“If something cannot go on forever, it will stop.”
Herbert Stein
Reality is a scary place. Don’t go there. No matter what you do, don’t go there.
This is the advice our so-called leaders consistently give us, whether it’s dealing with the madness of transgender ideology or balancing a federal budget. Thus, we find ourselves cursed with people in positions of authority who can neither define a woman nor implement responsible fiscal policies.
This is profoundly pathetic…in both cases.
Because they’re cowards and fiscal dunderheads, they assume we are, too.
Are we?
Don’t answer just yet. Not until you’re certain you possess the courage and good sense to get our collective financial house (i.e., government spending and debt) in some semblance of order.
A start at courage is a steely willingness to face scary truths. Since our leaders aren’t going to be the adults in the room, the rest of us will have to be. Since they aren’t going to get real about financial problems, we must do so. Since they aren’t going to provide leadership, we must muddle through on our own.
That’s reality, damn straight and damn scary.
Allow me, your not so humble blogger, to offer insight and guidance, in the form of rantings.
Our financial reality is indeed a frightening place, largely of our own childish making. It’s the bed better not looked under, the basement best kept out of, the attic wisely left unvisited. It’s the cemetery, old motel, seemingly abandoned house, all of which we should drive the hell past. It’s the stupid things people do in a horror movie, without which there would be no movie in the first place. Financial reality is a terrifying Hieronymus Bosch painting come to life and screaming at us in no uncertain terms that our own stupidity and childishness mean we have quite the day of financial reckoning ahead.
No matter what our betters tell us, we need to wise up, grow up, and get cracking on taking care of a hell of a fiscal mess we made.
Uh, we?
Yes. We.
This ain’t a dictatorship where the blame gets pinned on a single person. We possess the right to select our leaders. We the People are responsible because we elected fools to positions of leadership, and they failed spectacularly in regard to our collective finances that we call government spending and debt. This is not a new phenomenon. It’s been going on for a long time. For such a long time, that we indeed believe it need never stop. We have, after all, drunk long and deep of the fiscal Jonestown Kool-Aid—and it ain’t killed us yet.
Yet.
A summary of the problem is quite straightforward. We allow our leaders to spend vastly more money on our behalf than we collect in revenue. We allow them to make promises of future spending that dwarf any remotely credible scenario that suggests enough future revenue collection—or an actual increase in our nation’s wealth—to pay for it. We allow them to hide this flimflammery in plain sight through accounting shenanigans and a delusional belief that the future will fix the mess we ignore today.
Boy, those folks in the future are sure possessed of the courage and prudence that earlier spendthrifts lacked. Which is a good thing because we’re counting on those folks in the future to save us. You know, someday.
Indeed, it’s ultimately our fault as voters. Not only do we allow our leaders to act the fool, we insist on it. They know, and we know, they won’t get elected or reelected otherwise.
A post-game locker room speech by former San Francisco Forty-Niners head coach Jim Tomsula nicely sums up what we ought to do: Own it, fix it, move on. Hell, that’s good advice for a lot of shit in our lives. Didn’t work for him, but maybe we’ll have better luck.
But I don’t want you to harbor any delusions. Fixing it is going to be painful—and for a very long time. It requires maturity, patience, making heartbreaking choices (i.e., real decisions with real consequences). It requires real investment, both short-term and long-term, rather than wasting resources and talent on speculation, deceit, delusion, flimflam, and pandering. It requires delayed gratification, a concept Americans at the present time don’t demonstrate in the least. Most importantly, it requires genuine courage. But the longer we wait, the greater the pain which shall come due in the future, the more terrible the consequences of our financial reckoning. If anybody tells you otherwise, they are flat-out fucking lying to you.
Unfortunately, our elected leaders are going to fiercely oppose all three of Jim’s steps. These dunderheads could sum up their irresponsible fiscal philosophy this way: Blame someone else, ignore it, and keep doing the same stupid shit until we’re all fucked. Admittedly, this version lacks the poetic pithiness of Jim’s adage, let alone the decorum.
But, again, let’s not ignore our own culpability. We voters can’t feign ignorance. Even among us dumbass masses (let alone our ignorant leaders), it’s commonly known that the government spends much more than it takes in, borrows money it has no hope of painlessly paying back, prints money to destroy wealth and cover its debts, continues to both propose costly new programs and cut taxes in the context of deficit spending and ballooning debt, and makes promises of unsustainable future spending.
Whaaaat? That’s news to us.
No, it isn’t.
We the Dumbasses go willingly along with these fiscal follies because to do otherwise is to face adult problems that require adult decision making. Adult decision making requires common sense, thoughtful consideration, prioritization, making tough choices and implementing these in the context of a balanced budget, and, most importantly, accepting the consequences of our actions. And there will be consequences—necessary ones, inescapable ones, terrible ones.
What actually happens is something quite different. We use delusional accounting practices. We shirk our fiduciary duty, and this is largely done in plain sight. We embrace flimflam with the same tenacity as a shipwreck survivor does a piece of flotsam—but he ignores that fact that much of his body dangles in shark-infested waters.
Examples of fiscal flimflam include the “off-the-books” accounting sleight-of-hand we use with Fannie Mae, Freddie Mac, Amtrak, the Post Office, the Federal Reserve Bank, Federal Deposit Insurance Corporation (FDIC), the Pension Benefit Guarantee Corporation (PBGC), whereby we pretend these entities (and their debt and unfunded liabilities) are separate—at least to some degree—from the government, when they damn well are not.
We are plagued with the flimflam of forever wars, which eat up our treasure and further increase our collective indebtedness. Trillions and trillions of dollars spent and upon which the military-industrial complex feasts. In 2023, when asked about the billions and billions of dollars intended (and already spent) for the conflicts in Ukraine and now Israel, the Treasury Secretary blithely assured us that we can certainly afford two wars. Only two? The “complex” is currently plotting war with China, an insane and unnecessary folly to add to the mix of these endless wars. Nobody asks where—specifically—each dollar for these conflicts comes from, just as nobody asks where exactly the energy in the power lines comes from when the power company crows about its “sustainability” flimflam.
A person may consider that military spending for a particular conflict is mindless interventionism, unnecessary folly, vital for our national security, aid to an ally, or the result of an existential threat. But regardless of one’s opinion, responsible adults must insist on an answer to this question: Where specifically is the money coming from? Making war “more palatable” by hiding its true financial consequences is a luxury no sane society should cotton. War is a dirty—and, yes, sometimes necessary—business. The people paying for it deserve all the facts, including monetary costs, since it’s their money and blood which must be spent.
Flimflam is everywhere. Automatic COLAs for Social Security payments is an insane abrogation of duty; rather than requiring an affirmative act of Congress, these COLAs are spending-increase doomsday machines; in essence, allowing inflation itself to set payments as if we elected Senator Inflation to office and he is free to spend, regardless of revenue. I’ll add that if our government and its Wall Street masters didn’t embrace the diabolical policy of deliberately ginning up inflation (aka “targeted inflation”), COLAs wouldn’t be necessary. Instead, rather than a COLA, pay raises would represent a sharing of actual new wealth which has been created.
The same flimflammery is evident in government programs that offer specific benefits regardless of the means to pay for them (e.g., Social Security, Medicare, Medicaid). We create mythical trust funds (e.g., Social Security Trust Fund, Medicare Trust Fund, Highway Trust Fund, PBGC Trust Fund), which do not contain actual wealth that can be redeemed; these trust funds contain nothing except guarantees of future tax increases, future borrowing, future devaluation of money via the printing press.
A comical statistic thrown into the mix is to relate government debt to the nation’s gross domestic product (GDP), which of course makes it look much more manageable than if matched up with what it should actually be compared: government revenue. This trickery is equivalent to a person ignoring his own mortgage-to-income ratio, and instead comparing his individual home mortgage to the total income of the entire neighborhood—and act as if this aggregate income existed absent its own debt service needs and were somehow available to pay his mortgage if need be. Bottom line: The ratio of government debt to government revenue is the statistic that matters. That’s why our conniving betters don’t use it.
Thus, we cook the books. Thus, we borrow money. Thus, we print money, killing trees literally and, by proxy, digitally. (Paper money is actually made of cotton and linen fibers, according to a Google search, but I indulge poetic license here.)
The indiscriminate printing of money is taxation via inflation. It’s called “quantitative easing” in order to fool us—not that we’re difficult to fool. Easing is a word with deceptively positive connotations, which suggests the notion of someone gently settling himself into a steaming hot tub on a cold winter’s day. Ahh, that feels delightful!
It is a particularly odious flimflam that we have a public policy that inflation is good because it helps profligate people and governments pay off debts with “less valuable future dollars”—the collateral damage resulting from this lunacy be damned; in fact, such debt is often incurred contingent on inflation doing the heavy lifting, thereby foisting the ultimate onus for repayment on our financially responsible non-profligate citizens and businesses who do not spend or borrow unwisely, and this policy is specifically designed to benefit spendthrifts, schemers, leverageaholics (e.g., Wall Street), and other irresponsible dunderheads. Those harmed the most are the lowest paid workers whose salaries often fail to keep pace with inflation.
But no need to worry about poor folks when a legislature can wave a magic wand to save them: The State of California passed a law in 2016 that gradually increased the minimum wage to $15 per hour, after which future increases are automatically tied to the Consumer Price Index—which allows politicians to avoid making future hard decisions about increases to the minimum wage. Yet another doomsday machine built by cowards. In 2023 they raised the minimum wage for certain fast-food workers to $20 per hour. (The state government, in theory, has the authority to pause these wage increases, but that’s like assuming an addict can responsibly pause his consumption of drugs.)
I’m tempted to shout, “Take that Wall Street!” but I know those Fat Cats will figure some way to gin the system to make out just Jim Dandy, while screwing over the rest of us. I agree that $15 or $20 per hour (or more) is probably a reasonable minimum wage for jobs we expect be done by adults, but it’s also reasonable to debate if it’s wise to accomplish this goal by legislative fiat. Hey, if these new minimum wages work out okay, then great. If not, we’ll add it to the list of financial flimflammery that politicians use to conjure wealth out of thin air.
Fiscal irresponsibility is the ticket. Both for personal finances and government finances. In a sense, our leaders would have us believe that it is much better to live in our parents’ basement deep into adulthood. Hide from that reality shit. Playing video games all day, smoking weed for our “glaucoma,” and listening to music. Buying stuff with a credit card that has a huge credit limit that for some unfathomable reason was issued to us by a bank fully possessed of the knowledge that the debt can never be paid back.
But reality eventually finds our asses. And kicks them but good.
Until then, we’d much rather extract a home equity loan to take a trip somewhere far, far away from reality, where the natives are friendlier and the drinks come with those cute paper umbrellas, rather than journey on over to stark fiscal responsibility. Where’s the fun in that? Who cares if the trip is paid for with debt when the vacation spot is replete with great food, exotic drinks, beautiful beaches, tropical breezes, and a gift shop crammed full of schlocky stuff we don’t need but sure as hell are going to purchase. Hey, nobody takes a selfie standing in front of reality.
There are plenty of enablers who tell us not to worry; economists, corporate titans, elected officials and their appointees, the Masters of Wall Street, quants, and tech poohbahs. Yeah, they got it all figured out.
Which brings up a point that the leftist Occupy crowd and I both agree on: Don’t trust any of the aforementioned con artists. This includes welfare queens who run electric car companies, hedge fund managers, patrons of the arts, wealthy socialists, subprime mortgage lenders, ratings agencies, investment bankers, credit default swappers, or debt securitizers. An easy way to identify these fiscal school-shooters is simple: Visit opening night at the opera (since you won’t be let in, hang out in front, near the society page photographers). Watch carefully as the arriving limousines vomit forth the problem all-a-glitter. Right in front of you are those who own a large share of blame.
Not that Conservatives are blameless—they sure as hell aren’t. Don’t fall for the lie that they’re somehow better stewards of our government finances than Liberals. Cutting taxes and buying aircraft carriers in the context of deficit spending, massive debt, and unfunded liabilities is no less insane.
Our world teems with bad financial advice. Most of it so comically bad that it shouldn’t even fool a child, let alone an adult—or a government, no less. But it does. Every goddamned day.
It’s way too easy to find a charlatan to tell you what you want to hear. We’ve a plethora of financial Grima Wormtongues let loose in our world. Watch the financial news channels on television, listen to the radio, read the newspapers, buy an investment book, listen to a realtor friend or acquaintance, attend a “free” financial seminar at the local Holiday Inn. There are lots of people who want to help you get rich—or help you believe that you are much richer than you are. There are many folks eager to assist you getting your ass into debt. Sometimes they’re the same person.
Now, that’s efficiency.
Oh, the siren songs they’ll coo into your eager ears. Deficits don’t matter. Government debt is not the same as private debt. You can get something for nothing. We need to “grow our way” out of this mess. There is good debt and bad debt. Everyone should be able to go to college. Hosting an Olympics or building a stadium for a professional sports team is a good thing for a city (hey, why not both!). Printing more money and taking on more debt is a great way to solve problems caused by previously printed and borrowed money. The “Inflation Reduction Act” shall reduce inflation. Natural disasters and wars are good for the economy (yes, there are idiots who believe this). Buy don’t rent. Purchase a home with the smallest down payment possible. A tax deduction for mortgage interest is wonderful. Buy a home you can’t afford because appreciation will allow you to refinance later. Hedge funds reduce risk. Hedge funds extract the ripe-for-the-picking spread. Credit default swaps insure against default. Credit default swaps should not be regulated as if these were insurance. Derivatives should not be regulated. The Social Security Trust Fund is financially sound. The value of companies is accurately reflected in their market capitalizations (i.e., markets miraculously find the “correct” stock price). The economy is booming—time for a tax cut to give the people back some of their money. The economy is in trouble—time for a tax cut to stimulate it. Regulating Wall Street is a threat to free market capitalism. Wall Street is the epitome of capitalism. If we don’t bail out dunderheads (i.e., Wall Street), “this sucker could go down.” Too big to fail. Deflation is a much, much worse risk than inflation. Hey, inflation is under control: Let’s get them interest rates back down to zero and fire up the quantitative easing! And on and on, and godblessamerica on.
I also like the whopper about how cap & trade for “carbon credits” will help us deal with global warming. An über-socialism contraption masquerading as capitalism that is meant to prevent a contrived apocalypse by still allowing the very behavior, albeit more expensively, that is allegedly leading to our doom. Thank God, they don’t have cap & trade for rape credits. Yet.
It’s the tax they wanted all along—and the glee of telling people what to do is a delightful bonus. Cap & trade is essentially the world’s biggest cigarette tax, the cigarettes in this case being our industrial base (think smokestacks as gigantic cigarettes). You’ll see this in spades if it successfully reduces carbon emissions (i.e., destroys modern economies), because rather than laud the supposed success, they’ll cry over the reduced tax receipts (i.e., less carbon emissions equals less fees), and, get this, how the reduced income will supposedly lead to death and destruction resulting from cuts to the myriad programs funded by the fees.
There is no pleasing these people. Really, there isn’t.
If you sincerely believe in global warming and that it risks the very end of our planet, then these carbon credits (and offsets) are immoral; no less than pedophilia credits (or offsets) would be if used as a tool to combat child rape and molestation, while still allowing wealthy perverts their prey. I want to prevent crimes against children. My molestation footprint is zero. Those elitists who espouse the horrors of global warming, and what they claim is its apocalyptic threat, have carbon footprints much, much larger than mine and yours. They sail mega-yachts and fly in private planes and are replete with mansions galore. They continue to buy and extensively remodel properties on the very coasts they swear are imminently doomed by rising sea levels. They are the equivalent of an anti-child pornography crusader whose hard drive is crammed full of thousands of sick images of exploited children.
These carbon footprint hypocrites are ashamed not one whit by their hypocrisy. How dare we call out their greenwashing and global warming flimflam. They’re doing the Lord’s work, after all. Someone has to do the dirty deed of telling the proles they must eat bugs and pay skyrocketing energy bills. C’mon: Who better to force us to do what’s best for us than someone who holds us in contempt and won’t suffer along with us.
I’m much more worried about nonsense emissions than I am about cee-oh-two. A great way to raise huge amounts of money would be to implement a crap & trade system for hypocrisy.
At some point the voice of common sense inside your skull screams that the mess which is our collective finances is surely folly. Deep down (somewhere) inside of you, an alarm bell peals pleadingly. Yet should you dare heed this warning, you’re considered a backwards rube who just doesn’t get it. If you’re an elected official who listens to common sense, you’re disparaged as an “extremist” and probably cast out of office by voters who hear the same warnings but choose to disregard these, much like an incorrigible juvenile delinquent ignores an exasperated parent—and who eventually ends up getting the electric chair for his wanton disregard.
It’s made surprisingly easy for us to ignore reality. We’ve built an enormous infrastructure to indulge our financial fantasies. A financial-fantasy-industrial complex that makes the military-industrial complex seem quaint and laughably amateurish by comparison.
This infrastructure includes Wall Street, banks, television’s financial gurus, the real estate industry, venture capitalists, ratings companies, the Federal Reserve, and elected officials at the federal, state, and local level. The goal of this massive financial-fantasy-industrial complex is simple: To keep us fooled for as long as possible until it is someone else’s problem—by which time, I might add, it’ll be way too fucking late.
As if those aforementioned someone elses in the future are going to solve the problem, let us keep what’s ours, somehow fully fulfill previously made promises, leave us unmolested and free from accountability or consequence. Oh, demographics and mathematics will squash that quaint delusional hope, believe you me.
Not everyone is fooled. Some people speak up against financial insanity—and are mocked, ignored, told they do not understand the complexities of this wonderful technologically-fueled “new capitalistic” system that oddly resembles socialism on steroids in the sense that welfare rains down in many forms, but is not actually called welfare unless it’s for the Negroes or White Trash.
Corporate bailouts, tax deductions for mortgage interest, tax credits for electric cars, tax breaks and public funding for sports stadiums and mega-sporting goods stores, ethanol subsidies, hosted Olympics, miniscule income tax rates for hedge fund managers (e.g., the outrage of carried interest), tax breaks for relocated businesses, and on and on and on…represent a tsunami of special interest welfare spending compared to the sparse raindrops sprinkled on actual poor folks.
Hell, the only difference between a Wall Street socialist and an archetypical leftist is the admitted socialist failed to dream insanely big. The leftist is a piker compared to an audacious hedge fund manager or corporate CEO.
The stereotypical welfare queen may be named Shaniqua, but she is but a pimple on the real problem. The audacious welfare queens who do by far the most damage to society are named Robert, Lloyd, Lawrence, Angelo, Elon, Jamie, Hank, Wentworth, Thurston, Biff, Mark, and Brad, among others.
I ain’t saying Shaniqua ain’t fucked up, but she’s nothing compared to these other homies. She’s scorned and mocked, while these others are feted patrons of the arts, builders of hospital wings and opera houses bearing their esteemed names.
Another stark example of financial flimflam involves retirement. The phantom cash and equity we believe ourselves to possess (or someday possess) for our Golden Years, not to mention the future government largesse we fancifully believe awaits us.
We cotton the whimsical notion that our houses are worth what they tell us they are worth; ditto stocks, bonds, 401(k) plans, pensions, gold ingots, and savings. We also believe that waiting for us in retirement is a certain “value” of Social Security payments (with built in COLAs!) and medical care (Medicare, Medicaid, or other retiree medical care).
A huge portion of the value of these “assets” is phantom equity that does not remotely exist—and never did and never will. It doesn’t exist, since it cannot be fully redeemed in the future (let alone the present) for an equivalent amount of goods and services based on expected valuations. Especially if done on a large scale.
In other words, redeemability is highly doubtful, especially when projected into the future. We presume a purchasing power that may not remotely exist due to inflation and asset overvaluation. The biggest threat is the inevitability that the government (that’d actually be us) is going to print catastrophic amounts of money (hell, it already has) to offset revenue shortages and prop up the phony equity represented by real estate and share prices—our betters and their government lackies would be more honest in their fiscal machinations if they stopped fooling around and passed a law that real estate and stock shares can never be sold for less than the purchase price. (There, solved it for you!)
There is no plausible way for the government to pay off its debt, including the promises of future spending (unfunded liabilities), without madly printing money. This by itself makes all your assets worth much less than you think.
Another word about inflation. It is comically obvious in the Year of our Lord 2023 (among other years) that the government (us again) dicks us around with inflation numbers (i.e., underreports its true magnitude). Businesses also play deceitful inflation games with us. They do this by keeping prices the same (or reducing cost increases) through slight-of-hand (e.g., a reduction in the quality or shrinking the size of products). Rolls of toilet paper contain fewer sheets (and the sheets are flimsier); Eggo waffles shrink in diameter (heading toward a breakfast singularity?); bars of soap are smaller and less dense; cereal boxes flattened; the indentations on the bottom of containers poke deeper into the product; Chunky Soup is more watery (albeit easier to get out of the can); shoes and clothing are of poorer quality; etc. Moving factories to poorer and poorer countries helps reign in price increases, but eventually the supply of these countries is exhausted. God help us when the U.S. dollar is no longer the world’s reserve currency. God help us when foreign governments no longer buy (or roll over) U.S. treasuries.
In summary, the wealth you believe you have (or will have) does not exist. It is based on a vast accounting con job perpetrated by the government and Wall Street, among others. The only way to ensure redeemability is to create actual wealth now and put in place the means to provide actual wealth in the future.
Good luck with that.
How do we embrace reality and then figure out what to do about this fiscal insanity?
This can only happen if we recognize that we need austerity for future prosperity. There is no painless way out of this mess. Timid incrementalism won’t work. Borrowing and printing more money sure as shit won’t work. Deceptive accounting practices guarantees for us a terrible end.
Collective maturity and courage require we balance our budget, keep it that way, and pay off (and write off) our debt (including unfunded liabilities). This requires acceptance of an excruciatingly terrible truth—one no politician dares utter: There is no credible scenario where future wealth exists in sufficient amounts to pay for previously promised benefits (e.g., Social Security benefits, pensions, Medicare) or allow us to fully redeem the alleged value of individually held assets such as cash, stocks, bonds, 401(k)s, real estate, precious metals, etc.
There are going to be cuts to these aforementioned entitlement programs and there will be suffering because of it. These cuts are either going to be direct cuts or indirect ones (via government-fueled inflation). Similarly, your personal assets are going to be significantly reduced in value via taxation and/or inflation.
If we cannot accept and face these truths, then we’re screwed.
Social Security is a particularly infuriating topic because employees and employers both contribute huge sums of money, over many years, to a program that is meant to provide secure retirement income. Unfortunately, it was gifted to a drunken sailor to fritter away on all manner of cheap booze, loose women, and rigged card games. If the sailor is lucky, he wakes up in the alley, covered in vomit, with a pounding headache, his pockets picked clean. Not so lucky and he doesn’t wake up with a slit throat.
Though it’s depressing as hell, I’ve thought quite a lot about how specific scenarios coming to pass could affect my retirement years. I’m damn luckier than most people. I’m vested in a defined benefit pension which has COLA protection, as long as inflation averages three percent or less per year. I also qualify for decent Social Security payments (which as previously mentioned has a built-in COLA). I own my home outright. I have a decent amount of money in savings. I have no debt. I’m willing to work at least part-time in retirement. Most importantly, I live well within my means; therefore, I can absorb a lot of unpleasant financial shocks and still be okay. In fact, well before the fiscal follies affected me materially, there’d be a revolution. Perhaps a long overdue one. (Technically, a revolution would affect all of us proles.)
Doesn’t mean I’d be happy about taking a financial hit, though. Should I take a financial hit, I’ll whine as much as anybody, though I’ll try not to—or at least I’ll try and feel ashamed afterwards.
If my entire savings disappeared overnight, but my pension and Social Security payments remained at their currently expected values, I’d be okay. I could handle some cuts to these payments or a reduction in the COLAs and still survive. Doesn’t mean I’d be happy about it.
If I had to sell my home and move somewhere cheaper or move in with relatives (combining households), I could do it. Not thrilled about these possibilities either.
Two conditions are important in giving me the best chance at enduring big hits to my retirement: (1) low or no inflation and (2) access to decent healthcare. Unfortunately, our dear leaders remain insistent that pro-inflation is good public policy, which of course is going to disproportionately boost healthcare costs, too. Without these two conditions, the challenge will be much, much more difficult. I hope not unbearably so.
The government has us headed toward a catastrophic printing of money (with plenty of warming up along these lines having already occurred, of course). The politician mindset is ridiculously simple: A disaster delayed, even if it’s made horribly worse because of the delay, is a disaster dealt with. If you want to see what our future might look like, read Lionel Shriver’s book, The Mandibles: A Family 2029-2047. She understands economics better than anyone who fancies themselves an economist or Master of Wall Street.
Our elected leaders operate on the timeline of an election cycle, while the problems we face require timelines on the order of decades to fix. Our leaders are beholden to corporate interests that demand artificially low interest rates and humming printing presses—they insanely treat “growth” via inflation and growth via an actual increase in real wealth as equivalent, though the former is far easier for lazy financial parasites to gin up to their advantage.
Lord, help us. And I say this as an atheist!
Allow me to provide fiscal advice. Some of it nothing more than restating what was in the past considered virtuous. A past we believe we’re much smarter than.
But we’re not.
For example, there are idiots who say you should put down as little as possible on a house and invest your money elsewhere (and yes, I’m fully aware of the laughable math behind this notion). But if this illogic were true, then the person lending you money to buy a house shouldn’t lend you the money; instead, that person should invest the money in the same place the people telling you to opt for a no, or low, down payment are telling you to put your money instead of putting it toward a down payment (got that; if not, read it again).
They say a house is your biggest investment. It isn’t. It’s not an investment. It’s a place to live. It is, in fact, your biggest expense. They say a tax deduction for mortgage interest is a wonderful thing. If that is true, then refinance your loan at a higher mortgage rate and make things even more splendid. They say everyone needs to go to college. This is patently not true, since there lots of jobs we want done which don’t require a college degree—and a lot of people in college do not belong there. A shitload of resources is wasted on excessive amounts of higher education—not to mention the money wasted on college football teams! We need far fewer colleges and reserve the slots for students who are both intellectually and temperamentally suited to higher education. Hopefully, this leads to lower levels of student debt, which would be a good thing.
Perhaps it would help to list some basics regarding fiscal matters. Therefore, I shall…
- A balanced budget is better than a budget deficit.
- Having no debt is better than having debt.
- Low or no inflation is better than high inflation.
- Paying off a mortgage is preferable to having one.
- Housing appreciation (aka inflation) is a bad thing. Ditto rent increases.
- The government should be neutral on whether a person owns or rents their home. The government should not be a provider or guarantor of mortgages.
- It is not the government’s job to keep interest rates artificially low or provide Monopoly money for Wall Street’s gambling addiction.
- Divest college athletics from the university system. Professional sport leagues can fund their own minor league systems.
- Stop the public funding of professional sports stadiums and arenas. Furthermore, no more bidding for Olympic Games.
- A simple tax code (e.g., a flat tax with no tax deductions) is better than a complicated one.
- Tax rates that are predictable in the long-term are better than a never-ending seesaw of capriciousness regarding tax rates.
- Everyone should pay taxes.
- Real wealth is created by hard work, competency, efficiency, productivity, and innovation.
- Real wealth is comprised of both actual goods and the ability to provide actual services.
- Real wealth is not created by accounting gimmickry, inflation, or other flimflam.
- The more people who work the better. The less idlers and malingerers, the better. Low unemployment is better than high unemployment.
- In general, the longer people work the better (e.g., more hours, retire later in life).
- We should live well within our means. Living within one’s means is better than profligacy.
- The biggest threat to free market capitalism is Wall Street.
- It is unrealistic to expect that an honest, hardworking, lower-wage earning adult who does a job we want done should not expect decent housing, food, transportation, basic healthcare, clothing, and some forms of entertainment.
- Open hostility toward cheap, reliable energy is a direct and catastrophic threat to our economic well-being.
- Austerity is required for future prosperity.
Despite the gloomy financial outlook, it’s worth considering that we’ve gotten to an amazing place in human history. And we got here despite economic fits and starts, wars, famine, various economic systems, both human genius and stupidity, both good and evil.
However we got here, we have lots of stuff (admittedly unevenly distributed), including medical advances, computers, worldwide travel, the ability to feed a staggering number of humans, and increased life expectancy, among other marvelous accomplishments. Many of the things we commonly possess today weren’t available to the richest person on Earth not that long ago (e.g., cell phones, polio vaccine).
But let’s not get cocky.
Going forward, it is important that we balance government budgets and not take on crazy levels of personal or corporate debt. The only way to truly make spending decisions is based on reflection, debate, and a commitment to spending within our means.
Endless deficit spending gives both sides what they want now, at the expense of future fiscal calamity. For a long time, Liberals have gotten oodles of social spending and their archenemies the Conservatives have gotten tax cuts and gobs of increased military spending, a large chunk of these goodies paid for via debt and the inflationary printing of money. It’s as if we have two parallel government systems funded by a seemingly bottomless magical pot of money, and who debate government spending in a fiscal kabuki theater for the masses.
Neither side has any intention of ever sincerely and meaningfully embracing their fiduciary responsibility.
None at all.
Ever.
My final rantings apply, whatever political stripes you wear:
- Don’t vote for people who don’t vote for a balanced budget.
- Don’t vote for people who make promises of future spending increases or tax reductions in the context of unbalanced budgets, debt, and unfunded liabilities.
- Don’t vote for people who borrow or print money.
Some might argue this advice is naïve (“He just doesn’t get it!”). Some might argue this advice is too late. It’s like telling someone who is already a hostage, “Don’t allow yourself to be kidnapped.”
Yes, it’s naïve advice, damned naïve advice. But only because the advice is indeed too late…
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