Excitement of the 2020 elections every episode we dig deep into something new this time were going to look at the wealth tax stacy thats right were looking at all the economic policies being presented by the Democratic Candidates many of them are very radical Bernie Sanders says billionaires should not exist and to find out whether or not they should we have a guest with us dr Michael Hudson and professor steve keen steve well start with you 1st well i have a very complicated position on this because part of my research is into. Whats called the financial instability hypothesis that explains where the 2008 crosses came from out of that part of what i discovered from the Mathematical Modeling i did was this is a simple relationship between an increasing level of private debt and a full name out of money going to work because as you had a rising level of debt which is what led to a crossroads that rising level of debt meant a rising amount of money going to the bankers and rather than the capital of spain the ones who paid for it in fact it was the work because there was a foreign income going to the workers now look at the Empirical Data thats whats happened as well the rausing level of private debt has meant more money going to bankers less going to work because and capital is feeding in the middle how come this issue is so misunderstood by the democrats they dont they seem to be financially illiterate and thats. Do we need billionaires should be really really phrased as where to billionaires come from other words how do you get billionaires thats right and it seems like theres a lot of area to examine in the Banking System in the central banking just where they seem to have engineers if you well using what in economics is called a cantillon effect where central bank prints billions hundreds of billions and somehow it never circulates in the economy and it goes to the same peoples pockets all the time so word of billionaires come through thats found in the question one way billionaires come from is getting too much private debt through to a private to the bubble that shouldnt have been allowed to happen in the 1st place then and so thats the sort of billionaire i want to get rid of and i agree with bernie completely on that front the doing is youre talking about we have the corner missed mainstream economists who run Central Banks who didnt see the crosses coming still kind of stand wat happen in the way of risk using it as being to pump up asset values in the belief that they will go what they call the will fix which will lead to more consumption and the idea is make make billionaires even wealthier by making shows more expensive and theyll spend that money in stimulate the economy now theres a very Good Research paper by the strange Little Organization called the Federal Reserve of which shows there is no wealth effect from shares you did very little benefit at all out of that so thats been artificially created well so those 2 are about to get rid of but the entrepreneurial 1000000000 is i have a different feeling i know the 2 of you talk about debt and Debt Forgiveness all the time and theres a notion of odious debt is there a notion could you say odious wealth as well if its being created artificially for a specific class i mean the data point out here that since 1989 the net worth of the top one percent in america went up 21. 00 trillion dollars while the bottom 50 percent lost 900000000000. 00 and wealth is that because the bottom 50 percent are just dom and they dont work as hard in the top one percent. Just uniquely smart and entrepreneurial and wealth creating or is it an odious mouth situation dr Michael Hudson if there is such a thing as odious debt or bad debt then there is such a thing as odious wealth on the other Balance Sheet the billionaires assets of the one percent are the debts of the 99 percent and the question is should america keep all of these debts on the books if it keeps the debt on the book the economy is going to shrink and shrink and shrink for the 99 percent and the only people who will be growing is the one percent of the creditors so the issue isnt really should you tax billionaires should you just wipe out the overhead to get back to americas golden age which was 945 when the economy emerged from world war 2 for chile debt free nobody owed anything the result was a takeoff a golden age everybody could buy a house there was industry going but nobody unclipping donald trump who says make America Great again says make America Great again by wiping out the debt and starting off with a clean slate and that means wiping out this 4. 00 trillion dollars of money that is just held in cash all this cash is somebody elses step and all of this debt is strangling the economy and stephen i are in agreement that the problem of wiping out the debt is there is all this wealth on the other side of the Balance Sheet the good thing is that by canceling the debts you cancel out the these huge amount billionaires power to take over the government to replace it and ultimately to become the government and thats what you call an oligarchy that you cannot have a democracy and at the same time have so many billionaires holding the rest of the economy in debt there was a time during the. Financial crisis of 2008 to 2009 when we had occupy wall street and there was a scene at the occupy wall street in london where these bankers were actually crumbling up money and throwing it at their poor people protesting essentially isnt that 4. 00 trillion dollars just sitting in a bank account collecting 0 percent Interest Rate almost the equivalent its mocking the economy and all the people who are impoverished and this economy if its money money should circulate so if youre lending money generates Economic Activity and if you have this money just watch you know in peoples Bank Accounts not being spent thats a major part of why the economy is in a relative slump right they say money is like the new or it should be spread around for a good work effect of what you had as accumulation of this stuff rather than spreading it around and thats the great problem of a capitalist economy it works best when theres massive amounts of circulation when people get wealthy they look at a way and they who are good and they hoard they spend less most rapidly you have a lower level of Economic Performance so that will is correlated with slow Economic Performance not High Economic before ill say so this is all very interesting in terms of the flow of money etc you know going back to 2008 we had the emergence of the holder doctrine for america older former attorney general who said that banks are strategic to the economy therefore he couldnt prosecute them he stablished they knew president that banks the biggest bankers were above the law used to be simple moral hazard you know the central bank would say well if you keep bailing people out continue to act poorly here theyve institutionalized what looking back now the prosecution that investigation of j. P. Morgan is obvious racketeering you know theyve made racketeering in the Banking Sector legal obviously thats going to create a concentration of wealth if i could steal money with no repercussions whatsoever im going to become a wealthy man now thats whats happened i mean the date of not intending on is really indicative here because im talking about trends in a pure capitalist economy with no stuff. Central bank has but i 87 began the stuff about central bankers with the greenspan port and ever since then theyve gone in there to rescue the banks whenever they start to fall over to rescue the Financial Institutions when i stuff up the classical course being a Long Term Capital Management so all this stuff is meant as well as the capitalist system driving inequality which slows the economy down the socalled managers the central bankers in particular greenspan and his followers have extension why did the inequality and exchange why did stagnation that comes out of that inequality so this wealth is giving a stag National Post no prosperity the problem is what is a capitalist economy most people think that a capitalist economy is a billionaire is using their money to invest in factories and to employ people but thats an Industrial Capitalist economy and what we have a Something Different we have a finance capitalist economy and the idea of a finance capital isnt to make money by employing workers to make more goods to sell at a profit its to make money from money its to make money by buying real estate stocks and bonds not factories and stocks and bonds you can make money on fastest by closing down the factories by outsourcing you make money if youre a finance capitalist by closing your American Factory and moving to china by taking all of your income and instead of reinvesting it in a factory you use it for stock buybacks to bid up the price of your stock or to pay out as dividends to push up the price was so difficult for the democrats to make the observation that when the monopolist and the monarchs the neo financial monarchs are strangling and economy a company or a country lets say in the case of grace they strangled grace they choked it out as a result they rewarded the finance heirs with the bailout with more hundreds of billions so every time they strangle a company or a country to death they get more capital they dont circulate the capital and so why cant the democrats why cant the opposition make that observation why cant those who are leading the Democratic Party say well. These guys are choking out these economies these companies this economy heres how they do it its a crime wave how can they dont take them to court why do they pretend its something its something other than that because the Democratic Party is wall street the Democratic Party is basically of the neo liberal wall street party that believes that if you give more money to the billionaires theyll spend it into the economy instead of doing what steve describes in the stowing spending it back into the Financial Markets to keep inflating asset prices well today isnt made by saving money its not made by investing in factories its made by buying stocks and bonds that the Federal Reserve inflates in price by this huge 4. 6 trillion of point a tape of easing that is all spent into the stocks and bonds not into the real economy thats why were filming here in brooklyn across the bridge you see the Financial Center 14 trillion dollars gone into rescuing them saving that is the millennial generation z. The next generation thats going to have to pay all these debts that accumulated by these banks stirrers they live out here and this is the heart of where all these policies of like a wealth tax of medicare for all these you guys all these sort of ideas are coming from out here front running is a double entendre for this show because its the political front runners as well as what you just described which is financial front running to the insiders know what the governments going to do ahead of time what theyre bailouts on their money printing and they front run they get ahead of that trade and they print profits risk list late and then their wealth skyrockets the rate dahlia Hedge Fund Managers say oh the wealth and income gap is so big how am i going to save my family and friends from the torches and say well why dont you turn in jamie diamond once you turn in your fellow kleptocrats put him in jail and help do something positive for society let me clarify something that they see said you talked about the current generation having to pay off the debts of the. Their predecessors theyre not going to pay him off these debts cannot be paid off they can go bankrupt they can starve they can die sooner but they tend not to pay off the debts mathematically there is no way of these exponential growth and debts being paid off in the end every economy reaches a point where the debts cannot be paid and it is a choice either it can wipe out the debts and girl again or it can leave the debts in place and let it strangle the economy thats what the Democratic Party and the Republican Party stand for today and not know it that these debts will never ever ever never be paid back dont go away much more coming on front running stay right there. Good and bad debt is the bad news in me and then the United States deems to be the good those were. The cia and the us military were engaged in covert actions to really drop the world. Where they were assassinating populist leaders they were backing up the right way military funding an army. Theres no. Because theres always a small. Profit. Welcome back to front running just learned from dr Michael Hudson that apparently the debts can never ever ever ever be paid simply because mathematically its impossible stacie yes the debts have been rising exponentially and i think its in an interesting way that context of front running is that we have the boomer generation dying off and the millennial generation is now a larger generation than the famous and the infamous boomer generation it feels like theyre asserting themselves through these economic policies its like hey what state were not suckers like generation x. And that were not going to pay your debt were not going to like ryle long in your stream of like bad debts so it is. Something that should be considered or are you just saying wipe out those debts completely the only way to do is to wipe out the debts rich people dont pay taxes only the poor people pay taxes rich people will declare all of this cash is really in liberia or panama or the Cayman Islands and its not really in america at all so it cant be taxed the only thing to do is to wipe out the debts and by wiping out the debts you wipe out this excess wealth and does america really want to like archy thats the issue do you want group of billionaires to run your Political Parties to control all of your medical care by saying it should be. Companies that we own not the public do you want to have a group of billionaires saying we are the government not a democracy or do you want to bunker say i hope to put things in a broader perspective and in proportion and thats the real proportion is a huge top of the economy whos debt is burdening it and crushing it and if you look at greece is greece americas future is Latin America americas future are we going to end up as broke as the these countries on this idea. That the rich paying taxes are not paying taxes of course the pushback on this is that the top billionaires will say well most of the taxes that are collected in the country we pay but we have to keep in mind thats on reported income most of the income is not reported for example if they pay taxes on all all income not just on reported they need to have a not have children doll in taxes collected last year probably because of the 8 or 9 trillion collected in taxes last year amazing it may seem rich people dont earn income billionaires known an income if you are an income you pay tax on it but you know its make Capital Gains and they dont have to pay taxes on these especially if theyre there offshore if you look at the National Income statistics for real estate you find the entire Real Estate Industry all the real estate america has paid just about 0 income since 1045. 00 is that donald trump says i love depreciation they have so many loopholes that they have no reportable income so taxes are not going to do it you have to go right to the root of thing its assets and debts at the Balance SheetBalance Sheets is what they should talk about and thats where we can be clear because taxation is the dumb way of trying to get the will back from the from the wealthy who fix procreated rather than earned it as models been saying but we have the were talking about profit by the way its been very careful here its the private debt thats caused this inequality its the private debt that stagnates the economy the Government Debt as modern monetary siri argues is something which is like a its the governments capacity to create money is mirrored in the amount of debt that it created so the Government Debt is something which is controllable its not the problem of course all the attention the Democratic Party in the publicans is on the Government Debt but we can decrease the governments money creation capacity to give everybody an equal amount of wealth and what that would mean is you actually reduce the debt. So you can do it in a row rather than try to take it off in terms of checks which they can always of you could use the governments money creation capability to give everybody cash which could be used to pay the debt stem and consequently youd reduce that concentration i dont want to pay the debts i dont want to make a 1000000000. 00 there isnt a trillion there is i want to wipe out the debts and wipe out all of this massive capital stifling but you know a lot of the assets