American delusion of unlimited borrowing, consumption and debt spending to come to an end
(NaturalNews) Right now, it’s pretty easy to disbelieve anyone who is trying to sound the alarm that something bad could ever happen to America.
It’s easy, while sitting in the comfort of our homes, watching life go on around us, to dismiss as fear-mongering anyone who tries to shatter the images of calm with dire predictions of calamity and chaos – just around the corner.
I get that. Believing that everything is okay – well, pretending that everything is okay – is a helluva lot easier than contemplating disaster and what to do when it happens.
And yet, that’s exactly what is liable to get so many Americans killed – or worse yet, enslaved (because I agree with our founding philosophers who believed it is worse to live in chains than to die a free man): This mistaken belief that, no matter what, our country will survive anything.
It’s the debt – and borrowing – stupid
But unlimited borrowing, risky fiscal and economic policies built on lies and the government’s addiction to spending will take its toll on our country, sooner or later. As we have already begun to see in socialist Europe – eventually, the politicians, seeking votes, promise far more in benefits than the beleaguered, taxpaying public can support; and when that happens, the system – the serene life as we know it – will come crashing down around us.
The experts have already begun to sound the alarm bells. Thorsten Polleit, writing for the Ludwig von Mises Institute, a libertarian-leaning group advocating the economic and fiscal policies of its Austrian namesake, notes:
The current upward dynamic of the debt-to-GDP ratio is economically unsustainable. It cannot go on forever. To see this, let us assume that the total debt-to-GDP ratio does continue to grow at the average rate at which it has expanded from Q1 1971 to Q2 2009… The total debt-to-GDP ratio would exceed 600 percent at the start of 2029 and reach more than 1000 percent in 2050.
Admittedly, we do not know how much debt relative to GDP an economy can shoulder. And, of course, there might even be good reasons for the ratio to rise over time. … One thing is clear, though: the level of debt relative to income cannot rise without limit. This insight is important, given that there is strong reason to believe that the extraordinary rise in the debt-to-GDP ratio is a result of the government-controlled, fiat-money system in which the money supply is increased through bank lending.
‘We haven’t even gotten people to understand the charade that we have’
Bill Fleckenstein, president of Fleckenstein Capital, who writes a popular column called “Contrarian Chronicles” for MSN Money, said this in a recent interview with King World News:
Right now, people continue to believe that the same idiots that created all of these problems, namely the central banks, are going to somehow get us out of it with the exact same policies that got us into it, only at a much higher (aggressive) level of pursuing those policies. …
We haven’t even gotten people to understand the charade that we have. … What the masses have done over and over again is to believe one more time that it’s all going to be OK … We are in a unique moment in history. The whole world is printing confetti, and (yet) people seem to think that’s going to work out fine.
The longer you keep pursuing insane policies, the more you pile (them) on top of each other, the worse it gets … So, when the Fed can’t print money and we have to deal with this, it’s going to be brutal.
What’s more, even the government’s own fiscal watchdog is saying the exact same thing. From a revised Congressional Budget Office report in May:
The Congressional Budget Office’s updated budget outlook projects that, under the baseline rules the agency is required by law to follow, spending will total $46.677 trillion over the next 10 years, revenues will total $40.336 trillion, and the debt will climb to $25.228 trillion by the end of 2023.
That’s unsustainable, period.
But then again, we’ve been warned. What we are prepared to do about it, as a people, remains to be seen.