We’re talking about reality and fantasy this week.
For those just tuning in, the adoption of a purely fiat monetary system – where governments and central banks print money at will – created a fantasy world.
Trillions of newly created dollars have poured into the economy over the last few decades. Those new dollars stole purchasing power from the dollars already in circulation and pushed interest rates to zero—making credit widely available, even for destructive projects.
In that world, governments behaved as though they had infinite amounts of money to spend… because they seemingly did. The US government ran up a debt bill of over $36 trillion over a period of about 50 years.
If we average this out, the US government had to spend $2 billion per day to accomplish this. That’s over $83 million every hour. How’s that even possible?
And here’s the kicker – these figures only account for the money that they spent in excess of tax revenues.
If we look at the federal budget by year, the US government has spent roughly $150 trillion since 1970. That’s $7.6 billion a day or $317 million an hour.
Now think about this – if we go back to 1980, there was less than $1.6 trillion in circulation. That’s the total amount of money that existed in the economy.
Classical economist Frédéric Bastiat wrote in 1848 that: “the State is the great fiction by which everyone tries to live at the expense of everyone else”.
What we’ve just lived through is that observation on steroids. And the DOGE (Department of Government Efficiency) audits that are starting to come out confirm this in a big way…
The USAID audit shows that we’ve been funding the British Broadcast Corporation (BBC)… “trans operas” in Columbia… DEI musicals in Ireland… gain of function research in Wuhan… color revolutions in Georgia, Serbia, Ukraine, Egypt, and Tunisia… “peaceful” protests here in the US… combatting “disinformation” in Kazakhstan… LGBT activism in Guatemala, Jamaica, the Balkans, and Uganda… as well as a whole host of other boondoggles ranging from ridiculous and infuriating to outright criminal activity.
What’s more, we’re finding out that large chunks of this money never even found its way to the designated recipients. Billions upon billions seems to routinely disappear before it gets where it’s supposed to go – lining the coffers of who knows who… to do who knows what.
Now we know why everything seemed to go downhill year after year in this country – regardless of who happened to be in political office. At some point the United States was taken over from within. A shadowy Administrative State effectively captured the US government. That enabled them to leverage our productivity and our tax dollars to create and perpetuate what I think can only be described as a dystopia.
Perhaps the word dystopia is a bit hyperbolic… but I don’t think you can describe the situation as anything else when you see chronic health issues exploding… life expectancies and standards of living falling… homelessness and poverty levels rising… and suddenly we’re having serious discussions about whether little boys can become girls.
As disturbing as it all is, everything comes back to the money. Fiat money allowed this fantasy world to come into existence.
The good news is that the fog has lifted, and the breadcrumbs point towards the remonetization of gold in some capacity.
And the trail is getting quite long at this point. More on that tomorrow…
-Joe Withrow