Bill Bonner sounds scarily like me:
We are watching the destruction of an empire. All empires must go away sometime. They are natural things. And nature puts a time bomb in everything she creates.
The U.S. empire is doomed. Just like all the others that went before it. It is doomed by nature herself — condemned by the gods to blow up and die.
None of this should be surprising. We’ve seen this movie before. Hundreds of empires have come and gone. We know how this movie ends. More or less.
What we know for sure is that the U.S. is going broke. There is hardly any other plausible outcome. We’ve gone over the numbers so often we don’t need to repeat them.
Yes, it is true that the feds could still save themselves if they had the will. They could cut taxes to a flat 10% and spend only what they raised in tax revenue. That would do the trick from an economic point of view.
But it’s too late for that politically. Empires have lives of their own. They go forward…expanding…spending…stretching…until, boom, they go too far. Empires do not back up. Some merely go bankrupt. Others are defeated in war. All end disastrously.
Only one presidential candidate favors rescuing the nation’s finances and pulling the empire back from disaster. Ron Paul. He is considered such an unelectable kook that the newspapers barely mention him. And the papers are right. He is unelectable. Because he is opposed by the zombies.
Perhaps my last post got a little fatalistic, just as Bonner does here.
Certainly, the last thing I want is for America to fail, for any reason. As I explained, I believe America’s constitution to be perhaps the most liberty-defending in history.
But if imperial overstretch is the general problem, things could get a lot hairier.
From the New York Times:
Atomic inspectors in Vienna confirmed Monday that Iran has begun enriching uranium at a new plant carved out of a mountain, an act of defiance that comes amid rising tensions between Washington and Tehran over oil revenues and global sanctions.
More than five years ago, the United Nations Security Council began calling on Iran to stop purifying uranium, which can fuel nuclear reactors or atom bombs. Instead, Tehran accelerated its efforts, saying its nuclear program is entirely peaceful in nature.
Can America afford another war?
Yes — say the military-Keynesians. Just what we need — stimulus! That will do wonders for aggregate demand!
But I say no. Rates are artificially low due to quantitative easing, which has constricted the supply of Treasuries, and due to the Fed’s zero-interest rate policy that punishes saving and investment, and encourages leverage and credit creation. Rates could very easily rise for a number of reasons, which would mean the debt would become much more expensive to service. Even arch-Keynesian Paul Krugman foresaw the potential for such a scenario.
More importantly, the last thing America needs is to lose even more productivity, even more resources and even more manpower to another pointless debt-accruing war, particularly one which will drive the Eurasian powers into deeper anti-Americanism.
America needs her money, her people and her resources to develop her domestic economy and create energy independence. To create wealth, to innovate, to compete.
We will see who is right.