From Butter to Guns
The ponzi math of the welfare state system no longer works. Too many old people. Not enough young people to pay for them. What to do?
Monday, September 8th, 2025
Bill Bonner, from Paris, France
“You're going to see employment leaping.”
That’s what Commerce Secretary, Howard Lutnick, said in April, attributing the good news to the trade war.
But instead of leaping, employment is falling down dead. Last month’s new job count, at 22,000, was statistically insignificant. Most of the numbers that are reported are later revised lower. This one is likely to go to zero.
The whole purpose – at least, as stated publicly – of the trade war was to bring good-paying manufacturing jobs back to the US. But with last week’s report, the number of ‘goods producing’ jobs has fallen by nearly 50,000 since January. Since 2007, more than 400,000 manufacturing jobs have been lost.
Poor Donald Trump. He is one year older than we are. But while we simply observe, safely and comfortably, from our home office, he is out and about...with the cares of the whole world resting precariously on his shoulders. His hands turn purple. His ankles swell. And nothing seems to be working out as advertised. Formerly friendly nations are ‘conspiring’ against him. His gunship diplomacy seems likely to trigger more conflict. The trade war is backfiring. The whole program — an awkward mixture of guns and butter — is proving to be either ineffective or illegal…or both. And hopes for the Nobel Peace Prize seem to be fading.
Still, here at BPR, we always look on the bright side. And there, warmed by the sun, everything is still going according to plan. Not Donald Trump’s plan. Not Hillary Clinton or Gavin Newsome’s plan. And certainly not our plan.
It is going according to History’s great plan. He that doth ride so high must be brought down low. And the USA in 1999 was a source of inspiration and awe all over the planet. She was on top of the world, admired and imitated...with the strongest economy on earth. From an historical perspective, she needed leaders who could help her down the mountain.
So along came George W. Bush, with his ‘war on terror.’ Then came Barack Obama, who added $8 trillion to the national debt. Joe Biden helped too — with his Inflation Reduction Act...which helped boost the rate of inflation to a 40-year high...and increased the debt to over $35 trillion. Biden should also be credited with promoting ‘woke’ and DEI fantasies and thus clearing the path for the man who was suited to do History’s heavy lifting: Donald J. Trump. To fulfill his historic mission, he had to step on the gas, speeding up the pace of wrecking the nation’s finances...and wasting its military.
When Trump leaves office in 2029 US debt should be nearing $45 trillion (if nothing goes wrong!) As for his work on the Pentagon, a little context is called for. German Chancellor Merz:
“The welfare state that we have created can no longer be financed with what we produce in the economy.”
He is right. The ponzi math of the welfare state system no longer works. Too many old people. Not enough young people to pay for them. What to do? How to keep ‘The People’ in line and on your side when you can no longer fulfill your promises? Switch from butter to guns! TIME:
Merz...pledged that Germany’s military would be the “strongest conventional army in Europe,” …. Merz will push to increase troop levels from the current 182,000 active-duty soldiers to as many as 240,000 by 2031 (most likely by reintroducing the draft). Germany will also replace aging aircraft, tanks, and ships. The rest will go toward defense-related infrastructure.
Germany’s last re-armament began ninety years ago. Maybe it will work out better this time, who knows?
America faces much the same math. Last year, US births outnumbered deaths by about 500,000. But more than half US counties have more elderly people than children. And many of the births happen among immigrants. Money Talks:
Hispanic and Asian Growth Offsets America's Declining Birth Rates
If the goal were to accelerate the insolvency of the Social Security system, what would the feds have to do? Get rid of the immigrants, of course.
An estimated 1.6 million ‘illegals’ left the US in the first six months of this year. This puts the net population change at MINUS a million people so far in 2025. We haven’t seen any reports on the subject, but it must mean that Social Security will go broke sooner than expected.
So, where does that leave the welfare state? Does it turn into a warfare state?
Is that the ‘historical’ reason the Trump Team proposes to change the ‘defense department’ into the ‘war department?’ Is that the real motivation behind naming drug dealers as ‘terrorists’...to distract the Pentagon with a no-account, ersatz enemy? And was that the real reason the US military gunned down people on a boat in the Caribbean last week?
More to come...
Regards,
Bill Bonner
If those illegal "immigrants" were paying income taxes, your point would be well made, Bill.
Instead, they pay taxes only on their small purchases (sales taxes) as a Social Security number is required in order to file and pay Income taxes.
However, that lack of a SS# didn't seem to work to keep them off the roles of our entitlement system. A system that has been rigged to support the costs for their housing, food, medical care and education. What a deal for them and for their own nations governments as well.
What we actually need is immigration reform. Legalizing a contingent or even a more permanent worker force. A fully legal and meritocratic system that allows for controlling our own borders (remember those pesky terrorists?) rather than importing even more problems,
We do need those that will work with the rest of us to actually "pull the wagon" rather than simply "riding in the wagon" feigning helplessness in order to ride alongside of our own aged and sick, those deserving and in need of our care.
When the Titanic was sinking, any man dressing as a woman in order to take the place in a Lifeboat of an actual woman or child was simply tossed into the Sea. When viewed in this manner, deportation is an act of kindness. Kindness to the illegals and kindness to our own aged and infirm - those to whom we actually owe a full measure of care.
“Still, here at BPR, we always look on the bright side.”
I guess mountains are for climbing, very inhospitable at the top. Maybe, a bad metaphor.
Some guy linked three circumstances, a prediction: They would try to assassinate Trump, he would be elected, he would be on his knees, in the Oval Office, praying for enlightenment when the economy collapses.
Kennedy says that when his uncle was president only 2% of Americans had chronic disease. Now, 69%? 70% of youth can’t qualify for military service.
They, Democrats, in real time, and Republicans under their breath excoriate him because they are paid by the pharmaceutical industry.
America has no hope, not because of Trump, but because the nation is a whore.
I like Trump, he does stuff, he does good stuff and unenlightened stuff. It is sort of like Pragmatism, try until it works.
Trump, at his age, jumps inside the fire.
You got to admire the personal grit, the ability to chance it all, the courage, determination.
He got rid of WOKE, DEI and illegals.
Even if the new illegals worked, the 12 to 14 million allowed in under Biden, their share of a boost in SS revenues would be limited. In a welfare state they would always have a negative economic impact; college graduates with 1.6 trillion in debt can’t get good paying jobs. 20% earns 80% of the income so I will guess that 80% of the income earned pays 20% into SS, the working poor pays 80%.
Why is it rich people hate SS?
When I see how they go after Kennedy, how corrupt everything is, I know there is no hope in the short term.
The world is crazy, and people are crazy.
The Big Crash is inevitable, maybe the big boom.
Makes you despair of politics. There must be a bigger reason for living.
No one has imagination; they can’t contemplate the suffering of Russians under Stalin and the barbarism of the Nazis. They don’t even remember the Dust Bowl (a man devised catastrophe) or The Great Depression.
It is always the poor, downtrodden that suffer for the haughty rich, those disillusioned rich.
Life goes on and after it is gone, we call it history.
We must live through it and reap what we have sown.