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Global debt has surged since 2008, to levels that should frighten any sane investor because debt has always had consequences. Much of the massive debt load hanging above our heads in 2008 has not gone away it has merely been transferred to the public sector where those in charge of such things feel it is more benign. A series of off-book and backdoor transactions by those in charge has transferred the burden of loss from the banks onto the shoulders of the people, however, shifting the liability from one sector to another does not alleviate the problem.
When the 2018 financial year budget was first unveiled it was projected to be $440 billion. An under-reported and unnoticed later report painted a far bleaker picture. The report titled the “Mid-Session Review” forecast the deficit much higher than originally predicted. The newer report predicted the deficit would come in at $890 billion which is more than double what they predicted in March of 2017.
Such a miss would bring up the question of whether the discrepancy in the 2018 budget is an outlier or a sign of incompetence. This is especially troubling because what was projected as a total budget deficit of $526 billion for 2019 Fiscal Year has now been revised to a staggering $1.085 trillion. Not only should the sheer size of these numbers trouble us but we should remember that until recently some Washington optimists were forecasting that deficits would begin to decline in 2020 and that we would even have a small surplus of 16 billion in 2026. The updated revisions have washed away this glimmer of hope and replaced it with more trillion-dollar deficits going forward.
Interestingly, the summery that begins on page one of the Mid-Session Review comes across as a promotional piece using terms like MAGAnomicics that praise and tout the Trump administration for its vision and great work. This is a time when it would be wise to remember numbers don't lie but the people using them do. This report is an example of how they re-frame a colossal train wreck into something more palatable. The report even goes so far as to assure us that the deficit will fall to 1.4 percent of the GDP in 2028, from its current 4.4 percent. As a result of the American economy having survived with little effect what was years ago described as a financial cliff we have become emboldened and now enjoy a false sense of security. Today instead of dire warning we hear news from Washington and the media how the stock market continues to push into new territory and all is well.
|National Debt Now At 23 Not 12 Trillion dollars|
It is very disturbing that so many people have forgotten or never taken the time to learn recent financial history. By recent, I'm referring to the last fifty to one hundred years. The path that Fed Chairman Paul Volcker set right decades ago has again become unsustainable and many people will be shocked when this reality hits. Do not underestimate the value of insight gained from decades of economic perspective. It tells us the economy of today is far different from the way things have always been.
Back in September of 2012, I wrote an article reflecting on how the economy of today had been greatly shaped by the actions that took place starting around 1979. Interest rates, inflation, and debt do matter and are more significant than most people realize. Rewarding savers and placing a value on the allocation of financial assets is important. It should be noted that many Americans living today were not even born or too young to appreciate the historical importance and ramifications of the events that took place back then. The impact of higher interest rates had a massive positive impact on corralling the growth of both credit and debt acting as a crucial reset to the economy for decades to come. Below is a copy of that article.
A Time For Action, 1980?
I recently picked up a copy of the book that I had read decades ago and while re-reading it I reflected on and tried to evaluate the events that brought us to today. As often the future is unpredictable, looking back, it is hard to imagine how we have made it this long without finding long-term solutions and addressing the concerns that Simon wrote about so many years ago. Back then it was about billions of dollars of debt, today it is about trillions of dollars. It appears that something has gone very wrong.
|Do Not Underestimate The Importance Of The Reset By Paul Volcker In 1980|
|Rates Today Are Ready To Fall Off The Chart!|
With our debt at 23 trillion and growing the path has again become unsustainable and many people will be shocked when the reality hits. As our debt climbs some Americans feel just as frightened and angry as Simon did so many years ago. America has kicked the can down the road, failing time and time again to face the tough decisions. Part of the problem is the amount of debt has grown so large that we can no longer imagine or put a face on it. The day of reckoning may soon be upon us, how it arrives is the question. Many of us see it coming, but the one thing we can bank on is that when it arrives many will be caught totally off guard.
By its nature censorship often implies those being silenced are trying to say something very wrong. I consider censorship and mainstream media's role in it as part of the self-feeding propaganda loop that plays such a huge role in shaping public opinion. This tends to result in those in leadership positions and controlling the media to slowly hack away at our individual rights by furthering the idea it is all "for the greater good."
The idea of having a press that is free to cover the news is generally linked to the idea they will be fair because such a freedom generally comes with a degree of responsibility. A common example is how freedom of speech should give someone the right to speak their mind but not scream fire in a crowded theater. This can slip into an argument as to the duty of the media in presenting as unbiased a view of events as possible. This is complicated by the fact many news outlets have moved more towards an entertainment format rather than presenting the cold hard facts and in that regard, sensationalism draws viewers.
In many ways, mainstream media has become a polarizing force that stirs the pot of social unrest. By promoting polarization America's media has made it impossible for the people to unite and regain any control over Washington. I would not be surprised if those in control are not giddy over this and the problems Facebook has created by playing fast and loose with data from its followers. Facebook by crossing the line and abusing the trust of those with accounts and information posted on its platform has taken a great deal of pressure off of the mainstream media to do a better job.
The sad reality is that "Power To The People" is dead because we are unable to agree on anything. Still, even more unsettling is the alliances' companies like Amazon have made with the government. This is evidenced by the massive contract Amazon's cloud division has with the CIA and NSA. Anyone who doesn't believe that countries use psychological warfare and propaganda to sway the opinions of people both in and outside of their country is naive. The fact Amazon's CEO also owns the Washington Post, which stands as America's most influential newspaper, should send shivers down the back of those believing in freedom and limited government.
Propaganda is a powerful tool that has resulted in many wars that enrich those who make weapons at the expense of those called upon to give their blood. The fact that behemoth Amazon has intertwined business interests with the CIA, NSA, and several other "Deep State" government agencies is a monument to our having lost control of the massive part of our government that spies on us and spins the narratives to which we dance. This tangled mess includes the influential Washington Post which is owned by the CEO of Amazon, Jeff Bezos. Simply put, this has unleashed a propaganda force to which none of our institutions can resist.
Today many people get the majority of their news over the internet. While this has made a huge difference in how news is distributed and how we receive the news, much of the content remains controlled by a few strong players that often are driven by an agenda of self-interest. I contend the subtle omission of a comment section online is often an effort to quell dissenting voices rather than because it to simplify the format. It could be argued that the media has a moral obligation to provide such a public forum if they want the right to call themselves "free and balanced."
Many of us out beyond the beltway in the backwaters and wilds of America have grown to feel the media has a casual relationship with the truth. In many ways, the media has become viewed more as a tool of the establishment than the protector of the people and defender of our rights. This could explain why the press is often held in such low esteem by the very public that relies on them for information. Coverage filled with subtle digs or comments and even subliminal messages taint the premise media is fair. During interviews, we often get an opportunity to witness examples of just how badly you can treat a guest invited to answer questions when they alter the narrative being pushed.
This often results in over the top efforts to put words in someone's mouth and take statements out of context. These words are then spun in the most harmful ways. If the guest represents views differing from the interviewer what we often see is an ambush. If a guest is favored or their views are endorsed it is often as though they had written the softball questions asked of them or as if they had been given the questions in advance or controlled the interview. All this can then be backed up by a series of scripted statements that all loop back around to support a hard or subliminal message.
With the biased coverage of current events being very common, it is little wonder that Americans question the honesty of the media whose ranks appear to have become filled with opportunists and bums dressed as journalist. The fact is we often don't agree with everything we view or read so "implied agreement" is not valid. Even including a simple thumbs up or down box at the end of an article would at least give readers a place to weigh in. Next time you are boiling mad or disagree with how an article is characterizing an event I urge you to take the time to see if the source has provided you with an opportunity to present your view. I would not be surprised if they have not.
Footnote; For more on this subject see the article below which delves into the free press and their responsibility to be fair.