Guest Post: The United States Of Delusion

Tyler Durden's picture

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The irony is that clinging to delusion rather than face the necessity of deep cuts in borrow-and-squander budgets will lead to the involuntary reset of the entire system, depriving every vested interest of their share of the swag.

We are living in the United States of Delusion. The delusion has four key sources:
1. We can borrow-print-and-spend our way to prosperity when debt and fiscal/monetary stimulus are yielding ever more marginal returns:
The Dangerous Blindspots of Clueless Keynesians (January 2, 2013) The Keynesian model is a Cargo Cult, mired in a distant, romanticized past where Central Planning, intervention and manipulation were solutions rather than the root of the economy's fatal disease.
2. The risks of this fatal fiscal delusion are masked by a complicit Mainstream Media and a perception-management, manipulation-dependent Central State and Federal Reserve.
Spoiled Teenager Syndrome (January 3, 2013) Masking risk, cost and consequence creates an illusory world that eventually crashes on the unforgiving rocks of reality.

Is masking risk, cost and consequence a strategy that leads to success? No; it is a pathway to repeated catastrophic failure. What is the Central Planning strategy being pursued by our Central State and the Federal Reserve? Masking risk, cost and consequence.

3. The true costs of the Neoliberal Cartel State are cloaked, massaged and distorted by bogus budgets and wildly unrealistic projections.

Sickcare is fundamentally a system of interlinked politically powerful cartels.Insiders who refuse to speak on the record for fear of antagonizing the powers that be, exorbitant price increases, confidential agreements and a tug-of-war between warring tribes. Is this the Mafia we're talking about?
From the point of view of investigative journalism, it could al 

so describe America's health care industry. Stated truthfully, the industry is a highly profitable and politically powerful group of companies which operate in cartel-like fashion: that is, they use their clout to limit competition and establish highly profitable pricing. 

Western Pennsylvania has about 140 MRI machines, while the 32 million residents of Canada share 151 MRI machines. And the U.S. machines are getting a lot of use: the number of CT and MRI scans (scans other than old-fashioned X rays) tripled from 85 to 234 per thousand insured people since 1999.
While proponents are quick to note that scans are cheaper than the alternative diagnostic procedures, one firm's research found that a doctor who owns his own machine is four times as likely to order a scan as a doctor who doesn't. 

As if that wasn't enough to highlight the self-serving nature of "fee for service" cartels, MRI scanner manufacturer General Electric waged a two-year lobbying campaign to roll back cuts in Medicare reimbursements for scans. While the effort proved unsuccessful due to the intense political pressure to reduce soaring Medicare costs, critics observed that providers simply made up the reduced reimbursements by increasing the number of tests administered. 

The only solution that actually addresses the systemic problem is to get rid of the entire fee-for-service structure and break up the cartels.Healthcare must be reconnected to diet, nutrition, fitness, lifestyle and community, and to education and emotional well-being.


If you really want a solution, then start by pinning down exactly who's getting all the money. Then find out if they're accountable for how it's spent. Nobody wants to admit the reality: our nation is dominated by cartels and fiefdoms serving entrenched constituencies whose budgets are simply not sustainable.Please consider this chart of the University of California system's employment of professors and administration. If we extrapolate the lines, then soon there will be more highly-compensated seat-warmers in administration than there will be professors teaching in the classrooms.

It seems that some members of the Education Cartel and Fiefdom came to do good but stayed to do well--as in triple the national median earnings of full-time workers: 


Salary: $172,163
Position: High School Teacher
Full/Part Time: Fulltime
Percent Time Employed: 100%
Assignment: Physics (Grades 9-12 Only)
Years Teaching: 30.5
Degree: Master's

Salary: $163,526
Position: High School Teacher
Full/Part Time: Fulltime
Percent Time Employed: 100%
Assignment: Driver Education
Years Teaching: 32
Degree: Master's

And how about those pension and retirement costs? We have an answer for New York City, and it is sobering. NYC budget - pension costs skyrocketing:

Over the past decade, New York City hasn’t really grown its population but has increased expenses from $28.8 billion to $49.7 billion. The vast majority of that $20.9 billion increase has been in the form of more dollars to fewer employees. Pension costs are killing us most: this has grown from $1.3 billion in 2002 to $8.3 billion in 2012.

That's a 638% increase in pension costs in one decade, while the city budget leaped 72% despite a stable population. The share of the budget devoted to pensions jumped from 4.5% in 2002 to 16.7% in 2012.

I have addressed these issues many times, for example in The Devolution of the Consumer Economy, Part II: Rising Costs, Declining Wages (April 8, 2011) and Complexity: Bureaucratic (Death Spiral) and Self-Organizing (Sustainable) (February 17, 2011).
I have highlighted the Education and Sickcare Cartels, but there are many others with exploding costs and zero alignment with accountability or performance. The Department of Defense, famous for routinely losing track of hundreds of billions of dollars (and does anyone lose their job over that gross mismanagement? No, everyone gets a promotion and raise for doing such a swell job), manages to triple the cost of every weapons system, regardless of the actual performance benefits (increasingly marginal, perhaps?)
The new F-35 fighter aircraft cost $150 million each, once we add in the overruns, replacing the Super Hornet F-18 E/F that cost $57 million each. (Once lifetime costs are included, the F-35 will cost upwards of $300 million each.) Is the F-35 really three times better than the F-18? Which would a commander facing 100 bogeys rather have, 30 F-35s or 90 F-18s? (I suspect they'd take the 90 F-18s, as long as they were loaded with the latest Sidewinder and long-range air-to-air missiles. As has been famously pointed out, at some point quantity becomes a winning quality.)
Will 100 F-35s prevail over 1,000 dirt-cheap drones? How about 10,000 drones? If the future of warfare is increasingly powerful unmanned networked drones (and it clearly is), why are we spending $1 trillion+ on hyper-costly aircraft that are essentially designed for a previous era?
4. The consequence of substituting delusion for reality is ignored or hidden from view, with the complicity of all the self-serving, entrenched vested-interests.
Is there any evidence that continuing to borrow and squander money on diminishing returns will magically cause a sudden return to productive investment? Of course there isn't; the magical belief that doing more of what has failed will eventually evade causality is delusional.
Does anyone seriously think that counterproductive "investments" in diminishing returns will "grow our way out of debt"? Of course not; everyone with a vested interest in the crumbling Status Quo is terrified that their share of the borrowed/printed swag will be cut. So the only alternative is to cling to a delusional state where belief in the impossible replaces a realistic assessment of risk, cost and consequence.
The irony is that this strategy of clinging to delusion rather than face the necessity of deep cuts in borrow-and-squander budgets will lead to the involuntary reset of the entire system, depriving every vested interest of their share of the swag. Is delusion a sustainable state? No. Thus we can confidently predict that causality, factuality and karma will eventually sweep aside delusion and all those who cling to it.

My new book Why Things Are Falling Apart and What We Can Do About It is now available in print and Kindle editions--10% to 20% discounts.

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Freddie's picture

Hope & Change Islamo Mugabe.

uno's picture

I'll raise you a choom wagon

Landotfree's picture

"We are living in the United States of Delusion"

fixed it for the author

"We are living on the Floating Rock of Delusion"

I assure you it's not just a US thing.  Until the author realizes the underlying problem instead of symptoms of the problem, he will remain delusion as well.

I can assure the author that he can stop all this so called printing, eliminate the whole government and the system will still collapse, matter of fact, I would wager the house on it happening overnight.   The worse delusional person is a delusional person that doesn't know they are delusional i.e. the author.

IvyMike's picture

It's the advocates of City-Statism (Civilization) who are delusional.

The United States is indeed a "shining city upon a hill," for all City-Statism is worth.

Even Jefferson recognized the filthy ways of city-slickers:

"When they get piled upon one another in large cities, as in Europe, they will become corrupt as in Europe."

~Thomas Jefferson
Letter to James Madison, December 20, 1787

Yep, that's the way Civilization (City-Statism) goes these last 8000 brutal years.

"Civilization originates in conquest abroad and repression at home."

~Stanley Diamond
In Search of the Primitive: A Critique of Civilization, p. 1

P.S. "The Voluntary City" is an oxymoron.

Zap Powerz's picture

Whatever you say Runs with Scissors.

redpill's picture

Speaking of delusion, did you know ostriches don't actually bury their heads in the sand?  They would suffocate.  Say, kind of like the American middle class!



12ToothAssassin's picture

IMO a grand reset *IS* the intended outcome.

walküre's picture

There is no other option. I talk to people who either know it and admit that or they pretend not to know it and lie. Forget the people that wouldn't understand what is going on. They'll be lining up for the latest I-crap the day of a currency reform.

TPTB_r_TBTF's picture

A reset has been part of the plan since 1913,

in other words,

a reset was always part of The Plan.

prains's picture

paying a good educator (these are rare but not impossible) with 30 + years 160k to do a good job is CHEAP and that person is a real contributor to your country's well being.

the fat ass on wall street loading toilet paper rolls in the "gents" room is making triple that.  I'm not a teacher but good teachers who suck on the end of the bullshit coming out of american classrooms

for 30 years can make 160 all day long, its the bankers you need to look at

IvyMike's picture

If you can only complain about unions and nothing else, you might be a KOCHsucker.

Funny watching the City-Statist factions fight amongst each other like Politburo apparatchiks.

Canadian Dirtlump's picture

Frank Marshall Davis jr.'s mojo should allow the casino to continue to operate until the control grid is complete.

<---- these people regularly beat off to pictures of Alan Greenspan

rotagen's picture

Theres only one delusion, the one that ignores the fact that Wilson allowed a criminal cartel of Banksters to issue fake money and create fake debt.  Thus rendering all talk about other "Delusions" void, false, and hypocritical.

Shizzmoney's picture

Western Pennsylvania has about 140 MRI machines, while the 32 million residents of Canada share 151 MRI machines.

The main component to these machines working is helium, which BTW, there is a shortage in:

Legislation passed in 1996 mandated that the federal government sell off its helium reserves by 2015. They've been selling the remaining gas since then, but as production around the world has slowed, and no government action has been taken yet, questions remain.

This will only mean not only will the price of helium will go up, but ALSO the cost of MRIs.

Dr. Richard Head's picture

You mean it will be more expensive to talk like a chipmunk?  Fuck!  When will the insanity end?

francis_sawyer's picture

So as soon as 'Obamacare' kicks in... Everybody should go once a day to request for an MRI of something while investing in helium futures... BULLISH!


I look for T Rowe Price to be right on top of this... After all, their commercials brag about 'understanding the complexities' of a global economy...

greyghost's picture

bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla bla "KARMA" bla charlie "i'm paid by the word" smithie. bla bla bla bla bla bla bla bla bla "KARMA" by charlie "i save the karma for the last sentence" smithe. we should be so lucky he takes off on a year long quest to the land of the dalai lama.

uno's picture

a friend who was a parametic in Toronto told me the expensive machines were distributed though many hospitals to keep expenses down; so if someone needed a mri they were put in an ambulance (if in a hospital) and carted there, then carted somewhere else if need be (cancer treatment etc). 

Jam Akin's picture

Never underestimate the power of inertia.

G_T_A_44's picture

Most people hear/believe only what they want to hear/believe, while very few act on what they see.

LouisDega's picture

Delusional. Hmm, Will drinking more merlot help?

francis_sawyer's picture

as long as it's 'kool aid' flavored...

DaveyJones's picture

No, but maybe this:

"Calif. company offers help to state in setting up retail-marijuana plan

A company that makes vending machines to dispense marijuana is one of dozens of firms and experts that have offered to help the state [Washington] set up new rules now that the drug has been legalized."

Brings new meaning to the names:

Krackel, Abba-Zaba, Mr. Goodbar, Whatchamacallit, and of course - Munch


redpill's picture

Total fiat absorption.  Fire up the choom wagon!

bank guy in Brussels's picture

Re 'Delusional', one of the delusional people is Charles Hugh-Smith with his 'two minds' .(admitted schizophrenia?) ... trying to market his now essentially stone-age product ... of all things, a 'book', ha!

As Hugh-Smith pimps himself above ...

« My new book Why Things Are Falling Apart and What We Can Do About It is now available in print and Kindle editions--10% to 20% discounts. »

So a 20% discount on something to prop the door open ... What is the point of a 'book' now in these days, other than a novel, or a nice special-interest book with pictures?

If it's friggin' worth anything, put the info on the web, dammit! ... instead of trying to jack people for a few fiatscos for a 'book'

DavidC's picture

It's hardly pimping when it's a one liner, below the body of the article.

And what's wrong with informing people that a book is available should they wish to avail themselves of it, even if you don't?

I've got a copy of Bill Bonner and Addison Wiggins's book 'Empire of Debt' that I still go back to occasionally, written in 2002 - amazing how prescient it all is.

Nothing wrong with books!


orangegeek's picture

The joke of the century was watching the markets rocket on Barry's higher taxes and sustained government over-spending.


Barry and his Ben are into the market buying over valued stock to keep the facade running as long as possible.


The reality is that increasing taxes will choke private sector revenue/profits as consumers spend less. 

Growth rates are already falling - markets remains up.  Let's see the results for Q4 - higher earnings (from firing) and lower revenues (because channels are stuffed and consumers reduced spending) have been going on for THREE straight quarters - can carry on for only so long.

CrimsonAvenger's picture

My candle burns at both ends;
It will not last the night;
But ah, my foes, and oh, my friends—
It gives a lovely light!

Buckaroo Banzai's picture

"The candle that burns twice as bright, burns half as long, and you burned so very, very brightly Roy." -- Dr. Eldon Tyrell

Last thing he says before Roy Batty rips Tyrell's head off.

Cult of Criminality's picture

"We are living in the United States of Delusion"


'They' are living in the United States of Delusion

Chupacabra-322's picture

No, more like mass "Mind Control" via Psyche Warefare/PsyOp propaganda.  All bought to by CIA/Mossad etc.. Intelligence Agencies/Pentagon/Military Industrial Complex. 

TerminalDebt's picture

The more you spend the more save

Cognitive Dissonance's picture

False hope chains us to our (self) delusions. This truism cannot be over stated.

Unlike a complicated mechanical device where breakdowns can (and will) happen with increasing regularity as complexity increases, hope, faith and belief are emotional engines and thus can operate long past their (obvious) fail date.

Dr. Richard Head's picture

So who has the false hopes?  The growth will come back or the the reset be a comin'?  I have assumed the former, but the planners have been pretty good at pepering over the latter.

Cognitive Dissonance's picture

My comment applies to any position taken (and/or maintained) for emotional reasons. At one time or another we have all clung to impossible situations way too long for our own good when we were emotionally involved, regardless of the "facts" of the situation.

This is why we must always question everything, starting with ourselves. Very often it is not that an outside force blinds us, but rather that an outside force leverages our own blindness.

DaveyJones's picture

your posts always get me emotional

There's good emotional of course but maybe that's not the right word. Maybe passion and a human or animal instinct for survival and a core "feeling" to protect yourself and your family 

Cognitive Dissonance's picture

I understand your point completely and I'm not saying that we should be emotion-less, just that we should be fully aware of our emotions and the vulnerabilities that are exposed when we are acting upon emotion.

For example, you posit that "There's good emotional of course but maybe that's not the right word. Maybe passion and a human or animal instinct for survival and a core "feeling" to protect yourself and your family". If we are not fully aware of our emotional response to our feelings of insecurity (aka FEAR) as well as to the ways our blind response to fear can expose us to exploitation, we can be herded around like frightened little sheep when a false flag event such as 9/11 (or Sandy Hook?) is pulled off.

We have all heard the phrase "Never let a crisis go to waste". They are of course talking about the ability to exploit our misdirected emotional responses, often the very one you point towards, that of our emotional need to protect heart and home.

Cathartes Aura's picture

you may need to find another descriptive CogDiss, as "emotional" is so gender'd,

Maybe passion and a human or animal instinct for survival and a core "feeling" to protect yourself and your family

no dudes here will allow that label to be applied to their act-ions, as DaveyJones shows.

bitches are emo, real men act passionately, from instincts.

this is in NO way detracting from either of your posts, as there IS a point to be made, and one angle might be to re-cognise that everyone has emotions, some have a wide range of emotions, some act from their emotions - as as you say, best to be fully aware of how one's emotions inform actions, before "they" manipulate one into a corner. . .

DaveyJones's picture

Really you're both right - it's more than a definitional problem. All I can say is both in my own life and two decades in the criminal courts I have seen "emotions" do good work and bad. In that sense, Cog is right, don't let them go on auto pilot. In the other sense, you're right our "lower" animal instincts whether a "female" protect and care or a male "fight or flight" should never be plain ignored   

Cathartes Aura's picture

I admit I was being facetious, but also pointing to the "emotion" word being used in a derogatory sense, and most frequently applied to women, as it would rankle most here to be labeled as such (self included, yes).

and one can only imagine the "emotional displays" you're privy to in court - though I'm betting a good portion draw from believing the bigger the display, the more attention, and the likelihood of getting what one wants. . . rather like indulged children, hm.

it's sad that our culture rewards immature "emotional" displays, as it just encourages acting out, and delays maturity, IMO.

and we all need to get our needs/wants sorted, particularly going forward, when *shocks* are going to push some people out of their comfort zones - cue drama!

best new years wishes DaveyJones!

Dr. Richard Head's picture

"Thus we can confidently predict that causality, factuality and karma will eventually sweep aside delusion and all those who cling to it."

This is the day that I, and probably many of us here, go to bed with.  It is a dream day that I anticipate and pray for constantly. 

eatthebanksters's picture

Barry pays lip service and provides cosmetic relief to his 'constituents' and then turns around and smiles at his well heeled friends knowing full well he has done nothing but create an illusion that the ignorant masses adore. Barry is good at Chicago style poitics which is about bullying, lying and taking care of your crony buddies...he's worthless as a leader and is a charlatan...All you need to do is look at the results of the debt ceiling negotiations.

yogibear's picture

"All you need to do is look at the results of the debt ceiling negotiations."

Absolutely! We will see the debt limit moved to $20 trillion.

Move on get to work Benny Bernake (Chuck Shumer says) and keep printing.

SmoothCoolSmoke's picture

Yer boy, I assume, Ronnie Reagan raised the debt ceiling...........18 TIMES!  Can I mark it down that you think Reagan was 9X the asshole you think Obama is?

SmoothCoolSmoke's picture

Yeah, Romney had no "well heeled friends", or "crony buddies". Too Funny.

12ToothAssassin's picture

Do you still not understand they are on exactly the same team?

Never One Roach's picture
Argentina presses claim to Falkland Islands, accusing UK of colonialism


 Fri January 4, 2013
yogibear's picture

Develop big enough nukes and they can claim anything. The one with the largest nukes and being able to deliver them wins, end of story.

Right now the UK is in control.

Buckaroo Banzai's picture

I would suggest that the UK invade Argentina and take it over, but the fact is, given how the UK runs itself, it wouldn't be much of an improvement.