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The Simon Lectures. Series I, Part 5. 💊 TRUTH PILL 💊
posted ago by simon_says ago by simon_says +190 / -0

The Simon Lectures. Series I, Part 5.

Originally published on greatawakening.win, 2022 October 14.

This is Part 5 of Series I of The Simon Lectures.

Part 4 can be found here: https://greatawakening.win/p/15JnPPYPZx/the-simon-lectures--series-i-par/

Part 3 can be found here: https://greatawakening.win/p/15JAllbd2t/the-simon-lectures--series-i-par/

Part 2 can be found here: https://greatawakening.win/p/15JAEy4lN4/the-simon-lectures--series-i-par/

Part 1 can be found here: https://greatawakening.win/p/15IrUHyPbl/the-simon-lectures--series-i-par/

To recap: (1) in Part 1, we determined that the United States federal government is insolvent, and that all of our assets bear illusory valuations, in that they’re all overvalued; (2) in Part 2 we observed (i) that the United States Dollar is backed by nothing other than the “full faith and credit” of an insolvent federal government, and (ii) that we have compelled use of the dollar by imposition of the petrodollar arrangement, thereby creating synthetic demand for the dollar in order to keep it artificially strong; (3) in Part 3 we concluded that the artificially strong dollar has decimated the U.S. manufacturing sector, but has fueled the stratospheric growth of Wall Street; and (4) in Part 4 we determined: (i) that Obama initiated a regimen of economic sabotage of this country; (ii) that expansion of our money supply is part of that regime; (iii) that the expanded money supply is being used by Wall Street to acquire business concerns on a global basis; and (iv) that the remainder of the world cannot “opt out” of all of this because they need our dollars to purchase OPEC oil.

Thus far, the Lectures have progressed linearly, with each Part building upon the previous ones. We are building to some conclusions that are, frankly, shocking and almost verge on unbelievable. In Part 6, the plotline accelerates. As the kids say, in Part 6 shit gets real. Although it kills me to do this, I’m going to backtrack for just this one Part. I’m going to depart from the line of reasoning we’ve been constructing in order to broaden our base of observations – in part to strengthen our foundation for Parts 6 and beyond, and in part to live up to a promise made in Part 1. Part 6 resumes the observational and logical journey from which this Part 5 departs. With that said, let’s launch into Part 5.

In Part 1, we noted that the United States has amassed an astronomical sum of debt that totals $31T as of the writing of this Part. In order to focus our discussion, I omitted certain topics from Part 1. First off, I simply asserted that $31T is recklessly large and unsustainable without exactly supporting that position. As a matter of initial subjective impression, $31T just sounds large so I knew no one would call me on it. Subjective impressions are not the same thing as reasoned evaluations though. So I should do a little more work here. The right way to evaluate the magnitude of our debt is to compare it to our gross domestic product. Our GDP is about $23T, making our national debt about 134% of our GDP.

Let’s put that ratio into perspective. When Greece initially descended into its sovereign debt crisis in 2009, its ratio of debt to GDP was 127%. Our ratio is 134%. This means that, objectively, we are on worse footing than Greece at the start of its sovereign debt crisis. Greece. Let that sink in. The country that nearly single-handedly fractured whatever remained of European solidarity. The country that required three separate bailouts from Eurozone countries. The country that has imposed a succession of thirteen austerity packages upon its citizens, resulting in full-scale civil riots. The country that – in the wake of having descended into its debt crisis – just successfully marketed its first 30-year bond last fucking year. Greece. Fucking Greece. And our fiscal foundation is shakier. (GAW’s u/dominicmilford has written a piece on Greece’s sovereign debt crisis. You can find it here: https://margincaller1.substack.com/p/qe-2-greece-ing-the-pig).

The problem is not only the ratio of our debt to our GDP (the ratio means we can’t afford this debt), it’s the size of the debt. In terms of sheer magnitude, our national debt is more than twice the size of any other country. The fact of the matter is that our “situation” is cataclysmic in a way that Greece’s wasn’t: there ain’t no bailing out $31T, my friends.

So we’ve established that our debt is enormous. That leaves open an obvious question: what is it, exactly, we are spending our money on?

Our federal budget is about $5.3T. About $1.5T of that is Medicare/Medicaid. About another $1.2T goes to social security. So that’s half the entire budget right there. We spend about $0.75T on defense, and almost $.5T on interest on our debt. These four items account for about 75% of our spending. The rest of everything else – the Department of Agriculture, the Department of Energy, the Department of Justice, the State Department, and so on – accounts for, in the aggregate, the remaining 25% of our budget. There’s only so much juice to be squeezed out of any one of these department’s budgets. So we’ll ignore them. Let’s focus on just the top four budgetary line items listed above.

Looking at the top four budgetary line items, ask yourself: which of these is discretionary? Medicare/Medicaid? Social Security? Could we just arbitrarily reduce spending under these programs in an act of “belt tightening?” Or would this result in riots similar to those inspired by Greece’s austerity measures? If you want some fun, enter “Greece austerity riots” into Google and click “Images.” You’ll see how reducing public benefits will go down. So, no, those line items plainly aren’t discretionary. How about interest on the debt? Could we just stop servicing our national debt? Of course not – defaulting on our debt is not an option. So that one’s out too. Defense is the only somewhat discretionary expenditure. In ordinary times, we can dial down some spending on that front without significant ramification.

Consider this: I’m 50. In my mother’s lifetime, spending on defense – the only significant “dial” we can “turn” to adjust our spending – has gone from being the largest dial on the control panel, to the second-largest, to the third-largest. And in May, the Congressional Budget Office just informed us that debt service payments will surpass defense spending within the decade. The only dial we can turn is about to become the fourth largest dial. In the next three decades, debt service payments will consume 40% of our federal budget. Folks, a collapse occurs well before that happens. Either the government collapses, or our debt collapses (we default), or our currency collapses. But 40% ain’t happening – collapse is.

Do you know what happens when a law firm finds itself in this situation? They make all of the associates junior partners. A junior partner is someone who: (1) has to “buy in” into the partnership, say, plunk down $1M; (2) but has somewhere between very little and no control of the operations of the firm; and (3) receives a paltry portion of the firm’s profits and benefit packages. So, legions of associates pay in $1M, but get essentially no control over the firm or much in the way of the benefits of being a part owner. But – hey – they get to say they are a partner. That’ll help the firm’s bottom line in no time!

Folks, the people running our country aren’t that smart. I promise. They are staring into a spreadsheet, and seeing the same major variables I just pointed out. And they are thinking to themselves: “if I were still at my law firm, we’d be making legions of junior partners to solve this problem. What America needs is ‘junior citizens’ – second class citizens that pay in, but control nothing and get little in the way of this country’s costly benefits.” Now let’s put on our thinking caps. Who is in our country that: (1) pays into the coffers via tax withholdings; (2) will never be able to control the country via running for office or voting; and (3) cannot collect on our most costly benefits, i.e., Medicare/Medicaid and Social Security? Oh that’s right. Illegal aliens who have entered via the Southern Border. They’re our “junior citizens.” That’s why they’re here. All 30M+ of them. Our leaders are reconstituting the citizenry of this country to include a dominant proportion of second-class citizens in order to fix a couple of problematic cells on a spreadsheet. It’s as simple as that. That’s our crisis on the Southern Border.

I will conclude Part 5 here. Trust me – Part 6 will flabbergast you. I recommend sticking around.

The takeaways from Part 5 are: (1) that our national debt is out of control; (2) that there are no realistic “levers” to pull in our federal budget in order to address the problem; (4) that, given the constraints imposed by the particular line items that happen to be the largest in the budget, our leaders have chosen to reconstitute the citizenry of this country; and (5) that the crisis on the Southern Border is an artifact of our leaders’ plan as it relates to such reconstitution.

Stay tuned for Part 6.

Or don’t. It’s your decision.

Ever yours, simon_says

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