February 12, 2018

Killer debt driven by parasitic elites, leads to populist revolution

In another instance of campaign-Trump getting out-maneuvered by the Republican party, the budget bill passed last week has dispelled once and for all with this fiction that the GOP gives a damn about not crushing America under an unpayable debt burden.

It was a constant of his rallies that emphasized how broken the nation has become -- "We owe $19 trillion in debt," he always said in a disgusted tone.

And unlike the passing mentions that this topic may have gotten from the other candidates, he pointed to the major factor that his own party was contributing to the debt -- our over-extended military occupation of the entire world, while getting nothing in return for it. No rent, no spoils, no tribute, no nothing. Germany, Saudi Arabia, Japan, South Korea -- all ripping us off big-league.

Not to mention the wars in Iraq and Afghanistan -- even after having been effectively co-opted, he continues to openly complain about the "seven trillion dollars wasted in the Middle East".

In fact, he promised to bring down military spending while getting more out of the suppliers and contractors, making a cost-efficiency argument for sending a killer negotiator businessman to clean up the waste in Washington's spending.

He didn't realize, as an outsider, that the purpose of the political parties is to provide patronage to the sectors of the economy that prop up either party, meaning that his plan would've cut off the gravy train for the defense contractors and weapons manufacturers who control the GOP.

Every spending bill passed since he took office has ramped up military spending far more than even "Trump" asked for in proposals.

This reveals to the public just how expensive it is to endlessly occupy the entire world with a nation's military. Trump tapped into popular anger at all this money getting sucked into far-flung imperial projects by saying that we should get out of Afghanistan and other places, and spend that money improving America instead. "We could have re-built our country many times over," he said to drive home the magnitude of the waste.

He did not touch on the other major source of our current sky-high debt burden -- bailing out the big banks after their airhead bubble popped in 2008. Like military bubbles, finance bubbles are also incredibly expensive to inflate -- on the order of trillions of dollars. That, plus the massive troop surge in Afghanistan during Obama's whole first term, sent the debt soaring by trillions in just a few years.

These policies are only continuing a policy begun since the start of the Reaganite paradigm that still reigns -- slashing tax revenues, off-shoring manufacturing, deregulating the economy, and soaring military budgets. All these interact to send the debt off into outer space, as wealthy individuals and especially institutions escape having to pay for anything, to protect ever-rising profits, while charging all sorts of goodies on a government credit card.

Before the Reagan era, we allocated large sums to all sorts of "social" or "domestic" spending, and never ran up the debt. Only the occasional war could send it temporarily high, before coming back down.

The main reason was that social programs are not very expensive, as they exploit economies of scale for the benefit of the people they serve -- Medicare is cheaper than private insurance, because the program collectively bargains with healthcare providers on behalf of the entire population in that age range. And it is not for-profit, so there is little in overhead costs such as CEO salaries.

Even cash payments were never large, and few relied on them anyway, as they were emergency measures rather than guaranteed basic income. Rather, the government guaranteed prosperous wages and incomes by restricting cheap labor tactics from employers -- union-busting, immigration, and off-shoring were all restricted by federal regulations.

The lesser reason was that tax rates were far higher back then compared to now, so even if some program was on the expensive side, it didn't matter since the wealthy paid over 90% in taxes on their top level of income.

The New Deal was fairly simple: don't get bogged down in very expensive endeavors like indefinite military occupation or bailing out too-big-to-fail banks every business cycle, and collect a lot in taxes from the wealthy in order to cover what you do spend money on.

As we shifted out of the New Deal and into the era of profits over people, we have slashed social and domestic spending. Even the liberal multicultural twist on the Reagan regime, Clinton's presidency, put an "end to welfare as we know it" in a time when "the era of Big Government is over". So the long-term rise in the national debt that began under Reagan has nothing to do with increased social spending -- our reforms there should have lowered the debt.

Nor can we put all the blame on slashing taxes since Reagan, although that has made things worse. We never took in stratospheric amounts of tax revenues back in the 1950s -- we just didn't waste so much on the really expensive things like endless war and bank bailouts.

What changed was the sense of duty that the elites felt toward the commoners. Before, they felt they had to protect and provide for them, and paid for it with high taxes. Now, they felt like the commoners would have to look out for themselves, even as the elites removed the good-paying jobs from the economy. Rather than pay for popular programs with taxes, the elites would simply run up a massive debt in order to enrich themselves.

That is the key lesson -- a debt that large can only be run up by elite parasitism. No commoner or group of commoners will ever get trillions of dollars dropped into their bank accounts after making the mother of all investment fuck-ups like Wall Street has done repeatedly across several business cycles. Nor will commoners get multi-billion-dollar contracts for consulting with the Pentagon or CIA on how to help jihadist militias in Syria take down the Assad government, or how to drone-strike a funeral procession in Yemen, or how to train one tribe of Afghans to battle some other tribe of Afghans.

We must never forget that it's the elites who have run up the debt for their own profiteering. As the nascent Tea Party movement reacted against the bank bailouts (and perhaps military spending?) of the early Obama years, it became rapidly co-opted by the Koch Brothers type of austerity ideology.

That is, the national debt was soaring because "we" were living beyond our means -- all that welfare spending giving Cadillacs to ghetto single mothers, university studies on the sexual fetishes of chinchillas, and removing lead from drinking water plumbing. Solution: "we" have to give up those things, as the alternative -- RAISING YOUR TAXES -- would be too much to ponder.

In this way, the conservative think tankers brainwashed the Tea Party people into identifying their own burden on gubmint spending with the burden of the elite sectors on gubmint spending. Despite the commoners not being a drag on the government, and the elites using federal spending bills as a great big fat credit card, enough commoners accepted that "we" -- they -- had to give up basic government functions in order to not go broke in the near future.

We are certainly going to see this attempt to bamboozle and hoodwink another generation of disgruntled commoners when the coming financial crash sends the banks with their hands out to Uncle Sam for even more bailout money than the last time, since this bubble is bigger than before. Or even now, as the Pentagon parasites hoover up as much as possible in order to not lose the mission to impose multicultural tolerance on Afghanistan.

We don't have to give up anything, but should be demanding a restoration of the social domestic spending from the good old days, which was never that expensive anyway, and we'll put in higher taxes on the wealthy just in case.

The main push is to cut off the senior partners in each party's coalition from using the federal spending bills as a credit card for elite profiteering -- whether the big banks or the big defense contractors.

Populists on the Left already get most of this, and those on the Right are at least halfway there (the only confusion being about how expensive social spending is -- or rather, is not, given the balanced budgets from the New Deal era).

What can we do to appeal to those who are not fiery populists but still don't want to see the society explode? There we can draw the historical parallels, where every time the national debt gets out of control, it has been due to the elites running up the bill for their own benefit -- mainly for the military aristocracy, but also the decadent courtier lifestyles.

Well, what's so bad about that, thinks the comfortable upper middle-class liberal/conservative? Because not long after that, the state broke down into a mob uprising or revolution that hollowed out the ranks of the elites. Most famously, leading up to the French Revolution, with their crushing debt coming mostly from war (the Seven Years War, and their aid in the American Revolution). As now, their elite sectors found one way or another to escape taxation, as compared to harmonious periods where they submit to taxation for the public good.

When the government starts to slash its functions that benefit the commoners, in a desperate and futile attempt to tame the debt (which is instead caused by elite over-spending and under-paying), it provokes a riot from the commoners. Nobody wants to get collectively punished at such a basic level (e.g. food prices spiraling out of control) for a crime they didn't commit.

Yet that's just the kind of thing that happens when the government tries to pay off the debt by diluting the value of its money in order to pay off an unpayable debt. If the debt required 10 tons worth of gold coins, and the treasury only has 1 ton worth of gold coins, why not just melt that 1 ton of gold in with 9 tons of worthless metal? Now you've got enough coins to fork over to your lenders.

Only now you've produced massive inflation, as a coin is now only worth 1/10 of what it used to be worth. Now the commoners have to pay 10 times as much for their daily bread, all in order for the government to pay off a debt that was run up by the elites -- and now the elites have a major riot or revolution on their hands, and heads will begin to roll.

Our government will find itself in a similar situation before too long, whether it defaults on the debt and makes it so that no one will invest in our country again, or whether it inflates it away and sends consumer prices through the roof -- and all while continuing to decimate their incomes by off-shoring their jobs, bringing in hordes of cheap-labor immigrants, and downsizing labor forces through monopolistic mergers and acquisitions.

The task for the populist backlash, led by Bernie Democrats, is to go after the elites and make them cough up as much as possible to re-pay their share of the national debt, which is just about all of it. Jack up their taxes, confiscate ill-gotten wealth, seize properties like university dorms and turn them into revenue streams like publicly owned apartments, charge rents for the military bases that we begin to depopulate in foreign lands (or at least collect a big lump sum for their transfer).

That's in addition to stopping the further explosion of debt by popping the bubbles in both the finance and military sectors. No more free money for their elites, that they just waste anyway. This argument will appeal to moderates and conservatives among the electorate, rather than a moral argument against imperialism. Forget moral, just on a practical level our military occupation of the entire world is untenable.

I doubt that a Bernie-style Democrat could cut off the supply of free money to the elites of both parties and not get immediately assassinated or impeached, without a mass movement backing him up and demanding the end of elite parasitism. That way the elites see that it's either go along with the peaceful transition proposed by Bernie and his cabinet -- or else the angry mob takes over, and literally heads begin to roll.

If the elites don't want to end up on the wrong end of a French Revolution, they must accept those terms of surrender. We don't have a long history to draw on, but at least last time the whole world was on fire circa WWI, we enjoyed a relatively peaceful transition out of the Social Darwinist Gilded Age and into the Progressive / New Deal era beginning in the 1920s.

We are a far more fractured country now than then, though, as we were still nationally unifying after just closing up the frontier and had yet to add Alaska and Hawaii into statehood. Things could get ugly this time around -- all the more reason for the elites to not assume the transition will be divinely guided into a peaceful transfer, and to take deliberate efforts to ensure that the transition is peaceful and defusing, rather than stoking populist anger with "let them eat cake" pronouncements.


  1. If the French Rev is too distant to spook elites, how about the Bolsheviks coming to power after crushing war debt broke the finances of a moribund empire:


    Racking up debt in a series of wars leading up to the most expensive WWI, inflation out the ass, and soaring prices for commoners. And of course the belief at the outset that it'll only last a brief moment, and then it'll be right back to prosperity and stability.

  2. Immigration is going to make the backlash even worse: who *really* does not have anything invested in the imperial adventures of Uncle Sam's military around the globe?


    No different from the heavy anti-war activism among Ellis Islanders during / after WWI, a lot of whom were deported back to Europe.

    As the parasitic defense contractors of Virginia, North Carolina, and Georgia import more and more foreigners into their states so they can cheaply re-model their kitchens and landscape their estates, they're sowing the seeds of their own destruction.

    Aside from voting, which immigrants do not take part in, they will be easily mobilized into mob riots when prices soar through the roof because of permanent wartime budgets and debt.

    Once the Pentagon is fingered as a main culprit, the immigrant hordes won't need to vote against war budgets -- they'll just storm the place, or riot throughout NOVA, or otherwise disturb business as usual.

    No tinge of patriotism will hold them back, unlike it would for a good chunk of Americans.

  3. “I want to keep prices down, but I also want to make sure that we have a steel industry and an aluminum industry, and we do need that for national defense,” he said.


    Brilliant appeal to neocons, no? They'll be clamoring for it


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