B (7:55)

The scam level here is so staggering. So there are hundreds of billions of dollars of transfer payments from the federal government to the states. Those transfer payments, the states self report what those transfer payment numbers should be. So California and New York and Illinois lie like crazy and say that these are all legitimate payments. Well, these days I think they're even admitting that they literally want hundreds of billions of dollars for illegals. But for a while there, they're trying to deny it.

C (8:38)

To Speedrun Elon's argument, it goes something like the whole game is to gain and retain political power. You do that by increasing your state's headcount. Because the census is coming in 2030 and a state's congressional seats and presidential electoral votes are determined not by the number of citizens you have, but merely by the number of people physically present in your state at the time of the census. The more immigrants, illegal or otherwise, the better. But you have to do something to gain and retain the immigrants. And that thing is to make government assistance available by any means, even fraud. But you have to get into the official system somehow to make things work. That's where the Social Security administration comes in.

B (9:26)

But so let me tell you how the scam works. It's a bank shot. So the, the Social Security Administration database is used as the source of truth by all the other databases that the government uses. So even if they stop the payments on the Social Security Administration database, like unemployment insurance, small business administration, student loans, all check the Social Security Administration database to say, is this a legitimate alive person? The Social Security database will say, yes, this person is still alive even though they're 200 years old, but forgets to mention that they're 200 years old. It just says, it just returns when the computer is queries, it says, yes, this person is live. And so then they're able to exploit the entire rest of the government ecosystem. So then you get fake student loans, then you get fake unemployment insurance, then you get fake medical payments.

E (10:20)

And this doesn't have to be tied to an individual where there's an address where you can check on this person.

B (10:26)

No, if you just did any check at all, you would stop this.

C (10:31)

People take advantage of fraudulent or erroneous Social Security numbers to get inside the system. Once inside the system, the person can get access to a whole host of government assistance programs. Medicaid, ebt, student loans, unemployment, and more. Potentially hundreds of billions of dollars are siphoned via this indirect bank shot, as Elon calls it. The fraud and waste is coming from both professional criminals who exploit the holes in the system, but also much of the misappropriated money is the states themselves trying to redirect federal dollars to fund things like migrant housing and luxury hotels that the average American couldn't afford.

E (11:14)

So what's going on right now is they have been funding these people, they've been giving them EBT cards, they've been giving them Medicaid.

B (11:22)

They were taking hotels like four and five star hotels like the Roosevelt Hotel being. The classic example was they were sending I think $60 million a year to the Roosevelt Hotel, which all it did was house illegals.

C (11:36)

Again, the goal is to gain and retain power by drawing in immigrants with open borders and financial assistance. But you can't just get them here. You've got to create a path for them to vote. This is being done in two ways. First, in some states like New York and California, lawmakers have made it illegal to ask for ID to vote. Not that it's just not required. That would be bad enough. It's actively illegal to ask to see someone's ID when They're trying to vote. And according to Elon, that's not the only type of fraud being perpetrated on the American people. There's also the case of what he calls zombie payments, because what we found.

B (12:15)

Was that there were tens of billions, maybe hundreds of billions of dollars that were zombie payments. So somebody had approved a payment, somebody in the government approved a payment and some recurring payment, and they retired or died or changed jobs and no one turned the money off, so the money would just keep going out. And it's a pretty rare to go where? To a company or an individual. And it's a pretty rare company or individual who will complain that they're getting money that they should not get.

C (12:52)

Once a recurring payment starts, they rarely stop. Billions of dollars quietly just drain away. And this is coming from both sides of the aisle. This is a big part of the reason that Elon got so much pushback from both the Republicans and the Democrats when he was attempting to reduce government spending. Both sides are benefiting from the flow of money and using it to help them get reelected. So no one wants it to stop.

B (13:24)

The entire basis for the government shutdown is that is that the Trump administration correctly does not want to send massive amounts of like hundreds of billions of dollars to fund illegal immigrants in the blue states, in all the states, really. And so the and Democrats want to keep the money spigot going to incent illegal immigrants to come into the US who will vote for them?

C (13:54)

According to Musk, a state like California would go bankrupt if it wasn't for the money it manages to pull from the federal government.

B (14:01)

New York and California would be bankrupt without. Without the massive fraudulent federal payments that go to those states to pay for illegals.

E (14:09)

How would they be bankrupt because of that?

B (14:11)

They wouldn't be able to balance their state budgets and they can't issue currency like the Federal Reserve can.

F (14:17)

We're hitting pause for a moment, but there's plenty more ahead, so don't go anywhere. We'll get back to the show in a second.

G (14:24)

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C (14:55)

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F (15:39)

Let's talk about the one advantage that beats everything else in business. The market does not reward perfection.

C (15:45)

It rewards speed.

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C (17:31)

If you're a large business.

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C (17:54)

That's insane. Despite having the fifth largest economy in the world if it were counted as a country, California can't even break even. That is how much waste there is. Even at the state level, which then puts additional strain on the federal government, which then forces them to print more money, which hurts the poor and middle class the most. And not by a little. It hurts them more by a lot. It is the very reason we have such wild wealth inequality and effectively two separate economies, the have assets and the have nots. They're living in different worlds right now. And I want to remind everyone right now neither the Republicans nor the Democrats are fighting to stop the flow of fraud and abuse. In fact, my one beef with Elon is that he paints this as more of a partisan issue than then it probably is. He claims 80% of the abuse is coming from the Democrats, but I haven't heard anything other than vibes to back that up. But even if in the end that ends up being true, I still think it is critical for people to understand that the big beautiful bill is a disaster that will bankrupt this country and the Democrats want to make it even worse. That's not an endorsement of the Republican party because they're keeping it a little tighter. It's a condemnation of of them both. The reality is that the scams will continue because they work for everyone in power. Democrats defend their sanctuary cities, welfare pipelines and NGO networks and Republicans guard their subsidies, defense contracts and donor funded projects. Different routes to the same destination of self preservation and continued rule. This is what Burnham was warning about when discussing the iron law of oligarchy and every organization once entrenched will bend towards protecting its own continuity. Washington isn't malfunctioning, it is following the laws of political physics where everyone is just trying to stay in office. The people who could fix the fraud are the same ones benefiting from it. So good luck they can't turn it off without starving their own re election machines. And getting elected and re elected is is the entire point. So when Musk describes the bank shot, he's not just exposing a computer glitch, he's showing us the operating system of modern politics. A self feeding cycle where fraud, waste and dependency are the lubricant that keeps the gears of power turning. If we do not balance the budget by any means necessary, we will create a catastrophe for everyone. It is not kind or humane to bleed the country dry of her economic resources that will not spare the poor. It allows you to pretend for a bit that you don't have a problem. But there is a financial asteroid racing towards Earth and it will smash into all of us if we don't do something dramatic immediately. So welcome to part two. Why this is so dangerous, especially right now. Compounding interest and deficit spending has now pushed the national debt over $38 trillion and climbing. That is a burden of over $275,000 per taxpayer. Roughly 25% of all federal revenue will go to paying interest on the debt in less than a decade. A reality we are unlikely to survive economically. According to the 2025 CBO budget outlook, mandatory spending plus interest on the debt already eats a full 77% of the entire federal budget, leaving just 23% for everything else, from defense to infrastructure. For anyone who thinks that we can tax our way out of this, please consider this. For every dollar of new tax revenue we have generated since 2019, Washington has added $1.58 in new spending. We do not have a revenue problem. We are already the richest country on earth. We have a spending problem. If no matter how much you make you spend more, you can be as rich as you want and still go broke. According to the Social Security trustees report, Social Security's trust fund will run dry by 2033. Stop for a second. That's only seven years from now. And it will force an automatic cut of nearly 25% to all Social Security benefits. Imagine being an elderly person and going from I can barely make ends meet to Would you like fries with that? That's what a 25% reduction means. Despite the largest tax receipts in history, the US Government still runs deficits larger than any pre pandemic wartime period. Than any wartime period. And people still present tax increases as the solution. Drug addicts don't need more money to stay out of trouble. They need to stop taking drugs. America doesn't need more tax revenue. We need to stop spending more than we make. The level of absurdity has hit parity levels. But it isn't parity. We are letting our politicians rob us blind. In fact, we are voting for it. Let's look at this through an analogy. Imagine a machine that prints money, not fake looking monopoly cash. I'm talking these look like real dollars that the whole planet accepts. Whoever controls that machine is going to be the richest and most powerful person on earth. They can buy favors, buy votes, delay consequences, paper over mistakes, and spend way more than they make because they can just print more money. That's Washington's literal superpower. They have that machine. We have the world's reserve currency and that gives us the ability to legally counterfeit our own money. But here's the iron law of economic gravity. Printing money makes it less valuable. And even printed money carries interest. That has to be paid, you can dilute your currency and you can rack up the debt, but you can't avoid the all consuming power of compounding interest. Eventually it will eat your entire federal budget. And even if you confiscate 100% of the wealth of billionaires or everybody, quite frankly, it only buys you a year or two. Not to mention, that would permanently kill the goose that lays the golden eggs. You get one nice meal, then you starve to death. So we are now caught in this weird double whammy trap. If we allow fraud and waste to continue and we don't balance the budget, we have to keep borrowing and printing to fund the gap. But if we keep borrowing and printing to fund the gap, we eventually break the confidence in the dollar. And then we can't borrow or print any more money because no one will buy the new dollars and that makes them instantly worthless. This happens to currencies around the world all of the time. Most people just quietly assume this can't happen to us. But it can and will. It's math. Even after the post pandemic cleanup, some agencies still admitted to $162 billion of improper payments in fiscal year 2024 alone. That's bigger than many cabinet departments. And this is every year. And it's only a subset of the full problem. Medicaid and Medicare alone rack up $100 billion plus in improper payments annually, while demographics are pushing costs up and worker to retiree ratios up down. So right now, every wasted dollar is another dollar we have to borrow. This is why the bank shot fraud problem matters so much, why immigration matters so much, why benefits have to be means tested, and why we must assess the government through the lens of a bunch of people who will do whatever and spend whatever it takes to gain and retain power. They all just want to get re elected. They'll promise free health care, free buses, more tax breaks, extra subsidies, et cetera. As if no one has to pay for anything. But we pay for all of it in the form of wealth inequality. It's a simple mechanism. The only way to shield yourself from the ravages of money printing caused inflation is to own assets. And 10% of Americans own 93% of all the assets. Not because they're mean, but because they understand the stock market and or they got into property before homes just got too damn expensive like they are right now due to horrible protectionist government policies designed to help politicians get re elected. When political survival depends on pleasing voters and funders, you build benefits that start instantly, recur automatically and are politically toxic to turn off recurring payments without hard end dates. Transfers that scale with headcount grants with fuzzy purpose fields, state pass throughs where the state self reports the need and the federal government automatically wires the cash with little to no oversight. That's where we are right now. You would also resistance to obvious fixes like mandatory appropriation codes, required comment fields, prepayment checks, auto sunsetting recurring payments unless re verified. You'd see that resistance because those controls interrupt the cash loop that helps incumbents. Both parties face the same physics. You need votes and you need money to get those votes. Benefits create loyalty contracts create donations transfers create grateful districts. Remove any of that and you've just volunteered to be the next ex official. And that's why we have the system that we have. And for all the reasons previously discussed, Our current system creates an intolerable amount of wealth inequality and intolerable levels of wealth inequality make societies unstable.

F (28:32)

Taking a short break, but there's more Impact Theory after Stay tuned. Indoor air is loaded with allergens, viruses, smoke particles, mold spores, all kinds of invisible contaminants that mess with your energy focus and overall health. Most air purifiers cannot touch these microscopic threats. They're built to handle the obvious stuff, not the particles that actually matter. Air Doctor is different. It captures particles 100 times smaller than standard HEPA filters can catch, eliminating 99.99% of the dangerous contaminants in your air. Newsweek even named it Best air purifier and 98% of customers report their home's air feels cleaner and healthier. Head to airdoctorpro.com and use promo code impact to get up to $300 off. You get a 30 day money back guarantee plus a three year warranty, an $84 value for free. Again, that's Air Doctor Pro.com and be sure to use Promo Code Impact. I want to talk about something your phone carrier is not telling you. You're paying twice for your phone service, once with your monthly bill and again with when they sell your data to the highest bidder. AT&T Verizon T Mobile, they have made headlines for massive data breaches and surveillance scandals. When they're not losing your data, they're actively selling it. They create invasive profiles of who you are, what you like, who you talk.

C (30:09)

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G (30:46)

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F (30:48)

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C (30:54)

Blocking out the world isn't always the smart place.

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C (31:46)

So the question becomes, how do you escape a system where the political class is addicted to free money and purchases votes so that you can actually avoid the calamity racing towards us? Let's answer that right now in part three. The solution to our woes. According to the Department of Labor, the Pandemic Unemployment Assistance Program overpaid by an estimated $191 billion, and only 11 billion has been clawed back. In fiscal year 2023 alone, improper Medicaid payments totaled $50.3 billion, and 82% of that was due to insufficient documentation. Same issue with Medicare. 51.7 billion in improper payments, largely due to bad documentation or medical necessity errors. The good news, Medicaid fraud control units recovered 1.4 billion in fiscal year 2024. And that's about $3.46 back per $1 spent. And according to the Government Accountability Office, the Treasury's do not pay system has flagged or stopped $22 billion in potentially improper payments since its creation simply by cross checking death records and eligibility files before money leaves federal accounts. Now we need to focus on cleaning up the Social Security Administration's database to ensure there are fewer avenues for abuse and fraud. Now, the path that we're on right now is a dead end. But we only accelerate our demise if we embrace hopelessness. The leaks are measurable, the fraud and waste is trackable, and there really are plenty of solutions out there. We can only muster the political will to apply them. So here's how we do it in four steps. Step 1 Focus on identity verification and data hygiene the Social Security database, the one that every other agency relies on, is full of bad Data. At least 6.5 million SSNs belong to people who are dead or haven't been born yet. Some tallies put the number of bad entries at close to 20 million. I've used really conservative numbers here to show that even at the low end, the problem is financially disastrous. Even if the true number is the lowest end of the spectrum. So many improper and fraudulent payments flow from bad entries in this database that as a matter of priority we have to clean it up. To that end, we fund a one time all hands cleanup effort. The SSA must reconcile its records with every state's death registry, the the va, the IRS, and anyone else who keeps vital data. Additionally, anything that can't be automatically verified using database queries or AI should be manually verified. Then we publish the results every month on a national accuracy scorecard, celebrate the wins, and pressure the government to find solutions to the stubborn gaps in data integrity. Once the data is clean, we lock it in as a real time prepayment feed. Every agency has to check the updated alive status before they send money out the door. And any new recurring payment, Social Security, unemployment, disability, et cetera, should be set to automatically expire after 12 months unless someone re verifies the eligibility. If the payment parameters are unable to be RE verified, the payment doesn't go out. Simple as that. We can no longer afford to default pay in the face of uncertainty. I understand the complications that that introduces, but they pale in comparison to the complications of going broke. Step two we must create total transparency and AI powered payment controls. When you've got the clean data, you've got to keep up with reporting and ensure AI enforced guardrails are clamped down on the actual flow of cash. Every payment should have an appropriation code and a purpose line. No blank fields, no miscellaneous, no unspecified. If a payment doesn't have a reason attached to it, it does not get sent. The goal has to move from maximum convenience to maximum transparency and accountability. We live in the digital age for God's sake. We need to stop pretending like we are carving stone tablets and we can't easily track and reconcile this stuff with technology. We can. We also need to end the ridiculous approach of pay now, chase later. That approach has cost the US hundreds of billions of dollars a year in improper payments and fraud. If the system is struggling to keep up, update the system. We literally had one of Earth's most effective technologists in the White House as a special government employee and rather than embracing his suggestions, we fought him tooth and nail like a bunch of rich kids who think Daddy will never run out of money. It is self destructive. And here's the good news. AI works. When the Pentagon's travel card audit found over $103 million in questionable charges, the automated transaction monitoring was turned on and it helped claw back 84 million. California also had a big win with AI using it to flag duplicate unemployment claims, which blocked roughly $20 billion in suspected fraud in a matter of months. Step three we must means test everything, including immigration. This one's touchy, but non negotiable if we want to avoid bankruptcy. Means testing is not cruel, it's not a punishment. It is simply making sure that people qualify for the aid. And it's fiscal discipline. No parent with any sense, no matter how wealthy, just keeps giving money to their kids. You set rules, you assess what they need and you stick to it. No one should ever have the expectation of just getting free stuff. At least not until the robots turn us into a Kardashev type 2 civilization. But that is a whole different. Video assistance programs need to be thought of as launch pads, not hammocks. Their goal should be to get people back to being totally self sufficient outside of seniors and the truly disabled. Government help should be temporary by design, get people back on their feet and contributing, then move those dollars to someone else who needs them at that moment. And this most aggressively includes immigration, which should be both hyper limited and means tested. If we want to rescue people from foreign hardship, fantastic. But we have to do it from within a balanced budget. We cannot keep importing people with their hands out, using it to gain voters and calling it compassion. There should be no incentive, financial or political, to import cheap labor people to pad the census or create a new voting bloc built on dependency. In no uncertain terms, importing dependents will bankrupt this nation and then nobody gets anything. And while it's beyond the scope of today's video, we also have got to stop financially punishing families intentionally. Dsa, I'm looking at you, or otherwise. A strong family unit is the most effective welfare program in human history and bad policy has been tearing that apart for decades. Step 4 Balance the budget and vote smart. We have to balance the budget. Not someday, right now. Because if we don't do it voluntarily, bankruptcy will do it for us. And bankruptcy is not kind to anyone. That means remembering that we don't have a tax revenue problem. We have a spending problem. History has proven no matter how much we bring in in taxes, we spend even more. We have got to cut the deficit until spending grows slower then revenue. Revenue must overtake our deficit. Anything else is financial suicide. Additionally, we use the only power that still scares Washington, our votes. And we have to use them far more wisely. In every election, we need to demand a pledge from our candidates that's very simple. They're going to ensure a balanced budget and stop stealing from our children and marching us towards the cliff of a bankruptcy. If they won't commit to that, they don't deserve our vote. Period. And if someone served in office and didn't do their part to balance the budget, we need to seek candidates that will now look, I am hyper aware that there are political realities. But if we do not become obsessive about this issue, no other issues will matter. Financial health is like human health. A man with good health has many dreams. A man with poor health has but one to get healthy. A country with healthy financials can pursue many goals. A country with poorer financials can only pursue one. You've got to balance the budget. None of this is complicated, but it's also not political or ideological. It's just math. If we don't stop spending more money than we make in tax revenue, we will bankrupt the country, the dollar will collapse, and no one will get any benefits of any kind. That's the part that I think people keep missing. We're talking about something that's only seven to 10 years away. We need to act now for no other reason than we must if we want to continue to be compassionate, let alone a superpower with many dreams. All right, if you guys want to see me explore topics like this in real time, be sure to join me live Wednesdays and Fridays at 7. 6am Pacific on YouTube x Twitch and Kick. You can join the debate or just chill in the community. I hope to see you there. Till next time, my friends. Be legendary. Take care. Peace.

F (41:42)

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H (43:01)

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