RUSH: The budget deal. It’s a big deal. It’s a two-year budget deal. We talked about this yesterday. And remember, I had an idea. You know, there’s a lot of people wondering about (laughing), “What is going on?” All of this spending, combined with the tax cuts, deficits as far as the eye can see — and it doesn’t seem like it’s very Republican. It doesn’t seem like it’s very conservative. And they indeed they shut down the government for a couple hours and they got it reopen last night when the deal was agreed to.
Trump signed it early this morning. So essentially it’s a two-year budget deal. The main thing that I think — and I admit this is cynical. But I think it’s relevant. I think a lot of Republicans voted for this thing just to ensure they will not be accused of shutting down (laughing) the government for two years now. Do not doubt me on this. Do not. Being accused of shutting down the government is something they think they’re gonna be guilty of whether they have anything to do with it or not every time it’s charged, and this is how they generally do it.
They kick things down the road to avoid dealing with them, and this kicks the government shutdown two years down the road. To heck with whatever else happens here. There’s massive amounts of defense spending, but discretional spending is skyrocketing. It’s going through the roof. There’s not even any pretense here at balancing a budget. There’s not even any pretense here of (chuckling) making the government smaller. There not even a pretense. The conservative caucus, the Freedom Caucus in the House, is beside itself.
Conservative Republicans exist when the Democrats are in power. When the Republicans are in power, conservatism vanishes. Now, I’m paraphrasing, but that’s pretty much what he said. But, look, he also voted for the tax cut. Now, in a lot of people’s view, the tax cut is a budget buster because the tax cut is gonna short the government $1 trillion, they say. Which is bogus. That’s not gonna happen. But the way these people in Washington score it, it is. They don’t score things dynamically.
They look at the tax cut, how many taxes are being cut, how many dollars, and they subtract that from how much money Washington got the previous year, and they think Washington’s gonna be down $1 trillion. Therefore, the deficit is going to be up and the national debt gonna be up $1 trillion. Well, that’s not be the case. That’s gonna be more money rolling into Washington than these guys can count. But they don’t score it that way. My point is, with everybody acclaiming that the tax cut was gonna raise deficit, there’s Rand Paul right in there voting for it.
So while he may be scoring big on trying to stop this vote last night because it’s budget busting, you could say that he busted the budget by supporting the tax cuts, the way they look at it. Now, here’s Matt Gaetz. Matt Gaetz is a Republican from Florida. He was on Cavuto Coast to Coast on the Fox Business Network this afternoon, and Cavuto said, “Do you think the gain of tax cuts will overcome the apparent hypocrisy of a party that talks big on containing spending but has now spent on the issue?”
GAETZ: We better hope so. I didn’t vote for that spending, but I think that at the end of the day people will vote based on whether or not they believe their personal economic conditions are better or worse. If you were to judge us today, people are doing better than they were doing in the Obama economy.
RUSH: They are. They are. So his point is — and it’s true to a point. We don’t know what the dollars are gonna be, but this tax cut is going to result in much more revenue flowing to Washington than anybody in the swamp is counting. I don’t mean to sound like a broken record, but its dynamic scoring versus static, and they don’t score things at the CBO or anywhere else in a dynamic way. They just run the numbers, and they’ve concluded that Washington’s gonna have $1 trillion less this year than it had last year.
That automatically means a deficit of at least $1 trillion this year. Well, that’s not gonna happen! Because more jobs are gonna be created, more taxpayers are gonna be created, and more taxpayers — even at lower rates — are gonna be paying more in taxes. The government is collecting records amount of money already! Record amounts of money already. Just through every form of taxation, revenue is at record levels. They announce it every quarter, and it’s through the roof.
But the question… You don’t have to answer this. Like if people are on hold, and if you don’t want to talk about this, fine. But if you don’t want to answer this, I’m putting it out there. “Does this budget bother you? If so, why? And if not, why not?” Because in the textbook of conservatism, every bit of this is a no-no except for the military spending. Every bit of it’s a no-no. Every bit of this could be chalked up to major, huge hypocrisy. “You guys, you ran on balancing the budget.
“You run on reducing spending, and you get into office and, my God, we’re spending more in a two-year budget than we ever have.” Folks, as I said yesterday, “The budget never gets smaller.” I don’t care who’s in office. I don’t care who’s in power. I don’t care who’s where doing what and why, the budget never gets smaller. It never has. The national debt has continued to grow. It has never gotten smaller/been reduced. The annual deficit? It’s a seesaw. Goes up and down. But it has been balanced since 1995.
We did have a surplus, remember, in the late nineties that the Clintons wanted to turn into… I forget what it was. But we did have a budget surplus for a year or two, and had it stayed in the Treasury, we would have a balanced budget, but Clinton used it as… What was it, the defense dividend or some such thing? (interruption) Yeah, “the peace dividend.” Right. The peace dividend. They lopped it into some… I forget what. But Washington never spends less money, in total. It’s never happened. The national debt has never gotten smaller.
And while all this has been happening, we have been listening to doom and gloom preached to us every year about it. And there hasn’t been… The doom and gloom that’s been predicted related to budgeting hasn’t happened. Now, we could be… As I so astutely observed yesterday, we could be in the middle of it (laughing) finally mattering here, and we can’t see it. The dragon could be at the door and we don’t know it. The monster could be lurking out there and we just don’t see it.
But the monster, we’ve been told, it’s always there and with every new budget, the monster’s gonna eat all of us. And here we still are. So I’d just the like to know, does this bug you? It bother you. If so, why? If not, why not. There isn’t any wrong answer, so don’t think you’re gonna get your head chewed here if… That only happens if you’re really factually wrong about something. But your opinion on this is not gonna be ridiculed, lambasted. So don’t be frightened about any of that.
BREAK TRANSCRIPT
RUSH: The question is: Do I think the Democrats will be perceived as losing the budget deal by their side, by the resistance because they didn’t get DACA in it? I think… This leads me into an entire… You know, the answer I have to your question here goes way beyond the specifics and the nature of your question — and I’ve said this before.
You’re not hearing anything I haven’t said before, but I don’t think the people in the, quote-unquote, “establishment,” the Democrat Party anywhere still have any idea who and what they’re dealing with in Donald Trump. So I think they are judging the fact… They think they’re cleaning his clock, wiping the floor with him, when the exact opposite is happening. They continue to look at everything through the prism… Well, you can’t blame ’em.
It’s the only prism they’ve known, and that is the prism of inside-the-Beltway establishment politics, which is a geographic and political area they have always dominated. I mean, every day they wake up knowing they run things, even when they lose elections. That’s what so irritates them when they lose elections. It doesn’t work! They know they dominate and lead everything, and yet they lose elections. It doesn’t work.
You’re asking me if the Democrats are gonna take a lot of heat from their voters ’cause there’s no DACA in this. The real question is: Where is the Republican voter uprising over this? This is so 180 degrees out of phase with what Republicans say they stand for: Smaller government, less government, balancing budgets, lowering government expenditures (particularly never expanding discretionary spending), attacking entitlements. And yet this thing has been greeted with pretty much a ho-hum and not much else.
You see the real question? You want to look at the battlefield going through massive changes that nobody notices yet, nobody sees yet. You want to look at the political landscape changing right before your very eyes while you don’t see it. The real question is: Why aren’t Trump’s voters up in arms at him over this? He didn’t campaign on this, and Republicans sure as hell didn’t. Now, some establishment Republicans like Mitch, they love this. There’s plenty of Republicans that love government getting bigger.
You remember Bill Kristol — whose nose is now so out of joint that I don’t think he can have an enjoyable day. Bill Kristol today has gotta be angrier than he’s ever been. You want to know why? ‘Cause it was Bill Kristol, back in the era of George W. Bush, who said that we as conservatives had better realize and recognize right now the American people want a big government. It’s a losing proposition to talk about smaller government, reducing government. The American people want it.
They want a big government providing this and that. They just want “smart” leadership, and Kristol said, “We are the smart guys.” You remember how everybody pooh-poohed that and said this was just Kristol sour grapes, giving up the fight. He and David Brooks were both on this point. The American people want a big government now, that we conservatives had better admit it. They want it, but they want a very smart and active, engaged executive — meaning somebody like them — to run it.
This is easily 10 years ago, and here we are. We’re right where Bill Kristol said we were ten years ago. This budget is exactly that. Now, you have the Freedom Caucus, Mark Meadows and his gang. They’re not happy about it — and that’s good, don’t misunderstand. I’m not criticizing anybody here. They don’t understand it. This is not who they are. This is not what they campaigned on. This budget doesn’t have any… Except defense spending and tax cuts, this budget doesn’t have anything in it that conservatism is known for on a signature basis.
He said, “Boy, I hope the tax cut starts generating revenue that nobody’s planning on, ’cause it’s the only way this budget deal is gonna be mitigated somewhat,” is if tax revenue skyrockets because the tax cuts create more taxpayers; therefore, the deficit is not gonna be nearly as big. That’s what he said he hopes for, and that will happen. But there’s another component to this, though, and that’s what’s happening on Wall Street — and what’s happening on Wall Street portends more trouble for Trump than this stuff does, and I will explain that by taking a call. We’ve got Kevin here in Tucson, Arizona. Kevin, great to have you. What’s up? What do you want to say about the market?
CALLER: Yeah. Thanks, Rush, professor. I had a theory, and I have some questions. I remember learning from you over the years that the Obama administration had been propping up the stock market by printing cash.
RUSH: Right.
CALLER: Now, my first question is, “How do they do that?” B, “Who controls it?” C, “Could they use that if there’s some Democrat controlling it to try and tank the market?” which is gonna fail because there’s so much consumer confidence that when they dump all their stock, somebody snatches it up.
RUSH: Okay.
CALLER: And I —
RUSH: Whoa, whoa, whoa. You’re getting ahead. Let me answer some of this stuff before you keeping going.
CALLER: Okay.
RUSH: You’re right. Obama did print money. You say, “Who did it?” The Fed. The Federal Reserve did it. They’re supposed to be independent of the White House —
CALLER: Right.
CALLER: (chuckles)
RUSH: What happened was called quantitative easing. It was printing money, but it didn’t go into the general money supply. The money was used in a circuitous way to purchase equity, securities in the stock market. But the key ingredient here that I need to remind you of is during the eight years of Obama, what did not happen? Interest rates did not go up. They stayed… You could get money for zero.
CALLER: Right.
RUSH: Now, the reason that’s important, the Fed not raising rates during Obama… Obama’s economy was a straight line, a dead line.
CALLER: Yeah.
RUSH: So there was no worry about the economy overheating, which is the traditional reason the Fed raises interest rates, on to slow down the economy.
CALLER: Right.
RUSH: So there were no rate increases. So there was nothing negative that happened to the Obama economy. In fact, if it weren’t for the quantitative easing and the spending, the Obama administration would have had nothing to talk about. The stock market was the only thing they could point to to show that their policies were having a positive impact on the economy. But they weren’t having a positive impact on the day-to-day free market economy where you and I live.
CALLER: Yeah.
RUSH: Now what’s happening, the Federal Reserve is… I think the Fed is what’s tanking the market, in part, not totally. But all of these threats and promises to raise interest rates, that’s the last thing these investors want to hear.
CALLER: Right.
RUSH: The last thing! Because it’s gonna slow down the economy. Nobody wants the economy to slow down. We’re just now reviving it. Why would they want to slow it down? But raising interest rates will do that.
CALLER: Yes.
RUSH: Raising interest rates is gonna make money more expensive to get. It means it’s gonna have a negative impact on the amount of investment in various places. Some are thinking that this is all part a strategy to bring Trump down —
CALLER: Right.
RUSH: — that while he’s out there touting the market, selling the market, pointing to it, that they’re causing all of this volatility in it. One day, up a thousand. The next day, down 500. The roller coaster that it’s been on.
CALLER: Yes.
RUSH: And you had computer programmed trading into all of this, and there are some who are thinking that this can be made to happen simply by the threat of rate increases — and the Fed has said that there might be four different rate increases this year alone when there were none during the eight years of Obama!
CALLER: Right, well —
CALLER: We’re back to the deep state.
RUSH: Well, if you want to call the Fed the deep state.
CALLER: (chuckling)
RUSH: I mean, we can’t get to it, so it may as well be.
CALLER: Right.
RUSH: But you asked how they do it. It was simple. They printed money, and… Look, I don’t know the process. I did. I just don’t remember it. But the end result of it was that the money printed ended up in the stock market. Now, I don’t know who got it, and I don’t know how they chose who got it. Did hedge funds get it? Did banks get it? Did they buy securities? All I know is that it ended up there, and it resulted in more equity and more securities being purchased with the money that was printed, and they had to hide this.
Normally printing money is one of the fastest ways to raise inflation. But they kept inflation rates down. I mean, it was practically zero for so many years with the Obama economy. Now they’re threatening to raise interest rates four times this year alone? And why? Who are they blaming? They’re blaming Trump! They’re blaming Trump’s tax cuts. They’re blaming Trump’s tax cuts for all the new hiring, that this is putting too much inflationary pressure on the economy and we’ve gotta slow it down.
I’m suspicious of this, to an extent, but it’s just another one of these areas where average, ordinary people cannot possibly know as much as there is to know about how things operate and how they work. But your instincts to be curious about this, particularly quantitative easing and how that resulted in interest rates not being raised… (chuckling) The Obama economy was a flat line. It literally was a flat line — 1% growth, two-tenths of a percent growth.
It was nothing, and Obama at the time was touting this as the new norm, and now we are roaring back and here comes this budget deal in the midst of all of this, and that’s gonna be used by people in the market to say, “This frightens us, all of this deficits, this unending spending. This makes for instability.” It’s gonna give manipulators even more reason to start monkeying with the stock market, however they do, if they want to. So, I’m glad that you called out there, Kev.
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