Debt piles up at the rate of $8+ billion per day; the day of reckoning comes closer. Day after day, the feds must finance and refinance more debt. Mathematically, there is no way this story ends well.
Tuesday, November 5th, 2024
Bill Bonner, writing today from Baltimore, Maryland
Consume my heart away; sick with desire
And fastened to a dying animal
It knows not what it is; and gather me
Into the artifice of eternity.
–W.B. Yeats
What is that smell?
Rank. Revolting. It is as if a raccoon had gotten trapped somewhere under the floorboards and died. You can’t get rid of it… not without tearing the house apart.
It’s the decay of the American ‘system’ — its economy and its society, fastened to the dying animal of politics.
In a few hours, the voters will deliver their verdict. A third of the public will shout for joy. Another third will say the election was stolen. And the other third, the best of the lot, will shrug.
Whatever the verdict, the punishment will be the same: the public will be hanged. And the stink won’t go away. Which is not to say there is no difference between the two suits. One might trigger WWIII; the other might not. One might hasten the coming debt crisis; the other might delay it.
But which is which? We don’t know. Neither do they. The odds are good that a Kamala victory will merely continue the slow strangulation of the US by its deep state elites, the wire biting deeper into the neck. While a Trump victory risks more sturm and drang…more unknowns…and more drama.
The problem, from an economic point of view, is that both are fastened to suicidal politics. Debt piles up at the rate of $8+ billion per day; the day of reckoning comes closer. Day after day, the feds must finance and refinance more debt. Mathematically, there is no way this story can end well. “All roads lead to inflation,” says Paul Tudor Jones.
And politically, the problem is that this kind of leadership — favoring more spending, more deficits, more control, more programs, more laws, more regulations, more inflation and more war — not only leads to more debt…it is out of step with what ‘The People’ really want. There is the real divide. Not between Republicans and Democrats, but between the common folk and the elites. James Nielson:
[The People] happen to be strongly against open borders, take pride in their country’s heritage, resent having to pay through the nose for energy in order to fight “climate change,” greatly dislike getting bullied by gender activists who think “transwomen” convicted of crimes, among them rape, should be put in prisons for females, find utterly ridiculous all the fuss about pronouns, and much else besides.
They don’t like getting poorer either!
But the deciders don’t care. The Wall Street Journal:
The Biden Economy Is ‘Glorious’—if You’re Wealthy
If you listen to the headline hoggers and glib, zinger slingers, you have been lectured more than once about how great the Trump economy once was and how wonderful the Biden economy now is. ‘If only people would recognize it!’ continue the reports.
Paul Krugman, for example, says the phenomenon is a kind of ‘irrational gloominess,’ a failure to recognize how glorious the economy is… a syndrome that typically strikes the deplorables, and the ‘garbage’ people outside of the elites’ zip codes. For them, the economy isn’t so great; the WSJ continues:
Mr. Biden’s economy has been glorious—for affluent liberals. It’s been awful for the working class. Socioeconomic disparities have grown in recent years owing to the policies that were supposed to shrink them. The well-to-do got wealthier while the rest got poorer.
The Journal cites a Fed study, showing that people who earn less than $60,000 were able to increase spending since January 2018 by 7.9% — less than half as much as those earning more than $100,000 a year. As you go up the socio-economic ladder, the view gets better and better… but below the top rungs, it is stale and dark. .
Polls show, not by coincidence, that the more affluent and educated you are, the more likely you are to be ‘satisfied’ with Biden’s economy.
Americans who own stocks are feeling good about the economy as they watch their 401(k)s and mutual funds grow. The S&P 500 index has surged by some 50% since January 2021. Ditto Americans who owned homes before interest rates rose in 2022 and may have refinanced at historically low interest rates. But others have seen inflation erode their wages and spending power. Those who can’t work from home are spending considerably more to fuel up. New home buyers are spending thousands more each month on mortgage payments than those who bought homes before Mr. Biden took office.
It is no wonder the Establishment generally supports Kamala; she promises to keep the show on the road.
Regards,
Bill Bonner
