There is an old saying that the difference between a rich man and a poor one is a matter of the direction of compound interest. Either compound interest works for the benefit of folks, as with rich people, who accrue returns on their investments; or it works against them, as with poor people mired in debt and mounting interest payments. The United States government is a case study of the latter, and why and how it got there I will explore in detail in future articles.
But there can be no doubt that deficit spending is going to catch up with this nation, with a very steep price to pay when that bill comes due. Current estimates indicate within 15 years (by 2030) just entitlements and interest payments on the nation’s debt alone will consume all projected revenues, with nothing left for defense and discretionary spending. So, we should consider how folks will react when this fiscal fecal matter hits the fan. Because when it hits, it will splatter on just about everyone, doing irreparable harm to the social fabric of our nation – except perhaps the architects of this crisis, whom I will discuss very shortly. But first, let’s see how the common folks will be impacted.
For example, consider today’s middle class elementary school children, and what they will face in 2030 as they are beginning their adult lives and getting started in their careers. They will undoubtedly have to pay high federal tax rates to support the aged and numerous Baby Boomers, hordes of dysfunctional poor people, and interest on the debt that they had nothing to do with. Not a pleasant prospect. Does anyone think they will gladly fork over their money to a federal government that offers them nothing but a never ending pile of bills to pay? And in 2030 will they have any sense of allegiance to a government that views them strictly as a revenue stream to be milked dry to the greatest extent possible? Not likely.
At the other end of the spectrum, are the aging Baby Boomers who have done fairly well throughout their lives by hard work and thrift. I can almost guarantee there will be serious proposals to implement means testing of Social Security and government pensions. There will also be proposals to nationalize millions of 401k’s and IRAs. This huge demographic is not going to be happy at all. Blood will boil.
And finally, what about the huge welfare class, whose members have increasingly been raised on WIC, food stamps, Medicaid, and SSI? For years I have been warning about the effects of immigrants (and their children and descendants) growing accustomed to welfare, and how it hinders their assimilation into our country. Does anyone think this burgeoning and burdensome demographic is going to accept the coming austerity peacefully when the inevitable reduction of their benefits is mandated? And should the federal government fail just one time in replenishing those EBT cards on the first of the month, then widespread food riots will occur and civil order will vanish in many parts of our country.
There is one group that somehow stands to profit from this mess – and they are the very ones who have brought it about – the banking elites, or what the Occupy Wall Street Crowd refers to as “the one percent.” In actuality, the architects of this deep, dark sea of debt are far less than 1% of the population. Perhaps 0.01% would be more accurate. But regardless of their numbers, the “banksters,” as they are commonly called by those of us in the know, profit from this debt and have bought off politicians to fight every common sense measure to reign in excessive spending.
I used to be baffled as to why politicians could oppose a balanced budget amendment to our Constitution, or support measures to add new entitlements to the federal budget, knowing they would surely drown future taxpayers in a deeper sea of red ink. But once I came to understand the mechanisms of the Federal Reserve and the nature of our currency, which is created solely out of debt, then such loose pieces of the puzzle soon began to fit into place.
Over 100 years ago the big bankers in America and Europe foisted the Federal Reserve System on the USA to create a financial system that worked solely for their benefit while forcing the rest of us to pay interest on the debt. It is no coincidence that the Income Tax Amendment was added to our Constitution in the very same year, 1913, the Federal Reserve Act was passed. And while the banksters have been able to use their ill-gotten gains to buy off untold numbers of politicians since then, the day of reckoning (when the interest on the debt cannot be paid) is inexorably approaching. How the banksters have positioned themselves to benefit from a default by the US Treasury, is something I have not quite figured out, but I am certain that the nefarious characters who created and profited by this scheme, have figured out a way to do so. But by what means, I do not know, but it is something that keeps me up at night.
We all know the bottom line. The federal government has made so many promises to so many disparate groups that there are now inexorable demographic and fiscal forces moving to tear this country apart when the fiscal bill comes due. And if anyone thinks that the USA is bound to hang together for an eternity simply because “the matter of secession was settled by the Civil War,” he or she is not living in Realville.
To paraphrase the great French philosopher Rene Descartes, I think, therefore I am…..an Oath Keeper.