Mr. Progressive, Paul Krugman, insists that worries about the debt are overblown. Despite the fact that our economy isn't capable of growing more than 2.5% over the long term, he sees no problem growing our National Debt by 10% per year. It's as if his Nobel Prize was coated in lead and he has been sucking on it. Only someone who is brain damaged would argue that doubling our debt will solve a crisis caused by too much debt. It's as if Krugman wants to become the Irving Fisher of his time. One week prior to the Stock Market Crash of 1929 Fisher famously pronounced: "Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months." The truth is our lenders will not allow our National Debt to reach $24 trillion by 2019. The U.S. dollar has already lost more than 80% of its purchasing power since Nixon closed the gold window in 1971. The amount of currency in circulation since that time has gone up by a factor of 16 to $800 billion. The result has been a stagnation of real wages for the middle class, while the ruling elite have seen their wealth soar to astronomical levels. The correlation between printing more of something and its relative value are as clear as day to anyone with a smattering of intelligence. Ben Bernanke is attempting to print his way out of this financial crisis. He is playing a game of chicken with our foreign lenders. He wants to devalue the U.S. dollar slowly to reduce the unbearable weight of U.S. debt. Foreign lenders from China, Japan and the Middle East know what he is doing. They will be the long-term losers in this scenario. At some point in the next few years they will balk at buying more US debt. A "Weimar Moment" will strike the United States like a sledgehammer. The veil of financial stability will be revealed to be a fallacy and the worldwide reserve currency will revert to its intrinsic value of zero. The chaos that would ensue as people's life savings are wiped out would test the mettle of our country's citizens, government, and military.
The dollar is likely to collapse just based upon current spending and borrowing trends. The unsustainable entitlement promises made by politicians over decades would have guaranteed a dollar collapse by 2030 anyway, so we will just arrive sooner. Not one politician from either political party has the courage to stand in front of the American people and tell them they will not receive the Social Security and Medicare benefits they were promised. Not one politician from either party is even willing to discuss the fact these promises cannot be honored. This train has been headed down the track since the 1960s, picking up speed, and no one is willing to apply the brakes. The Baby Boomers have sold their children and grandchildren into slavery. Their unwillingness to sacrifice entitlement benefits, guarantees a vastly lower standard of living for their descendents. How very egocentric and superficial of them. The most coddled, self absorbed, egotistical generation in history would rather crash the economic system than make any personal sacrifice for future generations. The $106.8 trillion of unfunded promises will not by paid, because there will be nothing left to pay. The country is bankrupt today. By 2030, half of all tax revenue would be needed to fund these programs. The Boomers will be forced to accept much less than they expected. The delusion of getting something for nothing will be put to rest during this Crisis.
The wildcard within the current Fourth Turning is cheap easily accessible petroleum. Progressives and those who only view the world in a linear way, fail to recognize that easily accessible oil only came onto the scene 150 years ago and we have depleted the easiest to reach 50%. The implication of these facts is beyond the comprehension of linear thinkers. They trust our ingenuity and brilliance to solve the problem. A new form of energy will magically appear on the scene and save our industrial world. Brain power and human resourcefulness played only a small part in the economic boom of the last 150 years, produced by cheap oil. The industrial revolution began more like Jed Clampett shooting at some food and getting bubbling crude. The world benefited from a positive Black Swan event. In other words, we got lucky. Now the luck is running out. There is a finite amount of petroleum on the planet. Most of the remaining supply is trapped beneath deep oceans, within tar sands, in shale rock and in inhospitable countries. Cheap sweet crude is running out. New oil discoveries peaked in 1964. Worldwide oil production peaked between 2005 and 2010. As supply enters terminal decline and demand continues its relentless rise, prices will soar and the world will be transformed forever. This could even put a creak in America's military machine that consumes over 150 million barrels of oil per year.
The deniers believe that technology will save the day. They don't step back and think that their technology couldn't function without cheap oil. The hardware and software are made in factories run by fossil fuel. The amount of energy that exists on the planet is a closed loop system. The sun's energy created fossil fuels. The population of the planet has converted 50% of these fossil fuels back into CO2 and other byproducts. This is the process of entropy. Entropy is the movement of energy from complex, higher states to simple, lower states. Energy cannot be created or destroyed, only changed entropy dictates that energy flows in only one direction, from being concentrated in one place to becoming diffused or dispersed and spread out; from being ordered to being disordered. After 150 years of profligate use of oil, we are within a few years of experiencing an unsolvable oil shortage which will affect transportation, industry, heating, plastics, fertilizers, pharmaceuticals and all the myriad products essential to our contemporary lives. Our energy-devouring civilization has been accelerating entropy. Kunstler sees this entropy leading to a crisis of epic proportions:
"We don't really need to reach the end of oil to experience the disorder that accompanies entropy. The economic efficiency we praise creates one-industry towns that become simplified and vulnerable communities. Businesses evolve into big corporations that dehumanize and feudalize our lives. Our monocultures of specialization create ecological disasters. We poison our water, land and air using the justification that more and faster are always better. Mass production produces the homogeneity that deadens the spirit and vitality of people they compensate by becoming hyper-consumers, fad-chasers, unsettled and disquieted beings in search of the meaning denied to them by a loss of complexity."
The combination of debt, dollar devaluation, delusion and depletion will make this Fourth Turning the most challenging and dangerous in U.S. history.
The Five Ds of the Fourth Turning
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