In 1976, economist Herbert Stein, the father of Ben Stein—known for his role in *Ferris Bueller’s Day Off*—noted that the trajectory of U.S. government debt was unsustainable. He thus articulated what is now known as Stein’s Law:
“If something cannot go on forever, it will stop.”
While Stein’s theory might have had merit, the persistent rise of U.S. government debt continued even after his passing in 1999. Those currently observing this trend may not share his fortune of being removed from its eventual fallout.
Sometimes, predictions of catastrophic events come and go, yet life continues for some. We suspect that the present situation of escalating debt, deficits, and state-induced economic hardship is one of those moments.
We will delve deeper into this shortly, but first, let’s take a historical look back several centuries for context, enlightenment, and wisdom.
In 1696, William Whiston, a disciple of Isaac Newton, published a book with the grand title, “A New Theory of the Earth from its Original to the Consummation of all Things.” In this work, he argued, among other things, that the biblical flood of Noah was caused by a comet.
Whiston approached his findings with unwavering seriousness, and the people of London appeared to take him at his word. Whether it was due to his conviction or an unyielding fear of comets, they never considered him a mere quack.
Similar to Neil Ferguson and his colleagues at Imperial College, whose epidemic models have been widely scrutinized, Whiston’s conclusions filled a significant void. Despite the lack of scientific rigor, they provided alarming predictions that captivated a society eager for prophecies of doom.
It was only a matter of time before Whiston’s findings would spark controversy…
Judgment Day
In 1736, William Whiston analyzed his data and forecasted an impending apocalypse. What he saw terrified him to the core.
He proclaimed his findings, ranting to whoever would listen. In no time, he had inflamed his neighbors with a prediction that a comet would annihilate the world on October 13 of that year.
Jonathan Swift, in his work, “A True and Faithful Narrative of What Passed in London on a Rumor of the Day of Judgment,” quoted Whiston as saying:
“Friends and fellow-citizens, all speculative science is at an end: the period of all things is at hand; on Friday next this world shall be no more. Put not your confidence in me, brethren; for tomorrow morning, five minutes after five, the truth will be evident; in that instant the comet shall appear, of which I have heretofore warned you. As ye have heard, believe. Go hence, and prepare your wives, your families, and friends, for the universal change.”
Clergy gathered to offer prayers, and churches overflowed with congregants. Individuals of all social standings were gripped by fear. Lawyers contemplated their fates, while judges felt relieved to outgrow their former roles. Teetotalers indulged; drunks sought sobriety. Bankers forgave debts, and criminals once condemned found joy in their reprieve.
The wealthy offered gifts to beggars, only to have the beggars return the favor. Many affluent individuals made hefty donations to the church, likely in hopes of securing prime spots in the afterlife. Husbands reconciled with mistresses, while secrets spilled from confessions.
To quell the growing unrest, Archbishop of Canterbury William Wake found it necessary to officially deny Whiston’s prediction. However, his efforts mostly fell flat. Crowds assembled at Islington, Hampstead, and neighboring fields, eager to witness what they believed would be the “beginning of the end.”
Then, as Whiston had predicted, a comet appeared. Prayers were fervently offered, deathbed confessions became common, and in that moment of peak anxiety, the unexpected happened: the world didn’t end.
The comet merely passed by without incident.
In The Long Run We Are All Alive
The saga of Whiston and his ill-fated prophecy suggests that alarming forecasts of doom will oscillate while humanity persists. At times, the repercussions of such predictions are minimal, while at other moments, they can lead to dire consequences. Here’s the crux of our point…
“In the long run we are all dead,” stated the 20th-century economist and Fabian socialist, John Maynard Keynes. This was his justification for why governments should borrow from the future to stimulate economic growth today.
Politicians, of course, revel in theories that provide justification for their interventions in the economy. This is especially true when it allows them to spend public funds to secure votes. Keynesian economics advocates, particularly for counter-cyclical stimulus, do precisely that.
For the last 80 years, U.S. politicians have sought to borrow and spend the nation into prosperity. Over the past decade, the Federal Reserve has relentlessly printed money to underwrite Washington’s monumental borrowing spree. Just yesterday, for example, Fed Chair Jay Powell confirmed the Fed’s commitment to policies that risk dollar depreciation to supposedly foster job creation.
The world we once knew—where a dollar was synonymous with stability—has vanished. Today, as we navigate the aftermath of that reality, we are witnessing the illusion of wealth, born from generations of debt and over-expenditure, crumble before our eyes.
Moreover, counter to Keynes’s assertion, in the long run we are not all dead. In truth, we are quite alive and must confront the mounting repercussions of myopic economic policies.
Sincerely,
MN Gordon
for Economic Prism
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