Realizing the Full Implications of the Forthcoming Catastrophe

“Facilis descensus Averno.” – Virgil

Delivering Tomorrow’s Curses

Roman poet Virgil penned these words in his epic, The Aeneid, roughly a generation before the birth of Jesus of Nazareth.  They can be loosely translated to, “the descent to hell is easy.”  Those who’ve traversed this passage can attest to the veracity of this axiom.

Though not apparent in the milieu of Virgil’s poem, for our purposes today, we’ll extend its application to the insidious progression of currency debasement.  What short utterance more aptly characterizes the steady degradation, as currently practiced by today’s church of state?

Yesterday [Thursday], for example, the House acted with untroubled ease to further America’s descent to hell.  With little resistance, federal spending was increased and the debt ceiling was suspended for two years.  Having delivered tomorrow’s curses, the nation’s Representatives can skip town without missing a moment of summer recess.

As you can see, the allure of getting something for nothing is far too enticing for even the most honest politician to pass up.  And with an endless supply of fake money behind you, why stick your neck out and get clobbered?  The public debt encumbered is already well beyond honest repayment.  But that’s a problem for tomorrow; not today.

Representative government in America, circa now, has nothing to do with upholding individual freedoms and liberties.  Nor is it about making tough decisions in the interest of the long-term health of the nation.  It’s about doing the expedient – and suspending the debt ceiling so the descent to hell can be made as comfortable as possible.

Wreckage from the Past

Rarely are people capable of understanding the full implications of a forthcoming catastrophe of their making.  Perhaps, it’s not because they’re truly incapable of it.  More likely, it’s because they’d rather ignore it.

Facing up to the facts of an unpleasant reality can be painful.  It also implies a recognition that what one has been doing isn’t working.  And that the arduous task of righting one’s wrongs must be initiated forthright.

Pursuing delusion, of course, is abundantly easier – for a time.  However, as the wreckage piles up from the past to the present, the day of reckoning becomes much more ominous.  There really is no escaping it.

Certainly, Congress is far from this recognition.  Otherwise, they’d get serious about the nation’s fiscal doom, tighten their belts, reverse course, and suffer the immediate consequences.  But that’s not what’s happening at all.

Instead, Congress is doubling down on their wreckage from the past.  They’re blowing the debt out like there’s no tomorrow.  The insanity of it, even for a casual observer, is near impossible to ignore.

For example, at the turn of the new millennium, the national debt was $5.7 trillion.  By 2010 it had more than doubled to $13.5 trillion.  By 2020, it’ll be over $24 trillion.

Hence, over the last 20 years the national debt has increased 320 percent.  But over this same period, nominal gross domestic product (GDP) has only increased 100 percent.  What’s more, this divergence stands to get much more extreme…

Realizing the Full Implications of the Forthcoming Catastrophe

When the next recession arrives, and Washington pulls out all the stops to counteract it with massive new applications of debt based stimulus, the debt will go vertical while GDP flat lines or contracts.  These different trajectories will be reconciled by default or price inflation.  Washington, no doubt, prefers price inflation.

The popular delusion of the 21st century is to assume the highest virtues of democracy.  This faulty assumption  propagates a dangerous archetype: the tyranny of the masses and its twin consequences, deficits and inflation.

Voters want a free lunch.  They want their neighbors to pay for it.  They elect stooges to office who promise massive social welfare, public works, and defense spending programs.  Then, the hack economists advance an absurd theory – like Modern Monetary Theory – to deliver something for nothing.

The deficits mount up year after year, the currency’s debased year after year, until something gives.  In short order, confidence evaporates and price inflation explodes.  The country succumbs to political, economic, and cultural destruction.

Indeed, the descent to hell is easy.  But Virgil also adds a lesser known corollary, “Sed revocare gradum, superasque evadere ad auras, Hoc opus, hic labor est,” which can generally mean, “But to retrace the way and return to the upper airs; this is the task, and where the mighty labor lies.”

Congress may still ignore it.  The Treasury Secretary may still ignore it.  The President too.  But for more and more Americans the full implications of the forthcoming catastrophe are becoming painfully clear.  That is, the realization that we are absolutely and utterly screwed.



MN Gordon
for Economic Prism

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18 Responses to Realizing the Full Implications of the Forthcoming Catastrophe

  1. Mike LoPresto says:

    But how do we prepare

    • Anson says:

      Try reading “how I found freedom in an unfree world” for a start. I first read it at the recommendation of a successful investor. It is a lot more than an investment book. I think the download is still about $10

  2. John Merryman. says:

    A large part of the problem is that money functions as a contract, with one side an asset and the other a debt, which serves as a useful medium of exchange, to enable mass society to function. Yet we individually experience it as quantified hope, so we try to save and store. Though a medium is dynamic, while a store is static.
    For instance, in the body, blood is the medium and fat is the store. Of for cars, roads are the medium and parking lots are the store.
    So, in order to store the asset, similar amounts of debt have to be created.
    One way is for the government to borrow it up, so a large impetus behind public debt is the private wealth it backs. Where would those trillions go otherwise?
    Given the deficit started with Roosevelt, he wasn’t just putting unemployed labor back to work, but unemployed capital, as well.
    Another factor is this asset\debt dichotomy creates a centripedial dynamic, as positive feedback pulls the asset to the center and negative feedback pushes debt to the edges.
    Eventually people will have to accept that asset a useful medium, money functions as a social contract and we own it like we own the section of road we are using, or the fluids passing through our bodies. Then store value in more tangible assets, like stronger communities and healthy environments. Not just treat them as resources to mine notational value out of.
    Finance and money are like the circulation system and blood of the society. It’s like the heart telling the hands and feet they don’t need so much blood and should work harder for what they do get.
    We can only cheat on the foundation in order to store more gold in the penthouse for so long, before it does more than just trickle down.

  3. Ron says:

    The authors of the article need to rethink their analysis. There is current research and information they ignore.
    The USA is not a “democracy” now if it ever was. If anything it is more akin to an oligarchy or plutocracy.
    The main problem with falsely blaming the ills of the nation on “democracy”.
    Such a contention suggests that a solution may lie with LESS “democracy” and instead even MORE power to the actual ruling oligarchs (or some other selected elite group such as the military which is being allegedly hamstrung from doing imagined “good” by “democracy”).

  4. Angela R Johnson says:

    The last time MMT was used at scale was by Hitler, a fact few bankers know and even fewer would tell. The German national government scrip, not really that different than a ‘national’ fiat produced by private banks, was used in payment for labor, so there really was an exchange of value for payment in a medium of exchange. The German scrip was given over for work already performed. The US dollar’s existance is based on aspirations of future utility. Hitler built vast public works paying the otherwise unemployed German workforce with a centrally issued fiat.

  5. ursel doran says:

    Superb work Sir!!!
    Quote the seer Rothschild:
    “I care not who makes the laws as long as I am printing the (debt) money”.
    Ignorance, Apathy, Delusion are very deadly.
    Imagine having to raise the taxes to pay for all the welfare warfare state’s travails?

  6. Hans says:

    This is all the result of a indolent citizens
    lacking virtue and pols without a backbone.

    Toil and pain is on the way and will make
    most of us pay.

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