Since the economic crash of 2006-2009 (often called the downturn of 2008), two things have been clear to economists who are paying enough attention and politicians who care enough to gain true understanding of the situation: the United States economy is only alive through artificial means and there is no feasible way to fix it without extreme measures.
They know this. They’ve been able to maintain a modicum of faux-stability through quantitative easing and the destructive effects of zero interest rates combined with an exceptional disinformation and propaganda campaign that has mysteriously (some would say supernaturally) kept the majority of Americans from feeling true negative effects. I’m not talking about people losing their jobs or living in poverty. Those things are bad enough and are clearly happening around us all. The true negative effects I mean would come from a complete and sudden “bursting of the bubble” upon which we’re riding that will have catastrophic consequences for every non-financial-elite American, not to mention in most countries around the world.
The propaganda has been so strong that it’s almost admirable. After all, if Americans were allowed to look down and see the depth of the precipice we’re currently dangling ourselves over, we would panic. That panic would cause the very bursting of the bubble that we’re trying to avoid, so I understand the reasons for it. However, the continuous debt and spending increases, including the one that just passed in the Senate, have to stop. There is only one possible man-made solution to the problem and it’s the extremely unpopular notion of deep cuts to spending and a renegotiation of the debt situation. Both options are exceptionally ugly as they would have different negative consequences, but it’s the type of hard choice that very few in Washington DC seem willing to consider.
Before anyone calls this a “scare piece” to rally support for Rand Paul, Ted Cruz, or Marco Rubio, we have to take a look at the situation. Here’s the best example I can think of in layman terms:
It’s like a family deciding that they need to take out a high-interest loan to pay off a credit card in order to continue to use the credit card. The sad part is that the family is not cutting back on spending and in fact has decided to spend more with their “clean” credit card. What makes it even worse is that the interest that they have to pay on the high-interest loan is paid by the credit card. It’s a circle of dysfunction that would sink any family, company, or organization. It would also sink any other country that wasn’t the home of the world’s reserve currency, the petrodollar.
Some might wonder how this has been allowed to continue if it’s so damaging. The reason is because we’re dealing with such a dramatic scale – trillions of dollars – that on the surface it seems insurmountable. The money to pay the debt would be borrowed from the lenders who own the debt in the first place. Sounds crazy, right? It’s one of those backdoor deals that only makes sense to those who are either in the middle of it or oblivious to it. In essence, the debtor (the US) is only allowed to keep borrowing money that it clearly cannot pay because the interest alone is so substantial that the lenders couldn’t imagine not receiving it. From the Federal Reserve to other countries, they’re all okay with getting the interest and letting the principle continue to grow. Yes, grow.
Don’t even get me started on Social Security and other government black holes that are so deep in the debt pool that reconciliation is practically impossible. We owe trillions of dollars to Social Security, military retirement, government employee retirement, and disability. In other words, the US government has borrowed money from the US government in a paper shifting scheme that puts Ponzis to shame for not being that creative. We are literally borrowing money from ourselves that doesn’t even exist.
This is worse than a scam. It’s worse than a racket. It’s worse than a con. At least with a scam there’s a winner and a loser. Raising debt ceilings and increasing spending is making today’s economy lose a great deal while making the future economy lose even more.
It’s my contention that if the American people knew how all of this was working, that they would cry at the top of their lungs to make it stop immediately. That would have a humongous effect on current politicians and would cause a shakeup never seen before in the country. That’s the biggest reason that nobody is being told exactly how bad the situation is. This isn’t like Greece. This is much more akin to what’s currently happening in Venezuela.
The greatest tool the government has is that everything is so utterly unfathomable that most people don’t know what’s happening while the vast majority of those who do know are unwilling to let the cat out of the bag.