbers that we looked at earlier, those departmental budget lines.  It means taking £76 billion out of the NHS.

Peter McCormack: Okay.  Is there a chart that shows NHS spending year by year?  Danny, have a look.  I want to see when they were last spending £135 billion a year.  This will be interesting.

Danny Knowles: £136 billion.  Go on, both guess.

Dan Tubb: I think it will be less far back than you think, because the growth becomes --

Peter McCormack: 2012?

Danny Knowles: 2013/14, they spent £134 billion.

Peter McCormack: I mean, I kind of saw it anyway, so I was cheating!  Hang on, what was it the last two years, the two anomaly years?

Danny Knowles: £201 billion and then £200 billion basically, 2021/22.

Peter McCormack: And then they're saying it's going to come back down?

Danny Knowles: But I mean, by 2024/25, they're projecting £185 billion.

Dan Tubb: Yeah, probably.

Peter McCormack: And I wonder if the trajectory up is based on inflation or an aging population?

Dan Tubb: I guess partially, both probably, and I'm sure many more factors.

Peter McCormack: Okay, so you need to get it back to 2012 levels.  Okay, fine.

Dan Tubb: Now, bear in mind that I said earlier that the total budget, that includes a whole load of non-cash items.  So, the actual bit that they get to spend is £144 billion.  So, if you're taking £76 billion out of it, you're effectively halving the amount of money that the NHS has got to spend.  This is why I wanted to look at this from the UK perspective, rather than the US perspective.

Peter McCormack: We can contextualise it.

Dan Tubb: Yeah.  As three Brits, what do we think is the possibility of a political party getting elected promising to halve the budget of the NHS?

Danny Knowles: Zero.

Peter McCormack: Two chances: none; and fuck all!

Dan Tubb: Exactly.  So, there has not been a political party, a major political party, that has felt safe going into an election for the last 20 years without promising to increase the NHS by more than the rate of inflation.

Peter McCormack: Look, the conservatives are the ones who tend to push this most.

Dan Tubb: Not that hard.

Peter McCormack: Yeah, because they've tested all this.  They're like, "Maybe we'll just privatise one little element".

Dan Tubb: "We'll just modify a bit".

Peter McCormack: Yeah like, "Fuck you, keep your hands of our NHS".

Dan Tubb: They get shut down hard.

Peter McCormack: It's like that gun debate with the NRA where that guy was like, "Maybe we'll ban the big guns".  They're like, "Fuck you, don't touch our guns".

Dan Tubb: For any American listeners, it's basically our religion.

Peter McCormack: It's like banning guns in Texas.

Dan Tubb: Yeah, maybe even worse than that.  But yeah, it is of that order of magnitude.  I mean, unironically in this country, you will see church altars with an NHS banner draped over the top of them.  This ranks well above religion in this country, the NHS.  And if you're knocking out half of its budget -- and this is not just the NHS, this is everything on this list.

Peter McCormack: And it's funny, you're saying this at a time when we've got record wait times, we've got ambulances queuing outside hospitals.  I heard today about somebody -- most people are like, "If I go to the A&E, I'm going to be there four to five hours, it sucks".  Somebody was saying today that they were there for 15 hours.

Dan Tubb: So, there's no way that you could do it the way you're doing it now on that sort of money.

Peter McCormack: Well again, that's why it's a different show.  I want to know where they're spending their fucking money.  I've got a feeling it's on middle management bullshit, but anyway…

Dan Tubb: Yeah, there will be some of that.  So, when I came out of the city and I had a period of doing a bit of consulting, I did do some consulting for local government and I was a bit surprised actually, because being a right winger, I went in there expecting to find loads of unnecessary waste and padding and all that kind of stuff.  Actually, I was surprised, I didn't find that.  What I found was organisations which had basically been created because they thought they were going to go and do something and they gave it loads of money, and then everything's been through six or seven rounds of cuts since.

What you end up with is government trying to do a whole bunch of different things, failing badly at all of them because they've been through so many cut cycles, they're simply not effective.  But nobody wants to let them go, because it's the idea that it does a certain thing.

Peter McCormack: But I don't understand how a budget can go up 50% in ten years and a worse service be provided.  If Sky TV charged me 50% more and gave a worse service, I would be -- if you went to the local restaurant and there was a 50% increase in the price of a pizza and it was a shitter pizza, you'd be like, "I'm not buying your fucking pizza".

Dan Tubb: Yeah, and you do sometimes see restaurants like that, don't you, and you just steer clear of them.  I suppose I can't give you the perfect answer of why it is like that, but it is a problem.

Peter McCormack: You've said it already; it's religion. 

Dan Tubb: Yeah, okay.  All of us in Britain know that we can't do that.  So, we've got to this point, we're looking at the solution of cutting spending, and we're on line item 1 and we all agree that this is an absolute no-go; you are not getting anywhere near government if you do this.  Then look at pensions; you're basically again halving the spending of the pensions and welfare.  There's no way that you could provide pensions and welfare in the way that we're doing them now.  It would have to be something like boarding houses.  If you feel like you can't make ends meet, you ring up the government, a man comes out, he sells your house and all your possessions, he moves you into a boarding house and you get soup three times a day.

Peter McCormack: Well, listen, I've got a film coming out that I keep talking about this; got to release it.  I went down to Harlow and made a film about inflation, and we went to this place called Terminus House, and it's a fucking favella in the UK; that's basically what it is.  They've basically taken old office blocks that are not being used, turned them into apartments and they've filled them full of people, like social housing.  We are heading in that direction anyway.

Dan Tubb: Well, because it's the only cost-viable thing we've got left at this point.  Near me, there are new modern houses coming out and being used as social housing, so there is still some, well, you could call it fat of the system, but the point is if you want to go down the route of solving the deficit and the debt and repaying the national debt, then these are the sorts of -- and look, £38 billion, so effectively half the usable budget of the education department --

Peter McCormack: Okay, and none of this is tenable.

Dan Tubb: This is complete and utter fantasy as a solution because you would not get anywhere near government if you tried to do any of this.  So, we've done two solutions so far and both of them are complete and utter fantasy.

Taxing the rich.  This is the one that prominent left-wing economists on Twitter like to talk about; tax the rich.  And again, you know my approach when I'm looking at all of these.  I'm not going to mess around with a half-baked solution, I'm going to go all the way in there with something really radical, and we're going to find that doesn't actually solve the problem, as is the case here.  So, my no-messing-around solution with this one is that we're just going to take every single penny from the Times 250 Rich List.  So, the top 250 richest people in this country, which I think includes Rishi Sunak, I think he's on there at 222 --

Peter McCormack: Okay, yeah, we can take his.

Dan Tubb: -- we're going to take the lot.  We come back to the practicality as to whether we can actually do that or not.  Are they all keeping their money -- is Roman Abramovich keeping all of his money in a UK bank account waiting for it to be seized?  Probably not, but let's assume that you could actually do it.  That raises you £653 billion.  What can you do with £653 billion?

Peter McCormack: Pay off a quarter of the national debt.

Dan Tubb: Yeah, or run the government for seven months.

Peter McCormack: All right, that's the top 250, but did you do other scales; did you say take 50% of the top 2,000?

Dan Tubb: Yeah, it doesn't work either, because the next 250, they don't have even a fraction of the wealth that the top 250 have.

Peter McCormack: Plus, they all leave the country anyway.

Dan Tubb: Yeah.  And that assumes that you could actually get your hands on the money.  The moment you even remotely propose something like this, all of that money would vanish out of everywhere.

Peter McCormack: Yeah, and plus, it's not just cash in the bank, it's assets; it's unfeasible.

Dan Tubb: Yeah.  And more, bear in mind that if you did this to the top 250, the next 3,000 would instantly know that they're on the target list sooner or later.  So, every person with money and influence and power in the country would turn against you.  So again, any government or any party that looked like it might get elected, who was proposing something like this, you would get Epstein so hard if it looked like you might through the doors of Parliament.  I mean, you would be suicided into the sun before you got anywhere near this.

Peter McCormack: Okay, so that's unfeasible.

Dan Tubb: Yeah, so option 3, completely unfeasible.  Then we come to "raise growth", which is the favourite option on the right; we just do the growth thing, that will get us out of it.  The problem with that, and I'm going to slightly twist Greg Foss's words when he talks about this, because he talks about this at a global level, but let's bring back a similar version to the UK; UK national debt is 100% of GDP, our servicing costs at the moment are approaching 5%, so you're going to need growth of at least 5% just to stay ahead of the coupon.  The typical growth range for British growth is about 1.5% to 3%, and that was before the damage of lockdowns, all the businesses destroyed; that was before we sanctioned our biggest energy provider; it was before we really got heavily into the whole net zero thing.

Now, if you're going to move from a high-return-on-energy energy source to a low-return-on-energy energy source, even if you feel that that's exactly the right thing that you need to do, even if you feel it's all for the best, it's going to have an effect on growth.  You're not going to get the same sort of returns on that as you would.  So, 1.5% to 3% is probably optimistic, so you're not going to get that 5% growth.  And in fact, you don't even want 5%, you want some multiple of that if you're going to grow your way out of this situation.

Peter McCormack: Liz Truss tried growth.

Dan Tubb: She did and she lasted 50 days, or maybe even less; how long did she last?

Peter McCormack: Was it just bad timing?

Dan Tubb: I think that's an interesting one.

Peter McCormack: Because it was a very conservative policy, but as soon as she announced -- so the first thing, when she announced the tax cut, I was like, "I don't need a tax cut.  I'm the last person who needs a tax cut".  And we know trickledown economics is bullshit, everyone knows it's bullshit, it's just bollocks, but I didn't need the tax cut.  Then she was talking about all the increase in spending and I was like, "We can't afford this".  That was what was in my head.

Dan Tubb: There's something about that whole period that didn't smell entirely right to me, I've got to say, because look, we spent £500 billion on lockdown.  She came up with a proposal to basically get us out, because we are in a mess and she recognised that and she said, "Okay, let's try and grow our way out of it", and she came up with this package of tax cuts and pro-growth reforms that cost in total about £40 billion, something like that.  So, just comparing the size of that to the cost of lockdown, or in fact any of these numbers that we've seen so far, £40 billion is high but it's not --

Peter McCormack: It's about the same as Track and Trace!

Dan Tubb: Yeah, it's not super-crazy, is it?  I mean, it's not completely out on a limb.  And more than that, the only bit that the markets didn't know about, because most of it was published in advance, the only bit they didn't know about was the bit that you're referring to, the top-rate tax, basically taking the top rated tax in this country down to the level it was under the last Labour Government.  Many economists will tell you that actually, if you do a tax cut, it doesn't cost you money, you actually gain money, because it re-onshores and various other things and changes incentives and so on.

But let's just say that it was a complete reduction in income, it cost about £2 billion, which is half what we've given to Ukraine.

Peter McCormack: Hold on, what, a tax cut from the wealthiest from, what was it, 45 pence to 40 pence?

Dan Tubb: Yeah, it was a 5 pence tax cut at the top end.

Peter McCormack: And it was only worth £2 billion?

Dan Tubb: Yes.

Peter McCormack: I'd want to double-check that, but anyway.

Dan Tubb: Well, those are the numbers I've seen.  But yeah, we can double-check, I'm sure we can flash something up if we find something else.

Peter McCormack: Okay.

Dan Tubb: So, that was the only bit that the markets didn't know about on the day of the mini budget.  And then what happened of course was the whole snafu with the bond yields.  There were bigger things happening at the time, so that whole time we were experiencing the sort of Dollar Milkshake Theory play out, the dollar was getting stronger and stronger, money was flowing into that and away from other central banks, Japan had been beaten up pretty hard the week before.  I remember looking at that situation thinking, "Something else is going to blow up", and I was thinking it was probably going to be the ECB; I thought it was going to be the ECB because of Italian debt, because the Italians have got a lot of debt.

What happened is Liz Truss, at precisely the wrong moment, jumped onto the world stage and said, "Cooee, look at me!"  But even then, I'm a little bit suspicious.  Remember how it played out at the time?  Boris Johnson had to go because we had to get Rishi Sunak instead.

Peter McCormack: Hold on, Boris Johnson didn't have to go to Rishi Sunak; Boris Johnson had to go because he was deeply unpopular for a number of reasons.

Dan Tubb: Well, you say deeply unpopular, and I really didn't like him for what he did with lockdowns, but bear in mind when we say he was really unpopular, that the poll numbers tell a very different story now to then.

Peter McCormack: But there's a different pressure that comes in.  The polling might say one thing; I think people would have him back now, the public would rather have him than what they've got.  But I'm saying it becomes almost like this cancel culture, becomes this pressure that built up.

Dan Tubb: Well, there was that really strong media push.

Peter McCormack: There was a strong media push, there were reactions from people stepping down, refusing to -- look, you might say that was a whole conspiracy; I think the writing was on the wall for Boris for a long time, but by-the-by.

Dan Tubb: I'm not necessarily saying it was a conspiracy, I'm saying that clearly a view had been formed and was being pushed that he had to go, and it was very clear, if you remember that period, that all of the big influencers wanted Rishi to come in.

Peter McCormack: Of course, yeah.

Dan Tubb: They basically wanted a coronation and that was the thing they kept on pushing, "Let's just have a coronation, let's not even put it to the members".  And then it did go to a contest and the voters picked the wrong choice, they went for Liz Truss, and they were never happy with her.

Peter McCormack: Who are the powers that be that are unhappy with this; are these the back-benchers?

Dan Tubb: I think it's on many levels.  The truth is, I don't know, but I increasingly believe that the amount of real power that the average voter has in this country is utterly negligible.  I think almost all key decisions are taken at a level probably even higher than government.

Peter McCormack: So, what is the chain of events you're saying happened to remove Liz Truss?

Dan Tubb: I think she was as bit artless with that growth budget; I don't think the numbers were actually that big, as we talked about.  £40 billion is a big number, but not that big compared to this.  £2 billion on the day is the only thing they didn't know about, this is probably not an analogy I can use on this show, so prepare to edit me out, but it's not that it was too big, it was just that they needed to slow down and lube up a bit and it would have been fine.  But those two were just a little bit hasty.

Peter McCormack: But you're alluding to almost conspiracy to get rid of her?

Dan Tubb: I don't know exactly what I'm saying.

Peter McCormack: Suspicious.

Dan Tubb: I'm just saying that the scale of the numbers themselves did not, to me, justify the level of the reaction that we got.  I mean, what really happened is that enough people didn't show up to buy bonds on that particular day, and this was during a period where, because of the whole dollar strength, money was moving out of other central banks to the Fed anyway, because you could get better returns there, so there was a squeeze happening there anyway; a very small tax adjustment came through on the mini budget worth about £2 billion; and that apparently caused enough people to stay away from the next bond issuance to completely collapse the system? 

I'm not quite sold on that one.  Maybe it would have happened anyway; maybe some of these people who wanted to see Rishi come in anyway were all too happy to stay away that day, if they were connected to institutions that could have bought on those levels.  So I'm saying I don't know, just the whole thing doesn't seem right.  When you look at the scale of the numbers, it just doesn't seem right; that £2 billion unexpected could trigger that.

Peter McCormack: I hear you, I just want to know the details of that, but that's fine.

Dan Tubb: Yeah, I'd love to know and I'm just going to accept that I don't have to know.  The key point for this conversation is that we had a Prime Minister who attempted to go down the growth route.

Peter McCormack: It didn't work.

Dan Tubb: And the shortest serving Prime Minister.  And the media narrative was absolutely intense.  It was, "This is a libertarian Jihadist trying all sorts of completely crazy things like tax cuts; this is insane".

Peter McCormack: Okay, so growth isn't going to work, we're not going to be able to raise growth.

Dan Tubb: So basically, we looked at our four options and none of them are viable.  So, when you have these shows and you talk to people and they say, "The system cannot save itself, but there is no solution at this point", we've just walked through it.  None of those options is going to be viable.

Peter McCormack: But my response to that is, none of those options in isolation, but is there a mix that could maybe work, because you have presented something extreme, and each one as an extreme scenario doesn't work; but maybe some taxing the rich here, some spending cut there.

Dan Tubb: Well, yes, I have presented extreme options in each case and none of them have been sufficient in themselves, none of them have actually solved the problem, apart from the spending cut one, which is so politically completely unviable, so no measure of that is going to take place.

Peter McCormack: Yeah, but your spending cuts were across four specific --

Dan Tubb: No, I only showed four; it was across all of them, it was the entire government.  I just picked out four to show what the effect would be.  So actually, it went deeper than that.

Peter McCormack: So I wonder if we get back to, that deficit year, that 2021, is an exceptional year.  We see a massive difference in the deficit, but we've also seen, when we see the NHS spending chart, there's a massive anomaly year there.  What I'm wondering is, do we get back to deficit levels year-on-year that are lower, that aren't £210 billion, that are maybe £60 billion, £70 billion?  Maybe this is something that's a 50-year play, we gradually get back to -- I don't know.

Dan Tubb: Have we got 50 years to -- I think we're bleeding out right now.

Peter McCormack: Oh, look, I think we are, but what I'm just saying is, can we get a trajectory towards getting close to balance even?

Dan Tubb: I think it is going to become obviously broken long before the timescales that this would have to play out on, because you look at what the government's doing.  So, what I think will actually happen is they will select bits from the above, and it will always be the absolute minimum that they need to pick from the above which is the least politically unviable to get them through the next few months.

Peter McCormack: The cancer of the political cycle.

Dan Tubb: Yes.  And look at what the current Conservative Government is actually doing.  They are saying, well they put up a couple of taxes and they say, "We're going to put up more taxes", and they say they're going to cut spending.  But all of those big tax cuts and all of those big spending cuts are the other side of the election and they're not going to win the next election.

Peter McCormack: No, I mean they're done.

Dan Tubb: Yeah.  So, they're not actually doing anything to solve this problem.  And what do you think Labour's going to do as soon as they take office?

Peter McCormack: Make it worse, spend more.

Dan Tubb: Yeah, they're not going to take all of those spending cuts that the last government lined up for them and faithfully implement them and go even further, because even the ones that the Tories have lined up, all it does is it gets us to a slightly more balanced situation.  It basically trims the deficit down over an eight-year period, or something like that, assuming all of their optimistic scenarios, all of their optimistic projections come true.

So, we are going to continue to bleed out, we are going to continue to find that the national debt goes up.  The trajectory has always been that this deficit increases.  You can't, as I said, get the rate of tax to GDP much above that sort of 34%, 36%, and every time you try, it sort of blows up on you and comes back.  And you've got the inflation coming through on the system as well, and that's of course going to be the error term in all of this.  So, when you can't meet the obligations in any year, of course they're going to turn to money printing, so that's going to trigger more inflation, which is going to get into the situation we're in now.

Peter McCormack: More debt servicing.  This is basically a death spiral, you're talking about a death spiral.

Dan Tubb: Yeah, we are in a death spiral, and that's the reason I'm on this show.  We're on a death spiral, we can't get out of it.  If you try and fix it with inflation, you get to the problem we've got now, where you're giving I think nurses, is it 6%, or something like that; teachers have had around about 6%, it is of that sort of level, and it breaks stuff.  So, I'm a governor for a primary school and financially, we were very well run, we were actually having a surplus every year; we'd built up a bit of a nest egg.  But of course, most of the expenditure for the school is teachers' salaries.  So, you put a 6% increase on that and it knocks the whole thing out, because there's no corresponding increase yet from government to increase your revenues.

Peter McCormack: So what you're saying is, when they offer the pay rise to the teachers, they haven't matched that with more funding for the schools; they're saying to the schools, "You figure that out"?

Dan Tubb: So far they have, but it's not going to work.  My example is, we were a very financial well-run school and we have been knocked into deficit which is terminal.  So, there is no prospect, and if we're in that situation, I guarantee that 90% of schools are in that situation.  So, that line at least is going to have to go up; the NHS line, if you give those -- and you say that 2021 was an exceptional year.  Once you start adding in 6% to the payroll number, which is the biggest cost they have, it's not going to look so exceptional.  In fact, if anything, in a couple of years that's going to look quite a good year.

Peter McCormack: Well, this is the nub of the issue.  Listen, I have a home budget, okay, I'm within my budget at the moment.  And there are times when I've been out of it, when I had my credit card, and I generally run a deficit or a surplus through my whole life.  I know right now, if I was suddenly in a massive amount of financial problems, I would have to make some harsh choices.  I would have to maybe sell my car, or cut my holidays, or sell my house and move somewhere smaller, and all these things would suck, but you would have to do it.  The country needs to do it.

Dan Tubb: So, if you were the government, how would you do it; how would you solve this problem?

Peter McCormack: Look, I'm not going to give an intelligent answer off the cuff in a podcast.  I'm a few grades above moron, so let's be real about this.  But you would have to find a way and you would have to make -- it might be the case of, "It's the end of the NHS".  Now, look, I'm saying this.  If you could have the two political parties come together and say, "The county's fucked if we don't figure this out.  This is something we have to do together, we have to".

Dan Tubb: But that is not the --

Peter McCormack: I know, I'm in cloud cuckoo land.  All I'm saying is, this is what should happen, and you would be able to find a way to cut £240 billion from the spend, but some of it would be harsh.  It would be people going without pensions, or it would be the end of the NHS, or it would be the NHS only being available free for people who earn under £15,000 a year.  I don't know what the answer is, but there would be an answer.  When you have to find a way, if you were told, you would have to find a way.

Dan Tubb: I mean, there is a solution to all of it.  It is basically what you just said.  The only viable solution to save the system is to cut spending to within its means, and that means radical transformation of public services.  And at this point, it would be truly radical transformations.  It would be schooling to 11 only and after that, make your own provisions.  Now actually, where we've got to these days, with online learning and YouTube and stuff, that might not be the worst thing in the world imaginable.

But when it comes to the other stuff, when you move up from there and you're looking at halving the effective budgets of pensions and welfare, like I said, that is effectively boarding houses.  The public are never going to accept that, and for the NHS it means something like no NHS after 50, or something like that.

Peter McCormack: But this is why, as I say, it's line by line.  I can't go to anyone and go, "It's that, and this is the example", it has to be line by line, what can go.

Dan Tubb: Yeah, but those things I'm talking about, it would have to be all of those, and then every other line as well; all of them would have to get cut by that level at this point.  And that's the thing, this is the whole point of the talk, is that it is so politically completely unviable.  And not only that, it's that we're having this conversation now talking about it by looking at the numbers.  If we were to exit this room and walk down the hall and find somebody else, they would not even acknowledge the problem.  Nobody watches the mainstream media --

Peter McCormack: You mean, they're not aware of the problem?

Dan Tubb: Yeah.  So I mean, amongst your normie friends, who is talking like this about, "How do we find a solution to this government spending problem?"

Peter McCormack: What do you think, Sean?!  Sean's our studio producer for the day.  It would be interesting to chat to Sean afterwards though, because I think this is going to be the first time he's heard this.

Dan Tubb: Because this is nowhere in the mainstream media.  Nobody's saying that we're running up against the financial buffers here.

Peter McCormack: Well, the funny thing is, I'm telling you, there's certain people in my friendship circles or my family circles would hear this and say, "This is conspiracy".  It's like, "No, this is reality".

Dan Tubb: Oh, I've just bagged numbers from the budget, so, yeah.

Peter McCormack: These numbers exist online, the government publishes these numbers, these are true.  You tell me an answer, just run through this logically.  This is why, I don't know, we need more independent, successful journalists in the UK pushing this shit.

Danny Knowles: But the people within the system must see this?

Dan Tubb: Okay, so shall I talk about what I would do if I was them?

Peter McCormack: You mean, if you had the job; or, if you were evil?!

Dan Tubb: Oh, yeah, if I had the job and I was evil, because you'd have to be, wouldn't you?

Peter McCormack: So, what you think they're going to do within the constraints of their personal careers, their bullshit?

Dan Tubb: Yeah.  Well, look, you don't get into a position of power without -- so, the way they stop radicals from getting into these positions is, there are 1,000 different filters that you need to pass through before you get anywhere near this level.  So, anybody who has a non-mainstream approach to this would have been filtered out a long, long time ago.

Peter McCormack: Are you saying I've not got a chance?!

Dan Tubb: Anyone who watches this podcast is not getting anywhere near the reins of power on this; you would be filtered out a long time before.  So, what is a solution that is within the mainstream realm of thinking?  I know what that is.  You need to plan for significant civil unrest going forward.  And we know that they're talking about this, because you can go onto the World Economic Forum YouTube page and you can watch their talks.  They have spent years talking about significant civil unrest coming down the track.

Peter McCormack: Well, we have a small amount of civil unrest at the moment.  I think the level of strikes we're seeing is a form of civil unrest; it's a protest to begin with.

Dan Tubb: And I don't think that's entirely accidental.  One thing I don't think is entirely accidental is people gluing themselves to roads and Van Goghs, and so on, because what that's doing is gaining public support for a new public order bill.

Peter McCormack: Hold on, hold on, therefore you're implying that people like Extinction Rebellion are really government stooges doing this?

Dan Tubb: Have you ever looked at their webpage?  It is full of quotes from government scientists. 

Peter McCormack: Hold on, are you saying they're stooges, or they're inspiring stupidity?

Dan Tubb: I'm saying the government and them are singing from the same hymn sheet.

Peter McCormack: Okay, fine.

Dan Tubb: The only difference between the Conservative Government and Just Stop Oil is a timing one.  The Conservative Government want to achieve net zero by 2050, they want to do it by I think 2030.

Peter McCormack: Yeah, but what I'm saying is, full conspiracy is these are paid actors.

Dan Tubb: Oh no, I'm not saying they're paid actors.

Peter McCormack: I get it, we talked about it at the very start.  I believed what the government said with regards to lockdown at the very start.

Dan Tubb: Because they created a narrative.

Peter McCormack: They created a narrative and I believed it.  But I wasn't just a moron, I did speak to a doctor and he talked about the situation that was happening in the hospital.  I've spoken to him since and his view has changed.  But sometimes I wonder how much of this is insidious decision-making, and how much of it is maybe just the natural organic way these things happen, because of the incentive models.

Dan Tubb: Yeah, I think they become, to a certain extent, one and the same, because as I mentioned, in order to be in a top position in a western government at the moment, you need to ascribe to the whole set of views that become self-reinforcing.  And so therefore, they reinforce those views, they promote those views, because they hold them and you don't get into this club if you have a completely different set of views.

For example, my style of doing economics is more Austrian school.  There are no Austrian Economists at the Bank of England or the Treasury, because if you ascribe to my way of thinking about economics, the solution to these problems becomes, you need to scale down the size of government.  The mainstream economists, they do not factor in money and debt into their calculation.  So, the Fed has never acknowledged the debt; they don't think in those terms.  They effectively exclude it from their model, which sounds really weird, but they actually do.  They just don't think in those terms.  Therefore, an increase in money and debt is not a problem to them, because they just don't factor it into their thinking. 

So, that's just one example of it, but it goes well beyond that, it goes through all of the narratives, that I don't think there is going to be any change on approach from a whole bunch of this stuff from the people that we've got in there at the moment.  I don't think they're structurally capable of it.

Peter McCormack: Okay, carry on your train of thought.

Dan Tubb: Yeah, right.  So, what would I do if I was in there and I was running it?  You said "evil", but I don't think these people are actually evil, I don't think that's their motivation.

Peter McCormack: No, the incentive system creates evil output.

Dan Tubb: Yes, but I think they think they're doing the right thing, because they cannot imagine anything outside of this system.  So, they think that the most important thing is to maintain the system.  And it's very easy to make a good humanitarian case for that, because this system provides the NHS, it provides national defence, it provides welfare, it provides pensions.  So, it is very easy to think this system must maintain at all costs because otherwise, what's going to happen to those poor people? 

So, what are they going to do to maintain this system at all costs; and as I talked about, they are planning for significant civil unrest coming down the track.  So, what tools do you need to respond to that?  I would note that in 2018, the Davos event was themed around digital IDs.  And at the end of it, they produced a working paper that they gave out to governments to say, "This is what you need to go an implement at home".  And if you want to, whatever country you live in, you can go and search for something along the lines of, "Roll out digital IDs", and you will find shortly after that 2018 Davos paper, by a lag of one or two years, whatever country you're in, we've got it here in the UK, their plan on how to roll out digital IDs.  And you can look at the two documents and there's a very clear causal link between one and the other.

Peter McCormack: We've had Tony Blair pushing it, haven't we?

Dan Tubb: Yeah, well he's been pushing IDs for many, many years, but now he's switched on to digital IDs.  So, digital IDs gives them a way to keep tabs on distance and people who push back against this.  The other thing of course is going to be central bank digital currencies.  You put those two things together and you can control -- you don't even need policemen at that point.  If you step out of line, if you're involved in the wrong people, if you're involved in the wrong networks, your ability to spend money outside of the five miles around your house disappears.  You're not going to protests any more; a million and one ways that they can shut you down.

Peter McCormack: Overnight, it would be untenable, we're talking about a slow way of slipping into this?

Dan Tubb: Yeah.

Peter McCormack: It's like what happened in Canada.  I've had a guy emailing me about this this week, telling me about the protesters and how many problems it's caused in Ottawa, and I've been trying to argue back that it was still a peaceful protest and civil disobedience can still be peaceful.  He said, "How can it be?"  I was like, "Well for example", ironically this is the example I used, "if you sit on a road and block traffic, that is arguably a peaceful protest because you're not being violent, but it is also civil disobedience".  But we've seen what happened.  We literally saw in Canada, a developed nation, people cut out of the financial system for protesting.

Dan Tubb: Yeah, and retrospectively there've been cases, yeah.

Peter McCormack: Yeah, and so we've seen the domino fall there, and I can't understate how big an issue that is.

Dan Tubb: Oh, that is terrifying, yeah.  The government, there's now an established precedent in the western system that if you go up against the government, your bank account could be taken away from you, you can't buy food, you can't pay your mortgage.  I think more of that will come. 

So, how would I roll this out; what would I do?  Well, as soon as the technology -- because we know they're working on central bank digital currencies, the Bank of England and the Treasury, they've got the job adverts up there hiring people who have the technical skills to build this; they've published papers on how they're going to do it; they've talked about it.  In fact, one of my first big threads was on this, on central bank digital currencies, and that was back in the day, just two years ago, when they were still denying vigorously that they're going to do it.  They've now dropped that and they've said, "Yeah, we are actually working on these".

Peter McCormack: We know Rishi Sunak is a big fan of them.

Dan Tubb: Yeah, he's done these videos on them, hasn't he?

Peter McCormack: Britcoin!

Dan Tubb: Yes.

Peter McCormack: Twat!

Dan Tubb: So, how are they going to do it?  Well, I think what they're going to do is as soon as they've got something ready to go, they're going to co-opt businesses into it.  You've got a business which is presumably UK-based, so they're going to come to you at some point and they're going to say, "Businesses from now on have to pay their taxes through this digital CBDC wallet".

Peter McCormack: I think there's a step before that.

Dan Tubb: What's the step before that?

Peter McCormack: Visa and Mastercard.  And I know that, because one of those companies reached out to sponsor the podcast and I was like, "Okay, that's kind of interesting", and one of the things they talked about is CBDCs on their cards.  So, I think you co-opt the financial system.

Dan Tubb: Well, that would be a necessary step if you wanted to get the businesses on board.  So, I think these businesses first, maybe they line up all the ducks in terms of the Visa and Mastercard as well, and that's really important for them, because then you've got a collection of, not individuals but businesses, and they iron out the kinks in the process.  They see it working, it's a smaller number of people who have better support for when things go wrong, you can speak to somebody sensible on the other side, not somebody who's desperately confused or whatever else, but you can speak to the accountant on the other side and you can iron things out, so you can get the process fairly sophisticated.

Then I think after a couple of years, they roll it out to individuals and at that point, it's just optional.  People like us are going to be pushing back at that point saying, "Watch out!" and everybody's going to say, "Well, it's optional, you don't have to sign up.  What are you worried about?"

Peter McCormack: "It works great".

Dan Tubb: Yeah, "Get that tin foil hat off your head, don't worry about it.  It's purely optional.  It's only for businesses and people who want to have it".

Peter McCormack: Yeah, "Anyway, do you want a pint?"  Ping!

Dan Tubb: And then, I think basically they hold fire and wait for a crisis.  They won't have to wait long because there is always a crisis coming along.  Preferably you want an international one.  Then at that point it's going to be, "Well, we need to help people, we need to do a subsidy, we need to do a stimulus like the US did a few years ago".  And when the US did their stimulus, of course they just sent out cheques to people, but there were delays and there were problems, and it probably cost a lot to administer the system.  And those flaws will get amplified massively in a few years' time when this happens.

They'll be saying, "Look, the only way that we can do this, we've looked at it, the only way that we can make this work is by a rollout of the CBDC wallet to everybody and we have to do this because it's a crisis".  I don't know what the crisis is, maybe a meteor hits, whatever but, "We need to get these out to everybody".  That's the point where you're going to start jumping up and down saying, "Guys, this is a trap, don't do it", and the media narrative is going to be so strong that, I mean I had people calling me granny-killer all the time when I was pushing back against lockdowns. 

You're going to get that times ten when this comes through because people are going to be saying, "Pete, don't you understand, people are struggling, people can't pay their bills, people can't heat their homes, they can't feed themselves, and you're trying to stop them from getting a stimulus cheque".  You're going to have it turned on you, all guns blazing, all your friends and family, at the moment the ones who basically ignore you or sometimes call you a conspiracy theorist, they're going to be turning on you and it's going to be very unpleasant, because you're going to be, in their minds, standing between them and a stimulus cheque of whatever's been promised, like £4,000 or £5,000 or whatever it is.

The whole media narrative is not going to acknowledge what you're saying.  The whole media narrative is going to be, "How can we enrol the vulnerable onto this.  You've got old Mrs Miggins over there, and she's not too au fait with smart phones and digital wallets and stuff.  How can we make sure that everybody is included on this system?"  It is going to be like the lockdowns times ten when this comes.  And then of course, once we've got that and everybody's got this CBDC wallet, it's not going to solve the problem because this system, as we've talked about this whole presentation, it is all breaking, it is all falling apart.  The inflation effect is going to ensure that you cannot afford to get through the day.

So, you're going to have to turn into a UBI system before long.  It's going to have to become, at some point, £200 a month to help you with the cost of living.  It won't matter that some of us can remember back in 2000 when even somebody with no particular skills, somebody who just did manual labour, could live a perfectly good life and could even get a mortgage, go to the pub, probably have a holiday once a year; that won't matter.  We would have got to the point where in order to just get through typical living expenses, you're going to need this £200 a month payment.

Peter McCormack: I mean, look, we're already there.  In that film I made, I had Dominic Frisby in there talking about inflation.  He talked about, I don't remember the exact examples, but 30 years ago, a one-salary family could have all this; a two-salary family now can't afford the same.

Dan Tubb: Well, it's the whole Homer Simpson meme, isn't it?  We used to look of Homer Simpson as a loser, but now we think, "Bloody hell, he had a stay-at-home wife and a house".

Peter McCormack: Do you think this is a managed decline because they cannot envisage something else?

Dan Tubb: Yeah, exactly that.

Peter McCormack: It's a managed decline?

Dan Tubb: Well, the key thing is what you said, that they cannot envisage anything outside of the system.  So the system must be maintained at all costs.  And they know that because people are going to be squeezed, there is going to be an increase in populism.  Western electoral systems are very good at dealing with populists.  You take your preferred candidate, you lock him a box, you put him in a basement, you fortify the election and then your guy wins anyway.  So, we don't have to worry too much about populist candidates, they will be dealt with and they will probably be filtered out long before they get to that point anyway.

So, the only thing you're going to be given is the choice of the blue team or the red team.  And for me, that sort of feels like we're on a train and we're looking out the window and we're thinking, "We don't like where this train is going, we really don't like where this train is going, so I'll tell you what, let's vote to change the ticket collector".  It doesn't make any actual change to the people on the train, but they feel good because they've done something, and that's all we're going to do, it's purely theatre at this point.

What they're going to do is they're going to put in place additional laws to make sure they can crack down on protests, they're going to give us digital IDs and central bank digital currencies, so that actually, like I say, you don't even need policemen once you've got both of those things, you can shut things down well before that.

Peter McCormack: But we can revolt and I mean China is the worst example of this at the moment.

Dan Tubb: Yeah, it's terrifying, isn't it?

Peter McCormack: But we've seen a revolt there and a change in policy because of the revolt.  The zero COVID policy is over because of the revolt, because of the protests, because of the burning down of the encampments. 

Dan Tubb: Yeah, so these governments are very, very good at knowing exactly how far they can push before they need to --

Peter McCormack: Of course, but my point that I'm getting to is that we need to become very good at knowing how much we can push back.

Dan Tubb: The key thing, Peter, is where is China compared to where it was before it started?  Has the government got more power and control?

Peter McCormack: Of course.

Dan Tubb: So, it takes five steps forward and then it takes one step back.  It lets off the pressure, then it's going to wait until everybody calms down and start going forward again.

Peter McCormack: But almost every country in the history of the world that has gone down the road of too much control, too much socialism, has eventually seen a collapse and a revolution.

Dan Tubb: Oh yeah, and eventually I'm sure it will come.  Mind you, at the moment everybody thinks, well not everybody, I mean I don't, but a lot of people think that we are a free, democratic system at the moment.  So, people's headspace hasn't even adjusted to the process that's going on at the moment.

Peter McCormack: We still have relative freedoms to a lot of parts of the world.  I can still make this podcast and put it out, I can stand outside Downing Street and I can say exactly what I want, whereas I might be shot in other countries.  Okay, what I think we need to do is understand the relative amount of freedom we have and the encroachment, and we need to front-run a full revolution.  And that's why I said at the very start, how do we get the narrative and the language out so people don't think -- because you don't want to be put in the bucket of Katie Hopkins and Laurence Fox, who say some great things and also, a lot of the time, sound like absolute nutters. 

How do you get this message across and not sound like a nutter?  It's the thing that ways on me the most, Dan.  I'm always thinking about how do I translate this, because I take the insults and the statist cuck stuff all the time; it's because I'm always trying to -- how do I translate this to normal people?

Dan Tubb: Yeah, so specifically to answer your point, how can you do it, you can do it by --

Peter McCormack: Us, we?

Dan Tubb: Well, I'm going to answer for you.  But the way you can do it is by amplifying different voices who are pushing back on this and setting the frame differently.  So you've had me on.  Now, there will be certain people who watch this who will resonate with the way I think and they might want to follow me.  I've now got a regular gig at thelotuseaters.com, and I produce a series there called Brokenomics, where I basically take one economic concept a week and explain it: inflation, interest rates, whatever it is, get into that.

Peter McCormack: You must follow Bernie on Twitter, Bernie's Tweets?  What's her surname, Danny?  That's not her.  Oh, God.  I'll find it afterwards.

Dan Tubb: If you think of it, yeah.

Peter McCormack: So, she's starting to ring the bell a little bit about CBDCs.  Yeah, you've got it.  What's her name?

Danny Knowles: I don't even know how you say that.

Peter McCormack: You might recognise her from her picture.  Just show Dan quick.  If you're not following her, she's brilliant.

Dan Tubb: Yeah, I think I've seen her.

Peter McCormack: But Maajid as well, he's also good.  There are people ringing the bells of CBDCs.

Dan Tubb: So, this is what you do.  You highlight -- so, some people will have listened to me and want to hear more, but some people, the way that I think just doesn't resonate with them and they're not going to connect.  But if you bring on ten people who are looking at this problem through a different lens, hopefully one of us works for at least some section of the audience, and we provide the argument and get them thinking about it and arm them in a way to look at this problem, and then it slowly starts to permeate out. 

So specifically on what you're doing, yeah, you basically just raise up interesting voices that can connect with different groups of people.

Peter McCormack: But my podcast is this little niche podcast in a little corner of the internet that a few people in the UK, or crazy bitcoiners listen to.  There's just the constant debate, me and Danny have been having it for three years, should we jump out of Bitcoin, should we go a level above?  Bitcoin is our common thread.

Dan Tubb: Yeah, but you've done that, haven't you; you've done it by turning into a macro show effectively.

Peter McCormack: Yeah, but it's still What Bitcoin Did.  Should it be something else, and should we be leaping out of that and accepting, everyone who listens likes Bitcoin, not everyone, but a lot of people who listen to Bitcoin like Bitcoin, like the show.  Should it be something else?  Should it be a show which is like the cultural, weirdo layer of society?  Should we do that, so people aren't just put off by Bitcoin.  They can fucking hate Bitcoin and not care about it, but still understand this train wreck that's coming.

Dan Tubb: Well, how much are we talking about Bitcoin during this podcast? 

Peter McCormack: We've not, but what I'm saying is --

Dan Tubb: This is the thing.  So, if somebody watches this and it resonates with them and they want to go show it to their friend, their friend might say, "Oh, it's Bitcoin", "No, it's not Bitcoin, just watch it", and then all they've got to get through is one second of the thing that pops up at the beginning and then listen to it, and after that they forget about it.  But I think you've got a thing, you've got a groove.

Peter McCormack: But if I have Jürgen Klopp on Monday and Stormzy on Wednesday and Dan Tubb on Friday, maybe Liverpool fans who like Jürgen Klopp and Stormzy's rap fans suddenly listen to Dan Tubb and go, "Huh!"

Dan Tubb: That's it, you talk of a network that we're building.

Peter McCormack: Yeah.  I give Rogan as a great example.  He just had Aaron Rodgers on the show.  But with Aaron Rodgers, they're talking about this kind of stuff.  What we need is, we need the interesting people in culture, sports, music to understand this stuff to be pushing back, that's what we need.  So, every day I think about this, every fucking day; do I sacrifice having the Bitcoin show and take the gamble and go and do this wider thing?  Because, I feel like if we're in a war --

Dan Tubb: No, because what you're thinking about there is you're trying to be the whole network.

Peter McCormack: No, I'm not.  What I'm trying to think is, if this is a war and we're trying to stop this, doing it as a bitcoiner comes with an agenda.  Doing it as just a cultural layer, the agenda's different.  How do we reach more people?  I'm accepting that I sacrifice money and opportunity and my niche position to go and try and reach more people with this.  How do I do it; and how do I do it without sounding like, "Oh, it's that Bitcoin nutter, he's talking about CBDCs.  Fucking ignore him"?  I'm wrestling with this on a daily basis.

Dan Tubb: I think you've got a really strong part of the network and from that, you can branch out into other parts of the network and you can bring people in.  So, yeah, I am a bitcoiner, I hold Bitcoin, I educate myself more and more on Bitcoin, because there's always more to learn.  But then, my show isn't about Bitcoin.  I'm going to cover it at some point; I haven't done that yet.  So, you're just reaching out to the network and bringing voices on and highlighting voices and when you start to learn about a subject, this is what happens.

I can't remember who was the first person I listened to when I started going down my Bitcoin rabbit hole, I don't know who it was, but I listened to somebody and I thought, "That person's good".  So then I listened to an interview with that person with somebody else and I thought, "That interview's quite good as well", and then that interviewer interviewed somebody else.  And before you know it, you're just populating outwards.

So, you've got a strong position on the network where you are now.  It's not the whole network, but you're bringing me in and you said you're bring Stormzy?

Peter McCormack: No, I want to.  I'd love to have Stormzy on the show, but I want someone like him to understand this.  Like I say, watching Aaron Rodgers with Joe Rogan and all the things that they were talking about, and things that kind of sound like, you might even say they're conspiracy theorists or nutters, but they were having intelligent conversations.  Didn't they even talk about CBDCs on that?

Danny Knowles: I've not listened to that one.

Peter McCormack: But he has talked about CBDCs, it's increasingly coming up, and I want that in the voices of the people of this country.  But I'm not going to reach a massive audience who I am, but Stormzy might, or Ed Sheeran might, or Jürgen Klopp might, or Jude Bellingham!

Dan Tubb: Yeah, I mean it's still going to have to be good, quality information.  So, just find interesting voices, bring them on, promote them.  And yeah, I think the key thing with me is, a certain section of the audience will resonate and a certain section won't.  So, I do not expect to resonate with the old-fashioned lefties, I'm probably not going to connect with them particularly hard.  But there'll be a certain percentage who will say, "Okay, yeah, maybe there's something interesting there", and then they'll find me on a conversation I had with somebody else and they'll follow that other person as well.  The network organically grows.  I think you are doing the right thing.

Peter McCormack: All right, fair enough, Dan.

Dan Tubb: In terms of what I do about it, because I've been thinking the same thing as well, this is why I have not gone back into venture capital.  Even though I came out of it and it just so happened we had lockdown at that time, I could have then gone back into it having had the benefit of two years going deep down the rabbit hole on cryptos.  But for me actually, the most important thing is the messaging.  So, that's why I spend all my time now doing podcasts and radios and tweet threads and why I've joined Lotus Eaters, because I want to reach as many people as possible.

That's a completely different audience.  That is more focused around, you know, politically they're more the sensible centre, it's very much English oriented, well, maybe they do have American followers, but it's very much English oriented around that, and it's a lot of people who don't know anything about Bitcoin, or they've heard of it but they don't know much about it, and I will introduce that concept at some point.  But the bigger thing, for me, is talking about how government is failing us at this point and it is going to lead us to a bad place.  And in order to save itself, it is going to become something like China. 

It's never going to get all of the way there, but it's going to get something like that; our freedoms are going to be removed, and more importantly our ability to purchase anything through, well, just the effects of inflation are just going to squeeze us and squeeze us, and some of us are going to know what's happening, we're going to understand why we can't afford to buy anything any more, but we're going to get angry about it and we're going to turn to the government, who caused the problem, to provide the solution.  And, that solution is going to be Universal Basic Income provided through a central bank digital currency.  And once we're in that, we're trapped.

So, this is the only thing where, you know, two of my favourite guests on your show are probably Greg Foss and Jeff Booth, and that's the only thing where I vary from Jeff Booth a bit, is that he seems to imply, if I'm understanding correctly where he goes on this, is that he thinks that this dark future that I'm talking about might be a step, but then it will collapse fairly quickly.  I'm a lot less optimistic that once we get into that, that it will happen.

But there is also an optimistic case for me.  So, the good case is that this system is going to collapse, and the bad scenario is that it collapses, but after the central bank digital currency route is viable, and so we go straight onto that.  The good scenario is that this system collapses before that other thing is viable, but Bitcoin is by then viable.  And look, all of these things, they always last longer than you think they do.  I don't think this system is going to catastrophically collapse within this decade, but it is going to increasingly grind us down over the next decade.

So, let's imagine a scenario where in 2029, the rate of Bitcoin adoption and network, the user interface, the custody issues, have been significantly improved and 70% of people are using it, at least on some level, by 2029 and at that point, the system collapses.  Sovereign debt layer gets wiped out, the stuff that Greg Foss talks about all the time.  If 70% of people are using Bitcoin, you could just basically step from that one system to another, because we've seen this before.

You brought up the example of Argentina.  Every so often, their system collapses.  It doesn't really matter that much, because they all just go to their top drawer and they pull out the dollars and they get on with life, but that's because they are an island of chaos in a sea of stability; whereas it's going to be the other way round if the western financial system goes.  It's just going to be a sea of instability and chaos and probably the BRICS, if they get their system set up in time, they're going to have some sort of insulation against it, but it's going to be punishing. 

But if that Bitcoin option is viable at the time, potentially we step across to that, and I don't know which of the routes we go, because it all kind of depends on who's ready to go at the right time.  So, whether we end up in the good future or the bad future, for me it's 60/40.  I don't know whether it's 60/40 bad or good, but there is a good route out of this.  But that's why I'm dedicating all of my time to talking about this message, because it is so important, because I think if we get the bad outcome, it could be a generational issue before we get out of it.

Peter McCormack: Okay, a lot to think about, man.  We're going to have to follow up.

Dan Tubb: Yeah, I'd love to.

Peter McCormack: I think I almost want to do that next step now.  I want to map out the bad future and map out the good future, and how do we push the good future; what can we do to do that?  I think that would be a fascinating follow-up.  I feel like I interrupted quite a few times just because I was so into it.  Danny knows when there's going to be a show I like and he was like, "Pete, you're going to love this one".  Thank you so much, Dan, we will do a follow-up.  Where shall we send people if they want to find out more?

Dan Tubb: Yeah, you can follow me on Twitter.  I've got a really stupid Twitter handle, because I signed up 12 years ago and I thought it was a bit of a joke platform, I didn't realise it was going to be a thing, but it was.  So, @Kingbingo_, you can find me on Twitter, and I very recently joined Lotus Eaters and I'll be starting my Brokenomics series there soon, so follow that and I'll be having content up hopefully very soon.

Peter McCormack: Brilliant.  Well, look, thank you for this and, yeah, let's plan another show.

Dan Tubb: Thanks very much.

Peter McCormack: All right, cheers.