This week served as further evidence that America is irrevocably engaged in a course of currency degradation. Decades of misguided policies have led us to this critical point. Let’s delve deeper into this matter, starting with the notion of full commitment.
While we may not have firsthand experience in gutting a hog, we understand it’s quite a gruesome sight. The sheer volume of blood—commonly referred to as ‘bleeding like a stuck pig’—is certainly overwhelming.
When contemplating a classic bacon and egg breakfast, one can discern two distinct forms of commitment: that of the chicken and that of the pig. As the well-known analogy goes, the chicken contributes eggs for the meal, while the pig makes the ultimate sacrifice for the bacon.
Currently, America is bleeding like a stuck pig. Both public and private debts are creating a catastrophic situation. For context, the budget deficit for the fiscal year 2020, which concluded on September 30, was a staggering $3.3 trillion. This means the federal government expended twice as much as it garnered from tax receipts and similar measures. Notably, the national debt held by the public has now eclipsed 100% of GDP.
There’s no feasible way to repay this debt honestly; mathematically speaking, it’s impossible. An honest default is not politically viable either.
Instead, this debt will be addressed through dishonest means: specifically, through the debasement of the dollar. America is fully committed to this strategy. Here’s why…
Words of Omission
The presidential debate held on Tuesday has been described in many unfavorable terms. Some commentators expressed their disdain in rather colorful language.
At Economic Prism, we offer an alternative perspective. We found the debate refreshing in a peculiar way—akin to taking a polar bear plunge on New Year’s Day or going for a pre-dawn jog; it was painful yet oddly enjoyable.
President Trump’s cantankerous rhetoric and Biden’s struggling attempts to mask his cognitive decline provided a spectacle of disregard for facts. Chris Wallace, in his efforts to play the role of a seasoned moderator, seemed to fall short once again.
This event serves as a stark illustration of the degradation that accompanies democratic governance. Achieving the presidency often involves a paradoxical mix of selling one’s soul and wallowing in the muck. We feel compelled to grant this debate a five-star review, but it revealed another crucial insight…
There were important topics that went unaddressed. Within the 98-minute debate, the burgeoning $3.3 trillion budget deficit was notably absent from discourse, as was the staggering $26.8 trillion national debt that is aggressively escalating like a raging wildfire.
Furthermore, there was no discussion concerning the manipulative monetary system that concentrates wealth among the richest or the eye-watering $157.7 trillion in unfunded liabilities linked to Social Security and Medicare.
Neither Trump nor Biden addressed these pressing issues. Not even Wallace raised them. What gives? Where is the alternative viewpoint?
The underlying issue that was neglected during the debate is the ongoing crisis stemming from 50 years of insatiable debt accumulation. Each day, week, month, and year, the federal government has consistently spent more than it receives. Now, the resulting debt has surpassed any reasonable point of recovery; reversing this trajectory is no longer feasible.
This should be the real topic of debate. This is the narrative being overlooked by both presidential candidates. It’s a story of America’s decline—too dire for discussion. This glaring omission from Tuesday’s debate renders it little more than a significant distraction.
“In America Money Does Grow on Trees”
The U.S. government, along with the American populace, has fully embraced a strategy of currency debasement to diminish the debt problem. The prevailing belief is that defaulting implicitly through inflation is the gentler route.
Throughout history, notable figures ranging from John Law to Charles Ponzi and from John Maynard Keynes to Jerome Powell have promised the allure of obtaining something for nothing. They’ve devoted their intellect to achieving a multitude of economic schemes, including:
- Countercyclical stimulus spending
- Interest rate suppression
- Quantitative easing
- Elastic currencies
- Money shuffling
- Inflation targeting
- Smoke and mirrors
These strategies allow governments and individuals to overspend their means, ultimately defaulting on debt without repercussions. The ultimate outcome of this misguided intelligence is catastrophic.
So, why change course now? Americans, like the pig providing bacon, remain indelibly committed.
The pinnacle of this flawed reasoning is the rise of Modern Monetary Theory (MMT). Its proponents argue that the U.S. can print endless money to propel the economy forward, disregarding debts and deficits.
MMT is undoubtedly a system that champions big government. It allows for endless spending sprees without accountability. Though its underpinnings are questionable, many are drawn to its promises.
Recently, MMT advocate Stephanie Kelton released a book titled “The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy,” which has received acclaim from unexpected quarters. Even rap legend Ice Cube touted the book, stating:
“America loves to cry broke. But in America money does grow on trees.”
Predictably, as financial markets falter and the economy teeters, the populace will demand action. In response, both the President and Congress will surely commit fully to MMT or a similar approach—essentially offering money extracted from thin air. Debts will be settled, and, like the pig, the dollar may ultimately meet its demise.
So, savor the bacon while it lasts.
Sincerely,
MN Gordon
for Economic Prism
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