Column #423           October 6, 2023King of Beasts

Our nation has a long list of problems which most of us know by heart. Debt, border, Ukraine, crime, debauchery, wokeism, schools, military, legal system, censorship, deep state, foreign policy, energy policy, taxes, inflation, economy, weaponized legal system, police state, lying, medical deception, and more. These problems have been self-inflicted on the country by the leaders in and of our Federal government.

Our government’s top management is voted into office by American citizens. The permanent employees (bureaucrats) are also involved in management. Not only do they work under the guidance of the elected politicians but they also act as their guardrails. The result is a huge mob of people working together with the idea that what and how whatever was done in the past should be repeated in the future. In other words, don’t rock the boat. But, because the government’s debt is 123.8% of the GNP, the interest burden alone has reached a point where the debt can no longer be ignored. It’s a real problem that MUST be solved.

Today’s Federal government can’t function without borrowing 100% of the money required for funding its basic operating expenses. The government’s total tax revenue is $4.33 trillion (T). There are four “untouchable” budget items that total more than the annual revenue stream. They are Medicaid/Medicare $1.62T, Social Security $1.32T, Defense/War $0.79T, and interest on the debt $0.71T. With interest rates increasing like they are and as low interest bonds roll over, in a few more months the interest expense will exceed $1 trillion.1

If the Federal government was a business, it would already have been forced into receivership by its lenders. Businesses can have a lot of assets and significant revenues and still go bankrupt. It happens all the time and this year has seen an increase in business bankruptcies. Some of the best known are Yellow Corp., Bed Bath & Beyond, and Signature Bank. All of them were going concerns with revenues and assets prior to going bankrupt. Their failures were due to not being able to service their debts.2

Other than the big four budget items, it costs $1.78T to pay for all of the government’s other programs and every penny of that must be borrowed. Therefore, to be viable the government’s expenses can’t be just cut back by a few percentage points. That’s worthless pandering. There has to be, at a minium, a 29.2% reduction across the board to stop the borrowing. A proper budget that reduces the debt demands cuts greater than 30%—which means a total restructuring of every single expense (other than interest).

As James Rickards from “The Daily Reckoning” explained in a recent article, for many decades the USA was able to get away with deficit spending because GNP growth exceeded price inflation, interest rates came down to zero, and debt to GNP was kept under 60%. Those fortunate events led to complacency in managing the government’s finances. But those days are over.3

Without addressing the spending problem, many of our country’s other ills will stay with us. If restraint isn’t needed for managing the money, why should there be restraints on any other activity or thought process? As symptoms of the insanity mount they create distractions but do not inspire solutions. So, without taking control of the problems we drift ahead to the day when the credit system implodes on its own weight and the economy becomes THE issue on its own accord. That’s when nothing else will matter.

The options for tackling the debt problem are to increase taxes, renounce the debt, inflate it away, restructure it, or cut all budgets by more than 30% to create a surplus that will reduce the debt over time. None of these options will make citizens happy. They all involve pain.

Increasing taxes is counterproductive (people hate taxes) and it doesn’t address the spending. Renouncing the debt collapses the banking system and injures every entity that holds treasury securities as an asset. Inflating the debt away with hyperinflation will weaken the United States in the eyes of the world for decades if not centuries to come. The fourth option is the honorable thing to do. It will cause extreme hardship in the short term, but will strengthen the nation in the long term.

To go forward with the fourth option our country needs real leadership with integrity in all senior positions in the government—especially when it comes to the politicians elected to office. This is why Kevin McCarthy had to go. He wasn’t a leader with a clearly articulated vision that he could sell to the Congress and the public. He had all the trappings of a compromising politician that, in the past, always opted for incremental change what won’t rock the boat.

Going forward the boat has to be rocked. There’s no way to avoid it without ending up on the rocks. The actual hard realities must be explained to the masses. Yes, I know the MSM isn’t into realities, but there’s still a way to get the message out there. As for the budget, someone has to start talking about the hard decisions that have to be made and why. Proposals have to be made even if they are rejected by the majority. But let the unscrupulous politicians reject them. Then as things get worse, during the campaign season leading up to the 2024 elections, conservatives can point out why conditions are continuing to deteriorate. By election day the government’s debt will be approaching the $35T debt ceiling!

McCarthy’s overall goal was to continue to govern which is why he made the same old compromising proposals that everyone could agree to. He didn’t tell it like it is. He focused on amicable compromises that would achieve nothing but more price inflation and more debt. Of course, as the debt problem deteriorated, both sides of the isle would be blamed for the government’s runaway spending—and American citizens would be the biggest losers.

There are numerous seeds that need to be planted now in order for them to have a chance to bear fruit some day. Entitlements must be managed. Wasteful spending must be eliminated. Some programs/agencies have to be completely closed down—especially those the States have such as education departments, environmental protection, meat inspections, etc. The prospects of selling government land, oil leases, and other federal assets must be in the mix. Cutting back on military spending and ending support for Ukraine are necessities. International giveaway programs must be slashed.

Sensible proposals must be posted in the public domain—at first as options. Then let the current crop of politicians decide what to do. Then during the runup to the 2024 elections there will be real issues and real solutions as fodder for public discussions.

The reason the government has a long laundry list of problems is that the majority of representatives voted into office have no integrity and no leadership ability. Some of them speak of reducing spending and addressing the deficit. But nearly all of them are lying. Only a few actually want to put the government in a fiscally conservative position. At best some want to reduce spending, but not enough to address the problem of a growing debt load. What has to happen is the debt must be retired over time.

When a country realizes it must live within its means, many of the foolish, stupid, ignorant, outlandish, reckless, scandalous, dishonorable ideas that people live for today will fade away. Crime will be seen as it is. The reality of daily survival will trump wokeism.

Real conservatives have got to regain power in a counter revolution. As Victor Davis Hanson says,  conservatives are “fighting a culture in the Republican Party that preferred to ‘lose nobly’ as opposed to winning elections in an ‘ugly’ manner.” The tactics of our past 80 years did not lift our country above the trials it’s facing today. Instead they buried us in self-inflicted problems.4

On October 2, 2018, Victor Davis Hanson wrote a piece for the Hoover Institution titled “America’s New Jacobins.” It explained his belief that the United States is experiencing a Jacobin takeover of the country and what it means. So far, in the past five years the socialist Democrats have been right on target.5

There’s absolutely no question—conservatives need an overwhelming victory in 2024.

To your health.

Ted Slanker

Ted Slanker has been reporting on the fundamentals of nutritional research in publications, television and radio appearances, and at conferences since 1999. He condenses complex studies into the basics required for health and well-being. His eBook, The Real Diet of Man, is available online.

For additional reading:

1. Debt Clock

2. 2023 Bankruptcies from Stock Analysis

3. Something "Big & Stupid" Is Coming... by James Rickards from The Daily Reckoning

4. Victor Davis Hanson Joins Tucker to Discuss "We're In The Middle Of A Revolution" and More

5. America’s New Jacobins by Victor Davis Hanson for the Hoover Institution