The Inevitable Economic Collapse

          As the dollar devalues due to its fiat status and Federal Reserve policy and intention, prices of commodities have risen, in general. Debt has been rising to the tune measured in scale of trillions, both government, and personal debt are now at levels never before seen in this nations history. Many point to the US debt being 13 trillion. But, monetary policy in the uS allows for debt  to be transferred from one balance sheet to the next. If one gathered those balance sheets together, looked at them for the layers of debt they are, we are not looking at a total national debt of 40,000-50,000 $ per capita. We are looking at a total debt per taxpayer of about 150,000 $, since children, elderly, and non-productive net government loot recipients do not pay. But that’s the top sheet in that stack of sheets. Real liability of debt runs closer to about 100 trillion, which is about 250,000 dollars per capita, or, well over half a million dollars per taxpayer.

          If you pay taxes, and you like your statism fine as it is, or roughly so, you are over a half million dollars in debt. That is the net result of leftist policy, put into concrete-solid real world numbers. The lefts defense? “It feels good” ,or, “Its Bush’s fault”. Or, better yet, “This is why taxes have to go up on the rich.”

          Julian Simon was fond of saying that man, was mans greatest resource. There is value in capital formation, wealth creation, innovation, and free trade between free people. One should never short-sell the ability of individuals to work out huge accomplishments. There are also many physical resources in the United States. Well tended cropland, untapped reserves of fossil fuels and minerals. Vast tracts of land left untamed by civilization, waiting for those brave enough, and perhaps an easement or two. However, with these things in mind, given the massive obligations expecting fulfillment, economic collapse on a massive scale is still inevitable. The debate is when, not if, The key is that “if” equals mal-investment squared. I=ME2 Right now consumers and investors are mostly betting that saving a little, and hunkering a little, until a new brand arrives in Washington, will be enough. One could fill every house seat, senate seat, and the presidency, and its cabinet, with the worlds strictest fiscal conservatives, and medicare and social security checks, will still, stop coming in the mail, “at some point”. And as capital is destroyed using the regulatory state, this “day of reckoning”, may just approach us sooner, rather than later.

          If you work in an air-conditioned office, filling out forms, expect a collapse of what you are accustomed to. If your job is , or your livelihood is not an essential service, or commodity related…in a direct sense, expect a major change in your lifestyle, before this economic ship is righted. The storm has just begun. Americans can expect to be re-introduced to the Misery Index, and what it means, as well as what a falling “standard of living” looks and, feels like.

          What is the debt ceiling? It is the point at which over 300,000,000 heads touch the clouds and we hear a giant “BOINK” sound while these bruised skulls plummet to earth, following the laws of gravity. The shit hits the fan when income is not enough to pay interest. That is where these multiple balance sheets result in “no paycheck”, “no grocery store food”, and “no heat in January”. Be thankful if you have food, water, security, shelter and heat, and by all means, do not expect magical providers of health care and education, to appear. In the end, it is not about debt itself, it is about debt, as it relates to income. It is not about assets themselves (human mind, savings, stocks, equipment, real estate, ect), but assets as they relate to their ability to generate “income”. Is there orders for widgets? If so, great, if not, can I sell my widget machines? If so, ‘whew’. If not, why? Is there now a glut of liquidating widget machines out there? But collapse requires a large (fairly sudden) thump.

          Right now, the current regime looks at income from a hostile point of view. Taxes need to be raised, or, in this case, allowed to go up, since, to Washington, income is about “needs and sacrifice”, the creed of altruism, when in reality, income is about productive achievement, property rights,  the presence of basic rule of law, and of course, efficiency and expansion.

          The collapse occurs whether you want it to or not, and it will occur when too many borrowers have defaulted. Mal-investment, supply, demand, and payrolls be damned. The question is not when, it is, how many defaulters are “too many”? Even the most ardent of tea party candidates will not come out and say medicare and social security are no longer solvent, and need to be abolished. What they actually say is that they are no longer solvent, and need to be “fixed”. This is like asking a welder to dive 1,000 feet below in icy waters, 100 years hence, to attempt to repair the Titanic…because we feel bad about it having happened, and want to make it feel less like a tragedy. The worse scenario is that Tea Party candidates are too moderate, and coming in to power, too late. The better scenario is that they will be able to slow the fire by starving it of O2 for a little while, until more people can be educated on the burning issue of our time, and no doubt, our generation, ‘The’ Economic Collapse.

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