James Howard Kunstler -- World News Trust
Nov. 24, 2017
What if the fun and games of 2017 are over?
The hidden message behind the sexual harassment freak show of recent weeks is that nothing else is sufficiently serious to occupy the nation’s attention. We’re living in the Year of Suspended Reality, stuck in the sideshow and missing the three-ring circus next door in the big tent.
It probably all comes down to money. Money represents the mojo to keep on keeping on, and there is probably nothing more unreal in American life these days than the way we measure our money -- literally, what it’s worth, and what everything related to it is worth. So there is nothing more unreal in our national life than the idea that it’s possible to keep on keeping on as we do.
The weeks ahead may be most illuminating on this score. The debt ceiling suspension runs out on Dec. 8, around the same time that the tax reform question will resolve one way or another. The debt ceiling means that the Treasury can’t issue any more bonds, bills, or notes. That is, it can’t borrow any more money to pretend the government can keep running. Normally these days (and it’s really very abnormal), the treasury pawns off paper IOUs to the Federal Reserve and the Fed makes digital entries on various account ledgers that purport to be “money.” And, by the way, the Fed is a consortium of private banks not a department of government -- which is surely one of a thousand ways that the public is confused and deceived about what condition our condition is in, as the old song goes.
There’s a fair chance that Congress may not be able to resolve the debt ceiling deadline. The votes may just not be there. If the deadline comes and goes, the treasury can only use incoming tax revenues to cover its costs, and it won’t be enough. It will have to choose whether it issues paychecks to the roughly 2.7 million U.S. government employees, or pays the vendors that sell things like warplanes to the military, or pay out so-called entitlements like Medicare and SNAP cards, or pay the interest on the previously-issued bonds, debts, and bills that the US has racked up over the years. Believe it or not, making those interest payments is probably the top priority because failing to do that would shove the nation officially into default for the first time and destroy the country’s credit standing. The full faith and credit in the U.S. dollar would shatter.
And then the fun and games would really cease. The country would discover it doesn’t have its mojo working, as another old song goes. The reality of being truly broke will set in. After all, there are two basic ways of going broke as a nation: you can run out of money, or you can have plenty of money that is worthless. Take your pick.
There is some kind of revolution coming to American life. One way or another, it amounts to a much lower standard of living. The journey there may take the public by surprise, a la Ernest Hemingway’s crack about how a character in one of his stories went broke: slowly, and then all at once. The main question about this journey must be whether it is accompanied by political violence. One would have to think the potential for that is pretty high, given levels of animosity and delusional thinking among the two opposing factions -- can we even call them Left and Right anymore? -- which may even exceed the ill-feeling of 1861.
The tax reform bill, whether it lives or dies, may only become a laughable footnote to the greater quandary of national insolvency. And, anyway, the proposals so far amount to a hall of mirrors inside a three-card-monte house of horrors that almost nobody really understands. As yet another old song says, this ain’t no Mud Club… this ain’t no foolin’ around. Meanwhile, down in the rococo dining room of Mar a Lago, the Golden Golem of Greatness tweeted yesterday that he was presiding over the greatest stock market ever! Kind of reminds me of the moment that old Joe Kennedy got a stock tip from his shoeshine boy.
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