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.
Several weeks ago we came across a woeful tale of Mike Meru. Somehow, this special fellow, while of apparent sound mind 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’ve 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’ve gone full imbecile. That every decision they’ve 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 they’re 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, 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.
These debt figures represent the early lightening of the oncoming storm. These same debt figures are currently being ignored by practically everyone. The nation’s leaders, in particular, are ignoring the early lightening of the oncoming storm. 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’re 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’s a free market economy. Yet, somehow, miss the contradiction of the mammoth bureaucracy that’s been erected to oversee it. Free trade’s 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 flipside, the entire structure of Social Security and Medicare entitlement programs are 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 – would likely 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 go full imbecile. They’ll create money from nothing to make good on their obligations. But in the process, they’ll destroy the currency.
Make no bones about it, America’s in the midst of going full imbecile. 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’ve otherwise been possible. What’s more, the government’s solution, which requires destroying the dollar, is as sensible as cutting off ones head to cure a headache.
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. For the many unfortunate souls who experience the insidious injustice of having their lifesavings vaporized through state sponsored currency debasement, such a misplaced faith in government will never return.
for Economic Prism