The Last Link

Way back in the early days of the conservative movement, it was assumed that Federal spending was both unsustainable and damaging to the country. Cutting the size and scope of government was their thing. The tool they eventually settled on to reduce Federal spending was taxes. If they made high taxes so unpopular with the public, the Left could not keep raising taxes. If they could not raise taxes to cover their spending, they would eventually have to yield to the mathematics.

Obviously, that never happened. The big tax reforms of the 1980’s did simplify taxes and lower rates on rich people, but revenues remained stable. At the same time, spending kept growing. One of the unspoken truths of fiscal policy is the percent of GDP that is consumed by Federal taxes does not change much of time. The range is between 15% to 18%, depending on when tax policy was changed. This is the logic of the flat tax. One rate, no deductions and no more IRS.

Spending, of course, keeps going up, no matter who is in office. Despite their rhetoric, the Republicans are the big spenders. In the 1980’s they had to spend on the military to win the Cold War. In the Bush years it was the crusades against Islam. It is only when a Democrat is in the White House that the Republicans get tight-fisted, and even that is mostly ceremonial, as we have seen with the last Covid bill. It turns out that there is no relationship between taxes and spending.

Another shibboleth of conservatives is that eventually the bond markets will force a haircut on the government. The so-called bond vigilantes will drive up interest rates, which will make borrowing more expensive. The theory here is that there is a hard limit on debt. Once that limit is reached, spending must go down or taxes must go up in order to reconcile the books. Like the belief that taxes will curtail spending, faith in the mythological bond vigilantes has been misplaced.

Of course, you can go back further and find arguments from the hard money crowd about the limits of fiat currency. There was an argument in the old days that said fiat currency not only unleashes spending and inflation, but it eventually makes the money worthless, thus bankrupting the state. We have been off the gold standard for a very long time now and none of the predictions came true. The spending continues, the borrowing continues, and the money creation continues.

The gold bugs have now moved to crypto currency as the savior. Once everyone is using digital money that is outside the control of the state, then we end up with a de facto gold standard. That will force fiscal discipline on the state, which means radically reducing spending. The fact that this will never happen has so far not dimmed the enthusiasm, but like all of the other schemes to cut spending, this one will prove no match for the animal cunning of the ruling class.

There is another theory related to money. The monetarists have always argued that sound monetary policy would impose discipline on the state. Since central banks are independent of the state, they can maintain a stable money supply. While not the same as a gold standard, sound monetary policy has similar effects. That has turned out to be a myth as well. The Fed is now captive to the spending frenzy of Washington, finding new ways to underwrite trillions in new outlays.

Now, there are those who will keep lighting candles for their favorite theory. The gold bugs, for example, are sure hyperinflation is around the next corner. The bond vigilantes are similarly sure the next crisis will confirm their theory. The truth is though, none of these theories turned out to be true. The official debt is $28T, but that excludes things like Social Security. The real debt obligations of the Federal government are incalculable. No one knows and no one seems to care.

The lesson of the last half century is one the monetarists learned from the battles over the gold standard. If the ruler is so corrupt you need hard money to control him, your ruler is corrupt enough to find a way around the limits of hard money. It turns out our rulers are more than capable of conniving around every limit put before them. They have reached levels of corruption that were though impossible half a century ago. The display being put on now suggest they are just getting warmed up.

This rather shabby track record should raise a question. That is, is the field of economics just pseudoscientific nonsense? It has lots of complexity and lots of very clever solutions to the complex problems it unearths, but outside of the most basic of concepts like supply and demand, economics is not very useful. In all of the important things, it turns out to be wrong. Astrologers have a better record than economists, because they know they are grifters, not scientists.

Putting that aside, the lesson here is that contra the libertarians, economics is downstream from politics. No amount of fiddling with the tax code can fix the defects of the political class. Even further, the right people in a corrupt system cannot correct the defects of the corrupt system. This is why the people come and go in Washington, but the corruption rolls on unimpeded. In the great chain of causality, economics is the last link in that chain. It is the final effect of a chain of many causes.


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213 thoughts on “The Last Link

  1. America has been able to inflate the USD without immediate material consequence because she has been the global hegemon since at least WWII. Today America is in the process of losing that status with the rise of China and the transition to a world without a single power node. Once that happens, the USD and the FedGov debt will begin to collapse in value and interest rates rise.

    As of February 2021, the US FedGov’s debt is USD 26T while the US GDP was USD 21T. It won’t be repaid, not even by further inflation.

    America will certainly lose its global hegemon status sooner or later because the Ruling Class controls both political parties and wants to destroy it. This change may happen very soon since the current Executive branch is under the full control of the Ruling Class and is populated by career politicians and academics, neither of which have any practical experience with the real world.

    Once a real challenge arises to US global hegemony, for instance the PRC completing its Anschluss of the ROC, foreign holders will begin to diversify out of the USD to other currencies.

    Will this be a catastrophic change like the Weimar hyperinflation? I don’t think so, but it will drive interest rates up sharply which will reduce the US FedGov’s ability to spend on silly things like subsidizing foreign wars and minority idleness at home.

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  2. There remains the problem of getting blood from a stone whether you borrow it, print it or steal it..

    Maybe the reason why the “crack up boom” (von Mises) hasn’t happened is because the world has a greater store of unconsumed capital, material ,and intangible, that even Peter Schiff has imagined. So the law of supply and demand may well be in effect, its rain falling on the woke and the anti-woke alike. It just needs more time to assert itself in its indifferent cruelty.

  3. It is hard to impossible to predict what will happen economically when your country is ruled by people who hate the populace and do well in any economic situation. The tribe prospered during the Weimar Republic until the most evil man in history lead a rebellion

    • Once you have demographic changeout, there is no future. CA has no future the way a white person would want it.

  4. Like everything else economic theories are a belief system not reality. Goldbus worship gold as a God. As Z notes, they have been predicting hyperinflation forever and will always do so. Eventually they will be right. The crpto worshipers are convinced crypto will bring about economic paradise.

    Everything is rigged and corrupt. All we can do as investors is to try and understand what game is being played and play it too with the knowledge we are not privy to all the schemes and data of the ruling class.

    The mere fact that members of the tribe have won so many nobels for economics should tell us that it is a corrupt pseudo science

  5. It’s kind of sad that even in this forum so few people understand that the answer to these problems are to be found in bitcoin. Bitcoin is the hardest money ever found and and will eventually slow and then finally stop this bullshit. Fixing the system is not possible so it has to be bypassed and that is exactly what bitcoin does. Yet, EVEN HERE we get stupid comments by some complaining about its energy use yet this is exactly what makes it by now, impossible to stop ( though they will try ). Geezus people, just google ‘Why bitcoin energy use is a good thing” and you will get exactly the same FUD, by EXACTLY THE SAME PEOPLE that you know are screwing us all around. Yet, even there, further down you will find the real answer, but you won’t bother looking because it is FAR, FAR, FAR easier to just complain. Please wake up.

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      • Understand WHY you are doing it first. It isn’t an investment – it is a REVOLUTION perfectly disguised as a get rich quick scheme. Extremely surprised the theZman isn’t more into it myself. There is a TON of info out there, just avoid the mainstream negativity and ALL SHITCOINS. Do your own research. Twitter #Bitcoin will get you started but don’t buy for profit, buy for the privilege of helping to take down these f**ckers.

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        • If government, hackers, Russians, Chinese, CIA, some wiz kid, decide to, they will destroy, control, steal, or regulate crypto. The weak link is the internet. Buy ammo, bourbon, land with well water, silver coins, gold coins, books, tools. vegetable seeds, chickens, go solar.

          • Yet more FUD. Please stop conflating bitcoin with ‘crypto’. There are a lot of scams in ‘crypto’ but bitcoin is the real deal. NEVER been hacked, uptime nearly 100% except for a few hours when it was first starting.. On ramp to bitcoin is regulated but bitcoin itself can’t be regulated. Totally decentralised and now 1 trillion in size. So many uses that any country that tries to ban it will be laughed at soon enough. Sure, the things you mention are important but being able to cross a border with some of your wealth IN YOUR HEAD if necessary, is priceless. It doesn’t matter if the internet goes down for a while, or even an EMP attack. When things come back up your wealth will still be there.

        • That all sounds fine and dandy until, ya know, the gov’t decides Bitcoin is illegal.

          • Many governments have tried to ban bitcoin but have soon backtracked. There are MANY people in government who are bitcoin fans. This is ALL FUD and it makes me wonder if people here are serious about fixing things or are just resigned to collapse. Governments could ban gold too, and guns – what will you do then? Just tell them to FO? Well why wouldn’t you do that with bitcoin?

      • DeFi is coming, like it or not. Lots of scams so its hard to see what’s up. BTC is the real deal though. Decentralised, digital gold – the hardest money ever. Had a virgin birth, all other ‘coins’ are likely scammy, even if ‘useful’.

        • Bitcoin is only as “real” as to the extent people are willing to use it, which in itself is totally dependent upon there being electricity to use. lol, what if the power goes out for weeks at a time? Months? No reliable power for years? Yeah, US infrastructure is deteriorating and rolling blackouts are already real events in some places. Imagine during a boogaloo you go to meet someone in some dingy back alley to negotiate for food and vitamins and all you can bring is a flash drive. “But, bro, the crypto on this is will totally cover this!”

          • If the power goes out for weeks at a time you have more problems than that. Bitcoin is NOT designed to help you buy some food when you are starving, so yes, other things are also necessary. It is designed to protect part of your wealth from confiscation so that worst case you can just leave and start a new life. Try doing that with a bar of gold – most people would last a day. Bitcoin can be stored in your HEAD.

    • “Bitcoin” is only an embryo in what’s being worked on in the crypto-currency field. It’s major problems are:

      1. It doesn’t scale very well. It only supports about 100 transactions/second. Visa does 100,000 transactions/second. It’s not practical to buy beer with bitcoin. This is being worked on with sidechains and the lightning network. You need a “blockdag” (directed acyclic graph), not a blockCHAIN.

      2. There is too much private information on the blockchain. Bitcoin is NOT fungible. It is subject to a “blood diamond attack”. That is if enough miners agree that certain bitcoins are “tainted” due to their history they will become worthless.

      3. Bitcoin consensus is determined by collective mining capacity. It is suggested that consensus should be determined by collective stake in the currency. This latter would make Bitcoin a true “corporation” in the technical sense. In fact it would be a stateless corporation, even a *state* in and of itself. True, other states my sanction it, like the State Dept sanctions Russia, but that would have little effect.

  6. In different translations of the Lord’s prayer, I’ve seen the same word translated as ‘debts’, ‘sins’, and ‘trespasses’. So I guess debt is sin, which would explain why the world today is addicted to it.

    Maybe debt is like tyranny: we’ll have as much as we’ll put up with.

  7. Pie in the sky I realize, but why not a national sales tax? It’s more legitimate than taxing labor and it puts corporate and government interests at odds. The market god would be angry of course.

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  8. Modern Money Theory works, and that can’t be denied now. Money is nothing but the numeric representation of faith. It’s not just tradcon Americans that believe in America, but even our enemies believe in us and use our currency. However, the moral hazard inherent to MMT is also real. Nothing breeds failure like success, and if a little is good then a lot is better. The COVID crisis will test the upper limits of MMT and I believe it will fail, and when it does it will be spectacular. That’s the thing about faith. It’s powerful when it’s on your side, but also powerful when it opposes you. Our masters don’t realize this, and when they destroy that faith it will be impossible to rebuild.

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    • We’re not yet doing MMT, although it feels like it. The Fed is still creating bank reserves and crediting the government. MMT is a total bypass of this process. We’re definitely going to do it though at some point.

  9. Palace Economies work. Until they don’t. Before money, a Palace Economy was all there was. The King or equivalent controlled all the wealth, and labor, and would divide it out based on needs of the kingdom, war, etc. This worked reasonably well for a very long time: Babylonia/Mesopotamia, Egypt, the Mycenaean kingdoms, etc. The Bronze Age got along quite well. But it was fragile. Without the king and his men enforcing it, laborers many forced did not maintain the irrigation systems for other men’s crops. Nor would traders show up with ships filled with tin needed to make bronze.

    What is instructive is how advanced all these societies were, and how quickly they fell to the Sea Peoples out of Sardinia (we think) within a few decades. And then … nothing. Only Egypt survived, in a weakened state, and they had to retreat halfway up the Nile protected on their flanks by impassible deserts. Their military was dependent upon chariots filled with archers, suggesting that once the Mycenaean and Hittite and Babylonian and Ugarit empires either could not replace losses or were faced with an enemy resistant to chariots and archers, they were doomed.

    In the US, we are now seeing the Chief Diversity and Inclusion Officer for SOCOM demanding the trial for War Crimes of SOCOM individuals and generals.

    Ahem.

    • And SOCOM is our military’s crown jewels so to speak. If they go PC/MC our ground forces will be seriously crippled. Most empires through history did everything to keep their military strong not deliberately weaken it.

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    • This isn’t the place to delve into the “Ancient Astronaut” wild theories of such authors as the 1970’s Erich Von Daniken and similar. Yet, these books and videos, stripped of some of their more sensational science fiction claims, pose valid questions. The fact is, that the ancient Egyptians built some damned impressive pyramids that can be explained — just barely — in possible methods of construction, even by Bronze age technology and manual labor. The exact methods used are unknown. Even more mysterious are some of the edifices of the Americas. We of European descent may look down our noses at the Mesoamericans, but when they weren’t cutting out living hearts, they too built some impressive, and very durable, monuments and cities. It is my understanding that some of those that were built, such as Machu Pichu, defy all attempts to explain their construction. Some of these were built with enormous stones, each weighing many tons, individually shaped and then placed into a tight formation without mortar. They withstand earthquakes. The masonry skill is impressive enough. An even bigger head-scratcher is HOW the stone was got to the job site. It was sometimes a few mountain peaks away. You don’t just load a ten ton block onto a team of alpacas and schlep it down one mountain path and up another. Comparably mysterious are how some of the Stone Henge and similar English megaliths, which are known to have come from over a hundred miles away. Again, that is a lot of effort for primitives who didn’t even have the wheel.

      • The stones in many cases were built with geopolymers cast in place, hence the perfect.joints.

  10. Where is the bottomless pit spending going? It’s going into the stock market … and massive asset inflation. New highs daily, in spite of lowered economic activity. This has been the case since the housing crisis bubble popped, because for the first time, no readjustment was allowed to occur. And the interest rate of zero (or near zero) keeps the post-2008 magic act going.

    Biden announced he has a goal of transferring investment capitol from savers to the underserved community. What does that even mean? Sounds like research and investment funds are being redirected into consumption. The future is being pissed away to keep the peace.

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    • Yep. And since the lockdown consumer spending has went into the toilet. Contrary to Trump’s BS our economy never recovered. For example I like to point out to people that I live near a major Union Pacific rail line that ships Asian goods from the port of Long Beach to the East. Before the lockdown there was on average one Intermodal train(with means shipping containers and trailers) going Eastward every hour. Today there are maybe 4-6 freight trains going in either direction every day.

      Consumers are not spending because employment has been decimated by the lockdown. And because the Feds so-called Stimulus packages have been give aways to billionaires and cronies. 90% of the money went to them not to the people.

      What we are seeing is one of the most massive wealth transfers in history from the lower classes to the wealthy. This is the Great Reset.

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    • There will be no peace. Assets from the powerless can be taken fairly easily but that will run out soon enough.

      You perfectly described the currency devaluation underway and asset inflation. The main question is “why?” There is no good ending for anyone, which forces the conclusion the Ruling Class is insane and has bought into it’s own grift narrative.

  11. My mental model of fiat currency and gold has always been that both are commodities. However, that model isn’t working.

    The price of just about every metal has recently doubled. Part of that is due to steel mills shutting down, part of it is due to disruptions to industry, but part of it is just inflation. So copper, steel, aluminum – they’ve all gone up. Gold has gone down. What the hell?!

    Does anyone actually understand what’s going on with gold? Because I apparently don’t. I don’t see how market manipulation could take any form other than someone dumping gold on the market, which I don’t think our overclass would do if they anticipated hyperinflation: They’d all be holding onto hard assets as hard as they can, like they’re buying up land and real-estate.

    • Stimulus and bailouts have given lots of people lots of cash to spend. The shut down has cut off a lot of outlets for spending. Beyond that, there’s probably some wacky and nefarious stuff. However, extra cash with fewer purchasable goods generally leads to increased prices.

    • Lots of money flowed to gold when bond rates were tending toward zero or negative. The thinking was that, if neither produces a cash flow return, gold at least preserves value and hedges against inflation. But as the ten-year rate inches up and the expected inflation from trillions of dollars of stimulus fails to manifest, that capital is leaving gold and returning to bonds. What flirted with $2000/tr. oz. six months ago has retreated by several hundred dollars. The folks who are really gonna get spanked are those who bought the miners, like Barrick, hoping to get both a dividend and the upside on the metal. Like any essentially leveraged play, it’s just more volatile than owning the commodity itself.
      That said, I think interest rates will remain low enough that a larger group of investors than merely the die hard goldbugs will continue to hold some gold in their portfolios, hopefully maintaining a floor above $1500/tr. oz.

    • What you deem “price” of metal is a fiat derivative(futures)
      Those contracts can be rolled indefinitely and do not represent actual physical assets

      So it’s easily manipulated by main players. And it will work as long as current system keeps functioning

      Potential breakdown is if real shortages start. But for that something big needs to happen

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  13. I suspect that when the chinks decide to demand payment on all the bonds they hold, or they simply stop buying them – then economics will be retethered to reality.
    Also (not sure if it’s an actual econmic theory) but the axiom that the higher the climb, the harder the fall will be proved.

    • Stranger in a Strange Land: Your comment led me to research the difference and preferred usage between proved and proven. So I’ve already learned something today even if it had nothing to do with economics (both are past participles, modern American usage prefers proved, and my use of proven is probably attributable to my heavy reading of British literature).

      • 3g – perhaps a bit pedantic, but the proof is in the pudding, and you have proved to me your proof reading is correct and has proven to be enlightening.

    • Maybe, maybe not. If the chinese call the loan, the government can tell them to take a hike and not pay. If they stop buying, well that just leaves more for the fed, who’s the largest purchaser anyway.

      • The Feds can not continue to “make the market” wrt federal debt. If there are no other purchasers, then the “scheme” falls apart. So farther other countries have stepped up to buy significant quantities of our debt as well as US citizens, so all appears well. How long that lasts is the question.

  14. Unlike physics, the laws of economics are as malleable as thin sheet metal. I used to be worried about spending, debt and inflation. I don’t know what to think of it now that a multi-trillion “rescue package” of nonesuch designed to reward connected cronies seems to appear from Congress every few months.

    We just passed the Biden one and now his handlers are talking about an infrastructure one larded up with plenty of pork for the Ruling Class and their supporters and none of the real infrastructure that would actually make sense. I remember when FDR built an aircraft carrier, USS Hornet, as a stimulus before WWII. Now we just funnel bribes to the well connected, leaving us to navigate the pothole-strewn streets of cities with infrastructure that makes Haiti look decent.

    I was a little boy in the 1970s when stagflation and malaise felled our country. I remember my parents keeping the thermostat on 75 in our balmy Southern summers and 65 in the relatively mild winters because electricity was so danged expensive. We were told that stagflation was because of the two Arab oil embargoes and spending on the Vietnam War. I wonder if that was the case.

    I feel like the system is held together with bailing wire and bubble gum at this point and could implode at any moment. Or not.

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      • She’s a SWPL who called Trump racist, so even if her economic ideas are 100% accurate, no one on the right will listen to her.

        • I am afraid you are right. Wouldn’t MMT be great in an all white land, though? 🙂

    • No use to worry now. We’re past the point of no return. You can’t be destroyed by debt twice as hard, and so debt simply doesn’t matter because a default is inevitable.

      • I would like to be able to upvote this a thousand times. That the United States will default is backed into the cake. As posted above, the endgame remains uncertain unless this is Ruling Class madness, which it may prove to be.

  15. Agree with most points in the essay. Even somewhat down from its record high in 2020, gold is currently at about $1600 per troy ounce. Just for reference, that is about 40 times the “official” price when we abandoned that last vestige of the gold standard, fifty years ago. The last time the USA had circulating gold coins (1933), about 80 times. Gold is grossly overpriced in relation to the Dollar’s overall depreciation over those time periods, perhaps by a factor of three or four in terms of real-world goods it can buy.

    The hard money people are right, in that the fiat game can’t continue forever. The graveyard of failed currencies is quite extensive. It is inevitable that the Dollar will someday be buried there too. But when? Anybody’s guess. The game has aleady gone longer and further than many would have guessed. But in this game, they don’t stop playing until the money is totally worthless. I don’t especialy look forward to that day; usually very bad things happen to governments, especialy when it was a leading country that failed.

    You’re correct in calling out Economics as, at best, a soft science. If you get beyond very basic concepts like supply and demand, you rapidly wander into the tall grass of pseudo-science more in service of politicians than of business or legitimate forecasting. It’s worth noting that the “Nobel” prize in Economics was NOT one of the original award categories.

    • Gold has only briefly fallen below $1700 in the last several months, but that is not a reason to buy or sell. Gold is a hedge, not an investment. Keep some for emergencies and backup. But if you want returns, try something else.

    • Hard money, soft money, fiat money, BTC… if the king demands tax payment in a certain denomination and pays his soldiers in that denomination, then that is the hard money.

  16. One rule of thumb is to assume everything will ebb and flow with the Boomers.

    The US economy, and by extension the western economy, has basically been run to benefit the Boomers since the 1970s.

    The inflation of the 1970s benefitted the Boomers at the expense of others, as the Boomers were in their early earning years, maybe paying down some student debts or 1st car loans, buying their first home. While some would say that high nominal interest rates due to inflation were punishing, if buying your 1st home, those high nominal interest rates also depressed home prices and made it easier to enter the housing market. Further, your initial mortgage debt would have been inflated away, and within a few years you’d suddenly have a bunch of home equity to use towards your next home or whatever else. And your monthly mortgage payment in real terms becomes much lower over time, so your cash flow position improves markedly.

    As you get to the 80s and 90s and the Boomers have accumulated a bunch of assets and are reaching their peak earning years, we move to low inflation and financialization to maximize and leverage the Boomers’ wealth. Nice, stable economy, stable inflation, to keep the Boomers on their glide path. Of course, there were some hiccups like 2001 and 2009, but those hit the more highly leveraged much worse, i.e. the younger generations and the dark people.

    As long as the Boomers retain political power, asset prices (i.e. Boomer retirements) will be protected. 401ks, stocks, home values will be protected at the expense of other things.

    Once the Boomers finally age out in the next 5-10 years, and political power shifts to the Millennials (because the Boomers genocided Gen X by aborting 1/3rd of it, then later felt guilty and only aborted 1/5th of Millennials, so Gen X never gets a shot at political power), I’ll assume we’ll have devaluation/inflation/debt jubilee of some sort. The Millennials are not stupid enough to accept paying down $30T in recorded debt plus tens of trillions more in unfunded liabilities laid on them by their parents and grandparents. Further, they would benefit from all this debt being inflated away or devalued, both public debt and their personal debt (student loans, etc.), just as the Boomers did earlier in their earning years.

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    • But who inherits the Boomer’s money? Bloomberg recently estimated it at $62T—up from $42 before Trump. Answer: The very Millennials you say are fed up paying off debts.

      The real problem is one of demographic change—not generational change. The oncoming generation is predominantly non-White and unable to earn sufficient wages in our increasingly technological society —for a variety of reasons, not all the fault of Boomers.

  17. The lesson of the last half century, is that America is fucked. And by proxy, the rest of the west. The disease comes from America. You’re spreading it everywhere. Leftism is killing us.

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    • The disease may be coming from America now, but I believe it could be argued it originated among a particular ethnic group, a key cohort of whom emigrated to America along with their destructive critique of White Western Christian civilization.

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    • It’s a result of European Jewry who gave Marxism and Post-Modernism. The latter came to the states in the 60’s through the works of Derrida and Foucault and was eagerly embraced by our Ivy league schools. So our elites got infested first. The rest as they say is history.

      The West would be well served if our intellectual class was eradicated given the damage these spindly freaks of nature have caused.
      .

  18. There are some laws of economics that function like gravity. First, if printing fiat currency ad infinitum were never a problem, then the US Treasury & Fed could make everyone in the US an instant millionaire whenever the natives got restless. Just direct deposit the funds (bribe) and problem solved. That they haven’t done this yet suggests that no one believes it will actually work. Second, no one can predict the future with certitude, so if or when we collapse will always be an unknown. But what is always known is that if you can grow sufficient food in your backyard & defend it, you will not starve no matter what happens in the future. It’s Spring, so go start a garden. It’s not rocket science; everyone can grow a squash & garlic.

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  19. I’ve come to the conclusion now that taxes only serve the purpose of convincing people that their currency is sound.

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  20. Trees don’t grow to the sky. The birth rate can’t keep up with the mountain of debt. The swamp grifters operating the mechanics of this money laundering operation some call a “government” will have to be held accountable before they bankrupt the nation.

  21. “That is, is the field of economics just pseudoscientific nonsense?” – Libertarians have this “Golden Straight jacket Theory” , which is like a magic leaf in a video game that overrides big government. I’ve had a couple professors who believed this, and I myself believed it in my 20’s. It goes with Bob Marley CDs.. Once you stop drinking from red Solo cups, and want your liquor from clean glassware, you should be suspicious of this theory. It does work as a final endgame, when government finance is totally on the rocks, like New Zealand in the early 80’s, or Britain in ’79. It’s not a completely wrong theory, but the people and politicians they elect have to be completely despondent and out of ideas (and broke) to go down that road. The British never liked or accepted Thatcher, they were just desperate. We’re not there yet and won’t be for years. Government will keep growing until our monetary system cracks.

    • It’s even worse: they create money (credit) as needed, this has been the world’s “money” for decades. This scam will work until no one accepts the fiat money any more.

      Taxation is sort of a polite formality, a nod to tradition to pretend they’re not completely gone. We would not have amassed $30 Trillion (or whatever) in debt if we ever had even the pretense of paying as we went.

      • Taxation will also be used to extract the remaining assets from Heritage America for redistribution to our newly minted fellow “citizens” crossing the southern border as we speak.

        • Yep. Follow Biden’s new Infrastructure initiative, which is simply a tax plan deigned to grab the Boomer’s 401k’s before their Millennial offsping.

  22. Re: ” Even further, the right people in a corrupt system cannot correct the defects of the corrupt system “.

    Exactly. That’s a lesson that should have been learned a long long time ago.

    Oh wait – it was.

    It’s why most of the MEN who setup the government we used to have – tried to design it to keep as much power out of the hands of the Federal government as possible. You simply cannot trust politicians – EVER. The ONLY way to fix the problem – is to make sure the problem doesn’t exist in the first place. And even then – as our history has shown – they will still connive , manipulation, tweak, and go around any and all restrictions on their quest for power and riches.

    So maybe the cycle of history is that sooner or later we just need to have a bloody war (blood of patriots and tyrants?) – where everything that was corrupted and all of the people who populated that corrupt enterprise and/or supported it – are wiped out. Then we do a full reset and the rest of us get to live in some semblance of normalcy for a period of time.

  23. “The Fed is now captive to the spending frenzy of Washington.” – Always has been. today more so than ever. Even LBJ had to throw Fed Chairman McChesney against a wall to lower interest rates so Vietnam could be well funded. Today it’s catered dinners in NY and DC and Jackson Hole.

    • Saying “the Fed is now captive to the spending frenzy of Washington” is just craziness.

      The Fed was setup to ENABLE the spending frenzy of Washington.

      Duh.

      Reminds me of a co-worker who , over a lunchtime conversation one day amongst a number of us – made the comment ” without a central bank we’d have communism!!”. LOL.

      I told the guy ” you’ve got it 180 degrees wrong. A central bank IS ONE OF THE CENTRAL TENETS OF COMMUNISTS ” When the guy still kept arguing the point – the Chinese guy at the table – who got out of China to get away from the commies – let him really have it. That finally shut the guy up.

      I find it laughable that people can’t seem to connect the dots. Restrictions on the number of reps in the House. Direct election of Senators. The Federal Reserve. Overseas involvement in wars. The income tax. Restrictive gun laws. Vastly enlarged Federal government at all levels.

      All of these things started to happen in quick succession to each other – and kept building on each other. And they all happened with the “progressives” started coming in and really infesting the Western world and then the US. They’re all connected. You would think people who have been paying attention for the last 20 years – would be able to look back thru the history pages and see what is happening now – is just building on top of the foundations of what has been laid before.

      But I guess not.

  24. I think one of the biggest things that has changed with respect to money at the international level is: where else are you going to put it if you want to have a reasonable chance of ever getting it back? So, there is huge global demand for dollars and almost no global demand for any other kind of money. Our overlords realized that they can basically tax the whole planet because of that demand for dollars internationally. In short, we aren’t on the gold standard anymore and we shouldn’t act like the government’s money is similar to household finances where you owe x and you earn y and y > x. The Federal government does not need tax revenue to function. Local city governments need tax revenue to function. So imagine you are a billionaire in some foreign country and you need to save or invest your money. There is one option: America. Those dollars and investments operating in that sphere have nothing at all to do with us “real people” and neither does the debt or deficits. That was the big mistake of all the old people in America who remembered the gold standard days and imposed “fiscal responsibility” on us in an almost punitive way. It truly doesn’t matter if the US government owe 100 trillion dollars so long as everyone else on earth still needed dollars. The demand for dollars vastly outstrips the supply. So, supply them in a way that is profitable for us and forget about olden days ideas of fiscal responsibility.

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    • The term is called “seignorage”. The Fed cost to produce currency (“yay! money machine go brrrr”) is effectively zero, global demand for USD is infinite, so the arbitrage opportunity is huge.

      The issue with all of this is malinvestment: everyone’s investment plan pencils out when the cost of capital is zero.

  25. “The gold bugs have now moved to crypto currency as the savior.” – Not all of them. I refuse to buy digital canned air. Even if it takes off as a real currency it would be made illegal tomorrow (See E-Gold 12 years ago). And the establishment loves it because it creates a carbon sink, sponging up a lot of this excess money creation. There’s no greater fantasy land than a currency existing outside the scope of governments.

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    • Bitcoin is probably the prime example of Clown World perception being reality.

      The, “mining,” process consumes valuable electricity and ties up valuable computing hardware to solve a computational puzzle that does not seem to have a purpose beyond extracting another Bitcoin from the, “mine.”

      It’s not like they’re crunching radio telescope data to help search for intelligent life or biomedical data to determine which proteins most influence cancer growth.

      Put another way, Bitcoin consumes more power than the country of Argentina per year to solve a mathematical triviality. That doesn’t even account for all the physical computing hardware that is burned through to mine these things.

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      • XRP is clean, costs pennies, and is a delivery system that takes mere seconds. You might check it out. Under a buck now until SEC gets off their back.

    • Basically my view on Bitcoin, too. It’s a fiat currency with no State backing. A very stable fiat currency, perhaps, but no State backing.

      • That’s the WHOLE point! The state is what is slowly killing us. Decentralisation is coming, might as well understand this.

  26. “The so-called bond vigilantes will drive up interest rates, which will make borrowing more expensive.” – They actually did exist until the mid-90’s. Fed policy changes have ensured that they’re now impotent. The Fed IS the bond market, because it’s the buyer of last resort. This was especially seen in March of last year. If you sell a car knowing that a buyer with unlimited money will buy it at say $30k, the price of that car will never fall below 30k. And they’ll buy stock ETFs too when we have our free-fall later this year. They’ll buy it all to keep it propped up.

  27. “The range is between 15% to 18%, depending on when tax policy was changed. This is the logic of the flat tax.” – Not only is this true, various studies, including ones done by the IRS 20 years ago, have shown that when your effective tax rate climbs over 17%, you start cheating. Effective tax rates are incredibly stable. You reach a threshold where you can’t get blood from a turnip. It almost cries out for a 17% flat tax after a large personal exemption.

    • This reality reveals another reality of our tax code. It is not about funding government. It is about rewarding friends and punishing enemies. This in turns means everyone wants to be a friend and what better way to show you are friend than to make sure the pols have the lifestyle to which they are entitled.

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      • It also explains why even for the average individual, taxes are complex. Perhaps my situation isn’t typical, but I’d be lost without a CPA. If your income is from a private pension, you have investments, rental property, etc. good luck getting it done on a 1040-EZ! I recently sent in my tax paperwork and it was probably 50 pages of documents. In fairness, maybe half of that is my brokerage transactions. Zero or near-zero trading commisions are a mixed blessing; I suspect this year’s CPA bill is going to be a bit highen than last year’s 😀

        • My taxes come spiral bound. I haven’t read anything but the summary for years. It’s all gobbledygook. I just hold my breath till I get to the bottom line to see how much more of our time spent on Earth the IRS is clawing back.

      • This is exactly why they reject the flat tax. They want the tax code to be a negotiation for power and money and so they want it to be a byzantine as possible.

        • Good thing no European power in the late 18th century had a byzantine tax code that was used by the state to entrench government power, and subsequently was a factor in the head of state getting dethroned and decapitated.

    • Also said by the guy in his 70s, the guy in his 60s, the guy in his 50s… When do we stop kicking the can?

      • Will our Weimar hyperinflation be accompanied by Cabaret 2.0 and similar cultural phenomena? Will there be adequate wheelbarrow parking for the ticket purchasers?

        • Hyperinflation is just jubilee by another name. The Weimar republic’s currency problem existed mostly in the cities because the urban couldn’t trade directly with the rural for food. The rural largely escaped the worst of it.

    • So you have no offspring? Or do you not give a damn about them? Either way, you are a selfish dick. Please hurry up and move along.

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  28. There’s “hyperinflation” and there’s just plain real and serious inflation.

    We have the latter. Not sure why it makes a big difference when everything in your life is suddenly very expensive. And if you’re trying to buy a house, Or even a new car. Good luck thinking the prices will be like they were only 12-24 months ago. Same for groceries. And if you’re rich, the prices of luxury goods are through the roof.

    Point being, we don’t need to meet the definition of hyperinflation to find ourselves in a real squeeze. So the rules of money supply are still holding up — just not at the dramatic levels prophesied by the gold bugs.

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    • Excellent comment. I obviously agree with you regarding today’s level of inflation for the necessities of middle-class life, and the ever-tightening squeeze on the same. The goal and ultimate result will be the destruction of White people living like White people. Before eradication, we are to be reduced to peonage.

    • Like so much, the index to calculate inflation intentionally distorts the result. It bears little semblance to the realities of the current year. Rent, for example, literally cannot be collected so no inflation there. These type bureaucratic takings without due process will be the norm soon.

      • That’s an interesting point.

        All that money that would have been going to rent is going somewhere else. Is that causing price spikes elsewhere?

  29. Z Man;
    I can’t argue that govt. spending goes unchecked and the predicted restraints have not availed to stop it and the predicted catastrophes have not happened either.

    But yet….

    I very clearly recall > 18% inflation > 21% prime rate > 24% commercial unsecured credit when I was working as a summer-hire ‘credit punk’ in a regional money center commercial (non-consumer) bank in the summer of 1974. That’s not Weimar-level inflation, but we were well on our way. Had not the TPTB stepped in to stop it circa 1980, we might well have gotten to full Weimar.

    We’re hearing a lot of, ‘This time it’s different.’ theses days. All by itself that’s a warning sign, no econ. theory needed. I really wonder if today’s TPTB would be able to recognize the danger, care about it and step in. Magic 8 Ball says, “Indications are NO.”

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  30. IT-driven productivity gains have mostly kept pace with the sheer waste of bureaucracy. There really aren’t that many people doing useful work. Shut down most of the economy that’s mostly fake anyhow? Sure. Throw in third world serfs doing real work for virtual green paper and everything looks fine. Eventually China’s virtual paper is going to look better than ours, if only because China forces the issue and says you have to use it to buy their stuff. It’ll be the new Petrodollar. Then we’ll be really sorry that we don’t have a more nationalist economy.

    But we still need women doing even more useless corporate work instead of being mothers because reasons.

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  31. We were on a gold standard during both of the world wars. The wars cost enormous sums of money and the gold standard really did nothing to reign in the allied governments’ spending.

    Bitcoin is a joke. The second it starts having the effect its proponents claim it will have, they will outlaw it. But even if they weren’t going to outlaw it, do they really think the bottom 25% of the population can effectively deal with and use such a convoluted money system?

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  32. “Economics just pseudoscience”. Possibly, but I think the main purpose of economics is as an ad hoc justification for the status quo, if reality will achieve this then no doubt reality wIl do. If not, it’ll have to be pseudoscience.

  33. Our foreign “debt” isn’t really debt. It’s a way to morally launder old-school tribute payments from vassal states (who don’t expect their “loans” to ever be repaid) to the empire. We created this pretense because we don’t want to admit that we’re an empire or that we have vassal states that pay us tribute in exchange for security. But the reality of the situation is reflected in the fact that this debt behaves nothing like normal debt.

    When the empire winds down, we’re in for a nasty encounter with reality.

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  34. “Economics is downstream from politics.” And politics is downstream from biology. Everything is downstream from biology, which is why libertarianism doesn’t work and empires always collapse.

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    • There is a reason that, before they truncated the term to just “economics”, it was generally known as political economy.

  35. A New Tomorrow (cont)
    All LEOs are hunters, and some are Ronin.

    Contrary to PC disinformation, all LEOs are highly attuned to the common tells of criminal behavior, and profiling is alive and well but living under the radar. Why does it exist? Because it works. We all have this proclivity in our DNA, as it’s an ancient self-defense mechanism, but LEOs hone it into a professional skill. So don’t act like a criminal. And that starts in your head. If your cause is righteous, your body will follow your mind. And near forget that the disease afflicting this nation is, in fact, highly criminal. It violates many laws, as well as basic human decency.

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      • No. It comes out of my head as a spontaneous daily posting. Just what I’m thinking about on any given occasion. I get lots of inspiration from Zman’s knowledge of history and insight. You could call it a work in progress.

        As a side note. The book & movie “The Martian” by Andy Weir was actually created online as a collective effort of many contributors to his blog. It evolved over many months with lots of plot details solved by soliciting input from others. There’s no reason this same approach couldn’t be used by the DR.

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  36. Even more than the Covid spending spree, Japan is great destroyer of economic theory. Japan has massive debt and prints money like water over Niagara Falls, yet it battles deflation, not inflation.

    Sure there are explanations, trade surplus, aging population, debt held mostly internally, but still, debt to GDP of 250% and growing, yet its bond yield are lower than U.S. yields. Betting against the Yen and Japanese bond yields even has its own name: the Widow Maker.

    The scary thing is that Modern Monetary Theory seems to describe the world better than classic economics. Btw, don’t confuse MMT description of the world with the prescriptions politicians get from MMT. Those are two different things.

    Anyway, all of the DR folks waiting for the great collapse or big-time inflation might want to reconsider. Also, if borrowing doesn’t cause too many – if any – problems, than taxes don’t matter, so the Dems don’t have to raise taxes to pay for what they want. Ironically, if you follow the logic of MMT, taxes only use would be to pull money out of the system, not to pay for spending.

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    • I think this will fall apart when/if the US loses the reserve currency status and it probably really would cause hyperinflation. Of course, that assumes the rest of the status quo remains in effect. If we lost the reserve currency status, the government might very well pass limitations on foreign “investment” (using all that US money to buy up US assets.) and repudiate the bonds held by foreigners and foreign institutions.
      But internally, this would present, I would think, a lot of problems, especially with the unfunded liabilities. The new brown hordes are not going to accept huge tax burdens to pay the retirements and medical care of white boomers and Xers.

    • Citizen: Your QED makes sense – taxes’ utility is to pull money out of the system, not to pay for spending. And then consider who pays the taxes. Tits ‘n teeth (otherwise known as AOC) said something the other day when criticizing the latest spending bill for not going far enough in ‘transfer’ payments. Taxes are merely one of the official methods of extracting wealth from the White middle class and redistributing it to all the POX.

      • Correct. Under MMT, the govt just prints money as needed, supposedly in line with excess capacity in the system.

        In that system, taxes would be used for two purposes. First, to withdraw excess money from the system, which is an economic issue. Second, to reduce the income and/or wealth of Whites, which is a political issue.

        Sure, the govt can always give more money to POX via money printing, but that doesn’t lower the income/wealth of Whites. For that, you need direct taxation.

        And, remember, in a democracy, turning Whites in helots is perfectly legal and since a majority voted for it, perfectly moral. Right?

    • As mentioned above (by Z, maybe) taxes now operate as rewards and punishment rather than revenue. The coming hikes will target those who oppose even a hypothetical threat to the State

  37. “That is, is the field of economics just pseudoscientific nonsense?”

    Yes. Yes. Yes. As you mention, there are some economic truths; but even these could not really be said to be universal laws. Most theories I have seen for economics seem to borrow heavily from physics. Good old fashioned, easily verifiable physics, I might add – fluid dynamics for example. Naturally, if you want to give your field more credibility you dust of the old differential equations textbook and stick some mathematics in.

    I think it is also fair to say that even some pretty solid reasoning – like that of currency inflation – holds up very well for small scale systems. But at the large scale, everything gets lost. Also, how does one even test an economic theory?

    We know that we don’t know. But, we also know that our leaders don’t know. Which may be a blessing or a curse depending on how you look at it. This post reminded me of your ‘Jelly Bean Central Banker’ essay… it is interesting to imagine how the money supply of a small community, who knew that their local elites were printing money on demand, would change. Alas; scale, scale, scale. Our problem is scale.

    • Back in engineering school, we had to take “Econ 101”. Even at the young age of 20, it seemed to me that the economics field was trying overly hard to overlay calculus equations on their theories in order to be considered “science”. I’ve always maintained that economics is more social science than hard science.

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      • Economics isn’t even social science. In fact, anthropology is more useful in the study of monetary matters. Read David Graeber’s “Debt, The First Five Thousand Years”. People don’t actually want money anyway, they want stuff. Unless they’re higher level management or speedy outfielders, whose contracts are bigger than the economies of small countries. No matter how much money is enpixelated, it’s just electrons lined up in a server somewhere, not even slips of paper with dated engravings of career criminals . What counts is what can be obtained with it and profligate enpixelation will eventually lead to a currency being regarded as junk internationally. Trying buying a six-pack in Minot with Philippine pesos. Of course, the remedy for the problem is to blow up a lot people and things all over the planet.

      • “I’ve always maintained that economics is more social science than hard science.”

        Same with stock market “analysis”. Why is Tesla “worth more” than all the other auto makers combined?

        • Because “investors” are greedy and betting on the come. The want 100% returns before the holiday season returns. But they should not define the market, nor be considered representative of sound investing.

    • Well there is one school of economics – that the Swamp doesn’t like much, but has been reasonably accurate as to how things work. Typically what Austrian school economists will do is say ” if you do X – you’re going to get Y” . Most of the time – they’ve been correct.

      Much more correct than “establishment” economists like Krugman. My recollection is that Austrian economists have also come right out and declared that most Swamp supported economists rely far too heavily on equation and “math” to try and make their prediction. Economics is a study of human behavior – and history – not equations.

      Modern Monetary Theory, Not Modern , Not Monetary, Not a Theory:

      https://mises.org/power-market/mmt-not-modern-not-monetary-not-theory
      ——————

      Kelton’s essential argument, first advanced by MMT guru Warren Mosler in the 1990s, is quite simple: federal spending is unconstrained by revenue. Taxes function only to regulate demand and hence inflation; federal borrowing functions only to regulate interest rates. Sovereign government treasuries can create and spend as much money as they like to stimulate growth, especially when the economy is underperforming. If inflation spikes, taxes can be imposed to take money out of the economy.

      Thus the only constraints on unlimited government spending are political. Unleashing ourselves from these “self-imposed” constraints, as Mosler puts it, is purely a matter of political will. Revenue is irrelevant to how you fund a government, so why not use government to fund the economy as a whole?

      —————-

      Pretty sure MMT is just another facet of the current elite class’ drive for total and complete control. They just need an intellectual justification for what they do – and they get one with MMT.

      • “Typically what Austrian school economists will do is say ” if you do X – you’re going to get Y” . Most of the time – they’ve been correct.”

        Did you read Z’s post? Austrians are to economics as Libertarians are to human nature.

        MMT is the accurate description of the economic choices available to a country that is the reserve currency and has the biggest economy and most productive population. (Of course, we’re never going to pay it back…)

        • I don’t like the results either. But I assume that we are trying to be objective and observe the world as it really is, not as a model in our heads dictates.

  38. Blah blah blah.

    Always find these debates tedious. In 2021, bonds gold, crypto, taxes, are just whitey talk. With the new imported voting demographic, taxing and spending will be as the Democratic Party / Globohomo sees fit. One day your 401k and Robinhood will be confiscated. Because your great grandaddy was a racist.

    Ultimately every issue is downstream from race. The only language they speak is “Ayo, gibsmedat”

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    • They won’t confiscate your 401-K. That would destroy the grift and signal panic. Instead they will tell you that you can only buy government bonds with it. They will yield 2%. Inflation will be 10%. Problem solved. I’m guessing Reparations will be financed this way.

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      • Exactly. If someone can shift their 401k’s into what is now considered high yield muni bonds it is the time to do so. The equity markets will be routiney tanked here on out to increase buying opportunities for fewer select investors, too.

        Think of it as redistribution with commissions.

        TPTB loathe the day they allowed rebel to own equity and that is being corrected

    • I keep thinking about our 401ks being confiscated. We get closer all the time. They can come up with any number of ways to justify taking our retirement money using their way of blaming whiteness. After all, isn’t planning ahead and saving for the future a white thing? And if whiteness is bad and something to be eliminated, and equity is the goal….you can see where this is going.

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      • re reparations, who decides how black you have to be to get some, and how will the percentages be calculated. If my dna shows 3 percent african ancestry am I a repressed ex slave seeking entitlements? And will the reparations be a one time cash prize or an ongoing support mechanism, cuz, you know, if you give a mouse a cookie—

          • That’s the rub. If I thought for one second reparations would end the race grift, I would be all for them. But paying up reparations would only guarantee new demands for a second round of reparations.
            We are likely to get something worse than reparations, something more akin to the reparation schemes already going on in America with nebulous things like investments in the black community. They will not be a one time payment, but a new ongoing and ever increasing expense. Since most of it will be stolen or otherwise wasted, it will just make African-Americans more angry (all this talk of reparations and I didn’t get shit!).
            Reparations should be a one time official apology (it’s not like that hasn’t been done) and then a true examination of the books. This examination would show WE are the ones who deserve reparations! They were born in America, they are WAY better off because of past slavery.

          • They’re really not talking reparations. They never actually say what they mean and you should know that by now. What they want is Tribute. Monthly, yearly, eternally, never ending Tribute!

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      • I actually went to HR about two years ago and asked them to reduce the amount of my paycheck going toward my 401K. Even if they don’t confiscate it, the system will collapse long before I reach retirement age.

    • Regardless of the precise means used to do it, they will definitely be coming for the 401ks. Hubby and I just shake our heads at his former colleagues now retired from fedgov, constantly monitoring their 401ks and absolutely certain they’ve got their future and their progeny covered. We regard this the same as we regard any prognostication for ‘America’ in more than 10 years’ time – utter fantasy based on a dying entity.

      Yes, they can keep the financial plates spinning, but their equation depends on a certain % of pliant Whites to keep things running, and a certain passivity of the POX based on consistent gibs. Because they have based their future prognostications on their virtual reality instead of biology, it will all come crashing down. No, I cannot say when and it may not be in my lifetime, but I would be willing to bet it all that it will happen before my sons (Gens Y and Z) leave the field.

      • I deal with a guy who is convinced he is at the beginning of a great 10-year plan to get rich buying and renting condos to tourists in Florida.

        I don’t have the heart to tell him it’s not the year 2000, or even 2010.

        • Wild Geese- And yet, the irrationality and perverseness of humanity may prove his get rich scheme a success. I’m constantly amazed at what ends up being profitable and what does not.

      • They’ve already worked out how to steal the 401ks from the middle classes. The Roth 401ks and IRAs now require you to take the money out of the tax-free account within a couple years of inheriting it, and Biden’s tax plan will stop allowing basis step-ups when inheriting stocks. That means that when you get $500k of stock that grandpappy bought in 1930 for $100, you’re paying capital gains on all of it.

        • The end of basis step-up will have a dramatic effect on personal wealth. I’m scrambling to ditch a few things, nothing huge but important for me, before the tax code changes because capital gains taxes are about to be used to cripple those not favored.

  39. I’ve never understood any of the economic arguments, and not just because I’m a Liberal Arts guy who needs to take off a sock to count past ten. It’s because I know something about the history of the USSR. Their “economy” was pure make believe, top to bottom, stem to stern, and they staggered on for most of a century. What brought them down was the same thing that will bring “us” down: vapor lock. Each little bureaucrat is an emperor in his own kingdom. Each little kingdom is thoroughly corrupt. But alas for all the little emperors, they rely on the other little emperors doing their jobs in order to keep their own grifts going. Eventually one of the little emperors won’t be able to keep all the plates spinning, and the whole thing comes crashing down. “Money” makes for a nice fable, but it’s got nothing to do with anything.

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    • Took my fair share of economic classes back in the day. What a waste. Economics might be the stupidest major in the history of higher ed.

      First, it’s reasonably hard but pointless, so you’re wasting good minds on the equivalent of digging a ditch and filling it back up. Second, once you get past all the math and charts, it’s all just based on certain assumptions which are often ridiculous.

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    • Since the analogy between economics and physics has already been posted somewhere in this thread, what is true is that entropy always wins.

    • Sev;
      One thing the old Commies did understand was production. Sure, it was inefficient. Sure it was what GosPlan* wanted, not what the people wanted. Sure it took the KGB to keep it moving. So I’g guess that understanding was how they kept going so long. Pre-industrial feudalism gussied up under Marxist theories. No other economic theories needed.

      My theory of their collapse, FWIW: The new Commies actually believed Marxism and so they just *assumed* production (just like AOC). They thought they could get production without the KGB making life unpleasant for even them. Once they took the boot off the throats of the actual productive workers, production collapsed. Kinda like the Inca’s without the sun god and his whip-wielding henchmen: No reason for the peasants to work in the potato fields any more.

      Ain’t no distribution, much less redistribution, without production, as AOC will soon find out.

      • *GosPlan = State Central Planning, a vast bureaucracy that passed out production quotas to every enterprise, large or small.

        • Al, agreed (I even wrote about this somewhere). Gorbachev was born in the late 1930s, to a long line of insiders. The war didn’t affect him in any meaningful way (not least because he barely remembered it), and by the time he was coming up in the Apparat, Khrushchev had denounced Stalin and the kinks of Communism had been ironed out as much as they ever would be. It “worked,” and since he didn’t have any of the hard schooling his predecessors had, he just assumed it always would work…

          As for “understanding production,” well… they could build a tank, I’ll give you that. And some of their last generation of fighters were pretty cool. They could do it when it counted, I guess, but these are the same guys who mixed concrete with sand and pounded screws in with a hammer, just because. “They pretend to pay us, and we pretend to work” was the standard joke around Soviet factories, I’m told. Frankly I’m amazed it lasted as long as it did.

          Russians, man… I love ’em, but may God have mercy on us all, they are a very different breed of cat.

          • Heh, I guess that Z is Russian. We must know his degree of Asiatic admixture. Not entirely kidding on that point.

          • Sev;
            By ‘production’ I was thinking along the lines of the USSR as a Palace Economy with the Communist Party as Pharaoh/ Inca, whatever. The palace economies were pretty stable but the USSR was not. Both relied on coercion and (inherently dubious) supernatural validation (but mostly coercion). So what made the difference_?

            Because their legitimacy relied on recurring natural phenomenon, it didn’t really matter whether Pharaoh actually believed he could control the annual flood of the Nile or the Inca actually believed he could bring back the Sun from the North to end winter in the peasants’ potato fields. It was going to happen anyway and he could make life highly unpleasant for anyone daring to notice that fact in public.

            At some point early on, the old Commies stopped really believing they could actually re-make human nature but didn’t dare tell the newer Commies lest they be denounced for noticing. But human nature is (relatively) fixed and not cyclic. Hence Gorby and the crackup. After he lightened up on the coercion, all at once everybody noticed.

      • The Commies, like Libertarians, made certain assumptions about Human nature. Those assumptions proved false and those systems failed. Human nature has not changed, but it seems a new set of grifters wants to try the grift again on a younger, naive populace. Good luck with that.

  40. If economics is about anything, it’s about constraints. God bless the old macroeconomists; they thought a Government had constraints on spending – “crowding out” of production private investment via higher interest rates and capital scarcity, intertemporal consumption/savings preferences, trade/currency effects etc. The old economists just lacked imagination.

    They failed to grasp that the entire system could be financialized. Even subprime used car loans are routinely securitized and sold off on Wall Street, and at low rates that would astonish most people on this blog. Robinhood and LendingClub are just two recent examples of the exploration of new frontiers of financialization. Obviously nothing gets “crowded out” like the old professors used to teach us in Econ 101.

    Economics may or may not be downstream from politics. But I’d suggest that the DR needs to contemplate de-financialization as a political platform. Tearing up credit cards, barter, cash business etc is certainly a more valid political act than voting in these rigged elections. Again, thermodynamic constraints will be the only ones the political class will be forced to acknowledge – eg not enough chicken wings for welfare recipients, brown-outs, etc. Meanwhile, “sand in the gears” means disconnecting yourself from the financialized economy to the extent you’re able.

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    • The various methodologies of economic analysis can be useful, to a limited extent, as long as scarcity is a fundamental assumption in the analysis, and the analysis is focused on tradeoffs. Using economic theory to design a utopia is as stupid as using theology to design a utopia, because utopia is by it’s nature not limited by scarcity. There’s simply no way to turn a world of scarcity into a world of non-scarcity.

      • Indeed. This is why the “indifference curve” is still a useful framework for Microeconomics, even if the behavioral economics revolution disproved some of the assumptions around rationality.

        It’s just hard to extrapolate to the general case, as you observe so well.

      • Or restated, I’ve often belabored the point here, points better made by countless thinkers, that fundamental problem of philosophy going back to Plato (at least): You can create a simply delightful imaginary world (Utopia) in the mind, but the problem is figuring out how to either escape into it, or to impose one’s millenial scheme upon the uncooperative outside world 😀

        • My belief is that if you begin with a homogeneous population then many of the problems that have historically confounded us fall away.

          “Utopia” will always literally mean “nowhere,” but it’s a question of how many other unnecessary problems do you want to introduce to governing?

    • Capt.;
      Good point about financialization. In any society of any scale there has to be money. But there does not have to be financializattion.

  41. People on the right need to accept the reality that deficit spending does not matter in the ways that they want to believe it does.

    Further, it’s foolish to attempt to end it.
    The type of austerity that would be needed to bring the federal,budget into balance would be extremely unpopular, resulting in the party doing so losing power. And being replaced by people would ramp up the spending again.

    The only thing such an expertise would accomplish is enabling the priorities of their political opponents. Which is exactly what happened from 1994 -2010 when the republicans captured congress and almost balanced the budget – folllowed by Bush and Obama.

    Instead the fight should be over how to spend the money.

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    • “Instead the fight should be over how to spend the money.”
      Exactly this. I don’t care about the deficits. What I want eliminated are the subsidies for shitty art and fruitless space exploration, the make work jobs for idiots that are thinly veiled welfare, the federal loan guarantees that seduce those without merit to try tertiary education and fail. At its root, fedgov just can’t stomach seeing wholesale suffering, famine, disease and death; so no scheme seems unworthy of funding: a trough for every snout. So, in conclusion, I’m ready for round #4 of totally unneeded stimulus. Go big or go home.

      • The fedgov could easily ‘stomach’ wholesale suffering, famine, etc., so long as it’s limited to compliant Whites. The reason no scheme is seen as unworthy of funding is because it buys them temporary peace with the POX. However, said POX are constantly ratcheting up demand, just as their own numbers increase and ours are steeply decreasing. There will be a reckoning, and your children and/or grandchildren will pay it. Plan accordingly.

  42. Hyperinflation is a political decision. The rulers have to make some real deliberate effort to create one.
    When hyperinflation arrives one day, you should know that it was created intentionally and not as a result of mysterious market forces.

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    • Hyperinflation is the rights boogeyman.

      The reality is that it only happens in small isolated economies cut off from trade.

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      • Hmm, sure. that is not what I was talking about.
        Was Weimar Germany a small isolated economy?

        What I meant with my previous comment is that if hyperinflation arrives, it’s not going to be because of the “printing” that has been going on for decades. It will be because someone makes a decision to finish off the currency, just like they did in Germany after WWI.

        • This is correct. It is a political decision that benefits the powers that are implementing it. Mugabe in Zimbabwe used hyperinflation to purge his main competition (the upper class doctors / lawyers, etc). They were all forced to leave the country or become destitute. Better to rule a dung heap than deal with your opposition. Also, he was able to soak up all the charity money that flowed in at its peak.

        • Was Weimar Germany a small isolated economy?

          Yes it was, actually.

          They had just lost WWI – with enormous disruptions to their economy.

          They had also lost something like 30% of their pre war territory and the trading network of Eastern Europe – which they had previously been integrated with – had been shattered by the politcal fallout of the war – not least the collapse and disappearance of the Austrian Empire, the Russian Empire and the Soviet / Russian civil war.

          Finally, Weimar was still under military blockade in the early 20s, experiencing famine in its cities and reliant on food aid from the allies to prevent massive starvation.

          It’s really amazing how ignorant people in the US are of the post WWI situation in Germany.

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          • No it wasn’t isolated. None of what you wrote was a cause of the hyperinflation.
            And since you’re talking about ignorant people, you should look in the mirror.

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          • Those conditions were necessary for the hyperinflation to happen. The proximate cause was obviously the government’s attempt to inflate away their war debt.

            But that would not have been needed had they won WWI

            And it would not have led to the hyper inflation experienced by Germans had all those conditions not existed.

            You seam “offended” at the idea that Germany in the early 20s was being victimized by the WWI victors with the result of great suffering for the German people.

            Which is really odd as that narrative is why the NAZIs were able to come to power in a decade.

          • You are imagining things. I wasn’t offended.

            But I a ma bit annoyed by your cluelessness. You come very close to stating that hyperinflation was a political decision and then you go back to your nonsense.

          • You forgot the war reparations—to be paid in “gold” Reichsmarks. The Allies were no fools wrt inflation of currency to obliterate debt.

      • It can happen anywhere, though the U.S. and Europe have decided to print-print-print and it’s pushing everything else out. Local currencies cannot be caught to the upside (lest they not be able to export anything) so they need to print-print too, which makes the western currencies even more appealing, which allows even more inflation to be exported. Rinse-lather-repeat as they say.

        That’s kinda been the weird thing all along with China thinking it’s playing 4D chess with them poisoning their countryside and enforcing a regime of poverty on their people by trading their industrialization for phony green paper in an effort to destroy the industrialization of their enemy. Yes I think it’s bad for us over all (and, not all that great for them), but it’s hard to tell someone to quit buying stuff at some pawn store when that pawn store accepts any currency that comes off of their printer at home.

        The barrel does have a bottom though, and when it goes bad it will go bad all at once.

        • It can happen anywhere…

          It really can’t.

          Take a look at the countries that had episode of hyper inflation in the 20th century. They’re all small and economically isolated.

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          • Their room for error was just smaller; the room for error is still there though, it’s never “gone”.

    • Hun;
      Well, I certainly agree that letting hyper-inflation continue to spin up is a political decision. Our history would have been very different if TPTB on Wall St had not got the message to Jimmy Carter circa 1979 to push out the Marxists in his admin. and reign it in.

      Inflation was pushing 20% at the time, IIRC. Not Weimar but heading there.

      • 20% a year isn’t anywhere close to hyperinflation.

        There have been countries last century that had episode of triple digit annual inflation. That’s not hyperinflation either.

        • Dino;
          So there is no true hyperinflation/Scottsman_?

          So long as the govt. continues to expand the money supply, inflation compounds upon itself. It stops when the govt. stops. Same thing as happened in Weimar. The govt. stopped expanding the money supply and the inflation cycled down, as you should know.

  43. The saddest part is that all this spending, which has not “YET” brought about the fiscal apocalypse, has mostly been spent on so much useless junk.

    Imagine if we had printed say 5 trillion dollars and spent it all on fusion energy research to get the technology off the ground.

    We could have the same levels of non-hyperinflation along with a vastly improved living standards.

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    • “Imagine if we had printed say 5 trillion dollars and spent it all on fusion energy research to get the technology off the ground.”

      Instead we’ve spent 20 trillion attempting to fix a problem that cannot be fixed with money, only time. We’ve attempted to turn a genetic missing link who is 300,000 years (give or take) behind the evolutionary advancement of Homo-Sapien and turn it human by throwing money at it.

      In the 1960s at the height of our empire and ingenuity we instead decided to commit national suicide by slowly unraveling a Gordian Knot. So no fusion, no functional lunar colony, no sub-orbital commercial flight, nothing. Instead we got— Detroit. Everywhere.

      tinyurl.com/2avfvr77

      That study is from 2012 and we were at 15 trillion so I’m guessing 20 easily by now. But a n1qqa got some gibs and some rims yo! So don’t weep too hard for your civilization…

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      • Over 100 million people added to the total US population in the last 30 years.

        100 million! And that’s not because we’re breeding like rabbits. Quite the contrary.

        This country went off the rails a long time ago; monetary policy is just another symptom of it.

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      • I’ve got nothing insightful to add, but I was just thinking how much of a better place the world would be without them. Could you imagine not having to deal with what’s going on right now? Not double-checking to make sure the windows are always locked? Even waiting for a train without being hectored by a drunk panhandler!
        That’s why the best thing we can do right now is to establish unofficial communities with people who are like us.

    • Elon Musk would grift the project with promises of Back to the Future style Mr. Fusion. He would get richer and us, same old story.

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  44. What’s happened, as much or more by accident than design. Is that the dollar became the world’s reserve currency. Which means that it is desired by all countries engaged in global commerce. Even where that is not directly tied to the United States. This ‘demand’ is filled by expanding the supply, via federal debt. It’s a paradox that federal debt is fundamentally different than personal or corporate debt – that many people just can’t wrap their heads around. The money will never be repaid, and no one wants it to be because it’s not debt in that sense – it’s money creation.

    The situation is analogous to a country that suddenly discovered a huge gold deposit becoming instantly rich and powerful (this has actually happened repeatedly in history). Except that there is no marginal cost of production and no limit to how much money can be created.

    Hyper inflation and collapse are the inevitable end point of this dynamic. But, that can be very far off in the future, and honestly it’s not even on the horizon now. Because, the growth in global productive capacity has so far matched the increase in money supply.

    One way of looking at this is that the federal deficit spending is an inflation tax imposed on the entire world. It largely hidden, obscure and diffused. So there is little limit to it’s continued expansion.

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    • That’s MMT in a nutshell. So long as the money created and sent into the system matches the growth in the production of goods and services (plus money velocity), you won’t have inflation.

      The dollar is the world’s currency, not the the U.S. We print dollars and the world sucks them up to match production, but we get to use the dollars first, so as you say, an inflation tax on the rest of the world.

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      • From the hundred thousand foot view, the situation is sustainable long term as long as a little restraint is exercised.

        That view goes something like:

        Pax Americana lessens the need for countries under the defensive umbrellas to spend money on their own defense. And simultaneously creates the conditions that enable economic growth in those countries beyond what would exist without the enforced peace. That combination has been the benefit of empires throughout history. Basically increased trade and no or fewer wars means more prosperity for everyone.

        As long as the taxes extracted to maintain the empire are lower than the cost of the preceding wars and the empire does get too pushy the situation is too everyone’s benefit and will continue.

      • What you’ve noted is the kernel of Peter Zeihan’s geopolitical framework for analysis. Basically, if you don’t speak English, use USD and enjoy unfettered access to transport by water and fossil fuels, your future is suboptimal. I think he’s wildly over optimistic (he is a salesman after all); but he’s convinced me that the collapse will be long and drawn out rather than precipitous and chaotic.

      • The elite probably understands this and is why they felt so comfortable shutting down the US domestic economy over the Coof. Most American “workers”, at this point, are just paid from wealth transferred into the country from abroad anyway. People trade “services” with each other and this produces dollars that somehow can be exchanged with foreign countries that produce actual tangible things. This is the mystical “service economy” where I make a burger for you and you pay me by making a hot dog for me and then a Chinaman hands both of us an X-box. Perhaps the elite just figured they would send us both home to make our own burgers and hot dogs. As long as the Chinaman still hands over the X-box it doesn’t matter. If this sounds like the old Roman system where the masses of urban Rome were given “bread and circuses” as bribes for not rioting that’s because it is.

        Viewed like this perhaps we can just see the last year as a way of reconfiguring the empire’s internal distribution system. The BLM nonsense was a way to set the stage for a bigger share of the spoils for the PoC and the “stimulus” money a way to get much of the white lower and middle classes used to living on welfare too.

        This may also forebode something much more sinister too. If we are mostly basically just superfluous mouths to feed then it follows that the empire (and the associated benefits that accrue to the elite) can run just fine without us.

        This is all very bad news for anyone who still had hopes of making an “honest living” using old fashioned concepts like making useful things or doing useful work. It doesn’t sit well with me either and I’m currently trying to figure out how to re-engineer my life around the fact that what is left of the honest economy may be effectively outlawed or deliberately destabilized by the elite themselves.

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    • Yes, this phenomenon – the Triffin Paradox – has absorbed a lot of economists’ ink over the years and I think is pretty well understood by the Elites. The issue, as you and Citizen point out so well, is that the implicit arrangement – the USAF enforces Pax Americana while our Allies accept our dubious greenbacks – may not be sustainable with China’s rise.

  45. And of course, one of the major reasons that ConInc conservatives focused on economics is to avoid the dreaded “Rayciss!” accusation. And of course it didn’t work. the fallacious assumption being that the left screaming “Rayciss” had anything to do with something people were actually doing, any more than Stalin’s purges did. It has to do with who you are, not what you are doing, as now is becoming obvious to everyone but David French et al…

  46. As a confessed goldbug I draw the distinction between a gold standard and gold as money. I agree a gold standard is subject to abuse but it’s more difficult if gold itself is used as money. Prior to 1965 we had both a gold standard and silver as money, silver being 90% of every quarter, dime etc. My preference would be the use of gold and silver as money without the need for any standard.

    Arguably the Constitution does not permit the issuance of paper money in the first place. Not that anyone cares what it says anyway.

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  47. ” is the field of economics just pseudoscientific nonsense?”
    Maybe AOC is an economic virtuoso after all. When asked how she planned on financing free healthcare-for-all, didn’t she reply with something along the lines of “I don’t understand the problem. You still have healthcare, it just costs less.” This is probably how she thinks the fed and the budget works, and at this point, who can blame her? “I don’t understand the problem, we can just print more money…”

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    • She is certainly a propaganda virtuosa. AOC has made the classic error of conflating a health insurance card with actual access to a doctor who speaks English and has an MCAT score and training that would inspire confidence. The Soviet Union had “healthcare for all”, but my reading of “The Cancer Ward” suggests the reality didn’t match the slogan.

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      • The whole healthcare debate is really aggravating because the system even before Obamacare was more socialist than not.

        Totally up Medicare and Medicaid and the tricare system and government employee healthcare came out to something like 65% of total healthcare spending. The corporate employee health insurance system only existed in the first place because of the income tax code – so some of that spending can be added to the total too.

        So all the strum and drang is really arguing over changing a small fraction of the total spending from one type of government spending to another.

        And the health insurance model sucks for a number of reasons. It wasn’t a free market, didn’t provide much choice (unless you had one of those union of government employee gold plated plans), was very expensive and pushed a lot of risk onto individuals via unemployment.

        AOC is an idiot and a nut. But on this one she’s no more wrong that the average normie con screaming about “muh free market insurance”.

    • Well, in prepping for this event I’ve already bought a copy of the textbook Grey’s Anatomy, in addition to one on clinical medicine. Some of the boobs I’ve seen over the years and many, many more that I’ve heard about makes me think this is a wise choice.

      That said, I doubt I can operate on myself; but still. It’s a start. The lack of all round intelligence in some doctors is incredible. Then factor in diversity hiring. Then factor in bureaucratic careerism. Then factor in the lack of English speaking skills.

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    • Economics is psychology with sexier quant. It exists in that space between reality and the human endeavor to bring order to reality which of course invites all matters of anti-reality. Show me on the chart where the Fed touched you.

      The practitioners anchor economics in human behavior while also reserving the right (necessity) to produce sexy quant to explain the time travel and rationalizing irrational human choices necessary to square all the circles created. Its a nice little 120 IQ club.

      In their system humans are both operants and passive subjects of some greater force (to be determined.) So much dark matter.

      To be fair, the much more mathy physics has its own problems. But I have found economists to be just more arrogant psychologists. At least psychologists are constrained by their subject matter being human.

      Years back I knew my gut was correct in not lionizing the econ gods, which was common among my bankster peers, when the industry invented “Behavioral Economics”.

      Psychology was a joke to them except when they have to admit that econ has something to do with human behavior.

      Like wannabe rocket scientists they get annoyed that the rocket must carry astronauts.

      I guess the jokes on me though. Apparently MMT to the moon is a real thing and puling all my fiat out of the market because broken fundamentals was a psychological choice and not an economic one.

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      • The most astonishing thing about economics is how it’s pure theory, untethered from history. Moreover, the theory is never subject to revision if contradicted by history.

      • “In their system humans are both operants and passive subjects of some greater force (to be determined.) So much dark matter.”
        I think I remember us commenting about “dark matter” and theoretical physics a few weeks back. So much of advanced economic theory sounds the same– esoteric mumbo jumbo detached from actual reality.

        “Years back I knew my gut was correct in not lionizing the econ gods, which was common among my bankster peers, when the industry invented “Behavioral Economics”.

        I’m always fascinated by anyone who has experience in that world. I’ve never been near it, so I’m a total novice. In my early college years, I would ask anyone with the requisite credentials about economics, general markets, MMT etc. I could never get a straight answer out of anyone. Successful men would stumble over their words, stammer and hesitate, unable to answer basic questions or to explain things in anything resembling a simple coherent way. Then I met a guy who had worked at his dad’s firm but had left. He disliked his dad, and he hated that world (his mom was Irish, his Dad was Jewish and he wasn’t afraid to point that out to me). He was more helpful and eloquent than everyone else combined.

    • But she has a BA Cum Laude in BOTH Economics and International Relations! From Boston U. Surely she received a thorough education about how the real world works and thus is emminently qualified to opine on complex financial matters? 😀

  48. I worked in restaurants for a number of years and we always heard that restaurants had an incredibly narrow finacial margin in which to operate and I know that a lot of restaurants are closed this but more have not and they’ve been closed for a year and they’re still chugging along. We told
    half the population to stay home and not work, gave them fiat money and it’s all fine. I have no idea what’s going on but I’m pretty sure none of the great economic theorists from the past would either. All I can come up with is the Western world unbelievably resilient. I think it will be crushed eventually but I think it’s much harder to destroy than anyone thought

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    • The last year has shown that talking head class doesn’t understand the dynamics of business, especially small businesses – which is actually kind of shocking.

      What’s happened with restaurants, and other small businesses is that: They suffered a huge loss of revenue from the shutdowns. And those shutdowns also closed the civil court system. Which prevented foreclosures and evictions. So the business owners can be losing money every month, but can also remain open as long as they have some revenue, which exceeds the marginal cost of production. In practical terms, they have some money coming in even though they’re going deeper in debt every month and no one is forcing the collection of that debt. So they’re hanging on hoping for a turn around or bailout. And why not? It’s not like they can go get a job making more now anyway even if they wanted to to. So they keep extending and pretending. And make enough to survive another day.

      It’s going to take years for all of this to unwind. And it’s not completely nuts for them to hope for some bailout or at least forebearance.

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      • That’s interesting. The eviction moratorium is another one of those things. It’s got to be destroying a bunch of landlords but I guess the Court’s being closed is helping them too for the time being..

        • Indeed. The level of intervention is so extreme at this point that there is really no price discovery or actual transaction clearing for much of the market, up and down the stack.

          The restaurants, landlords, lenders, and investors all trade on a tenuous revolving debt arrangement that is an extension of fedgov debt in the same way that it is not yet allowed to reflect reality.

          Like “the truth always finds a way out”, reality will creep or crash back in. But the winners and losers have already been chosen.

          Something to watch is the labor supply. Round here retail and restaurants can’t find staff even tho 10% (20%) unemployment because PUA still pays enough to stay home.

          The two sides shall meet. Massive economic contraction and massive low skilled labor paid to stay home while the debt is stripmined into assets by en ever-shrinking set of players and the liabilities that are too impaired to ever be cleared are taken to that warehouse where they put that Ark indiana jones found along side the gorillion in derivatives from the last “great recession”.

          When I put on my chosenite globo banker cabal sombrero I don’t see a “great reset” without war. But I’m cynical like that.

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          • We may be making a transition similar to the one that happened in Rome in ca 150bc wherein small farmers were “forced” off their land and onto the dole in Rome. It was a consequence of empire – slaves made small holdings noncompetitive and empirial expansion brought in cheap grain from Sicily, North African and eventually Egypt.

            Our iteration is globalization and immigration driving people out of the labor market and money expansion enabling a UBI to buy votes / peace.

      • Those bailouts are beginning to be offered with massive Socialist strings attached. They basically turn the landlord into a private-sector government employee.

      • A lot of them are taking the stimulus loans. I see some crazy spending from restaurants that I know aren’t doing well.
        I’m sure they have no intention of repaying.

        My dentist says the last year has been awful but he sure did a lot of reinvestment. When asked he admitted PPA money was used.

  49. I believe supply and demand are still constants that remain valid. It just seems that right now supply is unlimited, allowing for the money printer to keep working overtime. I’m pretty sure that will end, probably in my lifetime, due to a variety of factors.

  50. The tax increases our fake rulers want to impose have nothing to do with spending or the deficit. They are a punishment for electing Trump twice and forcing them to rig an election to regain power. I don’t pay much attention to economic theory but I do know that Art Laffer is right and these increases will reduce tax revenue and GDP in the long run (that too is a punishment). Nothing is easier to move than a corporate headquarters.

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    • Taxes at the federal level now are levers to alter behavior and punish opponents. Actually collecting revenue is a minor concern.

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    • It all depends on where we currently are on the (hypothetical) Laffer curve. Reagan called it (correctly) on the right side of the curve—where tax reduction implied increase revenue. But that was then and before we had a couple more Presidents doing the same call. For all we know we may be on the left side of the curve, where a tax increase corresponds to a general revenue increase.

      On the other had, the proposals I’ve seen are complex (purposely) and not as simplistic as a general increase in income taxes—for example, taxing corporations at the highest rate in the world. Here we see not good economic policy aimed at maximizing revenue generation, but mor at emotionally satisfying punishment of “greedy” corporations.

  51. ” is the field of economics just pseudoscientific nonsense?”
    Well, they gave that idiot Paul Krugman a Nobel prize. No kidding.

    When my children were young and they wanted something that I told them we couldn’t afford, they always responded , write a check. I had to explain to them how personal finance works. Still works that way just not with governments. I need my own personal Fed.

    • Krugman wrote Economics textbooks before his NY Times gig. James Taranto at the Wall Street Journal used to post glaring contradictions Krugman made between his textbooks and his NY Times column. From what I saw, Krugman never responded to any of them. He is a good representation for our clown world.

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      • You can still find article he wrote in the 90s before he became an important liberal pundit. That are not insane and contradict progressive ideas.

        I wonder if his modern iteration is a knowing fraud or if he’s deluded himself.

        • Dino – Krugman’s married to strong black woman, but that couldn’t possibly have anything to do with his changing prognostications.

      • But, but, but… book by a respected publisher?! Column in national newspaper?! Yes, he is a good example of how deep the rot in The System is.

    • Yep, economic reality works at the personal level but not at the national one. The economic gloom and doomers haven’t been right in forever, but like a broken clock, probably will be at some point down the road.
      Nothing seems to make much sense anymore, so might as well go with the flow and don’t worry, be happy.

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