Growth, Debt and Demise:
Life takes some interesting twists, people who lived in camp trailers used to wish they had big homes and now people who have big homes wish they lived in camp trailers.
Ya see, if you live in a camp trailer you don’t have a big mortgage and you can move and take your home with you…not bad huh? Isn’t it interesting how circumstances change our perspective? “Wow, what a beautiful new SUV, sure wish I had one,” to, “Wow, a new SUV. What are you, some kind of a moron?”
Perspective is everything and perspective is subject to change. I hope to change your perspective today (a least a little), regarding debt and growth. I heard that. Someone said, “Just like he does everyday.” And…that would be correct.
In many of my past articles and certainly in my book, I point out that something went terribly wrong about 1970; the U.S. reached the limits of exponential growth as a viable foundation for our continuing economy.
Rather than pony-up and level with the good citizens, and rather than seek out a sustainable method of going forward, our government decided to replace the “cash and carry,” with the “print and loan” method of economics.
So let’s take a look at a chart that was graciously provided by babylontoday.com which helps us to visualize that point and time when we began our decline, or as the chart reveals, our incline up a mountain of debt.
Take a look at our National Debt on the chart above from1950 to 1970 and then from 1970 to Present. HOLY MOLEY! Also read the insert on the chart if you want to know why William Jefferson Clinton claimed a surplus (which never occurred…ever). The dot-com bust cost America some $2 TRILLION, but Mr. Bill was long gone and said, “I don’t know what George did, it was alright when I left.” Sure it was Bill.
I have covered the fact that inflation is the most insidious manner possible to conceal a failing system. It’s also the easiest way to cover-up a failing system and has a distinct advantage to the super-rich and for sitting politicians’ odds of remaining in office. Therefore, inflation is the official method in the U.S. for getting a few more miles out of dead horse.
Inflation is created only one way and that is by printing more money. Remember that we went off the gold standard in 1971 (keep 1970 in mind) and could print all the money that the FED determined necessary to keep the good citizens from rioting.
M3 represents the total amount of money that is in the system. Once more, look at 1970 and beyond. On February 28, 2006, the Federal Reserve quit reporting M3. As the chart questions; Wonder why?
Printing money creates government debt that is interest bearing. Most debt is sold to foreign nations; debt that American citizens have to repay. Shall we take a look at just exactly what each and every one of us does owe? Once more, look at 1970 on the next chart that was provided by Michael Hodges and his famous Grandfather Economic Report. http://mwhodges.home.att.net/#debt
This chart stops in 2006, but take my word for it, the angle of the line in now nearly perpendicular.
We began our journey in America on an economic foundation that was impossible to sustain long term. We reached that mathematical barrier around 1970 and are now totally out of control. These charts are factual representations of our voyage so far.
What do you think? Can we go on? The short answer is no. The U.S. arrived at this unfortunate point by following the paradigms of growth and debt, and when that failed, growth of debt.
Government on both sides of the aisle promise more growth and more debt. By doing so, they are in fact promising to end our very way of life. But you personally can chose not to comply; you may already be one of the lucky ones who have the camp trailers.