Budget Battle Looms

Preleminary US budget deficit for 2026 was $1.99 trillion. Source: Congressional Budget Office

Wednesday, October 14th, 2026

Bill Bonner, from Ardmore, Ireland

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CNBC:

French student protests heat up as budget battle looms

We are looking for the real cause of the students’ discontent. Not coincidentally, we find other dots in the same constellation...including the general discontent of their parents — and why they are turning against mainstream candidates. And the big one is there too — the much-discussed ‘decline of the West.’

What is the pattern that connects them? A high confidence hunch — it’s a web of money; we are all stuck in it.

Few people don’t pay for their own children’s education...or for their own retirement or their own medical expenses. All are socialized. Which means, like pigs at the trough, what we get depends not on our own output, but on being able to push others away from the swill. There’s only so much of it. And those who get the most are a kind of swine elite. Every mother wants her children to be right there with them.

The program works tolerably well — as long as the swill keeps coming. Alas, that is the problem du jour. For, like a box of cereal or a candy bar, public budgets are subject to shrink-flation.

Yesterday, we looked at it as a social phenomenon. Ambitious young people want to join the ranks of the deciders — the elites who decide who gets what in a socialized economy. But the economy is no longer growing fast enough to accommodate them all. And much of what the new junior varsity deciders would like to decide has already been decided for them by the senior team. .

Old people were promised pensions. Sick people were promised medical attention. The unemployed were given compensation. The unhoused were entitled to shelter. And now they jostle to get anything at all.

In a free society people don’t need such big snouts. They do the best they can with whatever they have to work with. If they can’t afford to send their children to medical school, well...it’s nobody’s fault, if not their own.

Education, though, has long been socialized. In the US, it began in 1647 in the Massachusetts Colony, with the Old Deluder Satan Act, requiring towns to create ‘public’ schools. The idea was to make sure young people could read the Bible and thus defend themselves from the Devil. And today, the Prince of Peace has been removed from the curriculum, but American children can attend school for free through the 12th grade.

In France, free education has been extended all the way through to the top. Even medical school is mostly free. But then, doctors, working for the national health service, earn only about half as much as their US brethren.

We offer no opinion on which is the better system. But as we all know, there’s no such thing as a free medical school. And the people who pay for it are people who don’t wear stethoscopes around their necks.

A further gratuitous opinion is that Satan is probably underrated. He is able to plant his delusions in the rich, heavily manured soil of the educated mind as well as, or maybe even better than, in the stony, ingrate head of unschooled voters.

After all, rare was the 21st century voter who had never known the joy of public education. But despite their enlightenment, they elected Bush, Obama, Biden and Trump, nevertheless. Could the uneducated yokel have done worse?

We don’t know. But it was college grads — including a whole phalanx of PhDs — who developed today’s funny money system. French leaders, as well as those in the US, found the fake money much more easily borrowed than the real stuff. Then, like a fat waiter on roller skates, they kept their tables richly served. And now, the interest on the public debt — that is, the carrying cost for promises made by previous deciders — is a big drag on current budgets...and a big part of the reason a ‘budget battle looms.’

The deVere Group:

France’s borrowing costs smashing through 5% is the starkest sign yet the world’s debt order has flipped, with rich nations now paying the kind of price once reserved for serial defaulters like Argentina.

French politicians — just like their US counterparts — voted for programs France really didn’t need and couldn’t really afford. They still can’t pay for them. All they can do is to pay interest on the money borrowed to implement them.

And behold how the dots multiply and come together. ‘Elite overproduction’ — too many deciders! — slowing GDP growth. Aging populations (needing more pensions, more medical attention). Falling real wages. Rising interest rates on the debt. All of which leaves the deciders with less room for maneuver than ever...and less real money to maneuver with.

This is the real crisis. It is not, as Pete Hegseth advertises, that western governments are not manly enough or no longer have the stomach for public executions. It is not, as Marco Rubio insists, that we have lost the taste for the ‘unapologetic pursuit of national power.’

The real crisis is a financial one. Puffing out our chests...and perhaps depriving our minds of oxygen...we pursued national power with great elan and recklessness. We spent our own money, our children’s money, our grandchildren’s money...and money that no one will ever earn. And now, those young adults are getting the bills. They don’t much like it.

Their parents don’t like it either. Their real earnings are falling. Their hopes of greatness are fading. And it looks like the public treasury — with all its funny money — may fail to cover their real retirement and medical costs as planned.

In effect, the fake money socialized everything. Costs that should have been paid years ago...misadventures that should have gotten the deciders publicly executed...and commitments that never should have been made at all — have all been socialized.

It is asking too much of the voting public to study or understand what has happened. Instead, they will go to the polls and demand that politicians ‘do something’ about it. And what can they do, but borrow and spend even more?

Regards,

Bill Bonner