If a lot of center-left Democrats I know understood this point clearly, they might seriously reconsider what it is that their party claims to be fighting for in the first place.
Bleeding hearts will never admit there is something wrong with the existing liberal view on gov spending. Realizing the truth means having to live with it.
I'm going to get slammed for this, that's OK. Someone has to point out the obvious.
"but the policies they put forth instead scream that they want the billionaires and the mega-rich to get significantly wealthier, while the bottom 50% of the nation’s quality of life continues to be brutalized."
That's EXACTLY what Trump's 2017 tax cut did. Yes, some of the taxpayers in the under 90% brackets got lower taxes, myself included, but the majority went to billionaires and corporations, thus exploding the deficit, and increasing the national debt. Trump promised to cut spending, he did the complete opposite. And he goosed the stock market which benefits the top 35% at the expense of everyone else. 65% of consumers live paycheck to paycheck, so no IRA for them, they need the money NOW. Trump 2.0 is going to be a repeat of Trump 1.0. He will cut spending here, which mostly benefits those 65%, and raise spending elsewhere, which benefits the other 35%.
I find it ironic that the world's richest man in trying to cut spending, affecting mostly those at the bottom. What does Musk know about economic insecurity? Or Trump. How many broke people fly around the country in their own jet?
Tax policy is what leveled the playing field from the 30's to the 60's, then the right decided that the rich were paying too much in taxes so they cut their taxes. Notice on QTR's inequality chart that inequality almost went parabolic under Trump. (There is a lag in policies, about 18 months. So the massive COVID relief under Trump gave us near record inflation during Biden's early presidency, as well as increasing the inequality.)
The right will argue that lower incomes went up. They did, until Trump's inflation wiped out the gains.
I do not see any voluntary cut is spending under either administration, both are run by senior citizens whose philosophies are that we must get everything for ourselves, damn the rest of the country. Baby Boomers, to be exact. Eventually the market will step in and force change, it won't be pretty.
"On this trajectory, at some point, quality of life for the bottom 50% of the nation is going to get so poor that someone will make this same point on a platform that garners significant attention, and it’s going to click with more everyday people."
Edit: Vanlords are now a thing. That tells you all you need to know about the state of America's economy. Next will be tentlords.
AsmondGoldTV who is a top streamer and reaction channel on YouTube has covered this more than once. He has over a million subscribers on YouTube.
Great article. I just had an interesting thought. Where do children count on the net wealth chart near the end of the piece? Here's why I ask: say you counted as the bottom half in net worth, but you live in a top 10% household. Theoretically you could say that 20% (assuming the parents replaced themselves) of the population has access to the 10% lifestyle. Now take it a step further, say the top 10% are 90%+ boomers or elderly, this means that up to 3 generations have access to the upper 10% lifestyle (eventually). Do you see where I'm going with this? I know the inequality is bad, but maybe the total percent of people who have access to these upper level net worths in an emergency situation is actually significantly higher than just 10%, maybe as high as 25-30%. If this is true, then maybe wealth is more "democratized" then we're led to believe, and it offers a strong reason as to why some people without wealth don't want to tax the rich, because there's someone in the family that is rich.
So it's another false premise of the Democrats platform.
The incredibly stupid Democrats are directed quietly by incredibly clever Communists in the shadows, working for China and working to destroy the US at every possible level... in society, schools, government, climate nonsense, destroying people with drugs, gender confusion, everything. The economic war was attempted before in the 60's with the Cloward-Piven strategy; Communists spoke openly about bankrupting the US with massive welfare commitments. The Dems are China's Useful Idiots, it would be funny if it wasn't so serious. The tragedy is that the Republicans haven't been shouting about it for years; they must tell people what's going on.
I've seen something similar to that chart of the wealth spread before, and it looks like a formula for revolution.
This country needs a few more political parties. It's in our history, but whatever/whoever runs this country will not allow it, and they brag about it.
The citizens of Duckville run to China Mart and blow out their cc on new LED sneakers.
"...a rise in debt isn’t an indication that we’re living beyond our means, because as [Antonio] Fatas puts it, one person’s debt is another person’s asset; or as I equivalently put it, debt is money we owe to ourselves — an obviously true statement that, I have discovered, has the power to induce blinding rage in many people." - Nobel Prize winning "economist" Paul Krugman.
America has already reached the tipping point, $35 Trillion, and growing, in debt. This will never be repaid, and once the bottom 50% of Americans finally understand what is being done to them thru inflation, my guess is the government will have no choice but to somehow default on the debt.
There are a few ways they can do this, but in any case, those holding US Treasury Bonds, both foreign and domestic, will suffer the largest losses.
Trump won the election partly on his promise to curb inflation, but Trump has already asked the Fed to lower their interest rates, knowing that if that happens, corporate bond yields will decrease, which in turn will force Treasury Bond yields lower. But, that will push inflation up once again, and that will affect those in the lower 50% bracket, more than the rest of the country. Plus, more and more people will find that they too are now finding it impossible to keep up, as inflation continues to grow, affecting a larger segment of the population every year.
The US Constitution requires that all debt be paid before money is spent on anything else. I am sure that congress will one day convene to change that. After that, whatever happens next is not known, but it's not going to make hardly anyone happy.
I think it's worth noting that during America's first 150 years of existence, there were no entitlements paid out by the federal government. It may happen again.
I’m doubly impressed. Had no idea until today that two of my go-tos follow each others substacks. Quoth the Raven and Jeff Childers ALWAYS bring the facts and rational outlook.
If you enjoy Jeff’s takes, and want to learn about market forces, do yourself a favor and add QTR to your substack follows!!
"Everybody understands the simple idea that if we run up too much debt, the country could, in essence, go bankrupt."
1. Even the Mises Freaks don't understand this. Especially them! They've predicted at least 20 of the last zero government bankruptcies!
2. Nobody understands the phenomenon of money, except at instinctive level some populist politicians do. I think I do but I may be fooling myself. You have to look at world history in non-monetary tribal societies and ask "how did they cooperate with each other".
3. Debt/money is not a simple idea.
4. Yes there is a limit & we could go bankrupt as a nation. But 1) what would that even mean in pracice and in reality (not an easy question) and 2) the same limit analysis applies to private sector indebtedness -- running up too much private debt could cause the same bankruptcy (per 2008 Mortgage crisis). There's nothing special about govt debt except 1 thing (OK, 2 things):
special thing 1: Private sector debt is fragmented across many entitites. Govt is "one entity".
special thing 2: bankruptcy is a normal way to address private debt problems. combined with atomized private debt individual bankruptcies don't shake the system too bad.
5. Maybe Scott Bessent will get clever and seek to atomize govt debt so pockets of it can get restructured without whole thing "going bankrupt" in a global Treasury market cataclysm. The odds of that -- US bankruptcy Treasury cataclysm -- happening under current administration is zero. Probably odds are zero for at least a decade out if not more. If anything, they'll restructure in some clever way that makes problems all disappear. Mr. Bessent must be a clever guy, working there with Mr. Soros. Those guys certainly do understand this stuff, but they play the game for profit.
maybe you are NOT SO CRAZY AFTER ALL. We birthed our very first 1 trillion dollar debt- baby in 1981. It is now 44 years later and we have 37 trillion debt-babies screaming to be fed, give or take a couple of trillion. So why hasn't America declared bankruptcy by now? That is the 37 trillion dollar question. Sadly if we are truly honest, I bet most people believe the US treasury has a second set of "OFF THE RECORD" books with maybe 100 trillion more debt that has been loaned to the rest of the world's central banks.
So why is the rest of the world still drinking the bankrupt dollar kool-aid? Surely 37 trillion is enough to cause the world to vomit all the useless dollars into the nearest commode.
37 trillion or 370 trillion, the number is really irrelevant. As long as the individual countries in this world believe that the almighty dollar is the safest, strongest, and smoothest means to transact trade, then the dollar will remain supreme. Now don't tell me about the brics countries. Do you want to hold in your bank account, the Turkish Lira, or the Russian Ruble or the Chinese Yuan? I didn't think so, and the rest of the world doesn't think so either.
Here is a dirty little secret bout purchasing goods between countries. All countries have billions of dollars held by their central bank. If Indonesia wants to buy 1 billion dollars worth of kite string from Austria, they have to give 1 billion American Dollars to Austria in exchange. Now Austria needs to buy 500 million dollars worth of cotton from India to make more kite string. Well, Austria needs to have 500 million dollars to complete their transaction.
Its all now a worldwide Catch-22. Every time the dollar goes down in value, these same countries need even more and more and more dollars. They are addicted to the dollar and they can not get off this cocaine-dollar train. The Federal Reserve Bank loves it when the dollar loses value as they can just magically create more dollars for the dollar addicted countries on this planet
This is the essence of the Trump takeover of the (R) party. As I've said before, Trump's coalition is the third party many have wanted. They're basically disaffected Democrats (often formerly union workers) who realized the hard way - through decades of getting the short stick - what you laid out in this article. There's nothing traditionally "Republican" about any of his - or their - views. It's why none of the "both sides do it" or typical red vs. blue analyses any longer make any sense. And it's why the 8 years of propaganda didn't work.
They generally don't know the mechanics of it, which the USAID shutdown laid bare: the elites (Fed, Treasury, Congress) pour taxpayer money in, that money feeds the vast "NGO" and consultant system to "address the underlying issues," and then the elites get richer on the taxpayer dollar, taking for themselves 95% of the money earmarked for "underlying issues." A nice benefit of incorporating in DE is that only 5% needs to go to the cause. (Interesting side note: these "left" elites actually believe in trickle-down economics - they just don't know it.)
It's why the only major block left supporting Dems are highly educated - usually private school - white collared, salaried "knowledge workers." They are the very people who get rich off this scheme. Either working directly for these entities or making money off support agencies: legal, marketing, PR, "content creators" (those would be our comment section trolls), paid activists on the streets - "community organizers" - and so on. Multiply that across a number of government agencies and you have the reason for the government making up so much of GDP and the reason the left elite are so mad about these cuts. It's an entire ecosystem of basically legalized theft that's being pulled out from under them.
I voted straight Republican ticket from 1972 to 2000. It wasn't until Bush's tax cut that I realized that trickle down was actually trickle up, and was designed to be trickle up since Reagan. Trump just accelerated that.
Both parties have fiscal policies that aren't ideal. But only one party has made balancing the budget - regardless of whether or not it comes with tax cuts - a priority. They are the party doing less harm.
I’m just here for the Paul Krugman pics
Bleeding hearts will never admit there is something wrong with the existing liberal view on gov spending. Realizing the truth means having to live with it.
I'm going to get slammed for this, that's OK. Someone has to point out the obvious.
"but the policies they put forth instead scream that they want the billionaires and the mega-rich to get significantly wealthier, while the bottom 50% of the nation’s quality of life continues to be brutalized."
That's EXACTLY what Trump's 2017 tax cut did. Yes, some of the taxpayers in the under 90% brackets got lower taxes, myself included, but the majority went to billionaires and corporations, thus exploding the deficit, and increasing the national debt. Trump promised to cut spending, he did the complete opposite. And he goosed the stock market which benefits the top 35% at the expense of everyone else. 65% of consumers live paycheck to paycheck, so no IRA for them, they need the money NOW. Trump 2.0 is going to be a repeat of Trump 1.0. He will cut spending here, which mostly benefits those 65%, and raise spending elsewhere, which benefits the other 35%.
I find it ironic that the world's richest man in trying to cut spending, affecting mostly those at the bottom. What does Musk know about economic insecurity? Or Trump. How many broke people fly around the country in their own jet?
Tax policy is what leveled the playing field from the 30's to the 60's, then the right decided that the rich were paying too much in taxes so they cut their taxes. Notice on QTR's inequality chart that inequality almost went parabolic under Trump. (There is a lag in policies, about 18 months. So the massive COVID relief under Trump gave us near record inflation during Biden's early presidency, as well as increasing the inequality.)
The right will argue that lower incomes went up. They did, until Trump's inflation wiped out the gains.
I do not see any voluntary cut is spending under either administration, both are run by senior citizens whose philosophies are that we must get everything for ourselves, damn the rest of the country. Baby Boomers, to be exact. Eventually the market will step in and force change, it won't be pretty.
Yeah, and while DOGE is cutting things for publicity Trump continues to increase the debt rather than say no more spending and pay down the debt.
It's a uniparty. The people and corporations closest to the party in power win. The average person always loses.
It's already happening.
"On this trajectory, at some point, quality of life for the bottom 50% of the nation is going to get so poor that someone will make this same point on a platform that garners significant attention, and it’s going to click with more everyday people."
Edit: Vanlords are now a thing. That tells you all you need to know about the state of America's economy. Next will be tentlords.
AsmondGoldTV who is a top streamer and reaction channel on YouTube has covered this more than once. He has over a million subscribers on YouTube.
U.S. Wealth Inequality - AsmondGoldTV
https://youtu.be/4dYpJBGe_XM?si=lNHWJuBzyxOgJIHC
Love the article, love the Game Genie reference 😆👍
Great article. I just had an interesting thought. Where do children count on the net wealth chart near the end of the piece? Here's why I ask: say you counted as the bottom half in net worth, but you live in a top 10% household. Theoretically you could say that 20% (assuming the parents replaced themselves) of the population has access to the 10% lifestyle. Now take it a step further, say the top 10% are 90%+ boomers or elderly, this means that up to 3 generations have access to the upper 10% lifestyle (eventually). Do you see where I'm going with this? I know the inequality is bad, but maybe the total percent of people who have access to these upper level net worths in an emergency situation is actually significantly higher than just 10%, maybe as high as 25-30%. If this is true, then maybe wealth is more "democratized" then we're led to believe, and it offers a strong reason as to why some people without wealth don't want to tax the rich, because there's someone in the family that is rich.
So it's another false premise of the Democrats platform.
The incredibly stupid Democrats are directed quietly by incredibly clever Communists in the shadows, working for China and working to destroy the US at every possible level... in society, schools, government, climate nonsense, destroying people with drugs, gender confusion, everything. The economic war was attempted before in the 60's with the Cloward-Piven strategy; Communists spoke openly about bankrupting the US with massive welfare commitments. The Dems are China's Useful Idiots, it would be funny if it wasn't so serious. The tragedy is that the Republicans haven't been shouting about it for years; they must tell people what's going on.
We know you get it. Now, how are you going to get the rest of the country to get it? Maybe start with Rogan. Good luck.
I've seen something similar to that chart of the wealth spread before, and it looks like a formula for revolution.
This country needs a few more political parties. It's in our history, but whatever/whoever runs this country will not allow it, and they brag about it.
The citizens of Duckville run to China Mart and blow out their cc on new LED sneakers.
"...a rise in debt isn’t an indication that we’re living beyond our means, because as [Antonio] Fatas puts it, one person’s debt is another person’s asset; or as I equivalently put it, debt is money we owe to ourselves — an obviously true statement that, I have discovered, has the power to induce blinding rage in many people." - Nobel Prize winning "economist" Paul Krugman.
I didn't know there was a Nobel Prize for comedy.
America has already reached the tipping point, $35 Trillion, and growing, in debt. This will never be repaid, and once the bottom 50% of Americans finally understand what is being done to them thru inflation, my guess is the government will have no choice but to somehow default on the debt.
There are a few ways they can do this, but in any case, those holding US Treasury Bonds, both foreign and domestic, will suffer the largest losses.
Trump won the election partly on his promise to curb inflation, but Trump has already asked the Fed to lower their interest rates, knowing that if that happens, corporate bond yields will decrease, which in turn will force Treasury Bond yields lower. But, that will push inflation up once again, and that will affect those in the lower 50% bracket, more than the rest of the country. Plus, more and more people will find that they too are now finding it impossible to keep up, as inflation continues to grow, affecting a larger segment of the population every year.
The US Constitution requires that all debt be paid before money is spent on anything else. I am sure that congress will one day convene to change that. After that, whatever happens next is not known, but it's not going to make hardly anyone happy.
I think it's worth noting that during America's first 150 years of existence, there were no entitlements paid out by the federal government. It may happen again.
I’m doubly impressed. Had no idea until today that two of my go-tos follow each others substacks. Quoth the Raven and Jeff Childers ALWAYS bring the facts and rational outlook.
If you enjoy Jeff’s takes, and want to learn about market forces, do yourself a favor and add QTR to your substack follows!!
"Everybody understands the simple idea that if we run up too much debt, the country could, in essence, go bankrupt."
1. Even the Mises Freaks don't understand this. Especially them! They've predicted at least 20 of the last zero government bankruptcies!
2. Nobody understands the phenomenon of money, except at instinctive level some populist politicians do. I think I do but I may be fooling myself. You have to look at world history in non-monetary tribal societies and ask "how did they cooperate with each other".
3. Debt/money is not a simple idea.
4. Yes there is a limit & we could go bankrupt as a nation. But 1) what would that even mean in pracice and in reality (not an easy question) and 2) the same limit analysis applies to private sector indebtedness -- running up too much private debt could cause the same bankruptcy (per 2008 Mortgage crisis). There's nothing special about govt debt except 1 thing (OK, 2 things):
special thing 1: Private sector debt is fragmented across many entitites. Govt is "one entity".
special thing 2: bankruptcy is a normal way to address private debt problems. combined with atomized private debt individual bankruptcies don't shake the system too bad.
5. Maybe Scott Bessent will get clever and seek to atomize govt debt so pockets of it can get restructured without whole thing "going bankrupt" in a global Treasury market cataclysm. The odds of that -- US bankruptcy Treasury cataclysm -- happening under current administration is zero. Probably odds are zero for at least a decade out if not more. If anything, they'll restructure in some clever way that makes problems all disappear. Mr. Bessent must be a clever guy, working there with Mr. Soros. Those guys certainly do understand this stuff, but they play the game for profit.
Crazyman,
maybe you are NOT SO CRAZY AFTER ALL. We birthed our very first 1 trillion dollar debt- baby in 1981. It is now 44 years later and we have 37 trillion debt-babies screaming to be fed, give or take a couple of trillion. So why hasn't America declared bankruptcy by now? That is the 37 trillion dollar question. Sadly if we are truly honest, I bet most people believe the US treasury has a second set of "OFF THE RECORD" books with maybe 100 trillion more debt that has been loaned to the rest of the world's central banks.
So why is the rest of the world still drinking the bankrupt dollar kool-aid? Surely 37 trillion is enough to cause the world to vomit all the useless dollars into the nearest commode.
37 trillion or 370 trillion, the number is really irrelevant. As long as the individual countries in this world believe that the almighty dollar is the safest, strongest, and smoothest means to transact trade, then the dollar will remain supreme. Now don't tell me about the brics countries. Do you want to hold in your bank account, the Turkish Lira, or the Russian Ruble or the Chinese Yuan? I didn't think so, and the rest of the world doesn't think so either.
Here is a dirty little secret bout purchasing goods between countries. All countries have billions of dollars held by their central bank. If Indonesia wants to buy 1 billion dollars worth of kite string from Austria, they have to give 1 billion American Dollars to Austria in exchange. Now Austria needs to buy 500 million dollars worth of cotton from India to make more kite string. Well, Austria needs to have 500 million dollars to complete their transaction.
Its all now a worldwide Catch-22. Every time the dollar goes down in value, these same countries need even more and more and more dollars. They are addicted to the dollar and they can not get off this cocaine-dollar train. The Federal Reserve Bank loves it when the dollar loses value as they can just magically create more dollars for the dollar addicted countries on this planet
"Are there any other issues that you can think of off the top of your head that both parties agree on and never argue about?"
Ukraine. It took me 0.234 seconds to think of that.
Israel. It took me 0.382 seconds to think of that.
Defense! It took me 0.298 seconds to think of that.
Misinformation! It took me 0.319 seconds to think of that.
Aka censorship, just over different things.
I'll stop here. But I could go on.
This is the essence of the Trump takeover of the (R) party. As I've said before, Trump's coalition is the third party many have wanted. They're basically disaffected Democrats (often formerly union workers) who realized the hard way - through decades of getting the short stick - what you laid out in this article. There's nothing traditionally "Republican" about any of his - or their - views. It's why none of the "both sides do it" or typical red vs. blue analyses any longer make any sense. And it's why the 8 years of propaganda didn't work.
They generally don't know the mechanics of it, which the USAID shutdown laid bare: the elites (Fed, Treasury, Congress) pour taxpayer money in, that money feeds the vast "NGO" and consultant system to "address the underlying issues," and then the elites get richer on the taxpayer dollar, taking for themselves 95% of the money earmarked for "underlying issues." A nice benefit of incorporating in DE is that only 5% needs to go to the cause. (Interesting side note: these "left" elites actually believe in trickle-down economics - they just don't know it.)
It's why the only major block left supporting Dems are highly educated - usually private school - white collared, salaried "knowledge workers." They are the very people who get rich off this scheme. Either working directly for these entities or making money off support agencies: legal, marketing, PR, "content creators" (those would be our comment section trolls), paid activists on the streets - "community organizers" - and so on. Multiply that across a number of government agencies and you have the reason for the government making up so much of GDP and the reason the left elite are so mad about these cuts. It's an entire ecosystem of basically legalized theft that's being pulled out from under them.
I voted straight Republican ticket from 1972 to 2000. It wasn't until Bush's tax cut that I realized that trickle down was actually trickle up, and was designed to be trickle up since Reagan. Trump just accelerated that.
Both parties have fiscal policies that aren't ideal. But only one party has made balancing the budget - regardless of whether or not it comes with tax cuts - a priority. They are the party doing less harm.
WHEN was the last time a Republican balanced the budget? I can think of a Democrat that did that...
Eisenhower was the last republican
Clinton was the last democrat