The America Bubble
Hurray! Our democratic leaders have rescued the nation, once again, from a crisis of their own making!
After the debt-ceiling was (inevitably) raised, and Gabby Giffords was wheeled out to take part in the exercise in bi-partisanship, the frequent refrain was sounded that “both sides” engaged in “painful comprise.” The reality is that nothing really happened and nothing really changed.
The initial increase in the debt ceiling of 900 billion (or what’s actually 2.1 trillion) is “matched” by cuts of $1 trillion… over the next 10 years. One hundred billion per annum will, of course, put but a mild dint in the projected growth of the federal government; no component will actually go away. Such “cuts” will, moreover, be quickly overwhelmed by the growth of debt, whose current clip is 4 billion per day.
Put simply, America remains strictly debt-financed—this includes its military empire, entitlement programs, and multicultural obsession. And until that happy day when this system collapses—or is destroyed by geopolitical actors—Washington will get away with it.
What still amazes me, though perhaps it shouldn’t, is the way in which the media and so many political activists—even AltRighters and White Nationalists—got caught up in the “crisis,” which was fabricated by Tim Geithner through his arbitrary and mythical “August 2nd deadline.” (As Jim Rickards points out, Geithner creates media events in a real Timmy Geithner kind of way—passive aggression and the projection of weakness.) Despite the millions of warnings of default, interest rates on Treasuries remained at historic lows. No one actually believed that a country that can emit its own currency would ever stop paying interest and its bills.
And there’s another important, and deeper, element to this that should be stressed. Despite the frequent claims by liberals that the Tea Party is a group of libertarian extremists, none of them—indeed, no one in the entire country—actually wants to reduce government.
Or put another way, Washington has covered its bases: The Red States get a debt-financed military, a debt-financed Military Industrial Complex, and debt-financed Medicare and Social Security. Liberals get debt-financed liberalism. Blacks get debt-financed public employment and debt-financed affirmative action. Hispanics get free entry into the country and the chance to feed off the debt-financed welfare state. Jews get debt-financed grants to Israel. Wall Street gets debt-financed bailouts. Und so weiter… Each side thinks that the other side’s programs are “wasteful” and “pork” and that its own programs are “essential.”
Though Congress might be unpopular, an Economist poll revealed last year that the vast majority of Americans don’t want to change anything about Washington. With the exception of the easy-to-hate foreign aid, ending any major entitlement is opposed by a supermajority of voters.
What this reveals, in the final analysis, is that with debt-financed “democratic capitalism,” the U.S. has achieved a more lasting and insidious form of egalitarianism than anything attempted by the Soviet Union of old.
Domestically speaking, by the middle of the 20th century, “America” signified, perhaps for the first time, a real nation. After the mass Third World immigration inaugurated by the 1965 Immigration Act, America was transformed into an economy (or a place where all people from around the globe can “achieve their dreams”). At the beginning of the 21st century, America is not even an economy but some kind of egalitarian, obviously unsustainable credit bubble that makes terms like “capitalism” and “socialism” seem irrelevant.