So I began writing in this blog about 8 months ago. My consistent theme has been against excess and corruption. These two characteristics manifest in various ways and inevitably manifest through central governments. DC is a mating ground for excess and corruption. I’ve talked a lot about the inevitable result of this excess and corruption and it is now coming to roost. There is no such thing as a free lunch. Everything is a trade off. In the past 6 years we’ve all indulged the excesses provided by our appointed officials. We’ve chosen to either buy into or ignore the notion that printing money out of air while increasing taxes to the working class is a successful strategy for recovery. We’ve been told that despite all the lessons of the past things will be different this time. This time we can print unlimited amounts of dollars without consequence. We can continue to implement destructive tax policies without affect on the nations working class. The facts, however, as evidenced by the past 6 years tell a very different story.
The money printed out of thin air has more than doubled our nations debt. It has destroyed the system of savings via compound interest and it has robbed this nation of long term investments. This is a burden our children and their children will bear. Now I want to talk about this in a bit more detail. I find it interesting that when I discuss national debt it seems to go in one ear and out the other. Most Americans have absolutely no concept of what $18 trillion dollars of debt means. The number is so far outside any of our conceptions that it is meaningless to us and so we simply ignore it. That is we don’t think about what it means to have this debt, the implications of the debt and who will bear the burden of this debt. And because of this phenomena there is almost no discussion amongst the people of this nation about limiting the debt.
Now when we discuss our own personal debt we are very attentive and concerned about taking on excess debt because we know very well the pain it inevitably causes. But if I told you your actual grandchild will be forced to pay 50% of their after tax income so essentially 75% of their income to the state in order to pay for our nation’s debt would you still ignore it? Would you be able to look your grandchildren or children in the eye and tell them that your apathy and acceptance of our nations excess and fiscal corruption means they will live far worse off than you? They will have to live in a smaller house, drive a cheaper car, eat less food and simply have a worse quality of life because you chose to ignore this issue. Could you inform your futures generations that you knowingly took more so they would have to accept less? Because this is exactly the reality. Again there is no such thing as a free lunch. It is a false notion. Every dollar our government prints now and every monetized bond guarantees the next generation a worse life than we are taking. That is not a metaphor or conjecture or a theoretical conceptual hypothesis. That is a cold hard fact. You and I are directly responsible for the hardships that our children and grandchildren will bear each day of their lives. And we hear this almost daily but yet we carry on as though it is not the case. That somehow it will all work itself out. I find it just so incredibly selfish and irresponsible. It goes against our most primitive behaviours of sustaining our blood lines. Parents are willing to die for their children yet we have no issue bankrupting them.
Well the implications of our apathy toward the excesses and corruption that have taken over what it means to be American are progressing from predictions to realities now. One remarkable aspect of social psychology is our ability to not only forget but deny so quickly after suffering the consequences of the same behaviour. Not 6 years ago the nation was on the brink of collapse due to the same behaviours of the past 6 years. Some declare these actions of excess and corruption are what saved us. But we haven’t been saved. There has been no recovery. We are told unemployment is under 6%. However we have less full time jobs today than we did 15 years ago. U6, the real unemployment figure, is 13% today. It was 5.8% in 2000 and 6.8% in 2007. We have more working aged folks not working than we did when women typically didn’t work outside the home. These are devastating realities that clearly evidence there has been no recovery other than in stock prices. Well the truth about that is 98% of stocks are owned by less than half the of population. The other truth is that those prices and consequential wealth is no more real than it was in 2008 and it will disappear just as quickly. The fact that unemployment is double what it was in 2007 and that median household incomes are falling along with median net worth means the nation’s ability to recover from the nearing latest collapse is going to be less than last time and as we’ve just discussed we haven’t recovered from the last time. And so where will that leave us? In much worse shape than we were in 2009. Try to think back to Christmas of 2008 and recall that constant pain in your stomach.
Folks I hope you recognize the realities of our situation. We are a dirty old house of cards and the headwinds are coming. Position yourselves to withstand the fallout. The bill for the excesses and corruption we either partook in or ignored is about to be paid.