Thank you Keynesians, marxists, and progressives!

At least some people are admitting that we are running out of other people’s money, and that the cost to address this problem is going to be brutal:

Much of the Western world will require defaults, a savings tax and higher inflation to clear the way for recovery as debt levels reach a 200-year high, according to a new report by the International Monetary Fund. The IMF working paper said debt burdens in developed nations have become extreme by any historical measure and will require a wave of haircuts, either negotiated 1930s-style write-offs or the standard mix of measures used by the IMF in its “toolkit” for emerging market blow-ups. “The size of the problem suggests that restructurings will be needed, for example, in the periphery of Europe, far beyond anything discussed in public to this point,” said the paper, by Harvard professors Carmen Reinhart and Kenneth Rogoff. The paper said policy elites in the West are still clinging to the illusion that rich countries are different from poorer regions and can therefore chip away at their debts with a blend of austerity cuts, growth, and tinkering (“forbearance”).

The presumption is that advanced economies “do not resort to such gimmicks” such as debt restructuring and repression, which would “give up hard-earned credibility” and throw the economy into a “vicious circle”. But the paper says this mantra borders on “collective amnesia” of European and US history, and is built on “overly optimistic” assumptions that risk doing far more damage to credibility in the end. It is causing the crisis to drag on, blocking a lasting solution. “This denial has led to policies that in some cases risk exacerbating the final costs,” it said. While use of debt pooling in the eurozone can reduce the need for restructuring or defaults, it comes at the cost of higher burdens for northern taxpayers. This could drag the EMU core states into a recession and aggravate their own debt and ageing crises. The clear implication of the IMF paper is that Germany and the creditor core would do better to bite the bullet on big write-offs immediately rather than buying time with creeping debt mutualisation.

The paper says the Western debt burden is now so big that rich states will need same tonic of debt haircuts, higher inflation and financial repression – defined as an “opaque tax on savers” – as used in countless IMF rescues for emerging markets. “The magnitude of the overall debt problem facing advanced economies today is difficult to overstate. The current central government debt in advanced economies is approaching a two-century high-water mark,” they said.

Things are bad. Really fucking bad. And yeah, this article focuses primarily on Europe, but Obama and the last 5 years have put the US, whom was on a slow road to the same disaster before the left took over, on the same fast track to disaster. The fact is that our elite have been acting as if their shit don’t stink, and they have basically set us all on a course to becoming a banana republic. With a hard stop in “fuck over the productive tax payers” land, first.

What we have now is unsustainable. Some of us saw this a long time ago. With finite resources this overspending put us on a road to disaster. Worse yet has been the focus on wealth redistribution and the cradle to grave welfare state, geared primarily towards the chronically unproductive, at the cost of the productive, especially in the upper lower and middle classes, whom get shafted far harder by these schemes and scams, and the wealth producers, despite the left’s assurance that was never supposed to be the case. The progressives, with their need to pick who gets to succeed/win and who doesn’t, have destroyed our economies and hobbled our ability to produce new wealth (a concept the progressives simply seem unable to grasp). Sure they will tell you it’s capitalism’s fault, but the real problem has always been that when government starts interfering and favoring something/someone over another, that capitalism no longer exists. What we have, and have had for the longest time, is cronyism: a system where the private sector is in bed with government, and in the US with one particular party which controls practically all access to abuses of the law to favor one group over another (do I need to remind you which party that is again, or can you guess?), and uses favor buying to keep out competition or advancement other than those the intelligentsia approve of, all while larding their campaign coffers and their own bank accounts. It’s not by accident that despite all the progressive overregulation of the Obama years that the rich have gotten richer, while everyone else, and especially the middle class, have gotten hammered.

Oh, the Keynesians will disagree and demand we have more of the same old shit that got us where we are today. But as I have often pointed out, the definition of insanity is that you keep doing the same shit, over and over, expecting different results. All we have done is drastically increased our nation’s debt while exacerbating the problem. Now we are told by the same people that caused this problem that what we need is to let them do even more of this insane tax & spend, government controlled, cronyism. Yeah, and this time it really, really, really, will work. These fucking idiots remind me of the doomsday cultists that constantly find an excuse for why their promise never came to pass, and then, tell us they know what went wrong and the next time they predict doom, it will really be real thing. Only our progressives are predicting salvation and delivering doom, in an ironic twist of faith.

The sooner we dismantle the nanny state, the sooner we can get things back in order. It’s pain now, or a lot more pain, if not outright death, later. But the fact is that what we have today doesn’t work and can’t be continued. Anyone pretending otherwise is not just deluded, but should make the rest of us wonder about their intent. When it is obvious how this plays out, and you will not give it up, we should be able to question your motives. And we should start calling them out on that.

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