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A View from the Altar / The Empire struck back. Victory, Team RINO
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The Empire struck back. Victory, Team RINO

The outcome of the budget “deal” was predictable ten days ago or ten years ago.  Borrowing and spending increase immediately in exchange for an assurance that some future Congress will cut spending some day, out there, over yonder, God willing.  So America’s great swarming masses of grifters will continue nursing at the government breast without interruption, at least for now, thank heaven.  The people who actually supply the milk get to delay full payment for another few months.  And people who have lent money to this fiscal house of cards will get paid something, for now.

In other words, the budget deal perpetuates the doomed status quo.  Both the Democrats and the RINOs want to keep pulling out Jenga sticks from America’s economy.  The gamesmanship consists in each trying to set up the other to be the one to trigger the final collapse.  They cannot think the thought of stopping this, and you can forget about putting all the Jenga sticks back in as the Tea Party demands.  The RINOs will say that’s dangerous, irresponsible, immature, outside the political realm of what’s possible, and so on.  The Democrats will say it’s racist and homophobic and gives money to the backstabbing, throat-cutting, Satan-loving, demon-infested rich.  And by “rich,” they mean anybody with a job.

Just to indulge a bit of idle speculation, I wonder if there’s anyone in America who actually doesn’t know we’re out of money.  Does reality ever intrude upon the thinking of our rulers?  Do they ever ponder the fact that this cannot continue and wonder what they’ll do the day after it all ends?
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Ah, well, to borrow from Solomon, the silver cord shall soon be broken.  The end game is coming into focus.  The Democrats and RINOs will continue to borrow from Asia and shell out free cash to franchised indigents till no lender on the planet will grant another mite. Then it’ll stop.

Lenders are growing inexorably more wary.  Soon they will begin to refuse long term lending and demand way higher interest for the short run.  Episodes of the ridiculously misnamed “quantitative easing” will become more frequent with larger installments each time.

Inflation will begin to ratchet up.  Lenders will begin to reject government securities.  More foreign institutions will retreat from the dollar, and that’ll turn into a race not to be the last one out.  We’ll reach the point where nobody on earth will buy U.S. treasury securities.  Quickly, lending to the government will plummet to zero.

To delay the collapse, the government will likely perform a Hugo Chavez maneuver and “nationalize,” that is, steal, IRAs and 401k accounts in exchange for a future promise of increased Social Security.  To prevent a mass panic sell-off, the public will not be permitted to see this coming.  It will be done as a surprise action something like when the FDIC takes over a failing bank.  The only warning sign you’re likely to get is some editorial grumping about the government’s persistent inability to sell off its securities.  And then one day, bam!

Once all that money is gone, U.S. government checks will be funded with pure phony money.  Fiat money.  Imaginary money.  Monopoly money. Actually, counterfeit money.  Computer blivits entered ex nihilo upon the accounts of Federal Reserve banks which will then pass along their sophisticated zeros to member banks.  Thereafter, government bills will be paid by checks having more and more meaningless zeroes tacked onto the end.  At long last, the gimme-people will begin to feel the effects of their greed as the value of their checks begins to approach infinitesimally close to zero.
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I visited Mexico during their hyperinflation in 1987.  The devaluation of the peso was at a ratio of a thousand to one, which isn’t bad when compared with history’s other episodes of hyperinflation.  That is, a man who had a thousand pesos in savings (about $80 back then) ended up with the value of one peso (about 8 cents).  Mexican merchants began to demand U.S. dollars, not pesos.  Imagine going to your local grocery store and having your dollars refused by a cashier who says, “The boss says for me not to accept dollars.  He wants pesos or Euros or Chinese yuan.”

To put this in modern terms, a moderately well-to-do man with $500,000 in his retirement account will end up with the account being worth about $500.  A low income woman who earns $2000 per month would see the value of her pay reduced to $2.  The Democrats, who never stop trumpeting their sham concern for the poor, are setting them up for the ultimate crash into genuine poverty.  And this is not the poverty of obesity, public housing with cable TeeVee and free health care.  This will be the poverty of people who have no food and no means to get any.

1987 was a strange time to be in Mexico.  Even though the value of a peso was less than a tenth of a cent, business people were still figuring prices and making change in pesos, so you’d end up with a pocket full of coins, the sum total of which was less than a penny.  One day a beggar approached me, and I thoughtlessly gave him some coins which he threw away.  They were valueless, not even worth a beggar’s effort to carry them around.
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If we’re really lucky, most creditors will have hidden their assets from the government by the time the stock market gets nationalized.  Such people would then be able to use their capital to start a recovery.  The American republic would survive, though weakened and greatly impoverished for a generation.  If the government gets too aggressive, however, and all the assets of the producing class get transferred to the grifters, the republic in its present form would likely not survive.  The fragmented regions that arose in its aftermath might need generations before people could accumulate enough capital to start producing again.
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There are some things the government could do to avert this, but won’t.  They could sell off vast tracts of government lands to raise money which would have the added benefit of placing nonproducing national resources into private hands.  They could open up American energy resources for development, not only getting revenue from the resources but also getting revenue from taxpayers who actually have jobs.  They could tell the vast swarms of gimme-people that the gravy train has come to an end and simply stop giving away trillions.  They could drain the regulatory swamp that is rapidly choking the life out of American industry and thereby let the country grow its way out of this crisis.

None of these things will be done, and each negative is for the same reasons.  There are two keys to power for the Democrats and RINOs in the ruling class.  First, they gain power by taking earnings from producers and forking them over – minus a 90 percent handling fee – to their principal constituency, the grifters.  This is how they buy the votes that keep themselves in power.  Second, they gain power by creating regulatory obstructions to literally everything productive.  Producers must then come crouching to them and begging for permission for whatever needs doing.  The elitists appear to love this more than life itself, and it reminds me of the Proverb about the servant who rules over princes. (Pr 19:10)  If either of these ruinous conditions changed, the ruling class would lose its position.  And they’ll sooner see America reduced to dank heaps of moldering rubble than to give up their grip on power.
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There’s a practical aspect to this from the elitist’s perspective.  Think of the forty-something guy, Princeton-educated in some governmental soft skills curriculum, paying an interest-only loan on a million-dollar house in northern Virginia.  What can this guy really do?  I mean, except for taxing and spending other people’s money, what job skills does he really have?  He is the Black Death of finance.  He can’t drive a truck or a backhoe, knows nothing of industry or production.  He can’t cut hair, cook food, or fix a car.  Heck, he can’t even change his own oil and has to hire his grass cut.  You couldn’t use him to muck out a chicken house without first rebooting his entire soul.  Ten thousands upon ten thousands of bureaucrats like him comprise the backbone of the bureaucratic power base that holds up the Democrats and RINOs.

The difficulty confronting the Tea Party is not just lying politicians who sleep with lobbyists and page boys.  It is this guy. How likely is this guy to embrace any form of change that will limit government growth?  “What?” he asks, eyes bulging with disbelief “Turn me out into the wide world to earn my own keep?”

To this guy, the debate is not a grandiose philosophical question about the proper role and mission of the state.  It’s about his own, personal gravy. And he knows it.  And he knows who is against him.  That’s why he agrees fiercely when Mr. Obama refers to the private sector as “the enemy.”  To such a man as this, your liberty is a direct, personal threat.  That’s what you’re up against.
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What are the prospects for reversing course short of a calamity?  In my opinion, they’re not strong.  Congress today has proven that the Democrats and RINOs still have a firm grip on power. They hate each other, but when push comes to shove, they will unite against their common enemy which is the producing class of liberty-loving Americans.  They will not let go until force or coercion have lost all power to summon any more of the producers’ wealth.

I can see three ways for that to happen.  One is an armed revolution.  Let every man of good will pray fervently against that.  A second way is for the wealth of the nation to be so far spent that there is nothing left for them to steal.  The third way is for some kind of event to kindle the fighting spirit of enough Americans to turn this thing around before it’s too late.  The 2010 election was a big step in the right direction but didn’t fully achieve that.  We hope and pray the 2012 election will move matters a great deal more, but to win, we’d need every producer to vote against every grifter. And that’s never happened before.

Could it happen this time?  Well, some British editorial writers think so.  They think the budget deal is a big victory for limited government because taxes weren’t raised.  In their opinion, this means the battle of the budget is set for spending cuts, not tax hikes.  They’re all excited about it. But the Democrats are dead set on getting some tax increases.

The entrenched power base in Washington is very strong.  And they have two weapons the citizens don’t have.  First, they have the power to arbitrarily create new laws. And they don’t need the Congress to do it. The regulatory apparatus of the executive branch and the “legiscourt” abuses of the judicial branch can create new laws almost at will, and even if those laws are overturned, it takes many years of battle to do it.  And they can hit hard. A generation ago the Internal Revenue Service wrought vengeance upon certain politicians who supported the taxpayer bill of rights.  Second, the Washington establishment can both work economic ruin and wrest it to its advantage.  When businesses and people are out of work, state power swells as people seek relief from adversity.
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I can do no better than to close with a quote from one of my favorite writers on the internet, Douglas Wilson of Blog and Mablog.  “Paper promises, like paper money, require honest men to execute them. And that, as it turns out, is where our real shortage is.”  Amen, Bro. Doug.

otherbrothersteve@gmail.com

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