Massive Somali Fraud in Minnesota with Nick Shirley, California Asset Seizure, $20B Groq-Nvidia Deal

All right, we have a massive show for. you today, besties, but it's not going. to be our prediction show. We thought we. were doing predictions end of the year, but we had so many amazing stories to. cover in the news that we're going to do. predictions next week. The first story. is we have investigative journalist Nick. Shirley on. He has uncovered in a. breaking 42-minute video that went viral. $110 million in potential fraud in. Minnesota. It's part of $9 billion in. overall fraud. and we've got him on the.

show here exclusively. This video. apparently perhaps prompted responses. from Cash Patel and DHS Secretary. Christy Gnome who have sent agents in to. inspect these facilities. Here's some. sort of important context. These. entitlement frauds in Minnesota have. been going on for over 10 years. It's a. 13 14 year old story. It started by an. investigative reporter named Jeff Balon. launched his first investigation into. this in February of 2013. at Fox 9 News, local investigative.

journalist. Uh, and after that expose, charges were brought in 2014 against a. Somali woman and her husband. They skip. bow. They never faced trial. Here's a. 45se secondond clip from 2016 from. Balon. >> Ali is facing numerous counts of theft. by swindle and racketeering. She ran a. daycare business and home healthcare. company that catered to lowincome. families. But former employees told the. Fox 9 investigators back in 2013 that it. was really part of a scam to collect.

millions in public subsidies. >> When I saw the bank account for the. business, there were large Cath. withdrawals on a continuous basis. >> Can I ask you a few questions? >> A year after our investigation, Ali was. arrested and charged with billing the. state out of about $4 million. >> Okay. Since 2018, Minnesota has seen 9. billion around 9 billion in entitlement. frauds according to federal prosecutors. Just to give you guys a a concept of uh.

what that means, that's half of the. total amount spent on 14 entitlement. programs in the state. So, here's the. direct quote from the federal prosecutor. on the Minnesota fraud. The magnitude. cannot be overstated. It's staggering. Industrialcale. fraud. There have been over 90. convictions for more than $800 million. in fraud since 2022. In 2022, 47 defendants were charged in a. $250 million fraud scheme called Feeding. Our Future that was supposed to feed.

hungry kids. Then up to 220 million was. stolen in funds for kids with autism. Then 300 million was stolen in Medicaid. funds meant to help people with. disabilities avoid homelessness. So. starting with that feeding our futures. fraud in 2022, 82 of 92 people charged. have been. Somalian. Joining us right now, 23-year-old investigative journalist. Nick Shirley. Welcome to the program.

>> Thank you. It's been a crazy past few. days out here in Minnesota. >> So I guess a good place to start is uh. you could tell the audience a little bit. about your background. uh when you got. into investigative journalism. Obviously, you've got a YouTube channel. I watched some of your early videos when. you were 16, 17 years old. I would say. along the Mr. Beast vibes and then. suddenly making a turn into politics. specifically around immigration and some. Vox pop uh kind of man on the street.

stuff. But maybe you could tell us a. little bit of how you got into all this. and how you got into this specific. story. Yeah. So, I've been doing YouTube. as far as I can pretty much remember. since as I was as a sophomore in high. school. It was just uh something I. thought I could would be good at. So, I'd do YouTube videos and all I could do. in high school was to do prank videos, sneaking into places, just kind of a fun. stuff you can do on the weekend. And. then as I've grown older and I've had. other experiences, um I've matured and.

I've wanted to get more into more. serious topics. And so, uh, as I've been. able to go places and kind of see the. world for what it is in different. countries and whatnot and have different. experiences, um, it kind of led me to. get into this more investigative. journalism content. And also, back in. around 2020, you couldn't even make. political content on YouTube without. word without being demonetized. For. instance, if you were to put Trump in a. YouTube title or thumbnail on my. channel, you would get demonetized cuz I. was a smaller channel. So, it was.

impossible to make that sort of content. and I was younger. I was about 17, 18. years old at that time. >> And now YouTube allows you to monetize. I noticed you had ads baked into the. program like many podcasters. And you're. not affiliated with any news source. And. I to the best of my knowledge, you're. not backed by any special interest. groups. You're not backed by some rich. billionaire. Where's the money coming to. do this reporting from? and and just to. confirm that with the audience. >> Yeah. Everything I do, I'm 100%.

independent and so I make my money off. of YouTube, off of brand deals inside of. YouTube videos. And if people want to. donate money, they can do that. However, everything I do is straight from my own. hands and I don't have any other people. really working for me other than me, myself, my mom, and a few other editors. >> So, tell us about the origin of this. story, and then I'll hand it off to the. rest of the besties to do some follow-up. questions. Yeah. So, I've been looking. into this fraud for a long time. Since. last June, I came to Minnesota to kind. of do a video on what was happening with.

the Somali population as far as like how. much it was increasing and and how. certain towns have been uh the. demographics have changed um and how. churches are turning into mosque and how. mosques are growing inside of. Minnesota. I thought it'd be an. interesting topic for people to see. And. when I was there, a lot of people were. starting to tell me about the fraud that. was taking place. And I was like, well, how do I I just can't come and label. everyone saying there's fraud happening. I need evidence. I need actual proof. And so I I've been doing my own.

investigation. And then a man by the. name of David who's inside my YouTube. video, he's been doing his own. investigation for years as he's as he. works next to some of these childcare. centers and he's driven by and he's. never seen a single child at any of. these daycarees. And so he started. looking into the funding and he was able. to get the numbers of how much money. these people were receiving from CCAP. funding. which is tax exempt and it was in the. millions of dollars. And so I was I told. him, "All right, I'm coming to. Minnesota. Let's go see what's happening. on these daycarees." And when I got. there, I was shocked to see when the.

first daycare we went to, all the. windows were blacked out and you didn't. even have the option to open the door. Everything was locked. So explain the. the mechanics of the fraud just so the. audience if they haven't seen this. understand how these frauds are being. played out. >> Yeah. So massive welfare frauds being. committed. People are opening up these. dayc carees, home healthcare clinics, you name it. anything that has anything. to do with like health welfare or even. just like helping people in general like.

with daycare or with uh healthcare, they're opening up these companies and. then they're able to receive millions of. dollars. And the state, for instance, I. don't know if they're doing any checkups. on these places because these places. literally had signs that said learing. instead of learning on their on their. doors on outside. And what business is. operating in a way where you can't even. go inside or the windows are all blocked. out? Very strange. >> Nick, let me ask you a question that I.

think a lot of people have, which is. when your video, first of all, let me. just say, took a lot of courage and it. was well produced and you communicated. some very complicated information in a. very simple way, which I think is a. tremendous skill. But the question that everybody asks is. how do we know that you are right? And. in traditional investigative journalism, there's a process that people follow and. there's insurance that you have to get.

and then there's errors and omissions. and you typically have to deal with. lawyers. Did you go through that process when you. made this? And do you think that it's an. important part of what needs to be done. for your credibility and for this piece. to stand on its own? >> Yeah, I think everyone knows that. fraud's been going on for years now. Like Jason was just saying, everyone. knows that the fraud's being committed, but nobody's actually went to go see it. firsthand. They know this fraud's been. happening, right? And that's why it's. been so hard for people to say, "Well,

this is happening." Or this is why. mainstream media's had such a hard time. to actually get exposure on the fraud. because they've actually never gone and. seen it firsthand or they've had the. opportunity to have a platform where. they can share on their own. Right. But. did you check all the traditional boxes. that the New York Times or other people? Because what I'm trying to get to is how. do we make sure that then you're not. attacked and that you're not discredited. and that people say this process is. faulty and he's mudslinging and how do. we make sure that you're not sued into.

oblivion? >> Yeah. And to specific to build on that. Shimoth the allegation has come out. Oh, you went on a Saturday. Oh, you went. during Christmas. And I guess you could. address that because now people are. obviously vetting your journalism. Yeah. Well, it's on I went on December 16th is. a weekday before Christmas break. So, there's that. And then, um, sorry, the. question as far as like did I do the. vetting and whatnot. The man who helped. me like lead the investigation himself, David, he had all the paperwork from the. capital. He had somebody from inside the.

capital leaking him the information. So, there was my like fact check, per se, was he had a source from inside the. capital. That's how we were able to get. the number specifically. Do you think. that it's going to be important for you. to. have lawyers that help you navigate? Because like if you build on this, there's obviously more fraud in. Minnesota. >> There's a bunch of stuff in our home. state. A lot of people would love you. and people like you to start looking in. all of these crevices.

But how important will it be that you. have all of the legal eyes dotted, tees. crossed here? >> Yeah, that's a good question. I haven't. really thought too much about that. because every I've never been in this. position where you have hundreds of. millions like I think over 500 million. people saw that video just alone just. from all the impressions aside from the. main video getting 100 million 125. million views, right? >> So yeah, that's something I definitely. need to think about. But I think more. than anything, I'm not trying to go in. and I'm more so just giving people.

transparency from the outside where. people can't see it when they're sitting. from behind a desk talking about it. Right. Right. I wasn't trying to barge. in any of these businesses. I was simply. asking like, okay, like is it possible. to enroll in ch a child into here? And. they would say no. Like what daycare. center doesn't have a paper for somebody. enroll a child? So I think like yeah, I. guess if I wanted if I was going to do. defamation on specific people and stuff. like James O'Keefe style, I know he's. always having to lawyer up which I don't.

want to ever have to do. That's like. would suck cuz that I hate getting I. don't want to ever have to deal with. that stuff. Are you done with Minnesota? Like, have you uncovered everything you. need to uncover and now you're going to. look at another state? There was a lot. of traffic this weekend about Ohio, Illinois, California. What do you do. now? >> Yeah. So, I've been making YouTube. videos consistently for the past 104. days, and I'll continue to def show the. fraud that's taking place here inside. Minnesota. It's not like I only just do. videos on fraud, but um I think just.

showing people what's happening inside. the country is super important. And yes, there's a lot more fraud taking place. here in Minnesota. And I do have a part. two episode on a whole different segment. of the fraud that is taking place within. the the state of Minnesota. And like you. said, a lot of people have reached out. to me, whether it be California, Ohio, and uh at that point, I will have to. kind of I'll be doing my research as. well to then not have to be in a. position where somebody can try and sue. me. >> What does it make you feel, Nick, as an.

American and also as a young American? you grow up, whatever your belief system. is, what do you think? Put aside the. investigative journalist pardon, what do. you think as just an American, as a. young American. >> about the fraud? >> Yeah. >> Yeah. I think it's very upsetting. I. mean, so many of my friends and so many. people are working. We're like, we're. working so hard just to be able to get. by. Like, I don't even have a friend. that owns a house at this point in their. life. And they're 23 years old. And we. talk to our grandparents and they're all. like talking about how they bought their. first house. We're married. And it's. like that's not even a possibility for.

most of us, right? And so when you see. that people are making millions of. dollars and not only is it millions of. dollars, it's tax exempt money. They're. getting it from CCAP funding, which is. uh tax exempt, right? And so when we're. working hard and we're paying anywhere. from 20 to 50% of our money back into. the hands of the government while people. are just funneling money, it makes us. all mad and it's not fair to anybody. quite frankly. >> It's interesting. Freeberg, I know. you're you're interested in the media as.

well, like I am. This story has been. covered for over 10 years by local news. You came in and did this. It became. essentially a national story. But when. we did our research, we did find a New. York Times story last month, but none of. the CNN's of the world have actually. covered this. So, there seems to be a. little pocketing going on here, Freeberg. the local news covering it. doggedly, uh, running gun journalists like. yourself, Nick, doing an incredible job. knocking on doors, but there's this. vacuum, Freedberg, on the national.

level. Any thoughts on that? Well, Nick, I think one of the things that makes. your content so compelling is that it is. long form. When you watch 60 Minutes or. CBS or whatever, they're cut down. They're sort of like segment pieces. It's seven minutes long. What's so great. about your footage is you get the raw. true experience. It really is what. citizen journalism is meant to be and. you and I have talked for a while. I. think you know we talked months ago. about some of the work you were doing in.

Portland cuz like I was asking all these. questions like well what is everyone. else in Portland up to cuz all the video. from all the news stations was what's. going on right outside that gate where. the ice facility was and there was like. 20 people going crazy but like what's. the rest of Portland like? and you went. out and collected that content. That's. the sort of stuff that I think makes. your work so compelling is it feels so. real. There just isn't a way for a. network news station or CNN to do that. sort of work where you can sit down and. spend 45 minutes looking at like the.

very real footage that you put out, which is awesome. Can I ask you a. question? So, you grew up Mormon, is. that right? >> Yeah. >> And did you do a mission? >> Yeah, I did do a two-year mission in. Chile. Do you think that that prepared. you like knocking on doors or engaging. people openly in your missionary work to. be able to do this? Because I can tell. you I know so many journalists who would. be scared shitless to go do the stuff. you've done in New York City and. Portland now in Minneapolis where you're. actually going into these facilities.

looking people face to face. Like how. did you develop that that capability? Was it rooted in your missionary work? I. mean, I think that might come from a. little of it, but I think being the. youngest brother also really just always. having to impress your older brothers. and being the daredevil for him and his. friends. Like, I just didn't grow up. with fear. Like, it wasn't even a. concept for me to go and do go do the. bike jump when I was 5 years old, right? So, it's always been something that I. haven't been afraid of and I've never. been afraid of rejection as well. I used.

to do door cells and the mission you. literally are just walking around trying. to talk to people about Jesus for two. years straight and you just get denied. every single day and you're just hoping. to have like a small sliver of success. for what you actually do. And so that. definitely helped. My mission more so taught me about the. effects of mass migration because I. would see so many people fleeing. countries like Venezuela and then I came. to the back to the US and I saw what was.

happening at the border and I was able. to learn Spanish. But the I think just. like my upbringing in general being the. youngest brother and then also uh my. morals from being a member of the Church. of Jesus Christ Latterday Saints. I. don't drink, I don't smoke, I don't do. any of that. So I feel like I have a. advantage for compared to a lot of. people as far as like my mind's always. I'm not getting skewed with addictions. or trying to go and do something else. >> Nick, are you still very religious? >> Yeah, I am. >> Sax, what's your take on this? And um.

the question I asked Freeberg, which you. didn't get to, maybe you could take, which is this hasn't seemed to made the. make the the national uh press, but it. has been on the local and obviously it's. on X. Maybe you could give your. handicapping of the media sphere and. Nick's role in it as you see it in 2025. >> Well, I think it's an indictment of the. press. They haven't covered this and. they still haven't covered Nick's video, which is now, like you said, a viral. video with hundreds of millions of views.

and everyone can see what's happening. You basically have this huge. multi-billion dollar fraud taking place. Yes, there were stories going back a. decade like you said Jason, but they. were isolated stories where they could. be portrayed that way. And I think what. Nick has done is show that the fraud is. massive and in plain sight and no one. bothered, no one cared enough to expose. it. And you know, Nick, you did this by. just going around to all these supposed. daycare centers which are receiving. vouchers from the government anywhere.

from what one and a half to $4 million. per daycare center per year based on. fictional enrollments of children. And. these centers aren't even operating and. they're collecting millions from the. government. All told, I guess it's adds. up to 8 to 10 billion. So this is. taxpayer money that's being stolen from. Minnesota that's being stolen by this. Somali. community basically. And I think the. story's gone viral because it includes. so many aspects of dysfunction. I mean,

you've got the issue of illegal. immigrants. Some of the people in the. Somali community got here illegally. Some of them didn't. You then have these. progressive judges who foolishly voided. convictions of some of the fraudsters. who were doing this. I mean it's just um. classic example of suicidal empathy or. something like that. So you have that. aspect of the story and then you've got. the political corruption. Again these. are not isolated incidents. This is a a. case where I think we have to see this.

as a system at work not just an example. of like a few isolated fraudsters. There's some roundt tripping here where. some of the funds that are going into. the pockets of the Somali community. through this fraud end up back in the. hands of politicians. And the really. extreme example of this is that Tim. Waltz even changed the flag of Minnesota. to resemble the Somali flag. I mean, he. lowered the old flag and raised this new. flag to that resembles the Somali flag, which shows the political clout of this.

community, which is why I think a lot of. politicians turned a blind eye to what. was going on. So, I just think you've. got all the ingredients here of this. story. You've got this suicidal. immigration policy that we've had. combined with massive government fraud. with dereliction of duty and. incompetence. combined with political corruption. And. that's why the story is going viral and. has gotten hundreds of millions of. views. So kudos to you, Nick. And of. course, the way that they are defending. themselves. Well, first of all, the. press is trying to ignore the story as.

much as possible. But to the extent that. they. have to confront it, what they do is. just accuse us of being white supremacy, that anyone who notices that this fraud. is being perpetrated by this Somalian. community, that somehow that must be. racial animist, that's the only reason. people care about or something like. that. And so they've accused Nick. And. that actually is the last element here, which is again this tired, worn out. trope of accusing anyone who threatens. this corrupt government machine of being.

somehow racist. Any event, let me stop. there. Nick, let me get your reaction to. all of that. >> Yeah. No, I love everything you said. because it's so true, especially like. for instance, they found a man here with. $7 million he had committed in fraud and. then the judge overturned it, right? And. then Tim Waltz is calling people like me. a white sup white supremacy. He says. we're acting on white supremacy. No, Tim, it's millions and billions of. dollars in fraud of hardworking motan. people that's being sent who knows. where. And so it's not like and then. today I'm just looking at the media and.

people are it was the craziest thing. I. get on there and people are starting to. say all these like crazy allegations. about me. I'm like whoa where are you. guys? People have even came out say said. I'm like a a pedto. It's like what? Like. I literally just went and did the job. that everyone's been wanting to see done. for years, right? And I just brought. limelight to everything, tried to make. it as uh just a simple issue about fraud. happening. >> Let's just be clear. You just went to. these daycarees and just I I looked up. the CCAP that you mentioned. It's the.

Minnesota Child Care Assistance Program. is what CCAP stands for. And it's a. state administered program, but it's. funded largely by federal dollars to. subsidize childare for low-income. families. So, it's not just motans who. are paying for this. It's all of us. through our federal tax dollars. And I'm. seeing a lot of follow-on commentators. in other states now saying, "Hey, you. know what? In Ohio or in the state of. Washington, we're looking at the. government roles and we're seeing that.

there's over 500 Somali owned daycare. centers." And by the way, that's just. like one type of fraud or one type of. very suspicious behavior, but you can. start to see that people are starting to. pull the thread here and they're seeing. like where this fraud goes. And it's. starting to raise questions about lots. of other government programs as well. For example, in California, we have $24. billion going to quote unquote homeless. programs. And yet, the number of. homeless people keeps rising. And you. know, everyone knows it's called the.

homeless industrial complex. they can't. pass an audit. The state refuses to even. permit an audit. So, we know there's. massive fraud going on in that program. There's massive fraud going on in. entitlements across the country. And I. think part of the reason why Nick's. video has gone viral here is people can. kind of feel that the whole country is. really being eaten alive by this fraud. and corruption. And it is a huge part of. why we have such a huge deficit, why we. have so much government debt. And it. feels like finally someone's blowing a.

lid on it. And Nick, it feels like. you're achieving what Doge set out to. do. And I think there's no one feeling. more vindicated right now than Elon Musk. because literally some of the things. that he was saying back in February, you. have now proven true that there's huge. amounts of of entitlement fraud. Some of. that money that is stolen then goes to. politicians who then either support the. expansion of that system or turn a blind. eye to what's going on. And some of this. is even connected, I think, to voter.

fraud. So, you're talking about here. stolen money maybe leading to stolen. elections. I mean, it really feels like. you've kicked this rock over and we're. starting to see a bunch of nasty things. underneath it. And what I think is. really cool is that you're inspiring. copycats. Now, some people have called. this decentralized Doge where now, you. know, hopefully we get a thousand or a. million Nick Shirley's all over the. country who start to show up and try to. shine a spotlight on what's going on. with all these government programs.

>> Yeah, I think it's essential that people. realize what's actually happening and. realize that, like you said, like we are. getting eaten from the inside. Like, why. is our money going to these places? We. we always talk about Tim WS was ranting. about healthcare the other week. I'm. like, well, maybe you shouldn't be. giving hundreds of millions of dollars. to healthcare companies that have. nothing to show when you go to their. business. and all the other stuff that goes along. with what you were saying. Like, yes, this like I think Elon's why it sparked. Elon's interest is because it's.

physically showing people with their. eyes, not just a contract. And it's. sparked such con such conversation. across the internet because it's. something people can physically see and. people are actually feeling inside of. their communities. >> Nick, do you think that the fraudsters. are going to get a little bit better at. covering their tracks now that you've. exposed them? Cuz I I feel like one of. the things that was really amazing is. you would just show up at these. daycarees that, you know, you can see. from the government roles are receiving. millions of dollars. They call.

themselves a learning center, but they. misspell the word learning. So, it's a. learing center and it's these cinder. block buildings like there's there's no. reception. There's no one there. I mean, it's almost like they've made it too. obvious. Then there were cases where you. would have people that got busted a. decade ago. The locations didn't even. change. They just renamed those. fraudulent businesses and they were. literally operating from the same. locations a decade later. I mean, it's. almost like there was just no attention. paid whatsoever to where this money was.

going. And I'm just I I guess the only. thing I'm kind of worried about now is. that with you blowing the lid off this. thing is whether the frauders are just. going to get better at covering their. tracks. >> Yeah. Well, I think that they're gonna. have to look into where they're sending. all this money, right? Because they if. they wanted to really confront this. fraud, they could have just cut off the. they could have just cut off the money. and said, "All right, one sec. Let's. take a month. Let's figure this out.". But no, they just kept giving more and. more and more and they even started. expanding it. For instance, how does a. place just have an increase in autism?

like how does that happen? Yeah, it. start it made me wonder whether a lot of. our statistics about issues like that. like autism like to what extent are they. manufactured because we're creating this. huge incentive for people to create. cases of autism of these like you know. fraudulent. healthcare centers and it does make me. wonder like well can we trust any of the. numbers. >> just to be specific in the areas that. you guys are talking about where they. think there was fraud Medicaid claims.

for autism in Minnesota spike like 130x. in 5 years. >> X what the heck. X. 130 not to 1.3. Oh my god. >> From 2018 to 2023 it went from 3 million. to $400 million. >> It's probably the water. It's probably. the water or vaccines. It could be. anything. Who knows what it could be? It. could be fraud. [laughter]. >> Jason, I have a question for you which. is twofold. One, what do you think of. what Nick did if you've watched the. video? two, why are your former brethren.

trying to bury this story? >> So, I think Nick is doing the most. fundamental act of journalism for which. he should be lauded and is correctly. being lauded, which is just go knock on. a door, right? And asked the most simple. question in the most unbiased way. Now, >> are there kids here? And can I send my. kid here? >> You know, I I looked into Nick. I looked. into your videos. >> Most basic could you get? >> Yeah. Incredible. And they failed test. They failed the most basic test. the. most basic simple test and you know I.

looked into all of Nick's videos because. I saw. >> anytime you do something like this. investigative journalism people will. correctly and you alluded to this chumat. in the beginning start to vet the veter. right and I was like okay tell me. everything about Nick Shirley let's look. at all his Twitter feed let's look at. his YouTube videos like who is this. person why are they doing what they're. doing and I watched Nick as you ask. questions at a Bernie rally uh and uh. some other events when you're doing your. man on the street stuff which is also. very brave because you can get your ass. kicked. I don't know if you have. security or not yet, but you're going to.

need it. Do you have security? >> Yeah, now I have to. >> Yeah, of course. So, this is brave. stuff, but this is the core task of. journalism is to get this primary. information and let the viewer decide. without bias. And we can criticize 60. Minutes and the New York Times and there. there's plenty to go around, but if you. look at the history of it, I think Nick, you've got incredible potential to sort. of take the baton that you saw from that. local newscaster on Fox 9 and keep. building on that. And to your point, David, I think Freberg you made about uh. crowdfunding and crowdsourcing this.

journalism, it's it's going to be very. powerful in the future. If you look at. how long it takes though to do this, these things take decades. So I think. you got to stay on the story and if you. look at the Catholic Church spotlight, the frontline documentary, you look at. 60 Minutes. and what they did with Big Tobacco, these things do take a long time. So you. should keep your hooks into them and. keep working it. The other thing I. thought that's really interesting here. is this could be the opportunity right. now is everybody in the United States.

who is a taxpayer does not want to see. fraud. They don't want to see waste. They don't want to see abuse. So. although Nick, I I think your leanings. are right. >> Are you sure? >> I am pretty sure that 90% of Americans. don't want to see their tax dollars. wasted. >> What if there's a group of people that. would be okay with it even if they were. told it was fraudulent, but it allows. their side to keep winning? Yeah, I I. that's like a conspiracy there. I don't. think. >> No, it's not a I'm just saying it's a. boundary condition. I just wonder if you.

actually put it there that you would get. 95% that says this is wrong. >> Yeah, I think you'll get 95% that will. say it's wrong. But we'll see. And what. I think could happen here is that this. could be the issue that pulls Americans. together that we could have consensus. on, which is we don't want to waste our. tax dollars. Putting aside the fact, Nick, that you're conservative, it. doesn't matter. You're religious. It. doesn't matter. What matters is the. truth. And the truth here is there's. massive waste, fraud, and abuse. And. Elon saw it. Elon told us, he confirmed. it. And he got attacked for it. Elon was.

100% right. Everybody who attacked him, they may not have liked his tactics and. how fast he was going and locking doors. and turning off credit cards, his. techniques, they may not have liked, but. we as Americans can all get behind not. allowing any more fraud. And we should. not be increasing taxes into a system. that is ripe with fraud. that I think. everybody will agree on. And when all. that fraud happens, it keeps us from. actually sending the money to things. that we might actually as a country uh. that might pull us together even more,

which is like I don't know, maybe we. could have universal healthcare like the. other 80 most developed countries in the. world if we rooted out this fraud. because there's just far too much waste. And so I I think you did a great job, Nick. And I think this is where we could. see massive opportunity for investment. in new publications. and new news sources that take folks. like Nick, pair them with two or three. other folks and now you got a team which. it seems like you're building and then. you could have a permanent funding. source. So if you could get. >> You only have GoFundMe Nick right now.

>> No, I don't have GoFundMe. I just accept. donations via Venmo or if you want to. send. >> Yeah. You should start a subscription. service, you know, like Substack or any. of the other ones, Beehive, and you. should literally use this momentum to. get to 10 to 100 to a million dollars a. month in donations that reoccur. That's. the key is the reoccurring. Go ahead. >> You have young people reaching out to. you that want to do this work with you. now. >> Yes. I think people are interested like. people are like, "How do we start or how. do we do it?" And uh it's a good. question. I think most people like I.

didn't I didn't go ask somebody how to. do it. I just went and did it. >> Mhm. And so a lot of people are so. scared to take those steps when in. reality you just have to go do things if. you want to make stuff happen. >> There was an image that I saw on X and. it had a ship. running into the iceberg. Nick, maybe. you can find it. And the ship's name was. the USS taxpayer. And the top of the. iceberg that was visible was Minnesota, but the bottom of the iceberg was. California, [laughter] which.

>> that's great. which is the fourth. largest economy in the world is just the. state of California. I don't know if you. can just show the tweet from Kevin. Kylie, which I retweeted with a couple of. things on. Here it is. What he says is a. third of college applicants were fake. 17 billion was spent on high-speed rail. with no track. 24 billion in. homelessness funds disappeared. 32. billion was lost to unemployment fraud. medical and SNAP are rife with improper.

payments. It's probably a hundred. billion dollars a year that's being just. completely pilered out of California. So, I don't know if Nick Shirley you. have the time to come out west, but if. you do, you're just going to find an. entire treasure trove of opportunities. to look at. Oh, there's massive fraud in. California. I mean, the homelessness has. just increased as they receive more. money. And that's just one part of it. And like you talked about the the light. rail and everything like that. Yeah. The. fraud is like crazy in California and.

they have the highest taxes. >> Yeah. They want more. [laughter]. >> Yeah. >> Nick, has anybody approached you about. this thing? I tweeted it about it. I had. never heard about it, but these guys. educated me on it called Quit, which is. this framework where you can actually. sue on behalf of the state and on behalf. of taxpayers. Has anybody approached you. about thinking about using all of the. information that you've garnered to try. to launch some of these lawsuits or No. Yeah, I actually had somebody reach out. to me the other day about it. So, I'm. going to actually hop on a phone call.

with that guy. >> Yeah. Also, as I understand it, some of. these whistleblower laws reward the. whistleblower with something like 20 to. 30% of amounts that. >> up to 50% in some cases. >> Yeah. That are I don't know if it's like. fines or it's amounts that are. recaptured. >> Recaptured. Yeah. >> But I don't know, Nick, you could become. a billionaire here just with all the. billions you've exposed. >> I got I got to sit down and figure it. out. I know that's not why you're in it, but. >> you'd be the most well-loved billionaire. in America if you didn't. >> Absolutely. Well, the way to do it is, you know, since you're drafting off of.

these other news reports, is to set up. your own tip line. So, Nick, what's your. website or do you have a website where. people can donate? And do you have a tip. line? Because you wouldn't get the. whistleblow awards for the stuff Fox9's. been doing for a decade, but for the. next one, you could. So, what is your. website where people can donate, Nick? >> Yeah, everything just on social media. So they can message me on any platform. I should probably get a website going. Um, so [laughter]. >> Nick, what's your social media handle. where people can DM you and donate?

>> Yeah, it's just Nick Shirley. And if you. go on X, I do have my tip section open. So if you would like to donate there, that gives them all the whether it be. Venmo, Cash App, Crypto, you can all do. it right there. >> So X.com/nickshirley, you can go right there and you can tip. if you want to support this kind of. research. Well done, Nick. >> Thank you. Are you spending all your. time in the US or are you still thinking. about some international stuff? >> Yeah, I have a international trips. planned for this month as well that I. had planned before this because it's.

funny that like everyone's talking about. this fraud stuff, but I I have a. business I have to run with my YouTube. videos. I've been posting every week. consistently for the past 104 weeks or. so at this point. And so I have to keep. moving on and keep producing content for. my followers. So yeah, I do have other. videos and I have other places I'm going. to go film as well. Look into those. whistleblower laws. I think uh. >> Yeah, make some money. Make some money, [laughter] man. >> No shame in the profit. You probably get. a ton of investors. >> Yeah. Yeah. I need to look into all that.

stuff. So, it's been cool. Like the cryp. I've had like some crypto communities. that have like even like funded money. I. have I'm like just down on my laptop at. night and people are sending me money. I'm like, what's going on? >> It's awesome. >> Well done. >> What's the sweatshirt you're wearing? Just show us the sweatshirt. the quality. of. >> lyricsing. center. Is that for sale now? Is that. the merch? >> Yeah. I'm going to go do a video outside. of it right now. And uh. >> you put on your YouTube channel for. merch? >> Yeah, I'll put on my YouTube and I'll. just put like on X. I'll probably like a. one time drop. >> Oh my god, dude.

>> You saw the guy who I guess runs that. place or owns it. He had a video on X. today saying that. No, no, no, no, no, no. This is a real daycare center. Nick. just happened to come by in the morning. and that's when all the kids are at. school. So, he just came at the wrong. time. >> What was super funny about that too is. the Department of Children was doing a. live feed at that same time and she said. that the daycare had was closed one week. ago and it closed after I posted my. initial video. So, like while he while.

he was saying that it's open, the lady. who runs the whole thing or runs. something in the government said they. closed it last week. >> Sorry, Nick. Just one before we lose. you, do do you have evidence or have you. collected evidence that people within. the agencies are part of the fraud. syndicate and that they're participating. in the fraud? It's hard to say like that you have like. the paper trail of it because you don't. it's hard to get get me the access to. that. But um I think if you just look at. like Elon Omar's net worth, if it's true.

that went from negative to 30 million. since she's been in Congress. >> Yeah. Let's Yeah, let's make sure we put a. couple allegedly. >> No, it's all over Yeah, you're right. It's all over social media, but. >> Yeah, which means it could be wrong. It. could be wrong. >> I haven't seen a fact check. I mean, I've not seen it. >> Always put an allegedly there. Just. >> Yeah. Also, I think I think Congress. people can report a range. I think the. range is 6 to 30. So, they use the. upper, but let's just throw in a couple. of allegedly. >> Still, she went from negative to being a.

multi-millionaire in. >> I'm not debating that. I think the trend. the trend is quite curious, Nick. I'm. not talking about the federal. congressperson. I'm talking about people. within these agencies that are signing. off on the check, signing off on these. centers. In your investigation and the. conversations you have, do you have. reason to believe that the individuals. within the agencies within the. government agencies are complicit and. partnering and participating in the. economic fraud? >> Yeah, 100%. Because a lot of these. daycarees, there's six, seven violations.

and they're still continuing to give. funding to these daycarees. Um, and they. have the same name, the same person has. opened up. I was in one of their fraud. committee meetings. The same person had. been opening up daycarees and healthcare. companies and it was all big. W They had. all the they had all mapped out and. somebody from inside the government in. Minnesota still continuing to write. these checks. So, >> they're not they can't be dumb, right? They can't be that dumb, I guess, is the. point. Well, I mean, it's possible that.

they're totally incompetent or they're. turning a blind eye or they're getting. payments. Probably one of the first two, but who knows, right? >> Well, the thing with the money they're. receiving is that CCAP money, it's a tax. exempt. And so, they they literally get. like the the money and they get it in. cash somehow. They don't pay the women. that are working there. Like, there's. videos of them just handing the ladies. cash. In Muslims, they're able to have. four wives and so they're able to. collect the welfare on top of that. That's why 81% of the population, small. population side of Minnesota is on. welfare because they're actually not.

paying the people. They're just. collecting the welfare from it. And then. if you go into any of the grocery stores. here, they're not grocery stores. They. have like six different shops inside of. them. And they all have money. transferring sites inside there where. they're just siphoning money out to. other countries and back home. And a lot. of time you can there's actually a Fox. did a thing on it in 2017. Um, and I. actually had somebody who's going to be. in my next video talking about this. He. used to work at TSA. And the Somalians. would literally bring in millions of. dollars in cash through TSA and they'd.

fly from there to Atlanta and then to. Dubai and then cuz there's no taxes in. Dubai, they then send that money back to. Somalia. And so like the rumors of them. funding al-Shabaab, they're real because. they've been able to funnel all this. money and once they go through the TSA. with a luggage full of cash and they. make it to Dubai, they're able to send. it to wherever they'd like. >> That's a terrorist group or. >> Yeah, the terrorist group. Nick, let me. ask you another question.

In the last two days since your video. went viral, we've seen the mayor of. Minneapolis and the governor come out. and effectively say, "Hey, we need to. protect this community." Why do you. think the leadership is not up in arms. on the obvious fraud that you've. demonstrated so clearly? Why are the. government officials within Minnesota. not throwing their hands up saying, "We. have to make this stop right away." Why. are they taking a defensive posturing? they're like incompetent or do you think. there's like complicit behavior here? >> It's because if there that's such a.

large group of votes that they can. receive and David said it as well, there's some weird voter fraud that's. also taking place here where you just. literally need a license. Like even in. one of their committee meeting meetings, they said that. But essentially like. this happens in the UK too is that when. they bring in uh specifically Muslims to. a lot of these areas and then comes time. to vote, the leader of the mosque or the. leader of this apartment complex will. say, "All right, everyone, now it's time. to go vote and let's go vote for this. person." And because it it the the.

it's tough because of uh Islam and. everything like their religion. like they should be more conservative if. they're actually voting off what they. care for because of their values, but. they're always voting democratically. They're always voting for the Democrats. Like if you people are going to give. more money. and so they're not really voting for. what they actually believe in. They're. voting for who's going to keep funding. them and who's going to keep writing the. checks. And so that's why you'll see.

them going to eat at a Somalian. restaurant and you can tell the guys are. ready to barf when he's trying to put. the food into his mouth and then the. lady putting the hijab on inside of one. of their grocery stores. It's just all. panhandering to get the most. >> Nick, you mentioned this terrorist. allegation and the funding of terrorism. from the social programs. Is that. something you've firsthand investigated. or something you read online or. something you talked to an insider. about? Can you unpack that first because.

that's a pretty explosive one and I know. Bessant has mentioned it but you can. unpack your firsthand knowledge of it if. >> well there's the reports from 2017 and. then it's also came out still coming out. and people are talking about that. I. think even the government, the US. government has said that as well. And. also I've talked to people as well. inside of these grocery shops where they. have 10 different stores and I asked. them like what do they do and they have. these shops where they wire off the. money to Africa. >> Right. But specifically the funding of.

terrorism, you don't have firsthand. knowledge of that just to be clear. >> Well, I don't think uh Somalia I I don't. think it's like very ran very well. So. >> I mean there's a lot of corruption. there. I mean when your main import and. exports pirates and piracy I don't think. that's probably the best thing. >> Okay, got it. Just want to confirm. because it's like a explosive. allegation. Want to make sure you're not. saying you know this. >> said it on national TV today Jay Cal. this morning. >> Yeah. No, no, I know. That's why I'm the. way Nick phrased it. I wanted to make.

sure if there was firsthand knowledge he. had or if he was just referencing the. the best and stuff. >> Yeah, it's really tough to say like it. firsthand because it's always like how. how does somebody just go get the. papers? And so that's why you. [clears throat] rely on the government. for instance like he just said like. Besset comes out and talks about it and. so like it's our responsibility to keep. investigating and looking into it and. then also trusting the people that we. trust. >> Is that going to be your international. trip? Are you going to go try to track. that down on the international if even. $1, if even $1 went abroad to a terror.

network? >> This is an entirely whole new kettle of. fish because now you're not just talking. about domestic fraud. Now you're talking. about international terrorism. And now. you're going to bring in every single. agency of the United States of America. who will have an opinion. >> Yeah. >> That is bad news bearsers for these. guys. If this is true, >> I'll tell you where you double clicked. on it. This is like this could be the. next story. >> Watch out. Yeah. And I'll tell you where. I have the most concern as a citizen.

I'd be most concerned about these. members of the government that are. complicit or turning a blind eye to. allow this capital to flow to. individuals who then turn around and use. that capital to make donations to those. government representatives campaigns. If. that paper trail is found that the. government representatives are causing. money to flow basically back into their. own pockets or their own campaign. coffers, that to me is the most. offensive thing as a citizen that not. only are they fraud, but.

>> we already know that. >> I've had mayors in California tell me. about that. Um who've given me firsthand. accounts of them knowing the family. members of people inside of the. government opening up nonprofits and. then that's how they get a lot of. campaign money. >> Yeah. Look, there's a very important. word here that we haven't used. We've. talked about incompetence, greed, theft. There's a very important word, patronage. This is a patronage system. An exac account called Amuse wrote a. really good blog post about this. Let me. just read you this part. Basically, this. fraud is is not incidental misconduct.

It is the patronage system operating. exactly as designed. Large welfare. states generate predictable cash flows. Fragmented bureaucracies create blind. spots. Language barriers, slow audits, cultural difference paralyzes. enforcement. When one operation is shut. down, another opens under a new name, a. new board, and the same people. Money. moves through layered nonprofits, shell. entities, and informal remittance. networks. Accountability evaporates. And. then, crucially, the system does not. require that all patrons be Somali. It.

requires only that patrons be paid. Non-Somali politicians learn quickly. They adopt the language, symbolism, and. rituals of the community. They attend. the right events. They avoid. uncomfortable questions. In return, they. receive votes. Campaign muscle and money. and insulation from accusations of. racism or Islamophobia. Investigations. stall. Prosecutors hesitate. Regulators. retreat. The system expands. And play. this video. This is of Tim Waltz. Just. play that video. >> Whoa. Wait a minute.

This is Tim Walsh, the governor of the. state, replacing their old flag with a. new flag that's designed to resemble the. flag of Somalia. >> So the allegation, Saxs, just to be. clear, is they are giving this money. knowing it buys votes and knowing that. >> Somalian community is incredibly. wellorganized in Minnesota. There was an. interview with the attorney general. where he was saying that this is another. ex video that you can find. I think his.

name is Keith Ellison. Anyway, he was. saying that the Somali community was. incredibly potent politically and was a. big reason why he got elected. And like. I said, it's very well organized and. they're turning to get their votes by. giving them this money to steal. >> It's not even a question. It's a fact. that that's why they're g only after and. so they're they're allowing the fraud to. happen because of the votes. Wait, that's just again that you're saying. that's a fact that they are.

>> Please don't act shocked. Come on. >> No, no, no. It's a It's an allegation. I. I just I would I would tell you a. journalist in training Nick to put. >> You think that's a coincidence allegedly. in the front of these things until you. actually know it's. >> Where did that new flag come from? >> I I I'm not saying it's not pandering to. them, but to say it's quit proquo. Just. >> that's the same thing. Yeah. In instead. instead of taking Sax's advice here, my. best advice, put the word allegedly. until you know it's a fact. Don't say. it's a fact. Unless you know it's a. fact. >> Allegedly. Okay. >> Yeah. Just just so you don't get sued.

and you know. >> I mean like is speaking the truth like. criminal because it is a fact. >> Okay. Great. You say it's a fact. >> How much more proof do you need, Jacob? >> No. No. It's. >> You won't believe it until Tim Walls is. caught on video accepting an envelope. from, you know, one of these small. frauders. Not my point. My point is this. is political patronage and look, a lot. of it is incompetence and they probably. didn't think they're going to get. caught. But on top of that, it's turning. a blind eye to an obvious problem. because it's going to alienate a.

critical demographic who supports and. has supported you in all of your. elections. It's that simple. >> What's the poly market say, Jay Cullen, whether Waltz is going to get. prosecuted, go to jail? >> Let's find out from our friends at Poly. Market. Tim Waltz charged by dot dot dot. and there's a lightly traded uh $60,000. 9% chance. >> 29% before 2027. >> and here's your other poly market will. anyone be charged over daycare fraud in. Minnesota by.

the end of January the end of June the. end of December 56 91 94 so people are. betting somebody is going to be charged. over this and if Tim Waltz is. specifically knows about this and did it. to buy votes and that can be proven, he. should go to jail. And if he knows and. anyone over there knows that this money. has been routed to a terrorist. organization, that would be treasonous. and that would be an even higher level. Uh so we need to investigate this. massively. So if Besson is listening, friend of the pot, yeah, double click,

double click, double click. >> It's already on Scott's agenda. That's. why he talked on TV talking about it, dude. He's been all over it. >> You can't hide now. that that this is. Pandora's. >> as part of that investigation. Someone. needs to investigate why these three. liberal judges have repeatedly refused. to hold Somali fraudsters accountable. even when the evidence is overwhelming. and a jury has convicted them. >> Unbelievable. >> These three judges set aside. convictions.

>> Well done, Nick Shirley. And uh next. time you have a great office, >> please come on the pot again and and let. us know. Thank you. I appreciate you. guys. Appreciate all the side of. history. >> Support on uh X and everything like that. means a lot. >> And believe me, there's there's a ton. more in California. >> Okay, let me just go around the horn. here. Lightning round Sachs. A year from. now, what will happen in relation to. what we've seen in Minnesota? >> Well, I hope that there will be a. serious investigation. I hope that there. will be indictments. I hope there will. be deportations, hopefully massive.

amounts of deportations. And I hope. there'll be impeachments of some of. these officials who let the fraud. happen. >> So the country is being eaten alive it. feels like by fraud. Government funds. are being stolen. Votes are being. stolen. I believe elections are being. stolen. And it all comes from the fact. that the party of government doesn't. really care where the money goes. It's. all just patronage to them. Whether it's. to Somali daycarees or whether it's to. this high-speed rail line that doesn't. have one piece of track. I mean, how.

much has California wasted on that? >> Yeah. >> Or 24 billion to the homelessness only. to see the homeless population increase. Look, these politicians don't care how. the money is spent at all. All they care. about is rewarding their supporters. That's the whole game. And then those. supporters round trip a portion of the. illotten gains they've gotten from the. government back to those politicians. That's the whole game. And then when the. whole thing blows up because it's just. so corrupt and inefficient and so. absurd, what do they do? They try to.

find productive people to scapegoat. And. they say that billionaires are your. problems. They'll blame billionaires for. that or they'll blame the tech. community. Look, the startup community. or the tech community is one of the I'd. say last extremely well functioning. parts of American society, but they. don't control it yet. And so that's what. the politicians will do is they will try. to find scapegoats to expand their. control and expand the size and scope of. the corrupt system that they're running. >> Freeberg, what do you think a year from now, where.

will we be? And. what do you think this um says about. America at the end of the empire? And. yeah, which you've been focused on. Yeah, >> probably two things. [clears throat] So. this is like everyone pocketing the. silverware as the Titanic is sinking. because the spiraling spending, the lack. of audits, the lack of accountability. effectively enables an environment like. this because we've basically increased. government spending so much to basically. try and grow the economy, prop up the.

debt, keep the debt service payments. flowing, etc. So as a result, anytime you have a. bubble, and in this case, we have a. bubble in government spending, you have. frothy, fraud behavior. There's my guess. tip of the iceberg. Elon's estimate was. 20% of federal spending falls under this. kind of fraud camp, could be more. And. then when you add in state and local. spending and you start to do the. accounting on all of this, we're. probably talking about a sizable. percentage of overall GDP that is.

effectively theft through government. agencies or government checks being. written. And I think that's going to be. the great uncovering of 2026 is we're. going to see on the order of trillions. of dollars of. >> trillions. >> trillions of dollars of this sort of. behavior happening across the economy. And I also think the other side, nothing. will happen. And and I think nothing. will happen because the cost is going to. be so significant. It's almost like. staring into the abyss. It's gonna make. people feel sick to try and address it.

>> Actually, let me ask you a question. How. do you differentiate between legal theft. and illegal theft? Meaning, I think what. the Somali daycarees were doing was. outright fraud and is illegal. But when. Stacy Abrams creates a NGO in the final. days of the Biden administration and. that gets stuffed with$2 billion. dollars, I mean technically I guess. that's legal, but it's clearly a. different kind of theft and fraud. >> Would you throw up in your mouth when. you heard the news? That's the that's. [laughter] the test. >> That's the little test.

that Yeah. And I call that the common. sense vomit in the mouth test. If you. don't pass the common sense vomit in the. mouth test, it doesn't matter whether. it's legal or illegal. It's up. and you'll realize that pretty quickly. >> Chimath, your thoughts on what we just. discussed and maybe a year from now, will any of this change? It is a. crucible moment for American society. If nothing happens and we deem this kind.

of theft acceptable, it is the beginning. of the end of the American Empire. It's just a level of. disrespect and. lack of care. for this country. I think so. I will be. waiting and observing how important it. is to root this out. That's number one.

The second, which is more tactical. political calculus, this is an enormous. opportunity. for the Republican party. If they take. this and run with this, is there waste, fraud, and abuse in every state? Absolutely. I don't think this is. endemically a Democratic problem, but. the scale of it is so gargantuan in. these Democratic states that if the. Republicans don't take advantage of it,

I think it is a huge political. miscalculation. So there is this. tactical opportunity which I think if. you want to have a chance in the. midterms and if you generally want to. have a chance to. level set the country you must take this. and run with it. >> Yeah. >> And separately if as Freebrook says it. does die on the vine. it is the beginning of the end of the. American empire unfortunately. >> Yeah. I was thinking the same thing as. you. These Democrats have nothing to.

hang their hat on. They have no. platform. They're lost. They're a drift. If you know, it's going to be impossible. for Gavin to do this because there's. been so much corruption in California. But if he did, theoretically, Gavin. Newsome, Josh Shapiro, Pritsker, if they. came out and said Elon was right, Doge. is the right idea. We should take what. Elon did and we should take every. agency, audit them, and we should. prosecute anybody and fire anybody who's.

incompetent, prosecute anybody who's a. criminal, and we should cut these. programs, you know, 10% a year for two. or three years and tighten them up and. make them perfect for the American. people so we can lower taxes and we can. provide better services. And that's my. platform for 2026 and 2028 for. president. that is going to be the. easiest path to victory and rebooting. the failed dopey Democratic party. >> Yeah, I think you're you're right, Jay. Cal. If the message from both parties is. enough is enough and let me just end on.

an optimistic note and they say enough. is enough. We've seen it. It's. staggering. We are going to fix it. That. is the party's message. That is the. country's message. That is the. government's message. Whether they're. holding hands or yelling across the. aisle saying, "We're going to fix it.". No, we're going to fix it. It's an. opportunity. And the reality is if the. fraud, waste, and abuse is of the scale. that it seems it might be based on what. we're just seeing with the tip of the. iceberg here, then there is a very. significant opportunity for us to.

significantly reduce government spending. and get out of the debt spiral at a. federal, state, and local level. If it. is this easy to just stop this sort of. and you could actually save. trillions of dollars of wasteful. spending, we could be in a very good. position with a growing economy. Here's. why I think it will actually happen. I'll build on something that Freeberg. and I talked about over the holidays. last week. We were talking about all of. this fraud in California and he said, "Chimmoff, mark my words, wait until the.

bond market sniffs out how fake and. propped up the California economy and. balance sheet and pension system is.". and he said, "You're going to see these. bonds run because those folks don't care. about anything other than the ones and. zeros of their own financial survival.". I completely agree with that. So, if you. take that to the limit, the optimistic. part of this is that now that this is.

being exposed, you are going to see risk get repriced. And if risk gets massively repriced and. MUN the bed and a bunch of state. bonds the bed and a bunch of these. issues get broken, these folks will have no choice except. to run and hide and cover their ass. >> and and that is a very and by the way so. that falls on the feet of a lot of. people outside of the United States who. when they see this issue will have a lot.

less tolerance even if Americans. may not run to solve it. So the good. news is that there is an overwhelming. amount of debt in the United States. There is an even larger amount of debt. that's owned by outsiders. and those folks fortunately I think will. have zero tolerance for this. They will. want their debts paid back. >> This is so key because mun bonds have. been the tax-free stable. I mean I've. tra. >> tax advantage but not for much longer.

If you if you know that this is. happening. >> yeah if you break munis. >> you can't underwrite this. I mean what. happens to bridges and schools and all. these in order to build infrastructure. you need these mun bonds to work and it. all starts with three words Elon was. right that's why I said at the beginning. the first Democrats to say Elon was. right they are going to win the prize if. you don't say that you don't win the. prize. >> I don't think they're going to say that. >> those are wonderful sentiment those are. wonderful sentiments Jay Cal.

>> but Democrats can't do that look. Democrats denouncing government waste is. like Don Corley Leon denouncing the. mafia. Okay. [laughter]. >> It's a myth. It's an urban legend. >> No, that is what they are. It's not like. it's like. >> the Democrat party is the party of. government waste and spending tax. It's. the party of government, okay? And they. just want the government to be as large. as possible. And if a big chunk of that. goes to fraudsters, so be it. You know.

what? Those fraudsters are donors, too. And that's the issue here is this is all. just political patronage. So yeah, you. know, it would be a smart strategy for. some Democrat to say the words that. you're saying. And in fact, Roana just. did. He said, "I support having an. investigation to root out government. inefficiency.". >> Perfectly to our next story. Thank you. for the master. >> I don't I don't believe them. I don't. believe them because they are the party. of government. And so and it's the. Republican party when it functions well.

>> is the party of the people, >> right? It's a party of everyone else. >> No. When it functions well, it's the. party attack comes from the rich. And. Trump marshals that populist energy. >> So, it's got to come from the. Republicans may not deliver. >> I'm not saying the Republicans are. perfect, but the Republicans, let me. just explain to Marshall that populist. energy. >> Okay. Go ahead. >> The Tik Tok of this is you have all this. fraud. >> Let's say in California. >> or Minnesota, you're going to bury it. Okay. Per Freeberg. Nobody wants to do.

anything. They want to just sweep it. under the rug and keep it going. Okay, the fraud needs to keep going. The. deficits keep growing because again, it's fraudulent, right? You're not. accomplishing your goals. You keep. raising taxes and eventually people. start leaving. First, it's the people. that can leave, then it's the people. that must leave, and then you have. whoever is left over left over. Now your. tax roles actually start to shrink at. some point and your deficits start to. become bigger and bigger again because.

you've decided to not root out the. fraud. The bond market will look at that. and they will throw up in their mouths. first. So they will pass the throw up in. your mouth test that Freeberg talked. about and then they are going to down. the throat of these state balance. sheets. That is the technical term that. I want you to understand down the. throat. And what that means is that the. 401ks and the pension systems that all. rely on these mun bonds and all these.

tax advantages to actually generate. yield will start to turn and it will be. the fault of these politicians who let. that happen. And what I am warning all of the. governors and all the politicians that. listen to this pod is you need to get in. front of this issue because even if you. think the voting population will not. force you to do something, the financial. markets will. And now that they seen. this, they will not stop. They will.

repric and repric and repric this risk. until they get you to capitulate. California has half a trillion dollars. of bonds outstanding and the state of. California is looking at an 18 billion. dollar deficit. They're going to. continue to issue bonds over the next. year. That number is going to climb to. 30 billion. So, the bond market is. crucial for California to continue to. operate. This is the world's fourth. largest economy, the state of. California, and it is already in a bit. of a fiscal bind. Not to mention what.

we've talked about in the past, which is. the looming pension obligations. The. state of California is going to have to. borrow somewhere on the order of. another, this is going to sound crazy, half a trillion dollars plus in order to. pay out their current pension. obligations. How the hell is that going. to happen? The US government will give. it to them. That's it. That they're. going to go to the Fed. Obviously, they're going to try to get bailed out, which is what the states always do. Just. go for the bail out. >> My point is the pressure the pressure is. on. And I think Chimath is is right that.

this market is going to start to. basically put pen to paper on the. reality of how things are operating. It's not just going to be. >> And by the way, we're about to light the. spark, which is the billionaire tax act. Once the BTA, if it gets on the ballot. and gets passed, it lights the spark on. the death spiral of these states. >> Right. Yes. >> Yeah. I think you're all right. I think. you're all right. And I think Jay's. right about you. Look, California, Illinois, New York, these states are all. in a death spiral. They're all in the.

process of collapsing. And they will try. to get bailed out by the feds. That's. their only potential savior cuz they're. not allowed to declare bankruptcy. By. the way, that would be a good thing if. states could declare bankruptcy so you. could unwind some of these crazy. obligations they've taken on. But you. can't do that. So, they will go to the. feds. And I think they're all just. trying to hold on until they can get. Democrats elected back in Washington. So. 2028 will become a very very important. election because this going to determine. whether these states have to finally.

make ends meet or whether they will. basically just try and federalize their. problems. >> No, the bill always comes due. That's. the truth. The bill always comes due. >> I've gone through that scenario analysis. with a bunch of macro folks and a couple. of external. central bank folks. That's not going to. happen. And the reason that's not going. to happen is then you'll see a 20 to 30%. of the bond buyers just leave the US. bond market. And so you will have. auctions that start to fail. This is. what I'm saying. There is no way out for.

these states. If the states think that. they can fail and they will federalize. it, that's not going to happen. Because. once whoever is the then sitting. secretary of the Treasury starts to call. and says we're going to run this. auction, they are not going to like what. they see. And the reason is because of. what Nick Shirley has exposed. Because. everybody will go back to this and say, "Hold on a second. If you could have cut. 20 to 30% of all of your budgets over. the last 10 years, that's 25 or 30. trillion dollars you could have used to. pay down your debts and you chose not to.

and now you want to come to us." So I. just think that it's an untenable. situation. The dollar will basically. have decayed in that entire process. another 90%. So, whoever is sitting in. the seat of government at the federal. level will not be able to do anything at. that time. That could be 28, it could be. 32, it could be 36. My point is, this is. just a wakeup call for America. We don't. have a choice. As much as you thought. you could hide it, you can't hide it. anymore. So, you're just going to have. to clean it up.

>> Do you think that Gavin Newsome will cut. $1 of state spending? I don't think so. >> No, no, no. I'm What I'm not I'm not I'm. not saying he will cut a single dollar. of it proactively. he will try to keep. the gravy train going growing. What I'm. saying is whoever is the then secretary. of the treasury, if somebody goes. bankrupt at the state level and they ask. to federalize the debt, what he or she. will do is sensitize the United States. balance sheet to absorb that and then. have to go and see who's willing to buy. the debt of the United States of America. to backs stop that. What I'm saying,

David, is that's when it fails. >> That's your prediction. Yes. And it. makes sense. Yeah. >> I think that these scenarios can be run. now. And I think that that's why it probably. makes sense for the Federal Reserve and. all these folks to basically write the. white paper now that says we're not in a. position to do it. So the states get the. memo. >> This is all going to require. somebody to get elected who has the. platform of austerity and fiscal. responsibility. And. >> you don't need austerity. These programs.

can work. Stop pilfering and stop. stealing. >> Number one, it's. >> be competent. >> Yeah. But it's going to require a. message to the American people, Chimath, that I am not going to allow not only. fraud, which people agree on, but we're. going to need to have some level of. austerity as a country. And nobody has. gotten elected on that. >> You don't need austerity. >> You need fiscal responsibility. I do. think that is different than austerity. You don't need to cut these programs. These programs don't work. They don't. work because everybody's stealing all. the money. Why don't you first spend the.

money for what you told us you were. going to spend it on when you asked us. to give you the money and forced us to. give you the money, then measure it, then tell us it's not working and before. you ask for more. >> I mean, I I I think this is the core of. this issue is going to be can somebody. get elected on the platform of fiscal. responsibility and nobody has been able. to. I will say this, we did have, I. think, a bit of impact on this podcast. when we kept harping on, you know, lowering the deficit. Even though that.

hasn't happened, it's still top of mind. in the country. And I think putting. above that, my number one issue going. into these elections going to be who is. Doge positive and will run Doge at all. levels of government. If you're not. willing to say, I attack fraud first and. then second, balancing the. budget/reducing the deficit, then why. are you even running for office now? You. have to do those first two things. If. you don't do those first two things, everything's ex existential from that. point on, which leads to our next story. >> Well, I hope you can admit that closing.

the border was a big win in this regard. >> 100%. like that was long overdue and I. was wrong about how many people were. coming in because it made no logical. sense to watch it go like this and my. hand is going straight across at a. million a year or so and then pop up to. three or four and there was no data to. support it other than people sharing. random clips which I don't trust. The. the border problem has exacerbated this. massively because there are some there. are states giving entitlements to people.

who are here illegally. That's insane. And if we want to maintain a low. unemployment rate while jobs are. displaced, the best way to do that is to. shut the border and not let more people. in because they're going to take jobs, obviously. So, that actually could be. the mitigating factor in all of this. And it's probably the I would say that's. the topic that got Trump elected. Uh the. number one reason Trump got elected is. because Biden was a was is scenile. And. the second is because Kamala was an. idiot and couldn't even debate. So you. take those two things together, you.

know, the third issue was obviously. immigration. Okay, but we have to get on. to this next story because I don't want. to run out of time for it, which is. California wants to do an act called. BTA. This act stands for Besties to. Austin. This is the Besties [laughter]. to Austin, and it's marked. Two of four besties, I. believe. >> Well, no, no, four of four. The other. two are actively looking for houses. We. just haven't. They're circling. They're. They're in India. >> We haven't found something we like. I.

don't want to say where I'm living, but. >> Okay. Besties to Austin, boys. Let's go. Ride them, boys. There's the. four of us on horses. Let's go. Let's get some Terry Blacks. [laughter]. Oh, man. Sax and I Terry Blacks eating. beef ribs with our shotguns and our. pistols. It's going to be a good time. Let's go. Uh anyway, we brought this up. back in October. A lot of people taking. victory laps. U but we got on this. first. This tax for billionaires is.

going to target residents with over a. billion in net worth. The history of. this is really interesting. Freeberg, why don't you walk the all-in audience. through how this came to be? So, California has a direct democratic. ballot process. So anyone can file for. something to go on the ballot and it. allows them to get around the state. senate and the assembly and basically. allow the citizens to vote directly on. an issue. When they make a filing, it. costs $2,000. Anyone can file for a.

ballot measure and then you have to go. collect signatures and you have to. collect roughly 900,000 signatures. Once. you've collected those signatures, it. makes it on the next ballot. The state. attorney general looks at it to make. sure that it's legally compliant and so. on. They write their summary of it and. then it makes it on the ballot. people. vote for it and if it votes it passes. So in this particular case, the. billionaire tax act as it's titled which. is likely going to get retitled when. it's finally filed for people to review. is a 5% tax on the assets of anyone.

that's got a net worth over a billion. dollars. It was proposed by a guy named. Dave Rean who runs SEIU which is one of. the unions in order to make up for the. healthc care shortfall. that his members are going to be. experiencing. So, this was not a broad. coalition that filed this. This is not. filed by the state. This is not filed by. anyone in the Assembly or the Senate. This is one individual at one union. that's put it forward and is now trying. to collect signatures to get it put on. the ball. >> To be clear, I just want to read it back. to you. It's a union leader who has a.

shortfall in health care for some number. of members. I don't know how many. members are in that union. and they just. came up with the idea, people hate. billionaires, we'll seize their money, 5% of it, to get health care for our. members of this very specific union. >> And the truth, the truth is it's. actually been set up as a negotiating. technique. So, it's primarily it's it it. may be. Yeah. I mean, look, there's a. momentum behind it at this point, but. it's fundamentally a point that creates. leverage that allows this individual to. go out and negotiate with other parties.

to try and find a way for this money to. show up so that he can reduce the. healthcare costs for his members, which. is what his objective is. And this is. the way the direct democratic process. works in California. Now, it's not the. first time a wealth tax has been. proposed in California. And I want to be. really clear on this. I think this is. very important for everyone to. understand. Forget the term billionaire. Forget the term wealth. What we are. talking about and this is now being. proposed in multiple places in the. United States and there's also a federal. bill being proposed several federal. bills that have been considered. We are.

talking about for the first time a tax. on individual people's private property. not on your income. So the way taxes. work today is when you earn income. either via labor so you collect a. paycheck or via the sale of an asset. So. you sell a house and make a profit or. you sell a stock or bond and make a. profit. You are earning income and you. pay a tax on that income and you only. pay taxes when you realize income when. you sell something or do work and get a. paycheck. So only when you get paid. cash. So for the first time ever we are.

talking about placing a tax on people's. private property that hasn't turned into. cash. For example, you own some real. estate, you own an apartment building. >> Well, I think it's worse than that. I. think it's worse than that because a lot. of people were calling this an. unrealized gains tax, but it's not an. unrealized gains tax. You could have. realized, let's say, let's say that you. had just had a a big outcome. >> and you sold your stock and you made a. billion dollars. You were fully paid up. on all of your taxes. >> Let me Yeah, let me just say not even a.

billion dollars, right? >> Forget about a billion. Let's say that. this asset tax because in some cases. it's being proposed on anyone over 50. million or anyone over a million dollars. >> in the country and and wait a [laughter]. second. This story just got really. important to me. >> in the country of and this is why this. is such a principled discussion and I'm. trying to avoid this current California. thing as the primary topic because there. are multiple of these being proposed. around the country and they have been. tried in the past. You sell a stock or. you do some work, you make some money, that money now sits in your bank.

account. You've paid your taxes on that. money. You sold your stock. You sold. your house. You did your work. You got. paid. You pay your taxes. After you pay. your taxes, the government comes and. says, "Hey, how much money do you have. in your bank account? What's the value. of your car? What's the value of the. thing that your grandma gave you? Give. me the value of everything you have in. your house. Add it all up and give me a. percentage of it." That's what this is. It's a private property seizure. It is a. seizure of your assets to pay a tax. based on all the things you own, even if.

you've already paid your taxes on all. those things. Correct? Now, this has. been tried and I'll give you guys a. couple of. anecdotes about this. In France in 1988, 1989, they passed this millionaire tax. Anyone with 1.3 million euro or greater. net worth had to pay a tax of like 1% a. year, 1 and a half% a year of their. total assets. And it raised 4 to 5 billion euro a year. in new tax revenue. But what. happened?€200 billion euro of net worth.

left France and the total income tax. went down by 8 billion. So they ended up. seeing a complete reduction in overall. tax revenue for the country of France. when they passed this. So by the year. 2018, they tried to revamp it a bunch of. times. They never got it to work. 20. years later in 2018, it got completely. turned off. So there's no longer this. asset tax in France and that was a small. asset tax. The reason they're calling it. a billionaire tax is to make it easier. for people to vote for it and sign up to. this entirely new tax system that.

they're proposing to put on all. Americans at some point in the United. States and for the first time ever. degrading our private property rights. Forget about how much wealth you have. Forget about how rich you are. Forget. about the term billionaire, millionaire, whatever it is. We're creating or. proposing the creation of a new tax. system that allows the government for. the first time ever to come in and audit. everything you own. All the jewelry your. grandma gave you, all the value of all. your couches in your house, the value of. your car, the value of all your stocks.

and bonds, and the government can now in. and for the first time look through the. veil into your personal property and. say, "Here's how much all this stuff is. worth. I'm charging you a percentage of. that. That's what I need to get paid.". And it doesn't matter that it starts. with billionaires. What matters is that. we're giving the government the right to. look into our private property and take. a percentage of it every year, which is. different than an income tax where every. time you sell a stock or bond or your. house or get a paycheck, you pay tax, which is totally reasonable because all. of that is trackable and that's a. transaction that's happening legally in.

the public and so on. So, the government. has a right to look at that stuff, but. we're giving the government the right to. look into our private property. Now, I'll say another thing. It's totally. reasonable to say that billionaires. aren't paying their fair share of taxes. And it's totally reasonable to say that. ultra high net worth people aren't. paying their fair share in taxes. They. pay an income tax, but the truth is a. lot of ultra wealthy people borrow money. against their assets and live off of. that borrowed money so they never have. to pay taxes by selling the stuff that. they own. That's the core fundamental.

issue that people are trying to address. when they say that folks aren't paying. enough. And there's a simple way to. address it, which is to charge them a. capital gains tax if they borrow against. their assets that they haven't paid. capital gains tax on. Very simple that. can resolve this. Another thing you can. do, you can raise the capital gains tax. rate. Sounds unpopular. I don't agree. with that, but that's another way to. deal with this, which is take the. capital gains tax rate from 20 to 30. Make it sound more make it more like an. income tax. You could do that. And I'll. give you guys another statistic. In the.

state of California, these billionaires, there's 200 of them. The total net worth. of billionaires in the state of. California is $2 trillion. So you're talking about raising hundred. billion on this onetime 5% tax or as. Roano would say 20 billion a year. California is looking again at a $1.5. trillion liability hole that it's. facing. Taxing billionaires doesn't. solve any of our problems. We have more. fundamental problems with respect to.

spending and the overall debt levels. that we've already taken on. And if you. tax billionaires of the whole country, let me give you guys the statistic on. this. There's about 900 billionaires in. the United States. The total net worth. of billionaires in the United States, $8. trillion. So if you took, let's say 1% a. year, every year you take 1% of the. billionaire's worth, that's $80 billion. of income for the federal government. every year. That will pay 20 days of. interest on our debt. 20 days. >> Yeah. The real money is in the middle.

class. The net worth of the United. States, the middle class, and everyone. else is 170 trillion compared to 8. trillion of the billionaire. >> They need a way to open the door so that. they can go after the real honeypot. The. real honey. >> So the real the real goal of this, just. so everyone understands, the real goal. of this is not to tax billionaires. because there are other ways to tax. billionaires. real goal of this is to. create for the first time in American. history a private property asset seizure. tax. >> and to use that as a way to take a. percentage because they're going after. the they're going after the 170 trillion.

not the 80 trillion of the billionaire. normalize auditing every American to. understand what they own and then take a. percentage of it every year it's been. tried in France it's been tried in other. countries it never works people leave. >> never worked it normally. >> that's why this is so offensive why not. just raise as you said capital gains or. an here. Yeah. >> The biggest lie in this whole debate. over this supposed tax is the term one. time. They keep describing as a one-time. tax. See, even you said a one-time tax.

It's not a one-time tax. There's no. guarantee in the language of this ballot. initiative that they'll never do it. again. They're not writing into the. Constitution that, okay, we're just. going to take 5% this one time and then. we're going to prohibit doing it. thereafter. This is the first of many. This is not a one-time tax. It's a first. of many tax. It's a presidential tax and. like you said the goal here is to create. a new I don't like using the word tax. because. >> it's not it's it's a taking it's not. based on. >> income it is it's an asset seizure and.

the idea. >> property seizure system. >> it's a it's a private property seizure. it doesn't matter whether the assets are. realized unrealized whether you pay tax. to do it again. >> but look the point is that it. establishes a precedent that we can. define an arbitrary group of people and. confiscate a bunch of their property. because they're politically unpopular. And if it succeeds here, it it will be. replicated over and over and over again. And obviously, the line will come way. down below billionaires because there's.

not enough money there. 8 trillion out of 170 trillion of. assets. The billionaires aren't the. target. At the end of the day, the. billionaires don't make a dent. If you. took 1% of the billionaire's net worth. every year, even if you took all their. net worth, you still wouldn't make a. dent. You've still got 40 trillion of. debt outstanding at the federal level. and we're adding nearly 2 trillion a. year. It's not going to make a. difference. The impact is in the middle. class. >> Let me tell you another lie about this. >> That's where the money is. >> So when you got into that debate with. Roana, who by the way I think is. actually very smart and as far as. progressives go, I like him in a lot of. ways. But he was trying to frame this.

thing as oh it's only 1% right 1% a year. for 5 years. >> That was the first line. >> Yeah. And again this minimizing language. they're using 1% one time. They're. trying to say, "Well, this is just an. insy beansy little thing." It's like, "We're only gonna use the pinky, not. >> not the fist, right? Uh, we're gonna use. as well. [laughter]. >> Just the tip of the pinky.". >> This just the tip of the pinky here. >> Oh, too much. Too much. Too much. >> Too [laughter] much. No, the point is. they're trying to minimize it because.

they know that the real value here is in. establishing a new precedent that now. asset seizures are permitted and that's. the beginning of basically the. government owning all of your property. In fact, all of your property is. effectively owned by the government. subject to people thinking that you're a. good enough person that you should be. allowed to keep your property. Because. basically what they're saying is look, there's an old line about democracy that. democracy can't be two wolves and a. sheep voting on what they're going to.

have for dinner. In other words, people. have rights. And so you have the system. of of democracy, but you also have this. system of of rights. And those two. things go together. And so we have a. bill of rights. We have protections. There's some things that a majority of. the population cannot take from you. A. lynch mob cannot hold on. A lynch mob. cannot vote to take your life. You have. rights. You have due process. >> I just want to make it clear. Look, I. think what's going to happen is that if. people don't see the forest from the. trees here and this thing passes, it's.

going to get litigated because I think. many of us feel that this is. fundamentally. illegal. That's going to take 6 7 8. years to resolve itself. And I suspect. that it will go all the way to the. Supreme Court. Let's just say that it. does pass. The thing is, it's much. easier for 900 Americans. to litigate in tax court. that this asset was mispriced, that.

other asset was mispriced, because. you're going to be talking about big. chunky things. But by the time that that. rule, if it's valid and it stands, legal. scrutiny, rolls down the hill to 170 million. Americans, they're not going to be in a position to. take it to tax court. And what's going. to happen is that there's going to be. these frameworks and these actuarial. tables and all these other things that. are set up that says, "Oh, you have a. 2025 Lexus. It's worth this." and you'll.

say, "But I don't think it's worth that. It's a little beaten up. I had a car. crash in it. You know, this and that. Sorry, that's the price." And you're. going to have no recourse. You live in a. certain neighborhood. Your house is. worth that. You have a certain asset. Okay. Well, we think it's worth this. Your wedding ring, which is a class C. diamond, it's worth this. And you'll. say, "But, you know, it's kind of nicked. and it's not." Sorry. And when you. multiply that by 170 million people, there is no recourse. And now you have.

this level of taking. which is just I think egregious. And. then on top of that, what are you. actually taking it for? Because we've. now just already proven that you can't. spend properly what you're already being. given. And you're creating some kind of. corrupt money wheel, but you're going to. create this another avenue of just. taking more and more and more. I think. it's crazy. And the fact that this story. broke the same week that you had this. California state auditor released a.

92page report that over $70 billion in. taxpayer funds had been quote lost. I. think that's a euphemism for stolen. It. can't be accounted for, you know, and. this includes things like the 24 billion. on homelessness, the 18 billion for the. highspeed rail where not a single track. has been laid, 2.5 billion for snap. fraud. I don't even think this includes. the 30. >> that 72 billion would have paid for the. healthare and it would have plugged the. deficit. >> and that's kind of where I was going. >> just by not allowing it to leak out. >> And that's kind of my point. But it's.

politically easier to say that you're. going to plug this hole by confiscating. the wealth of an unpopular group or a. group of people that you can demonize as. opposed to actually making the. government more efficient. Because. again, every single one of those. fraudsters who receive the government. payment, they're basically a political. supporter. I mean, those people don't. get chosen by accident, right? It's a. patronage system and they're the ones. who are part of the Democrat machine. You know, this homelessness industrial. complex and all the rest of it. So, they're never going to see cuts.

And by the way, the only reason this. hole happened, this cut, if you want to. call it that, is because in Big. Beautiful Bill, it said that you can't. use federal Medicaid funding anymore for. illegal aliens. That's the origin of. this whole thing. That's why they're. trying to plug this hole. But look, this. is why these deep blue states are. fundamentally broken and probably. unfixable. I don't want that to be the. case. But Sax, is the Trump. administration or Congress, if that's. what it's going to take, going to be.

able to get legislation passed or an. order passed that will allow for. bankruptcy of states? Because some. people, I think you've mentioned this, but some people have suggested that. that's going to ultimately be a path to. resolution on the bad fiscal condition. that these states are in and will allow. them a way to kind of crawl out of the. holes with respect to all the. obligations that they've accured that. they can't actually pay for. >> I just don't know. I mean, I I think. it's a great idea. I think that states. should be able to declare bankruptcy. I. also think that if states go broke, there needs to be a way to put them in.

some sort of receiverhip, right? >> They're not allowed to today, right? There's no mechanism. >> Yeah. >> I don't understand what happens when a. state goes broke, which these states are. on the verge of of being. So, I don't. know what happens. But, you know, to get. something like that passed, either you. do it through reconciliation, get 50. votes. Maybe that's possible. But, I. don't know. I haven't heard a lot of. conversation about that in Washington. Not yet. But it should be on the docket. If anyone's listening, I think it's a. good thing to start thinking about. >> You have the ear of certain people that.

might be able to do something about it. to keep us posted. >> Just to uh do a little self-reflection. here. I always like to think why or how. did we get to this billionaire's tax? And I think the fundamental issue is. that people really don't feel safe in. this country when it comes to healthcare. and housing. We heard that come up with. our guest earlier. He said, "None of my. friends have a home." And then obviously. we hear it come up all the time with, "Hey, can I get some forgiveness for my. student loans?" But just looking at. healthare, the fact that the United.

States does not have universal house. health care is complete disgra. There. are 80 countries in the world that have. it. We are the second biggest economy in. the world. We are the leader of the free. world still to this day. The fact that. we are so polarized as a country and we. have so much fraud as a country that we. can't solve something as simple and. basic as universal healthcare that is. the root of this evil and I think the. technology industry has not participated. in universal healthcare but there is a. solution to it and I think if we as very.

affluent people and as leaders cannot. come up with a way to give the poorest. people in this country and this is not. virtue signaling this is just catching. up to the modern world where people can. feel some base level that they can go. and get healthcare. We're going to. continue to see people go to a. billionaire's tax. We're going to. continue to see people like, you know, the CEO of United Health get murdered. That's where this is coming from. There. is a deep fear in poor people, in the.

lower classes in this country that feel. like, hey, if I get sick, I could go. bankrupt. We must solve this problem. And it's become such a political hot. potato that there's no creativity. There's no plan. It's just fighting and. Obamacare is terrible and you know back. and forth. That's what needs to be. solved. I don't know which politician is. going to be able to create some unity on. this entrepreneurs. >> as poor people get incredible. healthcare. It's the middle class that. gets screwed over. >> Okay. The the people in this country. still feel fear that we don't have.

universal healthcare. And if we solve. this problem, I believe that a lot of. this resentment. >> the problem is the middle class is. getting squeezed because the price of it. keeps going up because Obamacare did not. bring down the price. It made it more. expensive. >> Yeah. So what's your solution? >> You keep wanting to give away for free. >> I know you guys can criticize it. What. is your plan? What is your plan for. doing? And you don't have to give it to. me now, but I think as an industry, we. represent the technology industry here. Sax, you represent uh the 47th. administration in some way. You're part.

of it. We need to come up with a plan. for America. >> If you look at healthare just as an. example and you can graph it, there was. a trend line in the cost of healthcare. It was going up. And to your point, which is fair, under all. administrations, we had not yet cracked. that code. Okay. But there was something. that was massively discontinuous that. happened in Obama passed in 2010, implemented in 2014. And what was that? Obamacare had this one incredibly fatal. flaw, which I still cannot understand.

how these folks did not understand this. They cap the gross margin. Some people. at the extremely high level would say, "Well, that makes sense." Except it. doesn't because then how you make more. money is by just charging more. If you. can only make 15%, instead of making 15%. on $1,000, you'd rather make 15% on. $10,000. That is what's happened. It has just. gotten steadily up up up up and then the. quality has obviously decayed. So if. we're going to unwind this, we need to.

unwind the gross margin caps that exist. in Obamacare and try to wind these cost. curves back to normaly. >> Frag if we look at ourselves globally. I'm curious what you think. Actually, hold on. Let me just. >> You mentioned 80 countries that are. supposedly better than us. Would you. want to have surgery in any of those. countries? Just wondering. >> Oh, for me, I'm rich. I can do whatever. I want. I would go to the best place. And if you look at Americans, >> in your view, >> absolutely America. >> Oh, unless it was plastic surgery, then.

South Korea. >> Yeah. But. >> so these 80 countries supposedly that. have figured it out somehow the. healthcare you would not want to go. there for. >> No, no, >> just wondering. No, I'm just wondering. >> if if you looked at the price to value, which is the point I was about to get. to, >> where would you get your next. proctologology exam [laughter]. >> on the All-In podcast? They have to. remove a gerbble from your ass. Where. are you going? >> I would go to you. You seem to have the. [laughter] most experience. >> I would look to you for a referral. Sax, where did you get your stuff?

>> Good sir. >> But the point is, let's get serious. I. No, I want to finish my thought. Thank. you. If you look Freeberg at the cost. here, knee surgery in the top five uh. you know health care providers that have. countries that have universal. healthcare, it's six to eight times more. for bypass surgery, four times more for. a knee replacement. You know, just. getting an MRI is 5 to 10 times more. than the United States. Obviously, there's some problem here with where. we're paying a lot more than everybody.

else and we're not getting 5 to 10%. more. What do you think if you had a. creative solution? If you put your great. entrepreneurial mind to this, how do we. solve the problem of America not having. universal healthcare? >> I'm not the guy to answer that question. >> AI jali, >> there are people there are people that. study this and. >> is going to solve all these problems. >> There are a lot of proposals out there. >> This I want to throw up this one chart. because I do think this is our politics. in a nutshell. >> Here we go. >> Someone had this great tweet. I've got. to just show this and then we then we.

got to move on. But the the people who. created the red lines are blaming the. people who created the blue lines. This. is our politics in a nutshell. >> Yeah. >> So look how the the issue with the more. the government gets involved and I agree. you got to have healthcare for poor. people. I understand. >> but the more the government gets. involved in healthcare the more. expensive it gets. And the same thing. for college tuition and every other. category. >> sack. What would you do? >> Well I mean look you got to have market. forces. That's what that chart shows is. that where you have the most market. forces, which is technology,

>> that's where you have continual quality. improvements and price decreases. >> And while that's happening, the people. who create the red lines, basically the. people who create this out of control. fraud and corruption and cost problem, they're the ones attacking the people. needs to attack this with innovation and. marketplace dynamics and get the. government out of it. That's the. solution in part. It's a solution. >> in part. >> That's what I'm trying to get across. here is that we are actually our. industry is uniquely qualified to lower.

costs and create marketplaces and. competition. I would like to inspire our. industry to maybe get back on this. I. know that none of us do it because it's. the hardest castle to take, but we could. as an industry, I think, have a dramatic. impact on this, just like our friend. from Spotify, Daniel, is, you know, doing his 3D scanning and then you have. function health superpower. Tons of. these companies trying to get. self-directed healthcare going and lower. costs. Anyway, we have one thing we need. to get to here on the docket, which is a.

victory lap for our bestie, Chim Poly. Hapaya. This week, Nvidia entered into a. licensing agreement to uh license. Brock's technology for inference chips. Chamath was the backer of this company. for close to a decade and um had to come. rescue it a couple of times. It was a. brutal non-conensus bet. Uh you invested. in Grock essentially formed the company. with your partners 5 years, 6 years.

before chat GPT even debuted. So this. was a visionary thing to do and it was a. hard bet and so congratulations from one. Bessie to another on uh this incredible. non-conensus bet you made Chamath but. maybe take us through a little bit of. the backstory. We started the business. 10 years ago and the whole idea was just. observing that there is these patterns. that was happening inside of AI that we. wanted to be ready for. And I think that.

this is going to be really important. over the next 5 to 10 years. So to the. extent that you're either a technologist. or an investor, let's just take 30. seconds. So in a world of kind of these. LLMs, there's two terms that I think. you're going to hear a ton about over. these next few years. The first term is. prefill and the next is decode. Gavin. Baker had an excellent tweet that broke. this down. Nick, you can include that in. the show notes. What prefill and decode. are is two very distinct ways of how. models think and how a model goes.

through the process of answering a. question that you ask it. And so when. you send a prompt to AI, what happens is. that the model processes it. This is. called the reading phase or prefill. It. reads your entire prompt all at once and. then it does a bunch of math. Okay? Calculates all these relationships. between all the words and it stores them. in temporary memory. The problem is that this is really. compute bound. So it requires massive. brute force and NVIDIA GPUs crush you. and their architecture is designed for.

massive parallel processing which makes. them really amazing at digesting these. long prompts, right? And Sax and a bunch. of other people have talked about. context windows growing and growing. So. the problem just gets bigger and bigger. Nvidia just completely dominates. But. the next phase though, this critical. phase, the decode phase is the writing. phase, right? So the model starts to. generate a response. You ask it a. question and its response one token at a. time and then to pick the next token to. pick the next word it has to look back.

at everything it has said already so. that it doesn't hallucinate. The problem is that this is incredibly. memory bandwidth constrained. The math. of all of this is easy but then you got. to do all of this nonsense. Imagine like. a building and from getting from point A. to point B, you got to take an elevator, go up to the 10th floor, take the next. elevator, go back down to the ground. floor, then walk across. That would. never make any sense. You'd want to just. walk across the hallway, right? And in. our architecture a long time ago, we. made these design decisions from day.

one. We said, you know what, there's an. entire technology stack that Nvidia and. Google have pioneered. If we try to go. and build a building that looks like. that, we will fail. they're too smart, they're too capitalized, they're too. good, they're too big, they'll get the. best deals, and we'll just be shut out. And so what we did was we took a very. different architectural approach. We. took a very conservative process. technology. We weren't pushing the. boundaries of physics and we used a lot. of what's called SRAMM, so memory on the.

chip so that we could do this decode. thing as well or better than everybody. else. And so now when you put these two. things together, I just think it's going. to create. a huge acceleration in. the ability for this entire. infrastructure layer to get much cheaper. and much more valuable, which I suspect. then it'll have a lot more developer. pull. You'll get a lot more applications. being built, billions and billions of. more people using it. So think about it.

as pre-filled decode. We were really. great at decode and I think partnering. up was the strategic rational. And so. essentially what happened was last May. Nvidia announced this thing which. allowed their chip to talk to other. things and our team reached out and said. hey can we experiment to see if our chip. could talk to your chip and we could do. this thing better. And over the summer. there was some kind of like spreadsheet. work that happened. Then they were.

interested enough where they were like, "I'll give you a couple engineers." And. Jensen was kind of curious about it. And then about a month ago, he and I had. a call on a Saturday and he's like, "I. think this thing is really real.". And I called Jonathan and Sunny right. away and I said, "You should be prepared. that if this thing works, there's going. to be something interesting to be done. here." And one thing led to another and. they acted decisively. Here's what I'll. tell you about Jensen. to seeing a. little bit up close. He is operating at. a level of insight about what's. happening in this industry that I've.

really never seen with other folks in. other industries other than Elon in his. industries. It's a level of mastery and. a level of skill that is really. impressive. Obviously, it's a really big deal and. I'm really thankful to have been a part. of it. Yeah, it's great. >> Slack 25 billion, Grock 20 billion. Two. incredible. >> but Slack we sold to Salesforce. The. thing with rock is I just think that it. wasn't a point product. I think what. will happen here is if successful we. will be a foundational layer that Nvidia.

can use to again make AI much more. accessible, much cheaper, much more. beneficial to everybody. >> Was there a point just as a capital. allocator, as an entrepreneur, which I. consider you very entrepreneurial in the. case of Grock, >> that this looked like it was going to. get not make it because we went through. co we went through things and and. >> years first eight years. I mean look, Jonathan is a genius. I said this on X. of biblical proportions. His vision for. the V2 chip, V3, V4 chips. He is a. volcano of technical creativity, a true.

volcano. He was the inventor of TPU at. Google. There is very few people like. this in Silicon Valley or the world. >> Savant, >> but he's not a Savant. I just think he's. incredibly brilliant. Okay. So if that. road map can be married with Jensen's. brilliance, I think that like I said. it'll be hugely beneficial for AI in. general. And then separately though two. years ago they acquired definitive and. we were able to bring one of our other. besties Sunonny Madra in as president.

and I think the combo of those two. Sunny's team which are very practical. kind of like put your head down go to. market technologists plus Jonathan's. vision and technical brilliance frankly. allowed a lot of this to happen. It. wouldn't have happened without those two. working together. >> Well, congratulations. It's awesome to. see you get a win. >> Yeah. I'd like to I'd like to say a. couple things to a couple of people. >> Yeah, you do. Absolutely. It's like the. my ostensible, you know,

you got. okay to number two to the VC community. You can also. [laughter].

number three. I have a message to all. the people on social media, Reddit. You. can also [laughter]. >> now the audience knows what it's like to. lose a huge pot. >> Yes. Wow. For your turn, B. for your pre. >> He's a sore winner. He's a sore winner. >> Winner loser. >> He doesn't give a speech when he loses. like Helmouth. He gives a speech when he. wins and he berates you. >> Yeah. >> And how stupidly you played the hand.

>> They were terrible. And I hit my. [laughter] TWO OUTER. LIKE LITERALLY. Grock was a two outer. He bakes it and. he's like, [laughter] "I TOLD YOU IT WAS. COMING. SO MUCH FOR YOUR NUT FLUSH.". >> All right, boys. >> All right, everybody. This has been. another amazing episode of the All-In. podcast. We'll see you next week for our. prediction show. Sorry it got delayed. We just had too much on this document. Love you besties. >> We'll let your winners [music] ride.

We open sourced it to the fans and. they've just gone crazy with [music] it. >> Love you. Queen of [singing]. >> yours. Besties [music] are gone. >> That is my dog taking your driveway. >> Oh man, myasher will eat me. >> We should all just get a room and just. have [music] one big huge orgy cuz. they're all just useless. It's like this. like sexual tension that you just need.

to release somehow. >> That's going to be [laughter] good. We. need to get merch. >> I'm going all in. [music]. I'm going [music] all in.