Debt Slavery
Just Don't Worry About It!
The ponderous mountain of debt disturbed former Treasury Secretary Paul O’Neill.
A month later, Cheney told O’Neill he was fired.
That’s because in Cheney’s mind, to the victor go the spoils. Whoever wins the national popularity contest gets free rein to pillage the nation’s coffers, debase the currency, and sell future generations into debt bondage.
This is the winner’s due, and the looting has been relentless ever since:
Pentagon fails audit for sixth year in a row - can’t account for 63% of nearly $4 trillion in assets
After 15 years, CA high-speed rail still $100 billion away from completion
$1.7 million public toilet officially opens in San Francisco
O’Neill was fired in December 2002, when the national debt clocked in at $6 trillion. Today, it stands at $34 trillion - up 450% from what it was two decades ago.
This is getting expensive.
US Treasury spent $659 billion on interest alone last year.
In fact, servicing the debt has just eclipsed Defense spending and Medicare, and is now the second largest budget line item, just behind Social Security.
This is a massive problem - so massive that it’s threatening to wake up the masses.
Enter Paul Krugman with a new psyop in the NY Times:
Sure, don't worry about it.
I wish I could say Krugman's New York Times piece has some intriguing and fresh ideas to back up the provocative title...
But it doesn't.
Here's the argument in a nutshell:
First, while $34 trillion is a very large figure, it’s a lot less scary than many imagine if you put it in historical and international context... It’s roughly the same as it was at the end of World War II.
Ok, so it's not a big deal because we've been here before.
Except, we haven't.
Again, to the victor go the spoils.
America won World War II, and so the debt wasn't an issue. The post world war order was erected with the US as its economic and financial center.
If you call the shots, you get to set the ledger of account.
Today, we have similar debt-to-GDP levels as in the 1940s but the macro situation is almost the exact reverse:
1. We're now at the tail-end of the post-war era, as opposed to the beginning
2. We've been losing wars, as opposed to winning them (Korea, Vietnam, Somalia, Afghanistan, Iraq, Syria, potentially Ukraine)
Also, invoking the World War II era as a reason not to worry doesn't exactly inspire confidence. This was not a particularly fun time to be around...
Despite insisting that the debt isn't a problem, Krugman offers up solutions:
Bear in mind that governments, unlike individuals, never have to pay off their debt. How did we pay off the debt from World War II? We didn’t. Federal debt when John F. Kennedy took office was slightly higher than it had been in 1946. But debt as a percentage of G.D.P. was way down, thanks to growth and inflation.
America collects a much smaller percentage of its G.D.P. in taxes than most other rich countries; collecting an extra two percentage points would still leave us a low-tax nation and would be unlikely to hurt the economy.
That's right, at least on these two points we agree.
The inevitable "solution" will be confiscation either by inflation or by tax.
But there might be an interesting turn of events.
As the debt situation worsens, demand for US debt is drying up.
The Wall Street Journal published a piece last Friday titled: “Crypto Could Stave Off a U.S. Debt Crisis,” which spells out that the U.S. is headed toward a debt crisis, where healthcare and retirement promises will be broken, and that crypto can prevent this.
Yes, desperate times call for desperate measures.
The idea is that stablecoins are driving dollar demand globally and are already on a par with top-10 GDP countries in terms of appetite for US Treasuries.
It’s not really a solution, but it could kick the can further down the road.
If you needed another sign that crypto’s days as a piranha industry are over, and that it will instead be welcomed, even heralded as the savior of the West and catalyst for a new American dawn, this is it.
The Wall Street Journal is the dog whistle for normie world.
Mass adoption is here.
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