Dave Ramsey's Take on The Economy, Debt Crisis, and Wealth
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When you spend more than you make, it's not a sustainable situation. Duh. Dave, this one might be personal, but can you define the phrase, you can't find your butt with both hands? I've heard you say this. I'm from the North. Every generation I've ministered to, every generation I've worked with,

has had a group of people that refuse to say no to themselves. There's always been a group of people that will do what it takes to go win. They'll live like no one else, so later they'll live and give like no one else. It's almost impossible to get control of your money without becoming a better person while you're doing it. If you think you're going to get contentment surely from enough money, you'll never get enough money. Would you ever consider running for office? Well...

What's up, guys? George Kamel here, and I am super excited because today I am joined by America's favorite financial expert, Dave Ramsey. He's a bestselling author, world-traveling grandpa, self-proclaimed dog lover, and of course, my favorite Boston CEO.

And today we're going to talk about Dave's plan to fix the economy, how he defines being broke, and how much is enough when it comes to wealth. And by the way, Dave and I have a little bet going on, less of a bet, more of a threat. So if I don't get at least 500,000 views on this video, I'm fired. So before we get to talking, get to clicking those like and subscribe buttons and share this with at least 499,999 people just for job security. Please and thank you. Dave, welcome.

Quite the bet we have. Well, I wasn't aware of it, but that's good. We really need the win. That's all I'm saying. We need the clicks. This is fun. This is your first time in this studio. Yeah, slanted books. What do you think? Look at you, man. You're smart. We hand-selected books from your childhood. And they've held up.

They've held up well. So thank you for lending your library to us. What's up with all these books? Well, Dave, it's no secret the election's coming up. People are getting freaked out. And it's been joked about in the past, but would you ever consider running for office? No. Why is that? Well, because we actually help people here. Oh!

Oh, I thought it was the pay because the pay kind of sucks because you're a public servant. Well, yeah, and the pay cut. But yeah, but we actually do some good. I mean, the friends that I've got, I mean, I make fun of politicians all the time, but some of them are friends and they know I make fun of them all the time. But they have a very frustrating job. It's hard to really do anything. All they do is fight.

No traction, no progress. Yeah, I can't stand that. I got to get stuff done. So if it was up to your own devices and you could just get things done, maybe. Well, that would be like king. That wouldn't be like elected. Hey. Not going to sign up for that one. We might get back to that one day. It's not my job. God gave me other work to do. Well, just to be fair, you would be the youngest president we've had in years. That's true. If that makes you feel any better about your age. If you did run, could I be your press secretary? Absolutely. Yeah.

Yes. This is my dream come true. All right. Now, just for fun, let's pretend for some reason you were in the White House or chairman of the Fed, for example. What would you do differently to turn the economy around? You know, I'm just a free market guy. I'm a capitalist pig. And I read Adam Smith when I was in college. And I believe in the free market. It tends to discard the dead wood when we in business don't do a good job. We go out of business.

A restaurant that cooks really bad food and is late and cold, it goes out of business, and it should. The market punishes you. You don't have to have regulation to do it. And if you've got a restaurant that's the opposite of that, and the food is hot and wonderful, and it's well-priced and all that kind of stuff, there's a line around the block, and everybody knows those stories. So the marketplace will correct itself if you'll leave it alone. So the first thing that, if I could wave any magic wands, I would remove a lot of regulation.

And a lot of regulatory people would have to get other jobs. I'm not saying there doesn't need to be any regulation, but we've got at least 100% too much.

There's some former hall monitors that feel like they have a little too much power now. Yeah, it's a mall cop syndrome for sure. Well, the national debt is now over $35 trillion. That's a hard number to even fathom in our brain. But there was an op-ed in the New York Times where economist Paul Krugman wrote that governments, unlike individuals, never have to pay off their debt. Is that true? Does the national debt matter if we just continue to go into monopoly money levels of debt? There may be some truth to that. Paul Krugman –

would be a Keynesian economist. He would be John Maynard Keynes, helped Roosevelt introduce the New Deal. And Keynesian economics has become

Out of the college classroom, the standard. But basically, it's socialism or it's the edges of socialism. It's a very big government, a very intrusive government, a government that controls a lot of things including money supply and those kinds of things to way too great an extent. I don't believe that the debt is good.

But I also don't believe that we're on the precipice of all going into the zombie apocalypse either. A lot of people in the financial world have predicted the end of the world for a long time. And a lot of people in the Christian world have predicted the return of Christ for a long time. Probably both of those things are going to occur. But I don't think I know the time or the hour. Maybe not in our lifetime. Is it possible that we could reverse this?

the national deficit and become debt-free as a nation? Sure. What would that take? It would take more discipline than we have, the ability to accept and hear the ancient word no, because we've become so accustomed to government providing us anything and everything, including protection, including medicine, including things that are vital, that we love. There's two sides to the equation. In business,

You cannot cut enough expenses to become profitable. You need revenue. You have to increase your revenue.

And so you need a new product line. You need something that raises that. So you're talking about raising taxes? No, I'm talking about increasing the amount of tax dollars coming in. People get clouded by politics, so they have never really actually looked at the data. But the data says, the actual data of what has actually occurred at the federal government level, that Art Laffer was right with the Laffer curve. And the Laffer curve is simply this, that to a certain point,

lowering taxes stimulates so much of the economy that it raises the amount of revenue, the amount of tax dollars that come in. If you let people keep more of their money, it stimulates the economy and it stimulates the people like me to go make more money. And therefore, I pay even at a lower tax rate, I pay more in-tax dollars because, say, you cut my tax rate 10%, but my income doubled.

Okay, then that raises revenue. You know, you lower taxes, remove regulations, get the economy booming and heated up, and the tax revenues go way up. And then you've got to cut the crud out of this. And the problem is a high percentage of our federal dollar now goes to pay interest on the debt.

So that comes back to the debt question. Just like a consumer. You got to get rid of the debt to get rid of the interest to be able to have room to do some of the social things that are in the federal government. But this spending is just, there is no discipline on it whatsoever. No one on either party ever says no. And it really is as simple as we're not spending less than we're bringing in.

Oh, it is definitely that. So, Dave, I've seen on the Internet people said, well, if everyone followed Dave's advice, they got out of debt, the economy would collapse. Do you think that's true? You think about what happens with an individual, okay? An individual that goes through the baby steps in somewhere around 7 to 10 years is debt-free house and everything, and their income goes up during that time.

and they became millionaires somewhere around that 12, 14-year mark on average, okay? So what did they do? They followed the baby steps. They got out of debt. They lived on less than they make. Now, if more individuals did that, would the economy collapse? Well, the Twitter or Instagram or Reddit thread crap says, well, the economy is dependent upon borrowed money. It's actually not. It's dependent upon the consumer spending. The consumer spends more when they borrow more,

But the consumer also spends more when they don't have any debt and they have more money. So Sharon and I, when we became multi, multi, multi, multimillionaires, we didn't quit spending. We spend more because we have more. When people get out of debt, they don't stop spending. And they don't spend less than they did when they were in debt, using debt. Somebody that's got $10 million spends money. And so that drives the economy.

the differences of the economy would be much more stable. It's destabilized by all the consumer debt because the consumer is deep in debt, and then you add some other things to the mix, like a Biden inflationary situation, 10% inflation, 9.7% inflation, $5 gasoline. You put some stuff in there like that for the consumer. Oh, let's talk about interest rates on houses. Let's talk about house prices going up. See, when you put any of those things in the mix with people who are already frustrated

locked in. They don't have any more room to spend. Now you slow the economy down because the consumer has to slow spending down because their disposable income's gone. Well, disposable income goes up when you're debt-free. It doesn't go down. Let's test the theory. I think we should all become debt-free. Everybody become debt-free. Now, I'll tell you what it would be bad for. It'd be bad for banks. You

Too bad for Visa. The lenders wouldn't have the big buildings downtown. They can't sponsor the Taylor Swift tour, Dave. It would be bad for the car companies because they make more money on the debt than they do on the cars. They'd actually have to start making a profit on the car, not on the debt on the car. And so all these things that are debt-based, it'd be really bad for them. The whole debt industry would go down. Anything having to do with debt would go away because if they were dependent on people like me, they don't get any money.

I haven't given any interest to anybody in 35 years. Well, Visa, watch out. Well, they'd have a great debit card program. Yeah. America would be missing out on their cash back. So that would really hurt the American people. Well, probably be associated with a debit card. What do you think? I think some marketing would kick in.

Well, there's some fear and anxiety around the upcoming election and who ends up in the White House and how that affects people's wallets. What do you tell people who are – they're genuinely concerned? Not paranoid, not freaking out, but they're genuinely concerned. I mean it's not unwise to have a concern about it because policy does matter. If you affect taxes like we're talking about, it matters in the marketplace. If you affect –

It matters in the marketplace. Jobs are the result of that. There's a lot of things to be concerned about. The problem is that the candidate and the news media have convinced people that 90% of their future success is based on the candidate, and that 90% of the individual success is based on the individual. 10% is based on the candidate. Now, I paid less taxes under Trump.

So that's a good thing for me, right? You paid less taxes under Trump than I did under either one of the Democrats. And so that's something to look at. But I didn't go broke because of Biden or Obama. I didn't slow the business growth down because of Biden or Obama. I have made decisions.

profit and made progress in the business under every administration, and it had nothing to do with them. It had to do with the economy in general, which they don't control, any more than they control the weather.

And it had to do with me and this leadership team here at Ramsey and how hard, you know, George and Rachel and Deloney and Coleman work, right, and Jade. I mean, it had to do with us going out and killing something dragon at home, right? And so that's the thing that gets off in people's minds is if you're concerned about it past 10% of your life, then you're too concerned. It's more of a hobby for me. I like watching it, the drama of it's funny.

The crazy stuff they say and the stuff they just make up, it's just not even true. You know, on both sides, it's just nutty. It's good entertainment. Yeah, it is. That's about as good as it gets. It's a circus. Well, when politics get crazy, people, they get fed up and they talk about, I'm going to move to Canada. And I know you well enough, that wouldn't be your first choice.

Well, we agree. America's number one. If crap hits the fan, where is Dave Ramsey moving? Oh, I'm not. I don't have any thoughts of that. I'm not going anywhere. Crap hits the fan, we'll get a shovel. Oh, dang. That's deep. Sharon and I traveled all over the world. We spent a lot of time in these different places. And there's not an economy as strong or a set of freedoms, even though there's a lot of stuff I'd love to see America do. I'd love to see the United States change. But

I mean, there's not people that expat and they go to Costa Rica or Bahamas or something. I mean, Costa Rica is beautiful and it's very inexpensive to live there. There's a reason because there ain't nothing there. You're pretty much dumbed down to gym shorts and sandals. So that's, you better stick with that. And Sharon, I want to do some other things. We want to see the grandbabies. We want to,

enjoy some of the creature comforts of life. And we like the electricity to come on when we flip the switch. Maybe it does, maybe it doesn't in some of these countries. These places are wonderful to visit, and I enjoy the different cultures and the different people, and it's one of the reasons we travel. But I've yet to find an economic system that is even one-tenth as appealing as this one anywhere that would tempt me to go running over there

based on who's elected, I'm leaving. Oh, brother, give me a break, you drama queens. So aside from national debt, consumer debt is hitting all-time highs. We are number one at everything in America, the Olympics and consumer debt. What concerns you about the average...

Americans' money habits as you've been answering calls on The Ramsey Show? It doesn't seem to be getting any better. You've been doing this over 30 years. Yeah. I mean, we're not making any dent in it, but we made a dent in that one and that one and that one, but we haven't overall. Even helping 10 or 20 million people, that's still a fraction of... It's not enough. And, you know, we've still got record student loan debt, record car debt, record credit card debt. Again, that's got to do with the emotional maturity of the individual, the ability to say no to me.

called self-discipline in a culture that's got a magic wand in their hand. They can just buy anything anytime they want to buy it, answering questions they want to answer. And they live in a world of magic. And it's like going to be magic that my debt's going to go away. No, it's not. You're going to end up paying the piper. Well, do you think part of that with the younger generations, because we meet the ones that are amazing, that have the discipline, they're going to become debt-free, they're going to build wealth, and we meet the ones who will never do it because of whatever reason. Yeah.

So do you think part of that is due to social media? We have to have this lifestyle of smartphones and memberships and subscriptions and travel, things that maybe the older generations, that was a luxury to have that now has become an American right. No, I don't think it's generational. Every generation I've ministered to, every generation I've worked with has had a group of people

that refuse to say no to themselves. They live for the moment and they live like children and there's people my age that do it right now and I'm in my 60s, you know. I mean, it's not like this one generation has suddenly invented immaturity.

or suddenly invented the lack of discipline. But no, there's always been a group of people that will do what it takes to go win. They'll live like no one else. So later they'll live and give like no one else. They grow up, they're adults. The ability to delay pleasure is a sign of emotional, psychological, and spiritual maturity. And there's a group of people that will do that or come to the conclusion that that's the best way to live. And then they'll do that.

And there's always a group of people that they don't think the rules apply to them of life. And I can just spend whatever I want to spend, just like the government. And I don't have to say no to me. And how dare you suggest? And you've lost context because you're old or some of the bull crap. You know, I didn't lose context. You lost context. You lost the ability to do mathematics. And so, you know, when you spend more than you make, it's not a sustainable situation.

Well, I never thought of it that way. You know, when people say, well, Dave Ramsey's out of touch, I'm like, how many calls have you taken from real people with real money problems this week? Because you're on air, you know, all week long talking to real people. That would make you the most in touch, I would think. Yeah, I mean, just because I don't read YouTube comments doesn't mean I'm not in touch. You are missing out. No, I'm not. I didn't miss a thing. That's very healthy of you, Dave. What gives you hope? We talked about your concerns, what's going wrong. What gives you hope about...

American money habits and where they're going? You know, the people that come on with you and I on the air and they do a debt-free scream or they come on and tell us their story, whatever it is, or I run into them at a restaurant. I was actually dropping off some golf clubs at a golf thing this weekend and the guy getting my bag out, you know, started telling me his whole story. And he's a bag boy, you know, working the thing. And

He paid off $50,000 in debt. I mean, he was working down there for tips and just killing it. Just getting it, man. Getting it. What really gives me hope is not that those folks are getting out of debt or getting control of their money, although they are in mass, a lot of them. But the other thing that happens is it's almost impossible to do that, to get control of your money without becoming a better person while you're doing it. Yeah.

There's a personal growth that happens. They end up becoming a better dad, a better mom, a better husband, a better wife. They lose weight. Discipline begets discipline. And they start serving. They become other-centered rather than self-centered. Their generosity factor goes up. There's a whole thing that happens. You can't just fix one tiny little area of your life or destroy one tiny little area of your life without it impacting all the other things that it's touching. Right.

And what's so beautiful about these financial transformations is they mean life transformation. And so the sociological impact of some of the stuff that you and I are doing is... It's not just math. It becomes real ripple effect generationally down in the quality and the functionality of that family increases. The stress level in the marriage goes down. The likelihood the couple's going to stay together and

And therefore, the kids have two parents in the house, all because they started on this money thing. But you can't fix it without fixing you. Well, it reminds me, when you sign something, you always have your signature and you write, transform, Romans 12.2. Is that part of— That's it, yeah. Is that kind of what— Be not conformed to this world, because this world is always—

going to be immature. This world's always going to be quick fix, get rich quick. This world's always going to be looking for a shortcut, looking for the easy way out. I want to be on easy street without doing the hard work. Don't be conformed to that. Look around you. Do you want to really be like the people you see? No. They're freaks, man. Normal is what? You don't want to be normal. So be not conformed to this world, but be transformed.

by the renewing of your mind. New information, like watching this show, coming into your mind and you go, hmm, I may need to do something different. That's powerful. That's

That's what this place is built on. Absolutely. It's what happens every day. All right, we'll get back to the conversation in just a moment. But first, I want to shout out a sponsor of today's video, Laurel Road. They've got a great high-yield savings account that lets your money work harder for you. And right now, your account balance earns 5% APY, which means if you have $10,000 sitting in that savings account, you're going to make an extra $500 for doing literally nothing. So what are you waiting for? There's no monthly maintenance fees, no minimum balance required, and your deposits are FDIC insured.

Just go to laurelroad.com slash george or click the link in the description below. That's laurelroad.com slash george. The other sponsor of today's video is Tello, the mobile service provider with crazy affordable plans and killer nationwide coverage. So let me ask you this. How much are you currently paying for your cell phone plan? If it's more than 25 bucks, you're getting screwed.

OK, Tello's unlimited everything plan is just 25 bucks a month, which should leave you plenty of money to do more fun things. And get this. There's no contracts, no sneaky fees, and you can change your plan whenever you want. It's super simple to sign up all online from the comfort of your own home. Just go to Tello dot com slash George and you'll get an extra five bucks off the unlimited data plan during your first month of service or check out the link in the description below. All right. Let's get back to the conversation with Dave Ramsey.

You and I, we use the word broke a lot, and it's not describing, you know, people in poverty. What is your definition of broke? Negative net worth. The bottom line is your income doesn't determine wealth because if you make $200,000 a year and you owe $300,000 on your cars and your student loans and your other stuff and you can barely pay your bills, you're broke. You just make a lot of money and you're a broke person. Attraction shows up financially in net worth.

That's when debt goes down and assets go up. And that's where we see, that's how we know you're starting to actually win with money. You start to see that. And as you do that, then margin comes.

And when you're not broke, you have that income coming in and there's more and more and more of that income available to you to do future investing, to do generosity, to think longer term than just, oh God, I got to pay a bill. Oh God, look at this. I'm overwhelmed. Oh God, I got to pay a bill happens at half a million dollars a year, 200,000 a year, 100,000 a year, 40,000 a year. And I live on less than I make happens at all those same numbers too.

And living on less than they make gives you that margin. You begin to clear the debt down and the assets build up. So the 401k starts to grow. Debt goes away. Even later, the mortgage goes away and that spread becomes a million dollars. And that's your first million dollar net worth. Then you know you're starting to win. But these people are walking around looking like they're rich. Most of them aren't. I mean, they got a Louis Vuitton, a car lease, and Sally Mae's got her own bedroom.

I mean, they're broke and stressed because it takes a lot of work to hold up an appearance that's not true. Living a lie, is that what you call it? Yeah, that's what it is. Now, on the other side, we talk a lot about building wealth. What is your definition of wealth? Is it net worth? Bob Gass, an old evangelist, Irish evangelist up in Maine, used to say, if I have the money to do God's will—

in my life I'm wealthy. Whatever the Lord puts in front of me to do, if I got the money to do that, if it's something simple and I got just a small amount, then I'm wealthy. Another way of looking at it is, do you have a net worth that you've got the margin, so you've got some sustainability? And you start heading towards a million dollar net worth, you start to really build some real sustainability, you're debt free, you start to build some sustainability. Think about when you go into retirement.

and you're in your late 60s, early 70s, and you either have a mortgage or you don't, that's wealth. You either have some money in your 401k, half million, million, something in there, you've been put money in that 401k. If you did those two things, if you got six or 800,000 bucks in your 401k, that's 60, 80,000 bucks a year income for the rest of your life, and you don't have a mortgage or any other debt, you know, you've set your life up in such a way that that is wealthy.

versus the same exact person making the exact income living next door has a boat payment, two Sea-Doo payments, a payment on the vacation home that they had to buy to look like they could afford it, and they couldn't. They've still got a mortgage, and they're 60, 70 years old. But they live next door to this other guy who's 100% debt-free and got...

you know, eight or 900K and his 401K. And over here, I got zip in my retirement, a lot of debts and a lot of stuff sitting around looking at me, screaming at me how stupid I've been. So when you live fake rich, you become real broke. There you go. That's the TLDR right there. You should write a book. Dave, this one, it might be personal, but can you define the phrase, you can't find your butt with both hands? I've heard you say this. I'm from the North.

Is this a saying? Is this like a Southernism? I've heard a lot of stuff like that my whole life growing up. Do you have a book that you all have discovered of grandma's burns? I was visualizing this. I'm trying to find my butt with one hand, but you're saying with both hands, still couldn't find it. Still couldn't find it. Is it just a statement of intelligence? Yeah, just a sheer lack of ability, yeah.

I'm glad we got that clear, though. Well, while we're talking about wealth, there seems to be this thing where millionaires, even billionaires, they always feel like they need more money. The goalpost always moves. You know, you get $5 million, and now all of a sudden it's not enough because everyone around you has more. How...

How do you figure out how much is enough? How do you just be content with where you're at while also still being driven to create legacy and wealth? Is there a certain number? How do you calculate that? No, there's not a number. It's a spiritual decision. The Bible says godliness with contentment is great gain. I think where people get confused on this, and we've written about this some, is the difference between

Contentment and lack of ambition. I work really hard. I've got plenty of money. And it's not because I'm somehow psychologically damaged and I need more money or I'm greedy or something like that. I work hard because I love what I do. But I'm very content. But I'm very ambitious. So ambition and contentment are not really on the same spectrum. It really comes down to, okay, I've done a good job of...

planting the field, a bumper crop of corn comes in because God provided incredible sunshine and incredible rain. I did the hard work of putting the corn in the ground. And so we're going to have a really good crop this year because of this thing that God and I did together. I'm going to reap what I sow.

If I sow sparingly, I'm going to reap sparingly. If I put two kernels of corn in the ground, I'm not going to get a bumper crop. And so I've got to do the work. I've got to do the savings. I've got to do the investing. And then voila, it'll be more money. God will provide the sunshine, the blessing, and the rain, the blessing. And so we can look at it and say, wow, look what God did. And thank you for using us to do it, God. And I can sit in that and go, my loving Heavenly Father, who's crazy about me,

And if we, being evil, know how to give good gifts to our kids, how much more so our Father in heaven? That's beautiful. Well, I think what you're getting at here is there's a deeper reason for wealth. There's an underpinning that you have that many people don't. When you look at other financial YouTubers, creators out there, some of them, even just normal people, they have very thin reasons for building wealth. If wealth is your God, you'll never have enough. That's the golden calf. I mean, it's an idol.

And so if you think you're going to get contentment surely from enough money, you'll never get enough money. That's the thing. So it comes with this combination of spiritual maturity and looking around and going, it's okay if Sharon gets a nice purse. But if we're buying it for other people to see it, what are we, 14? Yeah.

I mean, we're old people. We shouldn't be buying a purse for other people or a car for other people. I got a nice car. I didn't buy it for anybody except because I wanted to drive it, you know. And that's contentment. There's no need to keep the other people happy at the stoplight or to go, ooh, look at him. He's cool. He's old and bald and in a cool car, you know. I mean, come on.

That seems to be most people driving really nice cars, to be fair. Tell me your reason for building wealth. Has it changed over time since you started doing this? Yeah. I mean, it does change in everyone. The first thing you do as you're getting control of your money is you take care of the now, the stuff that's right here. It's in your face. You got to take care of the bills. You got to get the wolf away from the door. We got to make sure the light bill's paid and there's food on the table. And take care of your own household first. Right.

And the Bible says that. And so you should do that first. And then you start, once you kind of get that going, you go, okay, I got a little margin. I think I got that. Then you can start to kind of take your eyes off yourself a little bit. You start looking around and go, okay, I need to do some things in the community. I need to do some things for my family tree. I want to build enough wealth that I can be outrageously generous and really impact some things in the society that need help.

and not wait on the government to do it. I need to go do it. There's people hurting there. Government programs have never helped hurting people as well as nonprofits have. Nonprofits always do a better job. Ministries always do a better job. People always do a better job taking care of people than the government does. And more of us need to do that. And that's a real reason to build wealth. But when you're trying to pay your bills and you're broke when you're first starting,

Working your debt snowball, that's a very selfish endeavor. And it should be until you get the stuff cleared away. The trick is to clear it away so that there's margin so you can start thinking about, well, we look over here and we see a need with an individual or with a thing that's happening in the marketplace. And we want to impact that. And you can, you know, you can write an unbelievable check and do that. And it's pretty cool. That's beautiful.

Well, it's been a real pleasure, Dave. I know you've got a lot of places you could be right now. Tea time, Cabo, you've chosen to be here in the studio, which I really appreciate. So thanks for coming on and thank you for helping build the studio. Well, anytime. I mean, I want my books back though.

We'll get them back to you. The 1928 book from my childhood, yeah. Hope you guys enjoyed that conversation with Dave Ramsey. I really think that's going to be the video that helps his career take off. This is going to be the one. And if you enjoyed the video, please hit that like button, the subscribe button, and share this with a friend who might enjoy it. And if you like this, you're going to love this next video where Dave Ramsey made me a cup of coffee that was better than I deserve. Thanks for watching. We'll see you next time.