"Nobody Wants to Fix It" – ITR Warns Government Debt Could Trigger a Global Depression

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**Tom** (0:06)
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**Patrick Bet-David** (0:08)
Closest metro to you is Union Square, about three blocks away. Hey Meta, text Mom, I'm getting on the train now.

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**Patrick Bet-David** (0:30)
Can you pull up ITR that's been around since 1948? Just type in ITR 1948
Yeah, just type in 1948 These guys have been predicting and forecasting what's gonna happen to the economy, okay, since 1948 And they've been accurate 94.7% of the time. 94.7% of the time, they've been accurate. Okay, they just came out and they predicted, they state that this figure is far, is their overall forecast accuracy since 1985 Based on their own audited methodology, it's not a claim that they correctly predicted 90, it is a claim that 94.7% of all economic events. And ITR has for years argued that the world is heading towards a major global depression in 2030
With the trough around 2036, so around a six-year period, they have built an entire research series around this thesis. Their argument is the following, and Tom, I'm coming to you first, and then definitely to Vinnie next. Their argument is based on several long-term structural trends. Number one, aging population and shrinking workforce. Number two, high government debt levels. Number three, rising entitlement obligations, which we just talked about snapping one of them. Number four, slower productivity growth. And number five, demographic shifts occurring simultaneously across many developed countries. Tom, do you agree with them that there will be a major global depression in the 2030s?

**Tom** (2:10)
So to answer your question from earlier, I didn't remember it was ITR, but I remember reading about this long-term thing.
And I believe, I don't know if it's the 30s, but there is merit to something. The first is people are retiring in the United States and they're not being replaced with people that are earning as much. And so one argument is, well, just open the borders and let everybody work and make sure everybody pays taxes.
And country debt and the long-term obligations on Social Security and Medicare. We're already having the discussions. And as a matter of fact, there was a poll last week. And do we cover the story? I think we covered the story, Pat. Which one? The poll about how people... It was a poll and it was bookended. People in their 30s were not in favor of continuing to pay higher taxes for Social Security. But people in their 70s were not in favor of cutting their Social Security benefits. So that the chart was like an X exactly along what you would think, the 10-year age lines. So there's two parts to it. They're correct about government debt needs to be corrected. When we're paying now more interest on the debt than our defense spending, we got a problem. So that's got to work itself out. And then what do we do with the aging population? We already see what's happening to health care. And what this study just says, listen guys, somewhere around 2030, three years from now, it's got to break and it's got to shift, and it will take five years to correct itself. So they're saying there would be like a 2008 to 2009 Remember we had a bounce back in 2009? Guess what? What they're saying, it's gonna be a 2008 and it's not gonna bounce back to 2013
So they're saying there's gonna be this major correction based on these things. I can't argue against their arguments of the macro factors. Does it happen this way or do we find ways around it?
I don't know. Is Elon Musk right that we're gonna have this productivity boom, that we're gonna have UBI for everybody under 100 grand a year, that everybody under 100 grand is gonna get paid for out of the taxes, because we're gonna tax the robots and stuff. But I'll tell you, you can't argue against their points. Their points are right.

**Patrick Bet-David** (4:31)
Yeah, and by the way, a part of it is the fertility rate. The other one is boomers are retiring and we gotta take care of them with Social Security. We saw the numbers, if you wanna pull it up with Social Security. It's running out in 2032, which by the way, when you're sitting down and thinking about the numbers, they've been saying this in your, if you've not looked at your Social Security statement, just so you know, in your Social Security statement, you know what they put in there the last 20 years? That this is gonna run out of money in 2032 Like, you know when you get yours, have you ever looked at your Social Security statement? Nope. Okay, when they send it in, they tell you, they've been telling you this for 20 plus years. The fund is gonna run out of money by 2032 ish. I don't know what the exact numbers, but they've been saying that. So, yeah, right there. So what is that? Social Security insolvency now projected for 2032, putting benefits at risk of a 22% cut. You know who's worried about this? The 70 million Americans across the board, benefits that are sitting there saying, what do you mean you're gonna cut 22% of it by 2032? We don't have a choice, is what they're saying.