The masses have been programmed and conditioned to love their debt servitude and yearn for more debt to fix an economic system that collapsed due to excessive debt. The cadre of ruling elite are obliging by creating debt at hyper-speed levels.
By Monty Pelerin
The deterioration of this nation’s economy is truly mind-boggling. What we experience today is an outgrowth of several decades of misguided economic policies.
Current economic policy is even more misguided than those that led us to this point. So, too is the regime uncertainty that surrounds facing economic actors. Productive people have targets painted on their backs. Business and investors do not know what is coming next and avoid expansion commitments other than those outside the country.
In real terms, the weekly wage is lower today than it was in 1966. That is partly because we are in a recession/depression. But this condition has existed since 1970. It is a sign of an economy that is dying, one where its citizens are experiencing declining living standards.
Few people realize that we/they are becoming poorer. Technological improvements and innovations have made more goods available to more people at lower real prices. We have more stuff than we did a decade or two ago. While goods should be cheaper today, our Federal Reserve has offset productivity and technology gains with inflationary money creation. Wages, in general, have not kept up with nominal prices.
Yet, we seem to live better and have more stuff. How can that be? It is simple. Our assets have increased but not nearly as fast as our liabilities. We have enhanced our lifestyle but not our wealth. We used debt to live beyond our means. Its use temporarily covers up the fact that our standard of living is actually in decline.
Debt enabled us to live better than we should have. Using debt today allowed us to increase our consumption. The piper, however, does not provide the debt for free. Every dollar of debt used today means less consumption available tomorrow. Whatever we earn, the debt must be serviced reducing the funds for consumption or savings. Each dollar borrowed reduces our future life style by a dollar plus. In short, we maintained today’s lifestyle by sacrificing tomorrow’s.
The magnitude of debt is beyond what an average person can comprehend. Here is a summary of some of the numbers from James Quinn:
Since 1979, Total Credit Market Debt in the United States has risen from $4.3 trillion to $55.3 trillion, a 1,286% increase in 33 years. Over this same time frame total wages and salaries have risen from $1.3 trillion to $6.9 trillion, a 531% increase. GDP has grown from $2.6 trillion to $15.8 trillion, a 608% increase. Luckily for the oligarchs, the math challenged masses don’t understand that 375% of the increase in GDP is strictly due to Federal Reserve created inflation, as the U.S. dollar has lost 68% of its purchasing power since 1979. This GDP growth was driven by debt, with consumer expenditures rising from 61% of GDP in 1979 to 71% of GDP today. In the one hundred years since the creation of the Federal Reserve the country’s population has tripled, while our public debt and unfunded liabilites have risen from $2 billion to over $200 trillion, a ten million percent increase. The masses have been programmed and conditioned to love their debt servitude and yearn for more debt to fix an economic system that collapsed due to excessive debt. The cadre of ruling elite are obliging by creating debt at hyperspeed levels. The corporate media, Wall Street shysters and low-life captured politicians assure the sheep-like masses that this is normal and beneficial to their interests, as the sheep are sheared and led to slaughter.
Hopefully those who lived for today (and yesterday) had a good time. Many mortgaged their futures for this pleasure. The piper is coming to collect and he will not be denied. And he is coming when the real standard of living is declining as a result of Washington policies. The country is about to get whacked with a double blow.
“Monty Pelerin” is a pseudonym derived from The Mont Pelerin Society. The writer has no connection with the Society (other than coincidence of philosophy). Nothing said by me should be considered to be representative of the views of the Mont Pelerin Society or any of its members. “Monty Pelerin” blogs at Monty Pelerin’s World
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