Guest Post from Stefan Gleason, Originally Published on Money Metals Exchange
The dramatic failure of the U.S. Senate’s last-ditch Obamacare repeal effort leaves Republicans so far without a major legislative win since Donald Trump took office. No healthcare reform. No tax reform. No monetary reform. No budgetary reform.
MD: When it comes to government, doing nothing “always” is better than their doing something. What’s not to like about this “dramatic failure”?
The more things change in Washington… the more they stay the same.
Despite an unconventional outsider in the White House, it’s business as usual for entrenched incumbents of both parties. The next major order of business for the bipartisan establishment is to raise the debt ceiling above $20 trillion.
MD: I.e. legitimize their total counterfeiting up to $20 trillion. Since they “always” raise this limit, it “is” no limit. Counterfeiting is how “all” governments sustain themselves. It is their very existence.
Since March, the Treasury Department has been relying on “extraordinary measures” to pay the government’s bills without breaching the statutory debt limit.
By October, according to Treasury officials, the government could begin defaulting on debt if Congress doesn’t approve additional borrowing authority.
MD: Could “begin” defaulting on debt? Government “always” defaults on its trading promise … i.e. its debt. A “rollover” is a default … plain and simple!
Treasury Secretary Steven Mnuchin wants Congress to pass a “clean” debt limit increase. That would entail just signing off on more debt without putting any restraints whatsoever on government spending.
Fiscal conservatives hope to tie the debt ceiling hike to at least some budgetary reforms. But even relatively minor spending concessions will be difficult to obtain from the bipartisan establishment.
MD: A budget is just a financial novel. It does nothing … just as we know a debt ceiling does nothing. The only thing that will stop governments … and the money changers that institute them is a competing MOE process. Articles like this that are deluded by what is actually going on just shield the government from such competition. They inhibit instituting a “proper” MOE process.
Democrats and a few left-leaning Republicans together have an effective majority in the U.S. Senate. They wielded their legislative might by defeating the GOP’s watered-down Obamacare repeal bill, with the decisive “no” vote cast by ailing Republican John McCain.
It was exactly the sort of media spotlight moment Senator McCain has craved throughout his long political career.
The narcissistic Senator’s shtick is to posture as a selfless crusader for noble causes that his fellow Republicans just aren’t high-minded enough to get behind.
Yet for all his sanctimony, McCain is just as politically opportunistic and just as hypocritical as many of his Senate colleagues. The Senator from Arizona ran for re-election last time around on repealing Obamacare. Yet when given the opportunity, he voted to keep it in place.
MD: Why do the people of Arizona keep returning McCain to the Senate? Because democracy involving more than 50 people does not work. It just reduces to a big expensive “ugly” contest. That too needs to change.
He campaigns as a conservative when it suits his political needs and portrays himself as a maverick when he wants media accolades. He legislates as neither a conservative nor a maverick but as an entrenched establishment incumbent. That can also be said of other big-name Republicans.
Trump’s Budget Cut Proposals Declared “Dead on Arrival” by Spending-Drunk Congress
When President Trump’s Budget Director Mick Mulvaney unveiled a proposed budget that, for the first time in decades, asked Congress to make tough cuts to an array of spending programs, establishment Republicans joined Democrats in branding it “dead on arrival.”
Congress didn’t even consider the idea of spending cuts to be on the table for negotiation. That’s how entrenched deep state loyalties are in Congress.
Instead of working with Trump’s budget, the Republican-controlled Congress promptly began hammering out a spending bill that added billions to what the administration requested – $4.6 billion more for agriculture, $4.3 billion more for interior and environmental programs, $8.6 billion more for the departments of Transportation and Housing and Urban Development.
No cuts to refugee and foreign aid programs. Even the much-maligned National Endowment for the Arts made it through the House Appropriations Committee unscathed.
The bottom line is that there will be no spending restraint in Washington, and therefore no way out of the coming debt crisis. The Congressional Budget Office projects that publicly held federal debt as a percentage of the economy will soon surge past all previous wartime spikes.
MD: Actually we should just get out of the way and let the thing explode as quickly as it naturally will. And quit paying “all” taxes. If just one or two of us quit, we go to jail and they take everything we have. But if we “all” quit, they can’t do anything about it. That’s the only chance we will ever have … and we have always had it
And go to the link to see the missing image below. I’m too lazy to copy it over.
National Debt (Publicly Held) as a Percentage of GDP
Source: Congressional Budget Office
The official national debt of nearly $20 trillion is just the tip of the iceberg. It represents a small proportion of the total unfunded liabilities the political class has racked up over the past few decades (pointedly, after President Richard Nixon repealed the last remnants of gold redeemability for the U.S. dollar and replaced it with pure fiat).
MD: The Deviant Investor is a site brought to you by gold bugs. They claim gold is “honest” money … as if traders promises are not honest. Let’s run the numbers here. Let’s say an ounce of gold is worth $2,000 (costs that much to create a new one). Divided by say 150 million USA tax payers, that $20 trillion debt comes to $133 per taxpayer. Since there is only 1oz of gold per person in the world, that uses up about 7% of their share of gold. That other 93% has to go for the promises they have in their house, their car, their savings, their checking accounts, their in-process credit card purchases and balances … and on and on and on. If gold was money, the USA taxpayer would quickly find he has no way to obtain the gold he needs to carry on these trading transactions. And of course that puts the “Deviant Investors” who presumably have more than their fair share of gold … it puts them in the cat bird’s seat doesn’t it!
Taxpayers are on the hook for perhaps $100 trillion more in unfunded entitlement and pension IOUs.
MD: Ooops …. that’s 5 times the 7% … that takes each USA taxpayer to 42% of his share of all the gold in the world!
Plus, state and local government pensions are underfunded by several trillion dollars. They haven’t blown up yet because the rising stock market and steady bond market seen over the past several years has enabled pension fund administrators to kick the can further down the road. They are projecting unrealistically high market returns into the future – and still coming up short.
MD: A financial novel is a financial fiction … novels are fictions.
Federal Reserve Makes It All Possible
Trillions upon trillions of dollars have been promised that simply won’t exist… unless the Federal Reserve creates them out of nothing. The Fed’s unlimited power to expand the currency supply enables politicians to commit acts of fiscal malfeasance with political impunity.
MD: And if the dollars won’t exist, any gold that might have been backing them … or being used instead of them … wouldn’t exist either … would it??? It’s not about creating something out of nothing … all traders do that when they create money. It’s about counterfeiting … it’s about defaulting … it’s about breaking trading promises. That’s a whole different ball game. You and I don’t do that. That’s “all” governments do … i.e. default.
A legislator might get voted out of office for raising taxes, but probably not for adding to the budget deficit. Most voters don’t perceive any immediate consequences to a rising national debt or the expansion of the currency supply. That’s why “borrow and print” is a politically convenient way for lawmakers to stealthily raise taxes.
MD: What do you expect from this thing they’re passing off as democracy … which is just a pitiful “ugly” contest. It can’t work with more than 50 people involved … and at the level of our most representative representative, there are over 500,000 people involved.
Government spending extracts resources from the economy regardless of whether that spending is paid for through taxes or through the deceit of borrow and print.
MD: Now that is nonsense. Making trading promises does not extract resources. If anything, it adds them. And it makes a huge difference whether the promise is delivered or defaulted with no mitigating interest collection to recover it. Taxes, if they went to delivering on government trading promises, “would” have zero effect on resources. But we know taxes just go to the money changers for their demanded tribute. They cleverly refer to that as interest.
What excessive borrowing today does is set up political demand for massive inflation of the currency supply down the road. The inflation tax can be just as devastating to a person’s wealth as any tax collected by the IRS.
MD: Poor Stefan. He just doesn’t get it!
Stefan Gleason is President of Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.
Thanks to Stefan Gleason
Gary Christenson
The Deviant Investor
The abiding genius of Karl Marx lies precisely here, in his acute understanding of the possible reaction of the ignorant intellectual to the workings of the capitalist or market order.