Bright: Yeah, so I just don't necessarily feel like I'm having the best day. I know a couple of weeks ago I was talking about how I just felt blah and you said maybe it's the end of summer blues. Maybe now that's finally catching up. Or it could be the simple fact that I stayed up late last night watching the soccer game and I just didn't get enough sleep. I I don't know what it is. But I just I'm just Yeah, I on a Wednesday night, City was playing late, so they didn't start till nine forty or something like that. The game didn't end till eleven forty five. I didn't even get up to my bed probably until midnight. And then of course the alarm goes off at six fifteen. And I I just It's just one of those I I feel unmotivated days. And I don't know if that's related to, like I said, lack of sleep or or it it's a Thursday. It's just like, let's get to the weekend already. I got plans this weekend. So maybe that'll help. Yeah, a short week. Yeah, definitely be because everything that we normally do on Mondays just gets pushed till Tuesday. So then Tuesday became my shitty day. That's my my busiest day. Mondays are normally my busiest day. And I'm running meetings and doing all those things. And so that just all fell onto Tuesday. And then right. Yeah. Yeah. I don't know. Yeah, that and that that's probably it. we have plans tomorrow night. we're going to some some charity thing. It's fine. But it's free booze, free food, and we got a babysitter, so that's good. And then my wife and I are going to the soccer game Saturday night. we have overnight babysitters, so we'll probably hang out a little bit more or go out for drinks after the game or something like that, and get a sleep in on Sunday. Yeah, overnight babysitting's the best. There's no doubt about it. And you need you need that every now and then. So I'm almost gonna have to You guys did, right. And I wanted to I wanted to follow up with that. We we ended our show last week with the tease, if you will, that you guys were going down to stay at the four seasons. I wanted to know how it Yeah. I mean we didn't do a whole lot. How was the restaurant? Good. It was well worth it. Yeah. Of course. You knew that going into it. Yeah. Yeah. Sure. Yeah. Just did Alocart. Sure. love tuna tartar. Right. Right. Yeah. Perfect. Right. More interruptions. Is it the kids or is it the wife? The book again, man, I tell ya. Yeah. That's funny. Right. Yeah. Mm-hmm. Yeah. Yeah. Is this is this like a an English thing, right? Yeah. Right. For your anniversary. Yeah. I've had that happen a couple of times when you're like, We can't eat anymore. Yeah. Yeah. Yes. Yeah. Yeah. They w they would have. And yeah, we've had that happen a couple of times and I think I've talked about it even a little bit on the pod when we did when we were in England, we had toffee pudding in England, which pff it's even better over there. but y it's not ice cream. You get like just the cream. Like it's so good. but when we did the what Michelin restaurants, right? And my wife struggles with those because she just she just can't put away that much food. Like a five course well, sometimes way more than that. I think minimum is seven, eight, ten courses. And then they bring you an Amoose Bouge over in Europe and you get the extra dessert because you're celebrating an anniversary or something like that. And you're like, Well I don't need two desserts. Right. Ugh They they are, but when you have ten of it it does trust me, it adds up. And when we were in Milan for our our ten year anniversary, we did the the two star Michelin restaurant and then they they had chocolate, which was completely separate. So we had like three desserts 'cause we did like the the chocolate that they do somewhere in there. Then you had the dessert that came with the the meal, the the courses, and then they brought out the the special dessert. So I was like three desserts and somewhere in the middle of that you have a sorbet. they also brought out a cheese. 'Cause that's like that's that's a European dessert. Yeah. I'm like, my god. That was like a four hour meal. that sounds good. Traditional. Sure. Yeah. Yeah. Yeah. So it was good. All right. And you get some Right. Yeah. Nice. And you and you liked it. You had a good seat, a good yeah, good view, good good ambiance. Nice. Yeah, good. So some good good drinks. Yeah. Right. Right. Yeah. Nice. Right. Really? Yeah. Yeah. I was pretty impressed. Good. Well sometimes a good breakfast like that when you're when you're at a restaurant you're not just cooking it yourself, like, i it it could be over the top. Always a good choice. Like big hunks of potato that fried yeah crushed up bacon. Nice. Nice. Yeah. Big fan. Yeah, yeah, yeah. You and your eggs and and sausage and all that. Yeah, yeah. Can't go wrong. Yeah. I still I still don't eat until noon. I still yep, yep. Just cuts down on the calories just to make sure I'm not overdoing the calorie intake. That's right. you did did you see any famous people? no. No. No. Like about famous people. The NFNP podcasters. Hey, don't I know you? Aren't you that that barely recognizable podcast that does local in the loo? Right. Yeah. Hey, you never know. One of these days we are gonna get recognized and you're gonna be like, wait, what? People actually listen to this thing? But Yeah, no. Well you'd you'd be easier to recognize with the beard and everything. Yeah, yeah. Shave that and that's a different story. Alright, well what about like the room and everything? Nice room. Did you guys do anything else? Right. Yeah, sure. Right. Right. Yeah, yeah. Yeah. Yeah. I th I think it's definitely it's about the s service, the the quality levels and and anything. And it's just sure. Absolutely. Yeah. It's it's just more about that status of people that If they go on any trip, that's where they stay. And that's why I kinda ask, like, do you see anybody famous? Because if you have like we just had the A C D C Foo Fighters concert down at the Dome. Now that was on Tuesday night, so you guys are probably a little early for them, but where do you think they stayed? Yeah. Some place. That's where they stayed. There's no other like really nice especially downtown hotels. That's that's it. It's yeah, it's the four seasons. And of course that's where famous people with money wanna stay. They just assume like that we'll stay at the four seasons, right? So Yeah, exactly. Exactly. It's character. Sure, absolutely. And that's the thing like the Hilton, the Marriott's, they all have The they have a lot of different brands and each brand is a little bit different. So to the average consumer, you might not always recognize you just see the name behind it and you're like, we're staying at the Hilton. Well you're staying at the the Hilton, the Double Tree, the Hampton Inn what what is it? They all they're all different. Yes. So yeah. Well well good. I'm glad you guys had a nice anniversary and then it's it's back to reality. But yeah, so we're we're kind of looking forward to that. I feel like this'll kind of be even though we'll have the kids intermittent. We'll have a little bit of a break and and even Sunday we have the morning and then it's grandparents' day at school on a Sunday, which is weird. So we'll kinda go meet there. So yeah, for for us. all right. Well maybe it's a maybe it's a thing. So so yeah, so the grandparents are gonna bring there and and we'll just kind of meet towards the end of it, pick the kids up, and then you only have like half a day left after that. So Yeah. So it should be a good weekend and and honestly I was I was looking forward to the podcasting. just in the sense that I'm like, yeah, this might cheer me up a little bit. Just getting on and and talking bullshit. So far so good. So far so good. Plus I get to have a beer and I forgot to call out this beer last time. and they're not an official sponsor yet, but I feel like I have to ask them. It's the the Four Hands Bright Vibes. it's it's too perfect. It's too perfect. I was like, I gotta I gotta call up. I haven't actually solicited anybody yet, and we might have the listener numbers that we could get small plugs. I don't know. that is perfect. Bright vibes and dud suds. that's too perfect actually. You've thought about this before. I did that together before. Nice, nice, nice, nice. All right. Let's get on to the the main topic. and I've I got a couple of different stories that maybe you can lead the way. But the main topic, the main thing I want to talk about, and it's a little bit different this week, is the five thousand dollar Trump checks, but not just that. And so we could talk a little bit about that. But I put together this quote unquote thought experiment. of what would happen if. And it kinda is like a a five year like this is what would probably happen if we did as a government XYZ. So I got that. I've got the AI doomsday information. I've got Yes. Yeah. I think you froze. I'm still there. Who froze? It was either you or me. Here. That was you. All right. I marked it. We'll edit we'll edit that out. All right. But yeah, five thousand dollars. All right, well let's let's just do that first 'cause I got it here and Yeah, so one point three five trillion dollars if he gave it truly to every American adult, which is what he said in his speech last night. And I didn't watch all of it, I watched some of it. And I do think one, a couple of interesting things. We're rolling into the midterms here, and it ain't looking good for the Republicans. And traditionally it it never really works out for the party that's in power. When it was Obama, the Republicans won. Well, right, and I feel like y especially with Trump, is like you come in, you win the the Senate, you win the House, and then we we don't really do anything. Nothing really got done, I don't think. I mean it is the status quo. And and and And Trump did some stuff, but all of his stuff is executive order, so it doesn't have any l stay power, right? As soon as there's an so that doesn't really count. Like the border is great for now and and there were other things that yeah, it's all it's all great. Right. So you need congressional action to actually do anything, and we haven't really been able to to get a lot of the stuff over the finish line. So it's like what have they really done? So Yeah, well that's that's what's so weird is even some of the things that you have bipartisan approval on, they won't actually vote on until other things get worked out. They're like, Yeah, yeah, we all agree on this, but we're gonna table that until and then you have different parties and people are holding everybody hostage. And now I'm like, We're two years into the Trump presidency with Senate and the House, and we didn't get anything done. It's exactly what happened last time he was president. And then he's gonna lose the midterms, and then he's not gonna get anything done the last two years. He'll probably get impeached a couple more times. And I'm just like, this is stupid guys, it's stupid. It is. It's very frustrating. Yes. Yeah. Yeah, definitely. And And so yeah, so then they they come out and they're doing this midterm convention, which is again has never been done before. And I almost feel like it's a little bit of a Hail Mary. Like, let's see if we can get a little bit of extra momentum and more TV coverage and get all of our people together and and start to build something. And we'll see, maybe it works. But then he comes out last night and he promises five thousand dollars to every American adult, which on first first look at it, I'm like, all right, well I could use five thousand dollars plus my wife. Ten thousand dollars? Yeah, I I could do something with that. But do we really want it? Is it worth it? Well No. Yes. And that's exactly what we saw with COVID, right? So I think that that becomes a little bit of the concern. Why stop at five dollars? No. So Yeah. Print. Sure. Well that as as we've talked about before, the money will become completely worthless at that point. It c we could probably sustain five thousand dollars, but right, you're gonna see inflation continue to rise and eventually we'll be right back into the same problem we're in now. You might get a short reprieve because people are suddenly cash rich. And what do you do? It's the same thing happened in COVID. You get an extra five or ten thousand dollars. Most people will just go out and spend it. It is part of the plan. You give the boost to the economy and that can give a boost. Then companies are like, Well, we need to hire more people to keep the momentum. You hire more people, whatever. Some of that is is fine in the short run, but then the inflation aspect of it ends up killing all that. And you're like, Well, I just accepted a job for a hundred and thirty thousand dollars. That's a big improvement off of what I was making. but now that hundred and thirty thousand dollars is actually the same five years later as what you were making before. It's actually a hundred and ten thousand dollars. Or worse, right? And then you're like, well, wait a minute, I'm in a worse spot because everything costs more. I'm actually making less money. So It's it's a debacle. All right. Well, and before we get into this thought experiment that I put together, and it's a little bit of a callback to to past episodes, but he said every American And in the past it's it's usually capped at people making less than four hundred thousand dollars or families making less than four hundred thousand dollars. I don't know why that's the magic number. He didn't say that last night. Last night he said every American and he only said if Republicans win the House and the Senate. So again, that almost sounds like a little bit of a a bribe. Now the Democrats the Democrats did it too. The Democrats said we'll wipe out student loan debts. Well then they that was that was specifically employed to get all the young people and the young vote and they already knew they had the the liberal vote, but now if we get the kids too, that'll push them over the edge. And it did. That can't be legal, right? And even this, even this, I feel like is is gray area. And I also felt like the student loan debt is gray area. I was like, this is all gonna happen now for every single election where somebody's gonna come out, they're gonna promise something that they can't deliver, and it'll feel like student council circa nineteen ninety-eight. Well, so that's what people are saying. Not only the Doge re refunds, the initial tariff refunds, he ended up giving money to the the military, seventeen seventy six dollars, I think, for military members, especially those that were displaced by No, right. Yeah. And I'm actually a proponent for tariffs. I do think Right. Right. Sure. Yeah, well that a lot of that is due yeah, due to the Supreme Court. So that that didn't help. And now we're not earning we're not earning enough money from the tariffs to pay $1.35 trillion. I think it would have to take it would have to be eight years worth of tariff money to pay the one point three five. And again, we know as soon as the Democrats come into power, they're gonna wipe out the tariffs. Now I'm not saying that's a good thing or a bad thing. It's just what they will do. So then if you hand out five thousand dollars today. How y how are you have to continue to pay for that somehow? And then the the Democrats are gonna wipe out the tariffs. Well I guess that's the bigger question. All right. Well here's the thought experiment. That's that's true. And they really just add it onto the ledger, right? Like they do really just That let's just add an extra zero to our total whatever. I don't know. All right. So what if America could hit a financial reset button and wipe out roughly two point nine trillion in credit card and student loan debt overnight? Would that permanently free millions of Americans, boost spending and mobility, and reshape the economy? Or would we simply recreate the same debt a few years later because we never fix the system it created? So the idea. The idea is that we talked about this a couple of episodes ago. So it's $1.35 trillion if you're gonna give every American $5,000. Credit card debt is $1.26 trillion, and student loan debt is $1.65 trillion. So I also find it high what's the word? hypocritical that Republicans were so pissed off about the student loans, which I wasn't necessarily a proponent of, but now it's it's actually this almost the same. Yeah, but see that's the thing, like and that's kinda what led me down this path, is five thousand dollars isn't the same to everybody, right? So people Yes. Right. Exactly. For us, we're we're probably in that middle area, like, hey, I I could use it. It certainly would help. But like, do I need it? Am I gonna am I gonna starve without it? Well For sure. A daycare daycare for my son for the year, basically. almost. Not even not even, but but close. Well, sure. Yeah. Right. Mm. Yes, and we we And it happened. We saw it happen with COVID. It's already been done. So we know how this works out. But okay. So combined, if you just took credit cards and student loans, you'd be at almost three trillion dollars. So I know that's a little bit more than the 1.35 that we're talking here. But but the the experiment is there nonetheless. Okay, so here's the rules of said thought experiment. Eleven fifty nine tonight, America owes two point nine one four trillion dollars across credit cards and student loans. At twelve AM, every balance becomes zero dollars. So that that's the promise that let's say the Republicans come up with. Seems crazy. And how they win the midterm elections. And they're wipe it out. Nobody receives a giant check. So instead of getting five thousand dollars or more. Just in your bank account, it's more about the the debt relief. Nobody's mortgage or car loans disappear. Existing credit lenders are compensated. So the government pays those bills. They take that one point two trillion dollars and they pay pay at the credit card companies. So they make their money, right? Federal student loans are canceled. Future borrowing is still legal. Credit cards still exist. Colleges still exist. No other economic rules change overnight. So it's more or less the idea of this is what happens to the world if we if we just wipe out three trillion dollars in consumer and student loan debt. All right. Well, this is this is what I got, and I think this gives us the most plausible version of what the actual reset might look like. So you ready? I'm just gonna run down the list. Yeah, yes. Open AI. That's right. That's right. All right. So roughly, let's see, the 2.914 trillion of household liabilities disappear overnight. Forty-three million federal student loan borrowers are suddenly staring at zero dollar balances. Every revolving credit card balance goes to zero. Minimum payments are gone. Interest stops accumulating on those balances. So a family paying $500 a month toward cards, $400 a month toward student loans, and let's be honest, that's probably low. Suddenly has $900 of monthly cash flow back, which is different than just a big lump sum. Now you've you've got cash flow. But their checking account has not increased by a dollar. This is not a $2.9 trillion shopping spree deposited into bank accounts. It is the elimination of future required payments. So the r the question right off the bat. Yeah, I mean it's definitely a bailout. It's a bailout of of the consumer. The debt holders, exactly. Yeah, instead of the big banks. We get the bailout this time. So you wake up completely debt free tomorrow. What's the first thing you do? Do you do something? You gotta go buy it? Well what do you you said what? Go buy a new T V or something? You don't die. Well let's see. So eight A. day one. Credit card utilization ratios plunge for anyone that was carrying balances. Obviously they they're not utilizing their their limits, right? it's possible. Debt to income ratios improve, obviously. People who had been budgeting hundreds or or even thousands per month towards debt suddenly need a new plan for that money. They are not bankrupt because the banks. Right. Yeah. W yeah. So what about the banks? The banks themselves, they're not bankrupts because in this scenario, the principal was compensated. So they were given money, but they'd lost out on on the biggest asset that they had, and that was years of future credit card interest payments, right? So now they they yeah, they have to rethink this how are they gonna make money? Right? 'Cause kinda like Mark said when he was on, it was all about feeding the machine. And anybody that works for any company is how can we make more money than we did last year, right? And that's certainly true for the banks. So yeah, they got this big lump sum payment, which kind of could be similar in in our scenario if Trump gave our gave us ten thousand dollars. Hey, great, but that's not actually helping me in the long run. I need to make more money. Right? So that's what the banks are thinking here too. Student loan service Their core business has changed overnight. Millions of accounts no longer require met require payment processing, collections, delinquency management, repayment administration, layoffs pretty much happen right away. So a lot of people, anybody that's that's working for a student loan servicer, they've probably lost their job, right? Yes. Yeah, I mean that's a good question. Yeah, if they owe debt, it it'd kinda be like that. So they're gonna get this big lump sum payment. So it's kinda like if you get ten thousand dollars and you have fifteen thousand dollars in credit card debt, well, one, are you gonna take that full ten thousand and put it towards that credit card debt? Probably not. Not that's not what most people do. They might put a little bit to it, but they also want money in their pocket. And if you owe fifteen thousand dollars, ten thousand ain't gonna cut it. Now if you owe five thousand, like, all right, you now you pay off that and you still got some cash. So I guess that depends. If these credit card companies, I don't know actually. I'm assuming they do hold debt. Otherwise they yeah. Sure. Yes. Yes. Sure. So I didn't even get into that. It it could be. Yeah. I don't think so. Okay. Yeah. Yeah, right. Okay. Sure. Mm-hmm. Yep. Yep. Yeah. Right. Well, I get into it a little bit more, but I think that's a good point, right? That they do the banks themselves owe debt and and you would probably see a snowball effect. So I do have some snowball effects in this and and then the question then becomes how are they gonna make money? We will get to that. So we're still on day one, right? what about no yeah, that's right. What about debt collectors? Credit card collection evaporates, right? Student loan collection falls dramatically. So it's one of those first industries that are gonna completely be destroyed because you don't you're not gonna need to go out there and collect that debt. I guess there's still gonna be medical debts and and things like that, but but yeah, so there's there would be jobs lost. No, no doubt, right? All right. So now we're in the first week. And of course consumers think, hey, we're debt free. So that consumer confidence definitely jumps. So what does that mean? yeah, for sure. So people feel richer, not because their paycheck changed, but because their monthly obligations did. So that probably means that, you said it earlier, spending's going to increase. So restaurants, travel, Amazon purchases, electronics, furniture, home improvement, cars, entertainment, child care, and then savings. People will save. Yeah. People will people will invest. Yeah. Some people will save and and and invest, but there is Well, I w we were gonna get to that. So there is evidence that debt payments affect consumption. So when the federal student loan payment resumed after the pandemic pause, Federal Reserve researchers estimated the restarted the restart reduced consumer spending by about eighty billion dollars annually. Just because people had they had other obligations. All of a sudden they got it they got that student loan debt that they hadn't had in five years. They had to start paying that again, they're they're gonna stop spending that on other things. Sure, right. That's right. Yes. some borrowers, of course, would do the same, so a lot of people would get a lot more conservative. You would see aggressive savers. People people that would not want to carry a credit card balance ever again. That would happen. Which Yes. Right. Yeah. Not not to the extent that it should. They have bad spending habits. Yeah, right. Yeah, and there there's emergencies too. So so obviously you don't plan on that and you're like, I can carry a little bit of credit card debt. No no big deal. Then you have a medical emergency or a car emergency or you lose your job or things like that and you're like, well I need this just I'll just just until I get on my feet. And then before you know it, you can never get out from under that minimum payment and and then you're stuck. Well, that's a different story, but but anyhow, discretionary spending would certainly get a noticeable lift. All right, what about week two? This is when Wall Street really realizes what just happened. Credit card companies have a problem. Their customers suddenly owe them nothing. So what does Capital One do? They probably s they set up huge sign up bonuses. Right? Get our card, work with us, bank with us, and you and give you give a bonus, right? Zero product zero percent introductory offers. Cashback promotions. Yeah. Balance transfer campaigns, they they don't really matter anymore. So that's something something that they relied on to get customers. They don't need that anymore. Aggressive attempts to get people swiping again. So new products to design that were designed to rebuild loan balances. Yeah. Yeah. Which is No. Listen to Dave Ramsey on that sense. Gotta yes. Gotta get back gotta get back into into the store, swiping the card, you getting the rewards, doing all those things. The big thing now though you're supposed to pay it off every five. Right. Yeah, yeah, yeah. And and that's what I mean. Eventually something pops up and you don't pay off that minimum payment and and see your point earlier, it snowballs. So these lenders though, they have a problem. They know that the federal government can come in and take it all away at any time. So they net well, if they did it once, they wiped out credit card debt once, they know that the government could come in and do it again. So they have to protect themselves this time. So yeah, they might come out with all this stuff, but they're also gonna have more higher risk premiums, tighter underwriting, st lower credit limits, higher annual fees. Gets guaranteed money. R sure. Yeah. Yeah. Mm. Mm. Absolutely. Exactly. Yep, that's true. Well using a credit card. No, you s you do it on on the simple fact that it's convenient and you're protected. Right? So hardly carry cat and Yeah, sure. Yeah. Now that's that's not to say Well and it's quite possible that that cash won't even be an an option years from now. Everything will be controlled by AI and yeah, and it'll have to be digital. Yeah, for sure. And and it's quite possible and this they talk about this in Mr. Robot, which I've talked about before, but it's possible that the US dollar becomes a cryptocurrency, if you will, in some fashion. Right? Yeah, right. Yeah. So Right. Yeah, I think we did. No, no. All right. so what about one month in? This is when America starts making different life decisions. So some people will leave their jobs. They either don't need anymore because they were working the job to sustain their debt. Right. Or they hate their job and now they don't feel obligated to work it anymore because again, they don't they don't have all that that debt anymore. So thirty thousand hour credit right now. Right, exactly. Yeah. Without that Without that big debt obligation, people are gonna change careers. They're gonna quit working overtime. They're gonna accept a lower paying job, right? They're not gonna need to work the second paying job. Yeah, they'll take a lower paying job that maybe offers more flexibility or isn't as demanding. Someone might start a new business. They might go part-time to raise kids. So you'll see people leaving the workforce. And some people might just tell their boss to F off. I don't need this job anymore, right? So yeah. Research Yes. Research has found that relieved borrowers became more geographically mobile and more likely to change jobs and eventually earn more. So that's the nice thing. So they'll change jobs and they'll it'll eventually work out for them and and we'll see upward mobility in in income. So debt clearly changes behavior, but removing it doesn't make everybody react the same way, obviously. We'll have savers, we'll have spenders, we'll have people that quit their job, people that open businesses, people that just keep doing the status quo. So far, I think it sounds positive for for the everyday American, yes. But let's I think I think this is where it gets it starts to change. All right. Somewhere around the month two to three. This is the shit. Houses are even more expensive. So millions of borrowers now have lower monthly debt obligations or or hardly any debt obligations. There's still other debt out there besides credit cards and student loans, obviously. but yes. So better debt to income ratios, lower credit card utilization, greater ability to save for a down payment, greater ability to qualify for loans, and housing is demand is going to rise. But Obviously we didn't magically build more houses at that time that the credit cards all went to zero. So the markets will have a constrained supply. So more buyers will compit Yeah. With buyers. Yeah. Right. Three trillion. Yeah. Yeah. So prices are gonna go up, rents are gonna go up. yeah. It's the same It will. And it's the same problem with cars. There'll be more financing capacity, fixed short run vehicle supply, and that'll all equal potential upward price pressure. So the great irony is we made people more able to afford houses and cars and then possibly made houses and cars more expensive. Which again is what we saw happen after COVID. Yeah. And especially with used cars. Remember after COVID how expensive used cars were? Yeah. Right. Right. Yeah. Right, it inflates. And that's where this is interesting though, because in this scenario it is different. And I actually think I like this scenario better than just giving everybody five thousand dollars. Cause that is more or less printing money or even or creating more debt, giving money feeding money into the system that you don't have yet, right? Whereas this is a slightly different. So most of those those loans, the student loans. It might do the same thing. I'm not an economist, I don't know, but that's where it is different. Those student loans, it's just the government's not gonna make that money back. 'cause like it could just forgive the student loans and and then they're just not they're not gonna make it'd be like if you owed me ten thousand dollars and I just said, forget it. Right? It'd be like that. So For the student loans, yeah it would. I gave you ten thousand dollars so that you could do whatever you wanted to do with it. I don't know. No, they control most of that debt. I think they could. I think for the I think for the student loan debt I think that's how it works. To the government. But the government holds the debt. Yeah, I Yeah. Yeah, but they're all fa I don't know. Right. Yeah. Right. So maybe they Yeah. Sure, right. Yeah. Right, right. I did, I hated it. My brother's an accountant, but I did, I hated it. And yet I Maybe, maybe. All right. Let's go into months three to six. This is where the Federal Reserve starts getting nervous. So we've seen consumer demand rise. We've seen retail sales strengthen. We've seen travel spending rise. Labor demand is strong because companies are making money. They want to make more money, so the labor market is good. Asset prices increase. Inflation is going to start having upward pressure. If inflation were already elevated, which it is now, so the Fed will either delay rate cuts or they're gonna increase interest rates. So now borrowing is a big going to become more expensive. Those rates are gonna stay higher longer. And in a stronger inflationary scenario, rate rates could rise, right. So we know that. the weird feedback loop. Government eliminates debt. Consumers have more spending power. Spending pushes demand higher. Rates go higher. New mortgages, car loans, and credit cards get more expensive. So some of the benefit gets clawed back through higher prices and borrowing costs. Which is pretty much exactly what we would expect, right? And what we saw post COVID. Alright, six months later, for the consumer, credit card debt is back. People still Yes, yes, they still have emergencies. Christmas has come and gone. There's car repairs, medical bills, vacations, people that just have bad spending habit, inflation. And banks have spent six months begging consumers to borrow. So credit card balances have started to rebuild. A 2025 study found that for every one this is student debt, but found that every one dollar of student debt forgiven, borrowers subscri subsequently accumulated about nine cents in additional debt, mortgage, auto, or credit card. So nine percent of of anything that you got for given, you're gonna go back out and accumulate more debt. Probably. Yeah. At a minimum. Probably more, right? So how many people celebrate paying off twenty thousand dollars in credit cards and and then have eight thousand dollars right back on it by Christmas, right? You're you're looking something up, I can tell. All right. One year while you look it up. The credit industry looks different. Likely losers, debt collectors, student loan services, some consumer finance operations, businesses built around refinancing, balanced transfer businesses, credit counseling firms, they're all gone. Winners, retail, travel, restaurants, home improvement. Look at COVID. Where did everybody go during COVID? They went to Lowe's and Home Depot. Car dealers, mortgage lenders, they're all living it up. Brokerage investment platforms. We would see a bump to the stock market. I think we also saw that in COVID. People got some extra money and they they put it right back into the the system. So credit card issuers survive because of course they do, and they would adapt very quickly. Within one year, revolving balances are building, new credit products exist, banks are collecting interest again, and people are earning airline miles again. Somewhere Dave Ramsey is pissed. Mm-hmm. That's what I thought. Okay. You don't even know what a write off is straight from not AI Seinfeld, real Seinfeld. Yeah, so it's exactly what I said. Hey, don't don't say I was never right about something. Maybe those accounting classes did pay off. I don't know. Yeah. So that's the thing. So in this scenario, all half the money we would have to pay the the credit card companies and the other half we just wouldn't collect to pay off future debt. So you do add to the you're gonna add to the debt by forgiving those loans because you're not going to earn that money back. It's already been printed. Yeah. Sure. Right. Mm. I tell ya. So what do you think so far? I still got a little bit more to go, but you think this is a better scenario or a worse scenario than just giving everybody five thousand dollars? Yeah. Yeah. Right. Initially. Well that's the thing. That's how I feel about it, is it's a little bit slower. Cause instead of getting five thousand dollars up front, if I owe nine hundred dollars in in credit card debt every month, it's gonna take me what is that? Six months to even get to five thousand dollars. So it's a slower process. Right. For Well see and that's or or credit card debt w thirty thousand or something. Right. But again, in this in this scenario, it still benefits the bad people. The the people that made poor decisions with their money. I know that wasn't the best way to put it. But the people that made poor decisions. So if I'm carrying zero credit card debt, then I d I don't receive any benefit. to this program. It's just Joe Schmoe next to me that's got a brand new boat sitting in his driveway and I'm gonna be like, What the hell? He's got a new boat Yeah. Right. Sure, two different things. Correct. Wipe out. Yeah. Correct. Yes. Mm-hmm, mm-hmm. Yeah, I know. Yes. Yes, they would. Yes. Yes. Yep. You were right about that. And the scenario again becomes the same as the the argument against forgiving everybody student loans. And we talked about this a couple of episodes ago, like, hey, we paid off our student loans. Why like again, we're kind of being penalized because we were smart with our money and we we sacrificed a little bit. Or the people that decided not to go to college. Right? Mm-hmm. Right. Yeah. Yeah. Yeah. Well, and that's that's the same thing that happened with the housing crisis, the housing crash, is we bailed all the banks out that made these bad loans. Right? I mean that's exactly what happened. They shouldn't have been taking those loans, they are those those hedge hedge bets and right. Yeah. Yeah. Exactly. Right. Yep. Yep. A hundred percent. A hundred percent. All right. all right, so we're still at one year. What happens to universities if we erased all the student loan debt but didn't change the system? Student loan debt two point would begin immediately because you'd have new kids that have to go to college and we didn't change the system in any way, shape or form. So you just start building that bubble again. Right, just gonna start again. Yep. All right. So now we're at years two to three. The labor market is really starting to sh to shift. This is where the quote unquote bullshit jobs becomes kind of interesting. So twenty million people, it's not twenty million people quit tomorrow. It's not nobody wants to work anymore. It's it's not necessarily that entire industries collapse overnight. It's more likely that we're Workers have become less desperate. People switch jobs more freely. Some employers must raise wages to retain people. Some unpleasant jobs become harder to fill, so those lower-end jobs. Companies automate more low-value work, and employees become more willing to reject terrible schedules, mandatory overtime, low wages, and long commutes. Employers respond with higher wages, better benefits, more flexible schedules, automation, fewer workers, higher prices. So maybe the debt reset doesn't eliminate the bullshit jobs, but it makes the bullshit jobs more expensive to staff. Sure. Right. I can't quit. If I if I'm a hundred percent reliant on that income, I can't just up and quit. Yeah. Yeah, right. Yep. All right, years four and five. Now it's the government's problem. So they've moved this giant amount of of leverage from household balance sheets to the federal balance sheet. So if the credit card payoff was funded through federal borrowing, which is exactly what we're saying, then the federal debt rises substantially, one point two trillion dollars. Again, that's the same as this five thousand dollar Trump check. Well that and that's kind of what we talked about. When you owe forty trillion, what is racking that up every year. W right, yeah. What is another one? So but the treasury still has to finance it somehow and taxpayers will ultimately bear the financing costs. So future bud budgets face additional interest expenses. And the fact that the student loans are gone, the federal government has surrendered future loan payments. So that's kind of what we were talking about. It's basically like they were anticipating that as income, kinda like a tariff, but they don't have that income anymore, so they're gonna have to rework their entire budget. So we didn't Well, and that that is possible. I'm not opposed to free education, but it can't be in the system that we have now. Right? Like we have these huge universities with college football Right, nothing's free. Exactly. Yeah, yeah, yeah. Right. Yes. Exactly. Yeah. All right. Five years later, most likely outcome. Have households that received relief? Yes. Definitely. They're definitely better off overall. Especially the households that saved the freed cash flow, bought a house, invested the money. Changed careers, maybe increased their earning potential or opened their own company, and if they avoided rebuilding the high interest credit card balances. I don't know, man. Credit cards themselves, again, still very much alive. Outstanding debt has rebuilt considerably, maybe not immediately back to the amount that it is today, but it's definitely not zero. Student loans. If the rules weren't changed, it's back and growing the same as it was before. There's a whole new generation that has enrolled since the reset. Universities probably s Charging more. Maybe. That yep. Yep, exactly. The labor market, it's probably seen some mobility, like we said, but no great resignation. Housing, definitely more expensive and more constrained markets. Consumer economy, definitely stronger at first, but inflation, is the big issue. No reset baseline, but magnitude would depend heavily on financing, monetary policy, and economic conditions. Banks are alive but have adapted. They're probably lending money to the same people again. America as a whole, not an economic utopia, but also not Mad Max. It wouldn't be the end of the system. So the take that how would you take that The most likely story We'd get an enormous one time improvement in household balance sheets, a burst of economic freedom and spending, followed by several years of the American financial system slowly recreating much of the same debt that we had just erased. Right. Yeah. Yeah. Yep. Mm-hmm, mm-hmm. Never. Yeah, I don't think so. That's pretty much exactly what I think. I don't I don't think that it'll ever get paid back. I don't think we'll ever pay off our debt. and I've it I don't understand how that works. The again, I'm not an expert in this in any way, shape, or form, but the only thing that can sustain it is continued GDP growth, right? So you get a the GDP and luckily the United States that we're not wrong. We have the best GDP growth in the world, and we have since COVID by a lot. We by far have the best economy in the world in that sense. So yes, I'm not saying it's perfect. We have inflation, we have all these other things, but Yeah. If if our GDP levels off or starts to decrease, I mean, it's one thing to go into a recession and and it goes down a little bit, but but if we're not growing over the long haul at three, four percent, we're we're not gonna be able to sustain the debt that we're taking on. And I think at some point, and maybe AI does this. Can you get to a GDP growth of five, six percent, eight percent? I I don't know. I don't know if those numbers are are possible, but if you did that with the economy that we generate, you could wipe out the debt. And and again, you could take it down to a scenario where okay, I've got a hundred thousand dollars in credit card debt. I all I need is one really good bonus from my company or or a raise. Yeah. Doesn't doesn't seem so bad, exactly. And you know that that's kinda how I treat my finances with daycare. I'm like, all right, I just I just gotta get through May of this year and that's gonna come off of my debt or my w you know, my spend. And I can take whatever I have then and well, I'm gonna move it into something else, probably new cars. But nevertheless, it's gonna feel like a big raise for me, right? And and that's Well, and I th I think that's an even bigger question, absolutely. It would that's why you have to supplement the population to an extent. So if if we're not having it all the illegal Yes. Now and and there's nothing wrong with that if you do it the wrong illegal. Well, right. Yeah, yeah. bringing immigrants in the right way and I li I think what Trump says is we wanna bring in qualified people, smart people, good people, family people that can come work these jobs. I mean you don't have to, but you probably end up something like Swiss like a cop out, like a And part of the reason that you can't have as many kids though is 'cause you can't afford it. Yeah. Right. Right. I mean I I wouldn't go that far, but you need people to work certain jobs. Some of those jobs might be high end tech jobs or or medical jobs where we just don't have enough people in our population to fill that niche. And when you Yeah, I mean i yes, it has to be growing enough. I think what we really want is a fine line between the two. You want an equilibrium. There's nothing wrong with bringing people in and growing your native population. You want to do y r well Yeah. Yeah. I think that's the biggest thing. I think it's I think it's the affordability crisis. And I mean, I don't know. I mean I look at my situation. Like could we have had more kids? I mean, of course, we w were healthy. it it was relatively easy for us. I th I think I would have had more kids. Yeah. If I could have hi if I could have afforded a nanny and because I think that's also part of it is you go crazy. I mean it it's tough to work. Right. If if maybe yeah, sure. Yeah. Or I didn't have to work and she did or right. Sure. Yeah. Yeah. Yeah. I agree. Sure, absolutely. I and of course there are other limiters. There's age, there's fertility, there there's all medical there's all kinds of situations of why people don't have more kids, but I agree for the people that can have more kids choose not to because of the rising costs of everything. And they're also I think this is I think this is an interesting point. The quality of life has also changed. And I and not necessarily like people want a higher quality of life. I think people have always wanted a higher quality of life, but I feel like it's more important to people now than ever before. Right? Like I look I look at my mom, who was one of five, and they lived in a pretty standard house and shared bedrooms and only had one bath and had to sleep outside when it got too hot because they didn't have air conditioning. like and that was that was just that. But that that's not a thing. Now you gotta ha everybody has to have their own room. And you got to have a you have to have a house with multiple multiple bathrooms. yeah. Sure. We've talked about that too. Yeah, yeah. Yeah. Yep. Definitely. Your money should be worth less. I agree. I agree. The money is the problem and it's always the problem. And let's end it there. I don't think we're ever going to solve this situation. Not on this podcast. But I think it's interesting to think about and when we look at this five thousand potential five thousand dollar bribery check. Which is what I think it it is, is I don't know that that it's any better than wiping out the student loan debt or the credit card debt. I I think that would serve people more than just giving everybody five thousand dollars. And again, like we said, there's a lot of people that don't need five thousand dollars. Yeah. And you and you said it yesterday, like, does he know who his base is? Like his true base, we want to bring down the debt. We wanna eliminate needless spending. We want interest rates to come back down. We right. Yeah. No, I know. I tell ya. All right. Well that's that. I say you wanna stay on and and record next week's episode right now? That's all right. All right. Tune in next week.