Episode 488
Good morning, good afternoon, or good evening, and welcome to the Paul Truesdell Podcast. It is Friday, September 26, 2025, and this is episode 488. Let’s begin with a simple request. Go get yourself a cup of coffee. Put your shoes on, lace them up, maybe get your golf cart ready. Even better, put in a pair of headsets or AirPods, step outside, and go for a walk. Do a little listening, do a little thinking, and do a little walking. Clear your head, move your body, and give your heart a bit of exercise. It is a trifecta that sets you up for sharper thinking and better conversations.
What we are about to cover is not background noise; it is the kind of thing that benefits from being digested while your body is in motion. So, treat this as a walk-and-think session. Listen closely, let the ideas bounce around while you take in the fresh air, and by the time you are back home, you will have more perspective than when you left.
Now, I will warn you. I am going to be sarcastic, because sarcasm often cuts through the fog. I am going to connect dots that at first might seem unrelated, and then I am going to explain why I do what I do here on the Paul Truesdell Podcast. The theme is always the same: governments — federal, state, county, and municipal. They are massive. They are powerful. And most of the time, people are not paying close enough attention to what they do with our money.
So today, let’s take a closer look at the beast in the room that nobody really wants to talk about. Let’s get started.

First or Phase One
When people ask me, “what percentage of the economy is the federal government,” I have to smile. Because it is one of those questions nobody asks until they realize Washington is not just the referee—it is one of the biggest players on the field.
There are two ways to measure this beast.
First, federal spending as a share of GDP. That is just a fancy way of saying, “how much of the entire U.S. economy is the government spending every single year.” Historically, in so-called normal times, Washington runs around twenty to twenty-two percent of GDP. One out of every five dollars in the economy is federal spending. That is the baseline.
But here is where it gets interesting. In times of crisis, the share spikes. During the Great Recession, spending hit twenty-four, twenty-five percent. And then came 2020. COVID hit, and the government threw money around like it was confetti at a parade. Federal spending surged to around thirty percent of GDP. Almost one-third of the entire economy ran through Washington’s fingers in a single year. And now, in 2025, projections put spending back in the twenty-three to twenty-five percent range. Translation: the crisis may have “ended,” but the appetite did not shrink. Once Washington stretches, it never snaps back.
Second, federal revenues as a share of GDP. That is the tax side. How much is actually flowing into the Treasury. This number is smaller. Usually, it hovers around sixteen to eighteen percent of GDP. So while Washington spends nearly a quarter of the economy, it only collects less than a fifth. That gap—between twenty-three to twenty-five percent out and sixteen to eighteen percent in—is not a rounding error. That is the deficit.
So let me put this in plain English. The U.S. economy is about a twenty-eight trillion-dollar machine. And every single year, the federal government spends roughly a quarter of that machine, while only collecting less than a fifth. Think about that. If you ran your household this way, you would be bankrupt before the next electric bill hit the mailbox. But in Washington, they call it “fiscal policy.”
And here is the foundation point you need to keep in mind: when one in every four dollars of the economy is coming from Washington, the government is not just a regulator or a safety net. It has become one of the largest sectors of the economy itself. That changes everything—how markets behave, how businesses invest, how individuals make decisions. It is the government as landlord, tenant, referee, and player all rolled into one.
That is the baseline. That is the foundation for everything else we are going to talk about.
Next or Phase Two
Let us take a moment to appreciate what we are witnessing. For the first time in my lifetime — and I have lived through Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, Reagan, Bush, Obama, Trump, Biden, and now Trump again — we are seeing a president who actually acts like a president. Donald J. Trump, number 45 and now number 47, has decided to play this game the way it should have always been played: no prisoners, no apologies, and certainly no participation trophies for obstructionists.
The message out of the White House is clear: keep the government funded or prepare for permanent pink slips. Not the usual furlough shuffle, not the typical “don’t worry, you’ll get back pay later” charade. No, this time it is reduction-in-force, and not a temporary one. Agencies are being told to identify positions that do not align with the president’s priorities, and once those jobs are gone, they are gone.
Naturally, the Democrats are shrieking. Chuck Schumer calls it intimidation, Hakeem Jeffries calls the budget director a “malignant political hack.” How original. You would think after half a century in Washington they could come up with something more creative than recycled playground insults. Their big stand? Insisting on hundreds of billions more in healthcare subsidies, plus reversing Medicaid cuts, plus unfreezing funds they do not control. In other words: “Give us everything we want, or else.”
Trump’s response was equally professional: he canceled the meeting. Why waste time with unserious people who believe compromise means the other side caves? This is not Reagan and Tip O’Neill sharing Irish whiskey in 1986. That was another era, one where dealmaking still existed. Today, Democrats treat governing as performance art, complete with hashtags and tearful press conferences. Trump treats it as a job — a job with deliverables and deadlines.
And about those deadlines: October 1 is the cutoff. The GOP has a seven-week stopgap plan on the table, already passed the House, and it includes added security funding after the tragic killing of Charlie Kirk. The Senate will return, Democrats will posture, and then the country will find out if they are willing to watch federal employees lose their jobs permanently just to preserve a bloated subsidy package.
The irony is delicious. For years we were told Trump was the chaos agent. Yet here he is, operating with methodical precision. He learned from his first term: the endless investigations, the de-platforming, the lawsuits. This time there is no illusion of bipartisanship for the sake of appearances. It is simple: here are the terms, take them or leave them.
So yes, there is a new sheriff in town — the same sheriff, actually, just wiser, tougher, and far less tolerant of nonsense. If Democrats want to play chicken, they had better realize Trump is not swerving. He has the wheel, the gas pedal, and the law on his side. And frankly, after watching decades of politicians stumble around like amateurs, it is refreshing to see someone finally willing to drive straight through the barricade.
Phase Three
Let us start with the basics. The United States has a population of about 340 million people. That is the headcount. Out of those, roughly 267 million are age 18 or older. So, call it almost four out of every five Americans who, at least by law, are adults. Now, being an “adult” and acting like one are two very different things, but we will save that for another day. For now, just keep in mind that the majority of this country is in that over-18 category.
Now let us narrow the lens. Out of those 267 million adults, who is actually working? The latest employment data shows around 163 million people are employed. That is not payroll entries, that is real bodies working in some capacity. Sounds like a big number, and it is. But before you get excited about all those hardworking Americans, remember this: not all of those jobs are in the private sector.
The government itself — federal, state, and local combined — employs about 23½ million people. One out of every seven workers in this country is pulling a paycheck that ultimately comes out of taxpayer pockets. Federal employees, state bureaucrats, teachers, local administrators — all part of that number. When politicians brag about “job creation,” they rarely admit how many of those jobs are the government hiring itself with your money.
Now, here comes the hard truth. Who actually pays the bills? It is not enough to say, “Well, 163 million people are employed, so everyone is carrying their share.” That is not how it works. Once you net out Social Security, Medicare, Medicaid, food stamps, housing vouchers, and the alphabet soup of transfer programs, the distribution shifts dramatically. According to the Congressional Budget Office, the bottom 60 percent of households receive more in transfers than they pay in taxes. Let me repeat that: the majority of households take out more than they put in.
That leaves the top 40 percent as the true net taxpayers. They are the ones actually putting more money into the system than they are getting back. If you apply that 40 percent share to the employed population, you end up with somewhere around 60 to 75 million people carrying the federal government on their backs. Think about that. Out of 340 million people living in this country, only 60 to 75 million are truly paying in more than they get out. That is the working core, the net contributors. The rest are either breaking even or pulling more out of the system than they put in.
Now let us layer on the national debt. The federal government has racked up about $36.2 trillion in debt. That is trillion with a “T.” The kind of number so large it becomes meaningless, until you personalize it. So let us personalize it.
If you spread that $36.2 trillion evenly across all 163 million employed people, the bill comes to about $222,000 per worker. That is a nice starter home in most of the country. But remember, not all workers are net taxpayers. If you confine that debt to the 60 to 75 million people actually carrying the load, the math gets brutal.
At 60 million net taxpayers, each one owes about $604,000 just to pay off the debt in a lump sum. At 65 million, it is around $557,000 each. At 70 million, it drops to about $517,000. And even at the high end, 75 million net taxpayers, the burden is still $483,000 apiece. That is the equivalent of taking out a mortgage — not for a house, not for land, but just for your personal share of Washington’s spending spree.
So here is the picture. Three hundred forty million people live in this country. Two hundred sixty-seven million are adults. One hundred sixty-three million are employed. Twenty-three and a half million of them work for the government. Sixty to seventy-five million of them are true net taxpayers. And together, that relatively small group is staring down a $36.2 trillion tab.
This is the foundation you need to understand before we talk about deficits, entitlements, or fiscal reform. Because every speech you hear from a politician, every promise made during an election, every new program they dangle in front of voters — it all comes down to this reality: a shrinking pool of net taxpayers carrying an ever-growing mountain of debt.
And Washington has the gall to call this “sustainable.”
Phase Four
You may wonder why I speak so often about the federal government, the Trump administration, and long-term forecasting. The reason is simple: if you ignore the behemoth, you do so at your own risk. The size and scope of the federal government — and let us not forget state, county, and municipal governments — is astronomical. We are not talking about a small referee on the sidelines. We are talking about a central player that dominates the field, the rulebook, and the scoreboard.
And here is the reality most people do not want to face: at the end of the day, it is the private sector that pays the bill. People like myself — business owners, entrepreneurs, taxpayers — we are the ones writing the check. Yes, plenty of people work in the public sector. They serve in the military, they serve in law enforcement, they serve in government agencies. And nobody denies that they pay their share of taxes. But here is the hard truth: when we calculate net contributions to the tax base, those jobs do not add to the surplus. They are funded by the private sector. From a business perspective, only private enterprise can be the true net contributor.
Now put that into context. We are up to our eyeballs in debt. And I am not just talking about the $36 trillion national debt. Add in mortgages, car loans, credit cards, and consumer debt of every flavor, and you see why most Americans live in fear of rocking the boat. They are barely holding on. “Please don’t change anything, I cannot afford another shock.” That is the mindset. But others are realizing something different: if we do not fix this leaking boat now, it is going to sink. And that is where Trump comes in.
Trump is riding that wave of realization. The political class does not know what to do with him because he is not playing their tired game. Add to that the backdrop: the assassination of Charlie Kirk, the indictment of James Comey, the auto-pen scandals of the Biden administration, the pardon-palooza during Biden’s final days, and mounting evidence that the Obama administration actively colluded to block Trump from being elected in the first place. Each event reinforces one undeniable point: the system is rotten, and massive change has to take place.
And if anyone doubts the power of government, look no further than the COVID lockdowns. Overnight, Americans discovered just how powerful their government actually is. Businesses shut down. Families were told to stay home. Mandates rolled out with the stroke of a pen. And we all saw what happened when securitization and mandated lending collapsed during the housing crisis. One bad policy, one artificial shove, and the entire structure wobbled. That is the reality of a behemoth government.
Now, add the international dimension. China has been flexing in ways we have not seen in modern times. Their naval expansion has been rapid, aggressive, and imperialistic. They are projecting power across multiple fronts — military, economic, and technological. When you put these pieces together — American debt, government overreach, foreign adversaries — you start to see the bigger picture. We are boxed in, and if we do not move quickly, we are going to be boxed out.
History gives us no comfort here. Nations collapse. It has happened again and again. The Sumerians, the Egyptians, the British, the French, the Spanish, the Soviets. You can walk through the centuries and see the same pattern: empires drown themselves in debt, corruption, and hubris until the system caves in. That is why I study these trends. That is why I read and reread the works on the collapse of nations. Because the past is not just a story; it is a warning.
And it is also why I do the math. I study taxation. I run quantitative analysis. I overlay the numbers with a qualitative lens that accounts for human behavior — and let us be honest, human irrationality. Politicians act irrational, but if you follow the money, you find the rationale. Lobbyists, influencers, family connections — the logic is always there once you strip away the rhetoric.
So yes, I rant about debt. I rant about taxation. I rant about government overreach. Because ignoring it is like tying one arm behind your back in a boxing match. Or cutting off a leg and telling someone to go run a marathon. You can try as hard as you want, but the outcome is inevitable. Reality wins every time.
And it is no different with trendy nonsense like DEI hiring quotas. You can pretend that performance does not matter. You can fill boxes on a form. But at the end of the day, if you are not putting the best people in the right roles, you lose. That is the bottom line.
This is why I always return to mindset. You cannot build sustainable wealth without changing the way we think. Mindset comes first. That is why, when I talk about the Seven Components of Wealth, mindset leads the list. Everything else — physical, emotional, intellectual, relational, income, risk management — follows behind. If we do not fix how we think, the rest is just noise.
And that is the rest of the story.