debt and this is economic inequality could cause us debt downgrade moody's says economic inequality isn't just an academic idea as the recent wave of populist voting has made clear but a new report suggests that worsening inequality in the u.s. could have financial repercussions for the country that report out by moody's early in october from the credit rating agencies moody's investor services called government of the united states rising income inequality will likely weigh on credit profile and i remember after the us election and they mention the populist wave we got blamed for pointing out the possible cause of the populous wave as the wealth an income gap and perhaps the people of wisconsin wish michigan for example did not want the tepee or t.t. ip trade deals so perhaps that was more likely for it rather than some foreign some guy who lives thousands of miles away whether it was in a cave or

a bin laden or moscow for putin you know it's always some foreigner way over there that has some sort of mystical control over american population but here moody's agrees with us that it could possibly be the wealth and income gap that is more important just confusing because in aggregate the numbers look better than you know they look like average wages are going in the wealth effect of rising stock market causing the market for jets to trend higher in even the market for use jets is trending higher but if you dig into the numbers you see that there is whining was an income gap so the averages might be going higher but that's just a meaning like there's a huge concentration of wealth in the top one percent or top one tenth of one percent and it's making the average is mislead the pundits on the mainstream the averages are going up averages median is going down so that half the population is earning less than. last so i mean i want to look for of what joran you know half

the population is actually earning less yeah yeah so the median going down and then this causes this wealth and income gap which leads to all kinds of problems that we've talked about and they go on to say why they are thinking moody's is considering i downgrade and basically they're putting the u.s. on watch to be downgraded so they said that in short the moody's analysts wrote the deficit is likely to serve as inequality increases the need for more social spending to support lower income households even as tax cuts that benefit the wealthy reduce revenue meanwhile fiscal consolidation efforts that attempt to reduce the burden of entitlement spending by hiking payroll taxes or cutting benefits would ultimately exacerbate inequality asked for inequality moody's thinks it's already problem so deepening it would be serious downgrading the debt now i think movies are one of the rating agencies downgraded american treasury debt

already from aaa to a.a. . plus plus i think that was maybe just briefly and then they upgraded it again so they've been flirting with this idea for a while they should downgrade the debt because the debt is still skyrocketing the trump administration has spent heavily the debt is over i think twenty one trillion and you have now the interest on the debt becoming the second great as budgetary line item right after the military defense spending if i looked at my figures recently we're going to talk about that in the next episode actually we're going to go over all the data about the deficit debt and all that sort of so this is you know this is beginning to will smell bad because you've got a population that's meyer in debt and a lots of other social problems and there's no way to pay for the stuff this theory of trickle down that can be paid off by tax cuts that encourage rising g.d.p. . and therefore

a bigger tax base that hasn't really ever worked in the thirty years that it was first proposed and you know it's not going to work ever well a lot of people in america will say if you look in the mainstream media they'll say well you know all these social justice warriors and all of these social democrats these people who like bernie sanders you know the fact is they're commies and they should you know we should get rid of them from the political space because inequality is not something to object to because you can't begrudge somebody who's a multi-billionaire from having their billions but if the system is rigged to create that situation in here there's actual economic consequences we already pay something like six hundred billion dollars a year and just on interest on our debt as a nation and here they're suggesting that it's actually going to rise because of this wealth and income gap but finally i want to say you know jared cushion or son in law of the president of the united states i want to show you one way that the wealthy can get wealthier wealthier based on the legal system that they own the

legislative system that they owe own in particular gerrard whose net worth is nearly three hundred twenty four million dollars appears to have paid almost no income tax from two thousand and nine to two thousand and sixteen the new york times reports the u.s. tax code allows real estate investors like cushion or whose family company cushion or companies has spent billions of dollars on real estate over the past decade to write off depreciation or properties devaluation because of use or wear and tear so he's reported significant depreciation on these assets that he has he's gotten to write that off against millions in income so he pays nothing in income tax unlike the ordinary joe bag of donuts or. you know yet the pay a lot in income tax we've paid a lot more than this guy he's now he's now basically paid by our taxes as well by the way but this is the sort of system that you know it's. there was actually

a carve out in the latest tax legislation just for these property developers to keep their this loophole that basically allows them to avoid any income taxes leona helmsley twenty years ago said only the little people pay taxes i mean she's a property developer her husband homes lee property is an empire really and in the property market you have this depreciation aspect that allows you to avoid paying taxes while having property that goes up in value. but this is the beauty of property and property speculation and this is how fortunes in america have typically been based on property and so but nothing is changed as such to make this any different because the property market is the number one source of revenue i would say roughly speaking for the banking sector so the banking sector has the strongest lobbyist in washington whether it's in the u.s.

or the u.k. lending into the property market is their number one source of revenue and they use a control the legislative branch so until you get bankers out of the legislative branch that is to say until you get bankers stopping making laws for themselves you know every time they get caught breaking the law they write a new law and that makes what was illegal suddenly legal as you saw as well crisis of the eighty's they made it illegal through passing laws and then we had the two thousand and eight crisis that was the same repeat of s. and l. crisis but the difference being that this time it was legal i want to point out as well that here in report in two thousand and sixteen we had francine mccann on to say why would trump try to hide his tax returns and this is exactly it because the mainstream media she said would have focused on the fact that he had reported massive losses in the order. he's now dear but in fact what the truth is what price report covers is that this is how. they they get to report massive losses they get

to look like losers on their i.r.s. tax returns in order to stay wealthy that's the way they say wealth you only can become wealthy if you don't pay any taxes like he has done and we covered that in kaiser back in two thousand and sixteen where we said it would show massive losses as well so they don't write us off states and for the second half right after this break. i've been saying the numbers mean something they matter the u.s. has over one trillion dollars in debt more than ten white collar crimes happen each day. eighty five percent of global wealth you longs to the rich eight point six percent market saw thirty percent from your home with four hundred to five hundred

three per circuit. and one rose to twenty thousand dollars. china is building a two point one billion dollar ai industrial park but don't let the numbers overwhelm. the only numbers you need to remember one one doesn't show you know for a minute the one and only. prosecution will need to become almost. where you. just read you'll find. somebody going to see do i mean me political pressure on the . security jennifer nance with. business models used by american corporations.

the solution. in this is he doesn't. need to can he sell some of those it is just somebody he's affiliated to an investigative documentary. ghost war on oxy. join me every thursday on the alex simon show and i'll be speaking to guest of the world the politics sports business i'm show business i'll see you then. cranking gave americans a lot of job opportunities i needed to come up here to make some money i could make twenty five thousand dollars as a teacher or i could make fifty thousand dollars a year girl truck so i chose to drive trucks people who rush to a small town in north dakota was an unemployment rate of zero percent like gold

rush is very very similar to a gold rush but this beautiful story ended with pollution and devastation a lot of people have left here i don't know too many people here in the mountains just slowed down so much they lost their jobs got laid off and the american dream is changing that's not what it used to be. and that's a tough reality to deal. welcome back to the cars report i'm max kaiser the time of turn june. is the co-founder of a hose show you know welcome thank you now you are the co-founder of osho we're out in las vegas and it's really

a security conference could be the first. big security conference in crypto and yet for the very beginning security has been such a huge issue in crypto from the mt gox blow up to every single day things are blowing up people lose their wallets how come security hasn't gotten the attention that it deserves you know so that's a great question i think that what's happened is there's these these periods of influx in the markets where a whole bunch of new people come in and the people have already been off for the last period of like hacks and i call them alcott stuff and all these other things they kind of learn their lesson they got burned a couple times and they do take siri security more seriously they demand from the wallets of the things that they use that they they go through a greater level of security diligence and process but then when all these newcomers come in they haven't had the experience of being burned in their they're fresh to it they're they're thinking about like all the the possibility and so they're

entrepreneurs starting new web sites and doing all these things to grow again traction and to try to use these technologies and sometimes they leave security the wayside and vegas a lot of people just jump right into the blackjack table they don't really know anything about blackjack but they're excited and they lose everything so you go do the research or so explain as i understand it what. you've created a kind of standardization for security so the whole show if you do business with a company and that company can say we've been host show scrutinizer we've got the whole show seal of approval you know. and that becomes an industry standard for security is that true is not a fair assessment kind of i mean what we've been helping primarily with small contract audits to begin with and then we start doing things that were like penetration testing and other pieces of the security infrastructure and security hygiene that company needs to undergo but we start out only doing pieces of the

security for companies and security needs to be much more comprehensive they need to consider everything right i mean the attack vectors are multiple they can come in and any place i mean every single week there's more hacks morse it does it mean facebook is major security breaches everything is a major suit as anything one hundred percent secure. historically i would say no basically anything that can be hacked at some point will be now in the case of software it's a problem if the software is hacked and there's problems in the case of crypto currency of course it's money so if you're a user and you hear that everything gets hacked all the time what does the user do they try to spread their accounts over multiple platforms or how can you mitigate the risk on the side of the user. you could split across multiple platforms i'd say doing a little bit more diligence right now on what's out there and what's available for security use is probably a better avenue than just like you know randomly using

a bunch of different services hoping that you know they're they're not you know targets on the dart board by say that we're we're still pretty early on in that the industry as a whole needs to kind of grow and that's that's why we're throwing this conference as to how those conversations and find out like what resources are out there for companies to use what resources have not yet been developed and need to be done in a collaborative way why is it seemingly more difficult in crypto than let's say their traditional banking space like one of the unique challenges in this space that you're facing one is just the cryptocurrency wallet. and the wallet you know is held in software and never really been the case before that you know a basically a string of characters your private key holds you know the access to all of your your your money and that brings on the really unique challenges from like custody to you know theft even if you know exactly who the culprit is that has stolen crypto there's really no guarantee that you could ever recover it so the

fundamental base layer that needs security is the wallet layer while even. that yes absolutely needs to be secure but there's a lot fragmentation there's a whole bunch of different wallets for different recurrences but the bigger mistakes are usually made by users wallets are technologically complex and the way they're designed now isn't ideal for the average person where they might lose those private keys where they might not secure them properly and like you know very much like a password or something you know people might get access to them and steal their funds and the it's just way more difficult more burdensome for the user the consumer even the entity to try to protect those assets right in case in the case of crypto once you have the private kids like i stole your wallet and i've got cash and that's it you're not really going to recover it type event that's the challenge there so let me ask you a question about quantum computing because people have suggested that this is

a security threat at some point a future and can you talk a little bit about it like what is it how does it relate to crypto and isn't a risk we actually have a speaker from nasa that leads the quantum group that's speaking tomorrow that i'm pretty excited to learn more about this very topic. for a big point for example there is a maximum complexity to how much the hashing rate power could be in the sense that you know the the prefacing can go but the prefacing. string on the the resulting hash is a bunch of zeros so. theoretically the maximum difficulty would be all zeros and if we ever get to a point where we have such a large amount of computing power that we could calculate the hash for that instantaneously then the security backbone that supports big coin would just dissipate it would be it be useless and so as you deal to rewrite the chain from any point in history and that's what proof of work is supposed to protect against

so i guess that would be one of the threats of you know having just an immense amount of computing power with quantum processing that being said you know you could obviously for quick point input like quantum resistant algorithms in protect against that. ok so what house where are we on the cycle like away because they are quantum computing stories are coming out more frequently measuring cubits or something it's all happening where were we as a threat in the time i mean it's difficult to say but i'd say we're still pretty far away as even if we get the hardware to where needs to be meaning we have quantum computers that are capable of doing what i say like breaking sha sensually it doesn't mean that. we would have the software. ready to employ on those quantum computers very quickly it's a different way of thinking and it's different than all the way like you know our

present programming languages are so far abstracted above what's essentially a binary system and so to use called quantum with cubits would be very very different so it was shots if you should actually secure hashing out over them to get the six there was have been new iteration is and some would say better hashing out where the. three for example so what would show us three how much of a protection do they are were designed offer. i mean if in a sense in the the scope of quantum computing almost nothing. really because. so ok well i am going there you came on the show because i just changed my life. no tell us about the smart contract strace some people argue that you can't do it on. a big court and by somebody i mean undress on top of us what are your thoughts about this i mean the big point i felt he was not constructed to be able to handle

contracts or do like you know the centralized processing and if you tried to convolute a way in to you know specifically declined to do it it would be very burdensome on the chain so it's an unrealistic use case that being said i know there are some companies trying to build a layer on top of that and i guess it depends on how much of the the processing or virtual machine happens in our other layer versus what happens with big client and . so i'm not too familiar with what that looks like right now. i'd say you know anything's possible if you try hard enough at it all right fair enough so low let's just get a feeling for what you would consider being in the whole show and you guys are like the big name in security now so what is the most in secure areas that you're looking at that you are focused on in the next year or two years what are you

really focusing on. so one is wall it's we are building a wall and it's just like an area that like since the very beginning of the company and even before you've always asked us how do we store our phone securely. you know what should we use how should we do it and we never had a great answer for people and so we decided that basically we would build our own and so that's definitely one huge piece on our roadmap the other thing is tooling that helps people write smart contracts more securely and develop on protocols more securely so. that's what meadowsweet is all about we open source that and we started building that in january to help us do the security analysis that we need to do because the tooling just didn't exist so where we had to build it all we got a couple of minutes let me speak broadly you know you got a start up owing guys been around fourteen fifteen months and so as an entrepreneur

as a start up is this your first startup it's my tenth your tenth and what were the lessons you learned that you brought the whole show they had so many. so of those had many of them failed some of them succeeded one of them was a big one exchange that we sold to crack him. and so i learned a lot of his security lessons there but probably the more valuable lessons i learned from that was just kind of you know like from a legal regulatory standpoint that like no one really knows what's going on in a lot of these areas is just so new and a lot i'd say the big lesson out of it is learn it yourself go dig and dig into the documents again so you know whether it's legal documents or it's programming code or whatever i learned about it and figure it out and see it because i mean i feel like there's just no better guidance than been going into it and trying to figure

out how it all to start up what's the common mistake people in startups make that you can pass along some wisdom here a veteran of over ten startups now with looks like a winner like what do what can a mystic to the millions of people watching and thinking i want to do a startup like what are the couple of the pitfalls they can avoid and there's so many even the ones i did well and i there's still so a mistake i made like one of them i didn't do any marketing at all and i realize that's a big problem how important is stamina in other words when you do. startup you're twenty four seven dealing with stress more or less and you need to eat right exercise and just have your stamina yeah ok i'd say that that's actually a big one is don't burn out like you know you you can be so tempted to work those hundred hundred ten hour weeks week after week after week and at some point you are going to burn out though if you do that and if you are now it's just way more

damaging overall than if you had just cut back a little bit and maybe you didn't meet that deadline maybe you didn't close that deal at least you can continue operating finally people are familiar with hardware wallets trizone others now there's some concern has been a concern about the middle attacks if you talk a little bit about the risks there and what your thoughts are i mean at the end of the day every single thing that you're storing or crypto on is going to have some sort of potential exploits or vulnerabilities and hardware walls are no different i think that a better approach than just keeping your capital on a single hardware device or only accessible by one is to use a multi signature approach where you split it up and in that instance it becomes less important whether or not that one device has some sort of very limited vulnerability because it's one of many fair enough you know some cohen thanks for being on the kaiser report thank you that's going to do it for this edition of

because a report was made masters are and states you ever want to thank our guests you know some co-founder of osho and founder of this fantastic event social con in vegas if you want to catch us on twitter it's kaiser report the next time i go. to war we've got to do is identify the threats that we have it's crazy. let it be an arms race in his own spearing dramatic. to follow through the only closely i'm going to resist i will see how that strategy will be successful. in time to sit down and talk. fracking gave americans a lot of new job opportunities i needed to come up here to make some money i

could make twenty five thousand dollars as a teacher or i could make fifty thousand dollars a year truck so i chose to drive truck people rushed to a small town in north dakota was among the employment rate of zero percent like gold rush is very very similar to a gold rush but this beautiful story ended with pollution and devastation a lot of people have left here i don't know too many people here and just slow down for much they lost their jobs got laid off the american dream is changing that's not what it used to be. and it's a tough reality to deal. with . this is says harlan kentucky. overboard this move the

employees says the wall street families. need. a co money city with almost no coal mines left. the jobs are gone all the polarizer said i'd. love to see these people the survivors of a world disappearing before their eyes. i remember thinking when i was younger that is anything ever happened to the coal mines here that it would become a ghost town but i never thought in a million years i would see that and it's how. it's happened. you know world of big partisan movies lot and conspiracy it's time to wake up to dig deeper to hit the stories that mainstream media refuses to tell more than ever we need to be smarter we need to stop slamming the door on the back and

shouting past each other it's time for critical thinking it's time to fight for the middle for the truth the time is now for washing clothes for watches the hawks. prosecution will need to become almost in this show the fault is all. over you who pushes the threat of fines. by the number one place you do i mean yeah i mean i've moved out political pressure on that i need him close enough to secure a dentist who knows how to pull your mind out of business models he was my american corporations dad of was incomplete please sold on could be mental disease as an abuse if you choose to see a man who was on the scene and the solution. lies up an association between. i know who can he sell some of those it is just somebody he's

a deleted data an investigative documentary. ghost war on oxy. i look at the thing look at. the boat see if you. think you know some people who believe it's important. i.

get all of the content for just twelve euros fifty per month. because news today then turkey's president says dissident saudi journalist. was the victim of a vicious murder and that his killing in the saudi consulate in istanbul was planned well in advance and had to write about it here in the agreement that should have been done years ago but still people come to this that we have more money than anybody else by far we'll build it up donald trump threatens to ramp up america's nuclear capabilities after vying to scrap decades old this element treaties with russia. a british man sues the u.s. army after being exposed to toxic chemicals while working as a contractor at a military base we speak direct to the whistleblower.