Credit has a wicked way...
...of magnifying a person’s defects. Even the most cautious man, with unlimited credit, can make mistakes that in retrospect seem absurd. But an average man, with unlimited credit, is preeminently disposed to going full imbecile.
Let us not forget about this important skill… [PT]
Several weeks ago we came across a woeful tale of Mike Meru. Somehow, this special fellow, while of apparent sound mine and worthy intent, racked up over $1 million dollars in student loan debt – all to become an orthodontist.
Surely, with several good text books, and a disciplined self-study program, Meru could have learned everything there was to possibly know about adjusting malpositioned teeth for roughly $200 bucks. Instead, with the full backing of Uncle Sam’s loan program, he went full imbecile.
Yet Meru isn’t alone. According to the Department of Education, there are 101 people in the U.S. who are a million dollars or more in federal student loan debt. What’s more, there are 2.5 million people who owe at least $100,000. What could they have possibly learned that could be so doggone valuable?
Did they discover how to turn nickels into dimes? Did they solve the geometry of a four-sided triangle? Did they learn the secrets of the universe? Did they get an insider’s peek at something more than what happens under the sun?
Delusions of Grandeur
Only at rare moments are people capable of understanding the full implications of the catastrophes of their making. These rare moments, often just before dawn, are the precise instants when they gain full clarity to the hopeless fact that they have gone full imbecile. That every decision they have ever made has led them to this exact place – where they find themselves to be completely and utterly screwed.
Nations, like the people who compose them, have also demonstrated that they are unqualified to responsibly function in a world of unlimited credit. Here in The United States of Debt, federal debt has exceeded $21 trillion, corporate debt has topped $6 trillion [ed note: this is only the amount of non-financial corporate debt issued in the form of bonds – the actual total is around $20 trillion (PT)], and total household debt has reached a record high of over $13 trillion. In other words, the country, as a whole, has gone full imbecile.
Behold the world’s greatest Ponzi scheme in all its splendor – US federal, corporate and household debt (see also our editor note above regarding the size of outstanding corporate debt). [PT]
These debt figures represent the early lightning of the oncoming storm. These same debt figures are currently ignored by practically everyone. The nation’s leaders, in particular, are ignoring them. After an 80 year run of near uninterrupted prosperity, who wants to think the unthinkable?
People would rather be flattered with delusions of grandeur than have cold buckets of ice watery truth dumped on their head. They want to believe that they are exceptional and that everyone – especially them – can live at the expense of their neighbors. They want to believe they can get more out of their retirement than they put in.
People hold onto the myth that America is a free market economy. Yet, somehow, they miss the contradiction inherent in the mammoth bureaucracy that has been erected to oversee it. Free trade is fine in theory, they rationalize. But, in practice, protectionist measures are required to make trade fair. And on and on the delusions go…
America Goes Full Imbecile
At the same time, large segments of the American populace – many involuntarily – have been reduced to abject debt servitude. On the flip-side, the entire structure of Social Security and Medicare entitlement programs is on the brink of collapse. These signature social achievements of FDR and LBJ, and the tens of millions of dependents that have put their faith and trust in them, stand to be wiped out faster than you can say lickety-split.
This week the Social Security and Medicare Boards of Trustees released their 2018 Annual Report. Inside they revealed that the Medicare trust fund will be depleted in 2026 and the Social Security trust funds – both for old-age benefits and disability insurance – are likely to be depleted in 2034.
So what happens when these milestones are reached? Will entitlement dependents find themselves up the creek without a paddle? Not exactly. Most likely, the Treasury, in concert with the Federal Reserve, will indeed go full imbecile. They will create money from nothing to make good on their obligations. But in the process, they will end up destroying the currency.
Massive amounts of debt, made possible through a debt based fake money system, have brought today’s many unique possibilities for destruction into existence much sooner than would have been possible otherwise. What’s more, the government’s solution, which requires destroying the dollar, is as sensible as cutting off one’s head to cure a headache.
You could have taken an aspirin… or you could have chosen the more permanent solution – adios migraine, forever! [PT]
Of course, faith in the government’s ability to cure all of society’s ailments is what got us into this mess in the first place. The many unfortunate souls set to experience the insidious injustice of having their life savings vaporized through state sponsored currency debasement, will come to deeply regret this misplaced faith in government. It will never return.
For the sake of completeness we would like to point out to readers that cutting off heads is also subject to as of yet unresolved gender equality problems. The head-chopping glass ceiling has yet to be shattered, so to speak. [PT]