Luke Gromen + Darius Dale: Why 'Money Printer Go Brrrrr' Is Our Inescapable Fate

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**Darius Dale** (1:00)
This is one of the most important slides I think I've ever doodled. I don't doodle much.

**Luke Gromen** (1:05)
It's a great slide. I'm looking at it like that's an awesome slide. I love that.

**Adam Taggart** (1:15)
Welcome to Thoughtful Money. I'm its founder and your host, Adam Taggart. With the US and nearly every other major G7 country engaging in historically high levels of deficit spending and increasingly struggling to service their massive sovereign debt balances, how does all this resolve? Is there a path to a manageable ending here? Or is a debt crisis, a currency crisis, or both inevitable at this point? In attempt to answer these fiscally existential questions we're fortunate to be joined today by two great Macro minds, Luke Gromen of Fftt LLC and Darius Dale of 42Macro. It's a true pleasure to host both of these gentlemen on this platform at the same time. Luke and Darius, thanks so much for joining us today.

**Darius Dale** (2:02)
It's a real pleasure, man. Thanks so much. You guys are two of my favorite people. I'm so grateful to be here. Anytime we can connect, it's a pleasure for me and a treasure for our audience. So let's have a great day today.

**Luke Gromen** (2:14)
Likewise, I'm really excited to be here. I'll always love to talk with both of you. All right.

**Adam Taggart** (2:19)
Well, look, right back at you, brothers, and I got to tell you, you set FinTWIT on fire when I announced that you guys were going to be speaking together here. Now, a lot of folks are saying, oh, I can't wait to see these two debates. My suspicion is that you two are much more aligned than you differ on your outlooks. And so I'm thinking that this conversation will probably more of like a co-exploration of a lot of these topics as you build off of each other's points of view. Of course, if there are points of difference, be great to sort of understand where and why you guys might see things differently. But I have a feeling this is just going to be a really fun, collegial experience and I know the audience is just incredibly excited for it. So why don't we just start by jumping right into the heart of the matter here?
I'm going to start with a broad question which I'm famous for at the beginning of these things. Why don't I start with you, Luke, and then Darius, you can respond any way you like. Luke, what is your current assessment of America's fiscal situation?

**Luke Gromen** (3:23)
Unsustainable.

**Darius Dale** (3:26)
I was like, oh, boy.

**Luke Gromen** (3:32)
It's unsustainable.
It's unsustainable, just because something is inevitable doesn't mean it's imminent, which is absolutely true. But one of the metrics I use to gauge imminence of issues is this metric of what I call true interest expense, or your interest plus your entitlement, current portion of entitlements plus Veterans Affairs, which is another off balance sheet liability interest payment. When you add those three things together and compare them to total tax receipts, you are right around 100 percent, maybe slightly over 100 percent of receipts. The challenge is receipts are at all-time highs. Challenge number two is that going back 80 years, you can set your highest marginal tax rate wherever you want to set it. It's arranged from call it 27 or 30 percent to 80 percent plus. It hasn't mattered. You always get 19, maybe 20 percent of GDP in terms of receipts. We're just about there. We're maybe a little short in 19 percent of GDP.