Clowns and Jokers

Plus, what would Bill do differently?

(Source: Getty Images)

Bill Bonner, reckoning today from Youghal, Ireland...

Clowns to the left of me
Jokers to the right

~ Jerry Rafferty, Joe Egan

More hilarity for the Christmas season!

We all know that the US owes $31 trillion. We all know too that it can’t pay it.  Imagine what it would take. Instead of running a $2 trillion deficit, the pols and hacks in Congress would have to cut $3 trillion from the budget to get a $1 trillion surplus – and do it for the next 31 years!

Not going to happen.

Instead, the plan is to spend, spend, spend…until daddy takes the credit card away.

What will actually happens is this: 

The feds will continue to spend, irresponsibly…wantonly…and stupidly.  Bloomberg has the latest:

US Senate Passes Giant $1.7 Trillion Spending Bill With Ukraine Aid, Election Change

The Senate easily passed a more than $1.7 trillion government funding bill that includes more aid for Ukraine and changes to the way presidential elections are counted. 

Passage of the bill funneling $47 billion toward the effort to help Ukraine’s defense against Russia came a day after Ukrainian President Volodymyr Zelenskiy addressed the US Congress in his first trip outside his war-torn homeland since the invasion began. 

Out the Wazoo!

This spending will shift more and more of the nation’s resources towards unproductive, or anti-productive, uses – such as buying weapons for the Ukrainians…. or simply giving them money to put in their Swiss bank accounts. The effect will be to reduce the real wealth of the USA…while also increasing the amount of dollars flushing through the system.

The dollars will multiply when the Fed finally abandons its inflation fighting and ‘pivots’ back towards more money printing. It will do that when the coming recession softens inflation numbers while it sharpens the pain felt by ordinary families...as well as by the elite.  

Already, the middle class has seen its real wages fall for 20 months in a row. And soon, its houses – where it stores its wealth – will fall in value.  

As for the rich, they’ve lost about 20% on their investments so far. By our estimate, they’ve got another 20% to go to get down to reasonable prices…and then 20% more on top of that as investors inevitably give up and prices ‘over-shoot.’

Then, amid the gnashing of teeth and wailing of widows the feds can go back to what they do best – destroying the economy with fake money and foolish spending.

The Fed will also be happily destroying the value of US bonds…which just happen to be the instruments in which US debt is calibrated. Yes, the common people, with their common sense, know that you can’t spend more than you earn forever. But the elite know how to make a buck off of it. Thus, will the debt be reduced…and eventually eliminated, as Americans also see their savings and living standards greatly reduced. But the stock market will be reflated…and the deciders will find ways to profit.

But stepping back to the present, we note that the pain and suffering of America’s future bankruptcy could be averted…or at least partly assuaged. The trick would be to get control of US finances now and not spend so damned much money.

We, The Mute

On that note, the House of Representatives has just swung over to the Republicans, who are supposed to be the people who care about such things. The House of Representatives is also supposed to have the ‘power of the purse;’ it is supposed to represent ‘The People’ and make sure their money isn’t wasted.

You’d think the current Republicans would insist on waiting, rather than going along with another huge spendapalooza. After all, The People have spoken; shouldn’t Congress listen to them before spending more money?

Dream on!

Instead, with the support of the Republicans, Congress has come up with the aforementioned $1.7 trillion spending extravaganza, Politico:

The year-end spending package that Congress is rushing to pass this week does more than fund the government through September. It’s also chock full of policy provisions that affect everything from the lobster industry to TikTok to professional sports.

The $1.7 trillion government funding measure is the last major must-pass bill on the legislative docket before the start of the 118th Congress in January, when divided government and a looming 2024 presidential election will make legislating even harder than it currently is. That makes the spending bill a magnet for members trying to cram in their priorities just before the holidays.     

Christmas Wishlist

On 4,155 slimy pages you will find their ‘priorities’; Representative Dan Bishop highlighted a few of them:

• $410 million to protect the borders – of Egypt, Tunisia, Jordan, Oman and Lebanon. Protect them from what? We don’t know.

• $65 million to “restore Pacific salmon populations.’ Heck, why not?

• $3.6 million to make a hiking trail named after Michelle Obama. Who could be against that?

• $200 million to promote ‘gender equity and equality’ with some of the funds ‘made available for programs to promote democracy and for gender equality in Pakistan.  

• $3 million for an LGBTQ museum in New York…another essential project for a bankrupt government.

Yes, the bill was all “christmas treed up.” Good, bad…Santa didn’t care.

Here are some other gems from the Heritage Foundation:

• $477,000 for the Equity Institute in Rhode Island to indoctrinate teachers with “antiracism virtual labs.” 

• $1 million for Zora’s House in Ohio, a “coworking and community space” for “women and gender-expansive people of color.” 

• $750,000 for “LGBT and Gender Non-Conforming housing” in Albany, N.Y. 

• $2 million for the “Great Blacks in Wax” museum in Baltimore. 

• $750,000 for the “TransLatin@ Coalition” to provide “workforce development programs and supportive services for Transgender and Gender nonconforming and Intersex (TGI) immigrant women in Los Angeles.” 

The bill affects all manner of commerce and social life in the USA. But not a single member of Congress will read it.  

Were we a member of Congress, we wouldn’t bother to read it either. What’s the point? It’s all giveaways, disguised as claptrap.

But since we are enjoying a Fezziwigian glow of holiday cheer…and since this will be our last contact with you until after Christmas…rather than criticize, we will offer some constructive suggestions.

How could the budget be cut and disaster avoided? (You may want to send this to your member of Congress to give him an opportunity to thank you, before tossing our recommendations into the wastebasket.)

Modest Suggestions

Were we, by some act of madness or imprudence, suddenly in charge of the US government, we would proceed quickly to eliminate our major problems, foreign and domestic. In less than 24 hours, inflation would disappear…the budget would be balanced, the Russians and Chinese would no longer be our mortal enemies…and Americans could go about their lives without the heavy hands of the feds holding them back.

As for the ‘foreign policy’ issues – Russia, Ukraine, China…and other bugaboos – what business of ours is it whether Russia’s frontier with the Ukraine runs along the Dnipro or the Sea of Azov? Ditto Taiwan. Not our problem. The US has spent billions of dollars promoting ‘democracy,’ or…sometimes…‘dictatorship’, depending on which way the wind is blowing. And what good has it done us? A lot of smart people have made their careers, their reputations and their fortunes meddling overseas, but ‘The People’ have gotten nothing from it…other than lost money, PTSDs and lost lives.  

We would simply announce that we have no further interest in the matter, cut off all foreign aid, and bring back all US troops now dawdling in far-flung, godforsaken outposts. 

We might, just for theatrical flourish and clarification, also send out a little note to foreign governments letting them know that we have renounced the whole ‘empire’ misadventure. No more sanctions. No more assassinations or coups. No more undeclared war. Our spooks would be recalled…tried for their crimes…fired or hung, as their cases warrant.  

Most of our long-range airplanes and warships, having no further use, would be scrapped. The Pentagon budget would be reduced from $855 billion to an amount actually needed to defend the country from attack…perhaps $100 billion, maybe less.

Turning to the homefront, the Fed would be immediately disbanded. Henceforth, if banks get into trouble – too bad for them. And buyers and sellers would figure out interest rates for themselves. Rates may be higher; they may be lower. But they would finally be honest.

We would also return to a gold standard, fixing the price of the dollar at 1/1800th of an ounce. This would not be a perfect money system, nothing is. But it is the best we can think of. There would be no further fear of inflation…and no further instability caused by fake money or fake interest rates.

So too, approximately 1,950 government agencies would be terminated. They come…but they don’t go. This is our chance to ‘drain the swamp,’ and get rid of them. Only those performing vital functions would remain, if there are any. All “welfare” would cease. All grants for this or that…giveaways…subsidies…payoffs

….bribes… would end. Social security and medical care would have to continue; we get a generous check each month. But they would be cut back, curtailed…and gradually eliminated.

In short, we would go back to the form of government foreseen and prescribed by the founding fathers – a small government with limited power and limited resources.  

The savings, from cuts in military and domestic spending, would give the feds a surplus of at least $2 trillion + annually…which could be applied to paying off the national debt.

Problem solved.

Of course, we don’t want to make light of the difficulty of going from here to there. The adjustments would be brutal for some – those accustomed to living off the hard work of others. For others, it would be seamless. And for all, it would be quick. All of a sudden, millions of people would have to get up off their fat duffs and get to work. The US economy would flower and bloom…driven by people who needed to provide goods or services to others. Almost everyone would be happier, as new inventions, new services, rediscovered freedom and cheaper products graced their lives.

What are the odds that this could happen?

Zero.

But as Hemingway put it, ‘wouldn’t it be pretty to think so.’

Merry Christmas. Happy Hanukkah. Enjoy the ‘Dark Passage.’ Or whatever.

Regards,

Bill Bonner