Lefties, please refrain from interjecting your usual bullshit. Let's have the adults in the room contribute their thoughts to a very real problem.
Let's just work with some rough numbers so as not to get bogged down in the details.
The government collects only about two-thirds of what it spends. It runs a deficit that is roughly a tenth of the gross national product. Three quarters of our national "production" are "services," i.e., there is no physical "good" involved in the transaction.
Each year the government must get buyers for its deficit or print the money via the central bank. Buyers are now the actual citizenry of the United States. Foreigners have been opting out.
Most of the money spent by the government doesn't go into something that produces a valuable good or service. Most of it goes into paying for retirements, healthcare, and the military. Though it is true that the military is an industry that produces jobs, the product is not valuable. It is destruction. It is a net flow of capital OUT OF THE COUNTRY. Healthcare, likewise, is a sunk cost, though not as bad as the military. Healthcare is like infrastructure. You need it to maintain a workforce, but it doesn't produce the goods. Retirements -- social security and various government pensions -- are clearly an unproductive use of capital.
So where do the REAL resources come from to cover that tenth of GDP? Artificial Intelligence? I see possibilities for cheaper healthcare. So you can find and diagnose disease faster. The treatment is still either cutting or a drug.
What covers this growing deficit? I have been arguing that we are in a structural period of inflation a la the 1970s. That doesn't say whether the stock market goes up or down. It does say, however, whether the market produces a real return. Real returns occur from invention and productivity growth. Is that going to be more than 10% per year even as most of the workforce are people offering nothing more than a pair of hands? How does the production of machines get distributed? Who will own the machines?
Of concern is the lack of a national border. This has put no limit on the burden of an under-producing workforce.
Tough questions. We try to use history as a guide, but we are in totally unchartered territory right now.
Let's just work with some rough numbers so as not to get bogged down in the details.
The government collects only about two-thirds of what it spends. It runs a deficit that is roughly a tenth of the gross national product. Three quarters of our national "production" are "services," i.e., there is no physical "good" involved in the transaction.
Each year the government must get buyers for its deficit or print the money via the central bank. Buyers are now the actual citizenry of the United States. Foreigners have been opting out.
Most of the money spent by the government doesn't go into something that produces a valuable good or service. Most of it goes into paying for retirements, healthcare, and the military. Though it is true that the military is an industry that produces jobs, the product is not valuable. It is destruction. It is a net flow of capital OUT OF THE COUNTRY. Healthcare, likewise, is a sunk cost, though not as bad as the military. Healthcare is like infrastructure. You need it to maintain a workforce, but it doesn't produce the goods. Retirements -- social security and various government pensions -- are clearly an unproductive use of capital.
So where do the REAL resources come from to cover that tenth of GDP? Artificial Intelligence? I see possibilities for cheaper healthcare. So you can find and diagnose disease faster. The treatment is still either cutting or a drug.
What covers this growing deficit? I have been arguing that we are in a structural period of inflation a la the 1970s. That doesn't say whether the stock market goes up or down. It does say, however, whether the market produces a real return. Real returns occur from invention and productivity growth. Is that going to be more than 10% per year even as most of the workforce are people offering nothing more than a pair of hands? How does the production of machines get distributed? Who will own the machines?
Of concern is the lack of a national border. This has put no limit on the burden of an under-producing workforce.
Tough questions. We try to use history as a guide, but we are in totally unchartered territory right now.
