https://youtubetranscript.com/?v=VyYO8qiFQDo
Your crew ran four balanced budgets as well. And so let everybody who’s listening know what the consequence of a balanced budget is, and then more importantly, what the consequence of an unbalanced budget is, and what the cumulative consequence is that, especially right now. Well, actually, I’ve been deeply shaped by studying British budget policy in the 19th century and the recovery from the scale of debt in the Napoleonic Wars and the way in which the British worked very hard to lower taxes, increase economic growth, and were very frugal. Gladstone, as prime minister, would reuse all the message boxes as a way of saving money, which is partly symbolic and partly real. And so I approached this whole issue of the budget from the standpoint, and I helped write our first budget of hope and opportunity when I was a freshman in 1979 as an alternative to Democrats. And we were making a couple of arguments. One is that a lower tax system creates a lot more jobs, that those extra jobs create a lot more revenue for the government because you have more people at work earning more money, more people getting profits earning more money. Second, that the best social policy, as Ronald Reagan said, was a job, and therefore having a robust economy was a major goal. And that in the long run, you could have much lower interest rates and much greater capital available to be invested if you had a balanced budget. And that we were very anti-inflation and very much for lower interest rates because we wanted to have a very robust private sector that was rapidly creating new technologies, new jobs, new opportunities. And if you think back to that period, it was at the very beginning of the explosion of the internet, of cell phones, of a whole range of technologies. So we were very interested in accelerating technological change. And that’s part of why we emphasized a dramatic lowering of the capital gains tax because we wanted to make it easy to liberate capital, to move to new companies and new opportunities and new ideas. Ironically, when we balanced the budget for four straight years, Alan Greenspan was chairman of the Federal Reserve and actually reported publicly in a congressional hearing that they had a working group trying to figure out that the projection was in 2009, we would pay off the federal debt. And they weren’t sure how they were gonna technically manage the money supply if they had no US debt. It was a situation we had not seen since 1837. And nobody predicted, I mean, nobody predicted we’d be a majority in 94. Nobody predicted we could balance the budget in four years and then keep it balanced. And it was really interesting. But part of the key to the balanced budget was it forced you to make choices and it forced you to modernize the system. So you couldn’t afford this, you know, when you’re willing to run deficits, everything sloppy becomes acceptable because after all, it’s all just money and nobody cares. And so you end up with huge levels of corruption. It’s an estimated $20 billion in theft in the California unemployment compensation last year, just by itself. You end up with huge volumes of waste. The Pentagon is an embarrassment. It is so bureaucratic and so wasteful. You end up with all sorts of sloppy projects because politicians say, look, since the budget is gonna be in deficit anyway, why can’t I have my half billion dollars? And you have no yardstick. There’s no way to control the system. And so we wanted to establish a genuinely controlled government that had to constantly improve itself. And I had been a student of both Edwards Deming, the father of the quality movement, and Peter Drucker, the best management writer of the 20th century. So I really brought a very management intense approach to thinking about the federal government. And I wanted the pressure of the balanced budget to force us into the kind of reforms we needed. When were the projections being made that the debt would be paid off by 2009? 99 and 2000. Right, right. So that was at the end of the internet boom. That was a remarkable decade, 1990s, of American economic expansion. Exactly what we had predicted. We said, you’re gonna get dramatically more growth. That will produce revenue. And if you control spending, for example, welfare reform led to such a dramatic drop in the number of people taking money from the government and those people now working and paying money as taxpayers, that you take both sides of that equation. The government’s paying out less and it’s getting in more. So for almost every state, and almost every state, welfare reform was a huge advantage to their fiscal budget. So why did the balanced budget vote fail? I know it was only by one vote. Why were people opposed to it? You mentioned a little earlier about the Democrat objection to work. I look, first of all, there are people who like big government. I mean, look at the Biden administration. Look at Bernie Sanders. I mean, they genuinely, sincerely like big government. Second, there were people who didn’t want to get in a straightjacket. They were thinking, oh my God, what if we get into a crisis and now we’re constrained? Well, my view, I mean, first of all, you always have an escape valve. So if you go to war or if there’s a gigantic emergency, you can respond to it. But as a general principle, in the absence of war and emergency, I think having a balanced budget requirements is good. But there were people who simply wanted to avoid that kind of control. Okay, so now given that things worked so well on the economic and the social front in the 1990s, I lived in the United States during the 1990s and it was quite a remarkable boom period. Very, very optimistic and maybe a period unlike any that has been since particularly. Now, given the massive success of that program, why did Republicans and Democrats alike relapse in the aftermath? Because we went right back to huge deficits and a growing and a spiraling debt, even with that object lesson. So why did people fail to learn and why more particularly was that also true of Republican administrations? Well, look, I don’t think either George H.W. Bush or George W. Bush had a clue about Reaganism and about modern conservatism. I think they were just managers and they managed the system as it existed. I mean, when George W. Bush announced he was gonna work with Teddy Kennedy on education reform, you knew it was an absurdity. I mean, Teddy Kennedy was the chief leader for the teachers unions. There wasn’t gonna be any education reform. They were just gonna spend a lot more money and accomplish nothing. And I think that there’s a wing of the Republican Party, which is a managerial wing. It likes things to be tidy. It doesn’t like fights. Well, if you’re gonna actually control the government, it is a struggle because the government doesn’t wanna be controlled. So if you’re gonna actually, for example, examine how we managed to build the F-35 as a bad airplane at such enormous cost, you’re gonna have every lobbyist who helped build the plane petitioning the Congress to avoid the investigation. And so you end up in a situation. I once said that the future has publicists, but the past has prison guards. And those prison guards are mostly lobbyists. And they do everything they can to stop the future. I’ll give you an example. I’ve done a lot of stuff. I founded the Center for Health Transformation. Done a lot of work on health reform. So somebody built a computer model that could evaluate your eyes and could, we currently have a system where every year you have to get your eyes checked if you need, for example, a prescription for contact lenses. Well, the recommendation actually, technically, is you ought to get your eyes examined every other year. But of course, if you’re an optometrist or an ophthalmologist, you like a provision that requires annually because that doubles the income. So this company comes along and actually has figured out you can have a home application using your laptop or your iPad. And it is literally technically as good as going in. So one year you’d go in, and the other year you’d give it to yourself. In state after state, the optometrist and the ophthalmologist lobbied to get the state to outlaw the new technology in order to protect their ability. Now, this is something that Adam Smith wrote about in 1776 in The Wealth of Nations, that any gathering of businessmen is a conspiracy against the consumer. And so all of these interest groups, like a sloppy, influence-ridden, bureaucratic and political structure, and they don’t particularly want a lean, aggressive, competitive environment. So, yeah, I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point. I think that’s a good point.