Look: Something Shiny
In fits of hubris, many “experts” in finance and economics argue that the gargantuan National Debt, which is approaching $30 Trillion, does not matter because those experts have no expectation or intention of the government ever paying the debt. Rather than reducing the debt burden, they simply expect it to grow without limit in perpetuity. I would argue that those actions are akin to deliberately overburdening the proverbial camel and willfully ignoring the inevitability of its back breaking. The U.S. economy is in similar and certain peril.
Modern Monetary Theorists posit that a country, which utilizes its own fiat currency, like the U.S. Dollar, can simply “print” more money to cover its debts. That much is technically accurate, but they also believe (or at least argue) that flooding the monetary market with Trillions of “new” dollars will have no adverse impact on the “value” of existing Dollars. They believe that inflation, in which prices rice in response to the decreased “value” (or purchasing power) for a currency, can be held at bay indefinitely.
They seemingly argue that the laws of Supply and Demand no longer apply to money, but their arrogance is akin to saying that one is capable of controlling gravity throughout the universe. However, they are notably reluctant to fully embrace their own theory by simply “printing” all of the money that government wants or needs. If the “theory” is sound, then we should dispense with taxes and borrowing: In for a penny, in for a pound.
First, one must understand that the U.S. Dollar has ZERO inherent value. The currency formerly was “backed” by gold and/or silver; however, today the “value,” which parties attribute to the Dollar is based exclusively upon the confidence (or blind faith) that other parties also attribute value to the Dollar and that transacting parties will accept it indefinitely as a medium of exchange.
In reality, the Dollar itself is not worth the paper that it is printed on since most Dollars are not evidenced by actual currency. Most “Dollars” are no more than entries on a computer. They are created out of thin air, and they are capable of disappearing almost as easily as flipping a switch.
Imagine paying a premium or “full price” for a sparkling diamond believing it to be precious and rare. Imagine that immediately thereafter someone pulls up beside you in a dump truck, and he begins paving a street using similar diamonds as aggregate. You question how he could afford to use such an “expensive” material in such a way, to which he replies, “We have a bottomless pit mine just on the edge of town and we take them out by the truckloads with excavators. They are everywhere just for the taking.”
What “value” would you then place on the “precious” stone that you have in your pocket? Would you expect a recipient to be impressed by your “generous” gift or satisfied by your transfer? Would you be proud of the amount you paid for it, or would you feel like a fool and sucker?
With regards to currency, the U.S. government is a political “De Beers.” De Beers controls a large proportion of the world’s diamonds. Historically, diamonds were not necessarily prized. They are not particularly rare, and gem quality stones can be manufactured relatively inexpensively. De Beers literally invented the “tradition” of giving engagement rings so as to boost its own sales.
The price of diamonds is kept high because De Beers maintains a monopoly over the supply, much like the federal government maintains the supply of Dollars. In a truly open market, the price of diamonds likely would collapse to something a mere fraction of what it is today. Diamonds are “precious” and “valuable” only because we believe them to be so, but that belief is not necessary founded in reason and fact.
The job of political minions is not so much to protect or add “value” but to convince consumers, citizens, and others of the continuing value of the currency (and of the stability of the resulting economy). They do so through comforting lies and through pleasing propaganda. It is literally a “confidence game” (i.e. a “con” game).
As with any classic con, it works only so long as the lies are believed and so long as the truth remains hidden. The moment that the truth becomes known — the moment that the “mark” opens his eyes — the charade dissolves, and the house of cards comes tumbling down. The mark may disappointed by the “loss” compared to what he thought he had (and perhaps even felt that he “deserved”). However, the reality did not change. The truth was always constant. There was never going to be a big payoff.
The only thing that changes is our relationship with singular truth and our perception of our immutable reality. We can choose to be complicit in the con. We can be willing dupes, but that does not change the realities. For the con to be successful, everyone has to participate in the same collective delusion.
It is time that we refuse to accept the lies. It is time that we refuse to embrace the convenient narratives and pleasing propaganda. It is time that we as individuals and as a nation wake up from our pipe dream. It is time that we quit deluding ourselves. It is time that we act like responsible adults.
If you want a sparking bauble to hang around your neck, to wear on your finger, or to keep in your pocket, then so be it. However, do not expect everyone else (worldwide) to have the same appreciation for “shiny things” that you do, and do not expect everyone else to place the same value on that trinket as you do. If you overpay for it, you are likely to get stuck with it.
If we do not soon open our eyes, the American taxpayer and citizens generally will eventually be stuck holding the bag for reckless spending and irresponsible financial stewardship.
