Congratulations USA — You Elected These Clowns

A three-ringed circus - The executive branch, the legislative branch, and, not to be forgotten, the judicial branch. Enjoy America.

The Spectacle Before Our Eyes

I am enthralled with the comedy that is unfolding in Washington. Nothing I could have imagined could have better underscored my thesis about the lack of wisdom in human beings than what we see unfolding before us.

It is a game. The brinksmanship game played with the full faith of the American credit structure. I could care less. The reality of biophysical economics will ultimately determine the outcome of this game. And there will be no winners. The posturing that is taking place in Washington is simply entertainment. They have no clue as to what is happening to us.

No. More than anything else, what you are watching is the ultimate failure of Homo sapiens, self-named and inappropriately so, to fit the environment. Our leaders are just a microcosmic focus of our failures to learn from mistakes and adapt.

Let's consider what the ‘leaders’ (and oh boy do I use that term loosely) are arguing about. Some time back, someone thought it would be a good idea to put a limit on the amount of debt that the country should carry so they suggested a debt ceiling. Sounds good enough. One should not carry more debt than one can afford to pay off some day. Just like revolving credit it is too easy to keep building the debt level and then get caught unable to meet the payments for both principal and interest. After a while, you are lucky to pay any interest and that keeps building because you aren't paying down the principal either. It is a vicious cycle. Far too many people have personal experience with this phenomenon with their credit cards.

Well why shouldn't the same principle apply to the country as a whole. It is conceivable that if national income doesn't rise over time, that the country could find itself with more debt load than it could service. So to protect against borrowing too much, establish a ceiling. Sounds OK.

But, of course, just like needful consumers who just have to have the latest iPod^TM the government has always found things it just needs to buy (votes or warships). And just like consumers it is easy to just borrow the funds needed to buy. OK, it is a little more complicated in terms of how this is accomplished but the principle is exactly the same. And note that it doesn't matter which party is in charge, the effect is always the same (with the singular exception of Clinton who at least brought down the rate of spending relative to the rate of income for a little while).

Now we get to the interesting part. You establish a debt ceiling, but over and over again you find you really need that latest widget. In order to give yourself permission to borrow more money to buy that widget, you simply raise the debt ceiling. Simple. And stupid.

Your ability to pay back on a debt depends entirely on your future ability to have more income than expenditures so as to have an excess to apply to the principal and interest. Now, of course, this doesn't preclude rolling debts over into yet future time periods, but the fact remains that in those time periods you have to make even more income. You can't go on increasing your debt unless you are also increasing your income by enough of a margin to do a little more than break even. And therein lies the fallacy. Unless income growth matches or exceeds debt growth, there is no way in hell or mathematics that you can come out ahead. Nor, of course, can your creditors.

For the country the accepted surrogate measure of national income is the gross domestic product (GDP). Lucky for the government, it gets to define how to compute the GDP and it has found a method, over the years, for redefining it so that it always seems to go up (except, of course, during recessions). Wow! The government is telling itself (and the public) that it will have more income in the future so it will be able to pay off its debt. Very convenient, don't you think?

Well, to be a little fair about it, the government had some help from the private sector in making the numbers look good. GDP has been grossly inflated by the financial sector creating monetized transactions, which then get counted into GDP, out of thin air. They report their income from the inflation in paper assets, including mortgages backed by inflation in housing prices. Well now we know the latter was not real. And we will soon discover that the stock market valuation that seems to be doing OK is not real either. The financial sector has been making the GDP look good for decades now. So do wars. Every time the US buys another warship GDP goes up. What happens to GDP when the warship gets sunk? But very soon now, that Ponzi scheme will come to a halt. And when it does I think we will watch in horror as the national income is revealed to have been either zero or even negative for the past decade.

My model of biophysical economics has already demonstrated that increasing debt becomes impossible when net energy needed for doing real wealth production peaks and goes into decline. And we in the US have passed the peak of net energy production. Even if we get serious about increasing efficiency in the use of what energy we have it will not be sufficient to restore a healthy wealth production economy to the point that it can service our prior debts (and here I mean both private and public). We will default, I have no doubts.

Raising the debt ceiling (as has been done over 100 times!) is one of the stupidest ideas I have ever encountered. It is made even more dangerous given the energy situation we face. And more dangerous still because the politicians, or should I say clowns, running things in Washington DC have absolutely no clue about the future of energy and the economy. They keep holding onto the belief (without any evidence whatever) that the economy will come roaring back. Jobs will be created. Consumers will spend again. Tax revenues will rise just because more people are working and spending. And life will return to normal. They have to belive this and tell the story to their constituents (and how they are helping make it happen) so that they will keep their jobs. Most of these clowns aren't so dumb that they don't realize that if they don't get re-elected that they will likely not have an adequate income themselves! So they continue to tell the public what it wants to hear, as opposed to what it needs to hear. And the expedient fix to everything is to raise the debt ceiling so the government can borrow more money in order to pay off its prior debt obligations (and entitlement programs have taken on all the form of debt for this purpose).

You couldn't make this kind of nonsense up if you tried.

To be honest, I really don't care if the Congress finds a pathway to passing a debt ceiling increase or not. It is a non-issue in the larger picture of a world that is destined for crash. But what I am interested in is the behavior and thinking of the participants. I hope you are watching this as well. Our species has reached its level of incompetence! What the circus in Washington is demonstrating, better than anything I could have come up with, is just how insanely incompetent our leaders are. And since we put them there, how incompetent we are!

OK, they just might come up with some kind of compromise in the 11^th hour and avoid the so-called default situation. It really doesn't matter though. They have already proved their incompetence to govern beyond any reasonable doubt with their incessant posturing and ideological fervor. Neither the left nor right has shown any comprehension of what is really ailing humanity and the economy. They are all blinded by their ideological beliefs.

Here is the greater tragedy. The current spate of congress persons and the president are probably the best we can do! That's right. These are the brightest and best that would ever acquiesce to occupy public service offices^*. They are there because they can't serve any other useful function in society. Politicians are politicians because they don't have any talents other than convincing rhetoric! They don't really need to understand anything because the electorate doesn't exercise critical thinking anyway. The sad fact is that the electorate is pathetically ignorant. Congratulations USA. You have achieved the status of a nation of fools.

Of course, America, you fell for that rhetoric. Look, I am guilty too, as much as I hate to admit it. I actually wanted desperately to believe that Obama got it. He talked about sacrifice. I thought, maybe, he would be able to lead us through what I know will be trying times. Fool me once. I confess. I voted for him.

But I would like to believe that I won't make the same mistake twice. He has proven to me that he really doesn't get it. Or he is just plain disingenuous. Either way I will not vote for him again.

And that leaves me with a real conundrum. And it leaves you readers with a conundrum as well if I am right. If you understand anything I have written you will recognize the problem. Who exactly would you choose as a leader? Who is running that you would entrust with the job?

Well you may have noticed that on the Democratic side there are no challengers to Obama. On the Republican side there is... Oh right, no one worth even considering. So what will you do come 2012? An independent candidate perhaps? Who?

This will sound crazy. I recommend that when you vote in 2012 you might write in your own name for president! Write in anyone you like for vice president! Seriously what choices do you have? OK I realize you are throwing away a vote. But imagine. What will happen if you vote for Obama and whoever (presumably Joe Bidden again)? Will you get reality? You might actually be better off voting for Michelle Bachman! At least you would know that you are getting another clown. And it might be worth it to accelerate the process and get the pain over with.

I haven't looked into this yet, but Americans Elect might be an alternative approach. This group is looking to capitalize on the apparent democracy of the Internet to nominate the best possible people for president without resort to ideological leanings. See what you think.

Meanwhile, sit back, relax, and enjoy the show.

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^* You know the old saying: Those who can do, those who can't teach, and those who haven't a clue run for office or become administrators! Naturally I take exception with the first part, but maybe some of my former students think I should have stayed in industry because I couldn't teach either!

Comments

[גופי תאורה]

Informative post! At any level of rationality is not all the criteria but majority assumes that each social group is autonomous rational beings capable of thinking independent decisions.