We are on the brink of total self-annihilation. The teetering effects of an over-levered country are starting to take its toll. States like Illinois are so broke they can’t even pay their Powerball winners (yes that is not a joke). On and individual level we are no better off. Everyone is walking around with mounting amounts of credit, mortgage and student loan debt. The debt levels we hold not only at the state, federal and individual level are in the worse position we have ever seen. Eventually, when a country, state or individual hits a certain debt level there is a point of no return. We are there. There is a debt bubble. We are all fucked.
Let’s begin this discussion from the bottom up – from the lowest level of existence, the individual level.
Individuals in the US are overflowing in debt. Consumerism is preached like Jesus Christ on a pedestal. If you are not buying, if you are not consuming and if you are not devouring through all of the junk the mass corporations are selling – you are a minority – a small forgotten word not taught in schools, the dinner table or anywhere called a saver. Say it slowly s-a-v-e-r. The word has an odd ring to it like you heard it in a past life but can’t recall the origination. The word is frightening. You panic when you hear it. Sweat starts dripping down your brow the more you think about it.
Keynesian economists must be proud of the success they have made making their theory a hit all of the way to the individual level. Hayekian economists are like old video stores – they are outdated, useless and not heard of by the children of Millennial’s. If consumers had any brains to their existence they would keep John Maynard Keynes’ The General Theory of Employment, Interest and Money by their nightstand. Due to the lack of brains, credit cards are kept there instead. In fact, I have heard tales of consumers sleeping and cuddling with their trusty credit cards.
We are taught at a young age to spend spend spend. There’s very little if any discussion of saving within the public school setting. Instead we are taught fake distorted unfactual history spewed into our brains to make our country sound tip top fucking great. This country was never great. It has always been an oppressed system used to manipulate the laborer. But what does that matter when expensive debt is easily obtainable. Instead of facing the challenges of day to day existence we can just emerge ourselves in consumerism to actually feel something. Say it with me, “our country tis of thee, sweet land we will never be debt free”.
Credit card debt isn’t the only debt we hold at an individual level. College debt is worse – and continues to mount as more young kids are taught the “importance” of a “good college education”.
College is completely unaffordable. The cost of an education is rising exponentially. And when you compare the cost of a college education to actual wage growth – one rises and the other is beginning to decrease. But we are all taught at a young age that a good college education is the function of a successful life. If you are not going to a four year University out of high school – you’re a loser. It’s pitiful what the masses are taught. College is a complete waste of time. 99% of the junk you are fed in College isn’t used in the actual workforce. You are taught to memorize junk, forget it next semester and follow orders – rinse, wash, repeat. College is a scam – a very expensive scam.
What’s worse, debt from college isn’t getting paid off. The minimum is paid every month and interest racks up for 30 plus years. Students are starting to complain that the government should pay their college debt off for them. Apparently college isn’t teaching graduates the responsibility of paying for something you bought – not letting the rest of the country pay for your worthless education.
Don’t even get me started on a house mortgage. Individuals have the need of keeping up with the Jones down the road. If they don’t have a five bedroom house with four bathrooms and the Jones do, you are not with it. It doesn’t matter if you can’t afford the mortgage or property taxes on that house. As long as you can show it off to guests you secretly despise, what does it matter if you can’t pay for it?
Building on that narrative, let’s discuss the state level using Illinois as a perfect case study.
The state of Illinois is so broke it can’t pay contractors to fix its road. The state can’t pay and never will pay the pension promised to its state workers. Illinois is so broke that it can’t pay winning Powerball winners.
It’s sickening what Illinois has turned into. If you look up corruption in the dictionary a picture of the politicians from Illinois show up. Politicians from Illinois haven’t been able to pass a budget in three years. Homelessness is rampant. People with mental health are going unaddressed. Corporations and small businesses are leaving the state in droves due to mounting tax hikes.
Eventually something will need to be done about the debt Illinois has racked up. My best guess is the trusty Federal Government will step in and bail that pathetic state out of bankruptcy – creating the worse kind of moral hazard this country has ever seen. A move from the Federal Government of those sorts will spew moral hazard to every other state burgeoning with debt. Everyone will want a bail out. Tax payers will take the burden of a nationwide bailout. The current 3-4% inflation rate will quickly turn to 20-30%. Hyperinflation will be discussed at the dinner table.
Finally, we make it to the Federal level. The Federal Government is the worst kind of debt hungry machine the world has ever seen. Every month debt levels continue to rise. The Federal Government doesn’t pay its debts off either. It pays the interest and rolls the rest over.
It will be nearly impossible to fix this situation. Everyone in this country feels entitled to something. If anything is cut, there will be hell to pay – no matter how much debt we are in. The only solution to pay the debt off is to completely overhaul the Government – subsequently cutting spending from every level. If that measure is not taken, hyperinflation will come.
But in reality, we will all go about our worthless existences consuming more of what they are selling – not thinking about the elephant in the room – debt. No matter how much we spend, an economic meltdown, the kind we have never imagined, is on its way. Everything you know and cherish will dissipate in the rise of a hyper-inflated currency. On a positive note, everyone will be millionaires when hyperinflation comes knocking on the door.