Coming to a Frenzied Crossroads

Just at the time that modern humans are given unprecedented technological tools for free expression and for empowering our creative imaginations, governments are rapidly shutting down the avenues of opportunity and freedom of economic action we will need in the near future.

Anyone can now publish books and journals, record music, create sophisticated feature-length videos, run his own TV network, operate an online university — and market them all to large markets using very little capital. Until recently these industries were protected by the high cost of entry, limiting large-scale public communication to just a few viewpoints.

… what really broke the left’s control over media was the Internet. Before its advent, one needed a large investment in a printing press or a broadcast tower to engage a mass audience; afterward, all one needed was a few hundred dollars for a basic computer and Internet service. The web shattered barriers to entry and, suddenly, pent up demand for information free of non-progressive bias met an onrush of supply.

The left began its stranglehold over the knowledge industry with patronage under the New Deal [1930s], and from that time to the present we have seen government spending balloon from around 10% of GDP to 40%, and the amount the government spends on transfer payments has gone from 30% of the budget to around 66%. _Federalist

The graphic below shows how government policies are shutting down the paths of future opportunity, by destroying economic vitality.

Approaching a point of no return, when debt inexorably creates more debt, in exponential fashion

Approaching a point of no return, when debt inexorably creates more debt, in exponential fashion Keith Hennessey

In their recently released annual Economic and Budget Outlook (PDF) CBO lays out the four costs of higher debt (page 7).

“Federal spending on interest payments will increase substantially as interest rates rise to more typical levels;”
“Because federal borrowing generally reduces national saving, the capital stock and wages will be smaller than if debt was lower;”
“Lawmakers would have less flexibility … to respond to unanticipated challenges;”
“A large debt poses a greater risk of precipitating a fiscal crisis, during which investors would lose so much confidence in the government’s ability to manage its budget that the government would be unable to borrow at affordable rates.”

Government debt is twice as large a share of the economy as it was before the financial crisis. In addition to increasing the risk of another catastrophic financial crisis, high government debt squeezes out other functions of government, creates pressure for higher taxes, leaves policymakers less able to respond to future recessions, wars, and terrorist attacks, and lowers future wage growth. This problem will only increase as entitlement spending growth kicks into high gear a few years from now, but simply stabilizing debt/GDP in the mid 70s is an insufficient goal.

The level of government debt under Obama is more than high enough to “create its own weather.” Even a very small upward shift in interest rates can have catastrophic effects on any economy that depends upon such a massively indebted government. A careful analysis of this massive runup of dept will show that large-scale corruption and nepotism has been at the root of it.

These issues are too large and too abstract to draw the attention of mass minds, who are conditioned to focus on trivialities. Which means that people inside governments that pull such shenanigans which put their citizens’ futures at risk, will most likely get away with it. They will walk away from the disaster with the booty, and with clean hands — as far as the public is able to determine.

Can this debacle — this destruction of our futures and our children’s futures — be stopped? Can the guilty parties be punished? Not likely. Who is even trying to reverse government corruption and nepotism? Almost no one. Rather, most people just want to get in on the action.

And that is why a choking off of opportunity and a widespread impoverishment of freedom of action appears inevitable. And it is why the development of broad-based competencies and skills in our children is so crucial.

It is possible that certain technological developments will reverse much of this decline into irreversible debt expansion — even under current forms of government. But since modern governments are working overtime to shut down private economic opportunity, such disruptive technological developments become less likely. They need to happen soon.

A much better chance for avoiding the economic debacle of debt and demographics, is for modern humans to learn how to disengage from their hopeless entanglement with government. Learn to do the things for yourself which governments claim to do for you.

If technologies are developed which help humans become more independent from corrupt, piratical, and tyrannical governments, modern humans stand a much better chance of creating a prosperous and open-ended future.

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4 Responses to Coming to a Frenzied Crossroads

  1. John says:

    I would leave a like on 90% of your articles but don’t know how sorry.
    But on point is that INHO and for a long time I have believed that we were headed for a crash
    and what has saved the nation/world for a long time has been the uptick in productivity, it goes along the lines of you cannot bleed a stone if we were not so prosperous or productive they could not take so much from us. I think or observe that as we get more and more results for less effort the government comes along and takes or grows more, we can do so much more than in the 40’s 50’s or even 80’s and 90’s but try working a 40 hr week and supporting a wife and kid or two at home and see how fast you go broke.
    My contention would be that if you were a gogetter you would work 40 hrs a week but the normal people would chose 20 or 30 just as when in the early 1900’s when the whole industrial age started and you had to work 80 or 90 just to survive. Now they tax us to give out handouts and promise a future they will not be able to keep up with and live high on the hog producing or worse not letting us produce anything.
    Read an article about the fed feeding in all there interest money back into the treasury, and his question was it possible to keep that up indefinatly to keep interest rates down, my thought would be that once they (us) start with rising rates they will get in trouble, and it will be a bad feedback loop because now the fed owns longer duration bonds so if rates rise then the treasury will be paying more than the fed is receiving so even though the fed cannot lose money it may finally be realized that all they are doing is printing cash to cover debt, a couple hundred billion lost on interest and another hundred or two lost from the fed and there goes any little cuts they may have hammered out.
    I would say the best we could hope for is for a quick crash before they run us into the ground and use up all our capital for there high life styles, we get more productive, ( cheap energy, robot workers or what ever ) they will just promise more and enslave more and those doing real jobs will just get better toys but mostly crums compared to where we could be without them.

    • alfin2101 says:

      Thanks for the comment. As you suggest, the most likely cause of a collapse in the near to intermediate future is an economic crash caused by US government policies combined with massive debt and cronyism. If that happens, you can expect multiple wars of convenience to pop up around the world, as the hegemon loses its extended reach and sharp claws.

      A nuclear EMP attack against Europe and North America could easily coincide with such a collapse.

      It is too bad that almost all of Obama’s policies make such a collapse more likely to happen, and much sooner than would otherwise be the case.

  2. John says:

    I could not agree with you more that we are on the verge of your next level, (even thou you do not really say that we are there Just hoping to survive and maybe see it happen would be my take on your view, sorry if I assume to much), but I would put my fear a little different, I do not look forward to a breakdown but with the way things are headed it seems inevitable, and if it does not happen we will end up just breading more chicken eaters than chicken feeders as one of my friends puts it and I am not just talking the welfare state, that is the small drag on the economy at least them you only have to feed and cloth, we are productive enough to do that in our sleep, the problem comes in form the top of the welfare chain where they take the people who want to produce and slow us down and don’t just want the necessities but want to use our capital and production against us so we don’t really want to work either.
    We have to spend more time protecting ourselves then building something fun, and from fun comes advancement, but who wants to advance if it is just going to be used to enslave you unless you are a part of the group and not all productive people want to be politicians ;>) .
    In her own crazy way Ann Rand was right 50 or 60 years ago.
    I think about it too much but am not a good writer, should do it more often makes you define your idea.
    Where I would fall on that whole plan is I think life should be easy and great but it seems to be getting more and more difficult because of the overhead and until it resets they will just keep piling it on so even though it would be a struggle (not really unless you think work sucks) I would rather live with the reset and keep what I build and see where the chips fall. Might be a lot quicker and more enjoyable way of getting to where you want to be.

    • alfin2101 says:

      The huge — government/lobbyist/union/lawyer/corporate crony/organized crime/community organizer/political activist/media syndicate/academic clique/pop culture — conglomerate is a tightly knit grouping. It controls elections and determines how — and whether — laws are enforced. It is difficult to determine where unions end and organized crime begins, for example. The same goes for all the rest of the components. As you hint, the game is fixed and the people are at a loss to know what to do about it.

      Oddly enough, the schisms between the races and cultures are relatively unimportant compared to the schism between the cabal and everyone else. If the insiders want to foment a race war to occupy the attention of the masses, while they are pulling a strategic maneuver, they will lose no sleep over it whether the insider is black, white, asian, or hispanic. Insider vs. outsider is the important divide.

      BTW, the main thing about writing is to say what you mean. As long as you do that, most of the rest is superfluous.

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