The Peter McCormack Show – Episode #051: "The Coming Economic Collapse"

Guests: Steve Baker & James Van Straten

Date: 17 February 2025

Episode Overview

In this episode, Peter McCormack is joined by Steve Baker (former MP and monetary reform advocate) and James Van Straten (Bitcoin strategist) for a candid and urgent discussion about the UK’s deteriorating economic situation. The conversation covers the unsustainable debt liabilities of the UK government, the out-of-control welfare and pension promises, the housing crisis, and the corrosive effects of inflation and poor political leadership. With both guests providing inside and outside perspectives, the panel covers the structural and cultural flaws of the British economic system, the inevitable reckoning for public finances, and the parallels between the current moment and previous periods of societal upheaval. They also discuss Bitcoin and alternative monetary systems as escape valves, the parallels with previous technological revolutions, and the glimmer of hope in new political movements and technology-driven change.

Key Discussion Points & Insights

1. The UK's True Debt and Looming Bankruptcy

• Steve Baker sets the tone by warning the UK's fiscal position is far worse than officially acknowledged. The country is "headed to bankruptcy within about 10 to 20 years" when factoring in off-balance-sheet liabilities (unfunded public and state pensions), bringing the real debt "about fourfold" higher than reported. [00:00, 28:52]
  • Quote:

  "It’s not just the stated national debt, it’s the 2.8 trillion of public sector pension liabilities that we haven’t funded and the 5.6 trillion of state pension liabilities that we haven’t funded. That increases the national debt by about fourfold. And this country is headed to bankruptcy within about 10 to 20 years." – Steve Baker [00:00, 28:52]

• The panel laments that no mainstream political party is prepared to articulate the true scale of the problem or propose hard solutions.

2. Failures of the Monetary System & Leadership Paralysis

• Baker recalls warning speeches in Parliament about the corrosive effects of easy money, cheap credit, and currency debasement—foresights largely unheeded by political colleagues [03:54].
  • Quote:

  “After 15 years of studying these matters... there is no way to change the present monetary order until the ideas behind it have been tested to destruction. And I do mean tested to destruction.” – Steve Baker [04:18]

• He raises the risk of disillusionment with democracy and potential for strongman politics given widespread distrust and the system’s failures:
  “Polling of young people who thought democracy had failed. Let’s have a strong man. Whoa, whoa, whoa. Let’s just remember some history here.” [02:36]

3. The Housing Crisis: Generational Divide & Lost Opportunity

• Housing is central to economic malaise and intergenerational inequity.
  • Previous generations bought houses on one salary; now, even dual earners struggle to get on the property ladder.
  • “Dual salary now... almost impossible to get onto the housing ladder. That fragmentation... society breaks down.” – James [15:16]
  • House prices have far outpaced wage growth, with asset inflation driven by money-printing.
• James advocates Bitcoin as a more promising store of value, framing UK housing as overvalued due to unsound money.

4. Comparisons: The Internet and Bitcoin Adoption

• The panel draws a parallel between initial dismissiveness of the internet (by the likes of Bill Gates) and prevailing skepticism about Bitcoin.
  • Adoption barriers with the internet were minimal and utility was immediately visible, while Bitcoin adoption involves "financial jeopardy" and stigma from legacy media. [10:44–12:20]
  • Peter: “Difference with Bitcoin is... you have this financial jeopardy... you’ve been fed all this propaganda... it’s this high risk, volatile asset...” [10:57]

5. Main Parties: “Managed Decline”, No Real Alternatives

• The consensus is that Labour and Conservatives are indistinguishable and have both presided over continual national decline.
  • “There’s a broad acceptance that Labour and Conservatives, there’s not much difference between them... managed decline.” – Peter [23:35]
• Steve Baker:

  “Labour are going to fail. It’s going to create a massive problem, a real problem in people’s lives. The question really is Kemi or Nigel Farage—one of the two... has got to cut through all of this and with charisma and resolve rise to the real challenge.” [30:27]

6. The Dysfunction and Waste of Modern Government

• The state is criticized for its size, waste, and lack of accountability.
  • “When you have a 22 billion hole, I think about how I run a business... I go through the bank account... and we cut things. Ministers don’t do that.” – Peter [54:45]
  • The procurement files exposing wasteful and bizarre spending are called “shaming” and illustrative of systematic rot [53:23].
• Media and journalism are called out for failing their watchdog role, now being bypassed by independent investigators and social media [57:38].

7. The Elite and Political Class: Underqualified, Unaccountable, Underpaid?

• Discussion on the low pay of top government officials, effect on talent, and perverse selection incentives [20:50].
• Steve: “People don’t do it for the money... but the only test for getting elected is can you get elected, can you get selected by a political party?” [21:01, 20:21]
• Populist parties are described as offering “the answers people want to hear... but it leads to ruin.” [42:22]

8. Structural Barriers to Reform

• Entrenched interests and complexity stymie change—on topics like net zero, energy policy, and public sector reform.
  • “If you want to get rid of net zero, you’ve got enormous vested interests who will turn up and say we’re all gonna die in the fires of climate change...” – Steve Baker [80:12]
• Manifestos are described as “another fraud” due to timing and lack of honest, detailed budgeting [59:18, 60:50].

9. Bitcoin, Investment, and the Younger Generation

• Younger generations are boxed out of property and investing in alternatives like Bitcoin.
  • “Continue buying bitcoin and renting, and then in a couple of years time 1 Bitcoin will be the average house.” – James [18:52]
• Traditional investments like the FTSE are described as stagnant or negative over real terms, pushing value-seekers to Bitcoin [91:49].
• Peter: “If my career had been pretty similar... but there had been no bitcoin, I would probably own a second house now.” [90:15]

10. The Demand for Authenticity, Political Realignment, and Hope for Renewal

• People are “craving authenticity” from politicians, with Reform and other parties gaining traction by offering forthright messages [45:28, 46:05].
• The fourth turning theory and historical cycles are discussed as a framework for the current instability [47:56, 49:27].
• Steve, repeatedly: “We need higher quality political leaders... we are headed for bankruptcy unless someone is honest about the challenge.” [82:53, 30:52]
• “There’s a kind of age of libertarianism dawning... the state needs to do less,” but the public remain addicted to “free stuff” and few politicians dare level with voters [97:22, 97:25].

Notable Quotes & Memorable Moments

• “This country is headed to bankruptcy within about ten to twenty years.” – Steve Baker [00:00; 28:52]
• "Few MPs spoke. It's complicated and they just don't understand it... [they] complain about their bins... or the trees down the street.” – Steve Baker [17:04]
• "The only thing that matters to the government is reelection." – Steve Baker [20:21]
• "The general public want lower taxes and higher spending. That is fundamental." – Steve Baker [41:47]
• “If Malay can go into Argentina and fix Argentina, if Bukele can go in El Salvador and fix it, every country can be fixed.” – Peter [24:56]
• "I think we're on the precipice of some form of revolution." – Peter [47:56]
• “The state is not an entrepreneur. Entrepreneurs are in the private sector with categorically different incentives.” – Steve Baker [30:52]
• "You want growth? What we need to do is reduce friction in business, reduce tax and make it easier and less expensive to set up business." – Peter [69:15]
• "Libertarianism can't sell because people love free stuff." – Steve Baker [97:25]
• “We need better politicians and I don’t see where they are coming from.” – Peter [98:36]

Timestamps for Important Segments

• 00:00 – 02:36: Steve Baker explains the UK’s real debt and imminent bankruptcy.
• 03:54 – 06:22: Steve’s 2014 speech on monetary system collapse, Bitcoin, and alternative currencies.
• 10:44 – 12:20: Parallels drawn between the Internet adoption curve and Bitcoin; stigma and hurdles.
• 13:32 – 16:19: Generational divide in personal responsibility and housing access.
• 16:19 – 18:52: Discussion of the UK housing market, money supply, and asset inflation.
• 24:09 – 25:47: "Managed decline", public disillusionment, the possibility of change.
• 28:52 – 30:52: Return to the bankruptcy thesis, why neither main party has the courage to address it.
• 41:46 – 42:22: Why UK politics is trapped in a fantasy of low taxes and high spending.
• 54:24 – 56:14: Government waste, procurement disasters, analogies to running a business.
• 69:15 – 70:22: Taxation and energy policy strangling small business and entrepreneurship.
• 80:12 – 81:28: Complexity and vested interests make reforms (e.g. net zero) so difficult.
• 87:15 – 88:23: Consensus, groupthink, and why "more of the same" persists in mainstream media and government.
• 94:17 – 94:39: The hope that change can come from self-education and new media, not politics.
• 97:22 – 97:52: Why libertarian policy is almost impossible to sell to voters.
• 100:10 – 102:30: UK’s 61,000 BTC reserves; prospects for Bitcoin policy in the UK.

Tone & Style

The conversation is frank, passionate, and at times wearied—laced with both cynicism (about the state and political class) and hope (for a new age of authenticity and individual empowerment). Steve Baker brings insider experience and history, James provides a sharp outsider/investor perspective, and Peter guides the conversation with relatable examples, humor, and genuine frustration. Swearing and sarcasm ("It's all bollocks") add emphasis, but the tone is fundamentally solution-oriented, with a repeated call for honesty, courage, and a return to sound money and authentic leadership.

For Listeners New to the Episode

• The UK’s economic position is far more perilous than the headlines suggest, with massive unfunded pension debts and no political will to confront reality.
• The housing crisis is a core manifestation of money-printing and mismanagement—exacerbating generational injustice.
• Both major parties are complicit in the current malaise, and rising movements (and technologies like Bitcoin) are both a symptom and a response to the crumbling status quo.
• The solution will require radically higher standards of honesty, accountability, and authenticity—in politics and media—and, potentially, a social and economic reckoning before a new order is possible.
• Listeners are encouraged to inform themselves, demand better, and not cede ground to cynicism.