So how’s Bidenomics working for you? Notice your monthly paycheck doesn’t go that far? Are you cutting back so your checking account doesn’t hit zero before the month is over?
If only you could take money from Peter, pay what’s owed to Paul this month, and never have to repay Peter. Pretending to be rich by taking from one person (Peter) to pay debts owed to another (Paul) is a common scam, a form of “Ponzi scheme.”
Investor.com says this rip-off is named for Charles Ponzi. “In the 1920s, Ponzi promised investors a 50% return within a few months for what he claimed was an investment in international mail coupons. Ponzi used funds from new investors to distribute fake ‘returns’ to earlier investors.”
Ponzi schemes always end in a bust. The last investors’ money is gone, and they get nothing. This is how actor Kevin Bacon lost his family’s fortune to New York financier Bernie Madoff. The judge sentencing Madoff called his crime an “extraordinary evil.”
Having watched the federal budget over the years, it is enlightening when people first realize they are participating in a giant national Ponzi scheme.
For me, it started in 1983, when the total tax receipts of the federal government for that year, added to the total for the next year, still would not pay off the national debt. That looked “Ponzi-like.”
This is due to a truth declared in the Supreme Court’s U.S. v. Winstar case, recognizing a centuries-old Constitutional principle. “One legislature may not bind the legislative authority of its successors,” the Court wrote, paraphrasing a famous British judge, Lord Blackstone.
A “Congress” lasts two years. After that, Americans reserve the right to hire a new Congress. The question is “Can a Congress take on more debt than it has voted to tax over their two years in office?”
If they do, doesn’t this “bind” a future Congress to raise taxes? The Fourteenth Amendment to the Constitution states, “The validity of the public debt of the United States . . . shall not be questioned.” There is only one way that debt is “not questioned,” and that is to pay it off.
But 1982 was the last time tax receipts over two years would have covered the national debt. From then on Members of Congress became Ponzi co-conspirators, thinking they could “spend the money now, and leave it to some future chump elected to Congress to pay it back.”
The next shoe in the national “extraordinary evil” dropped in 2012. That year U.S. debt exceeded the nation’s Gross Domestic Product. Put another way, the national debt became so large it couldn’t be paid even if Congress raised tax rates to one hundred percent.
It was at this point that corporate America must have joined the Ponzi. One hundred percent tax rates don’t raise any revenue. Not only would it “never happen,” it would never work. “Raising taxes to retire debt,” even done over decades, would require tax rates damaging to the economy.
Democrat economists, like the New York Times’ Paul Krugman, began uttering candid, shocking truths like, “Governments must service their debts — pay interest and repay principal when bonds come due — but they don’t necessarily have to pay them off.” That is rare honesty from a Ponzi con man.
This month the Ponzi scheme crossed a new threshold. The debt surpassed $33,000,000,000,000 (thirty-three trillion dollars). In 2024, at rates of 3% and rising, interest payments alone will exceed one trillion dollars. That’ll go to already-wealthy investors and foreign countries, not to benefit most Americans. It makes a “soft landing” look less likely, and recession is “in the air.”
Get ready for more penny-pinching. You, too, are now an “insider” in the national Ponzi scheme. Too bad it’s toward the tail end. In Ponzi schemes that’s not a good place to be.
(8) comments
I am no Marxist as...s h...le. I spent 28 years in the US Military defending the country against know-it-alls, like yourself. Save your columns for the Economists and other right-wing publications.
It's probably time that the dollar crashed....with
No gold standard there's nothing to back it up.
The dollar is a house of cards. The jews at the Federal Reserve have totally screwed up this country.
Keynes, A. Smith, and the rest of the so-called economist are operating in the 19th and 20th century. Those theories don't work now. You are no economist, theorist or expert. No your role.
"Know" your 21st century economics. Supply curves still exist (see https://www.investopedia.com/terms/s/supply-curve.asp). As the Fed quantitatively eases the money supply, the effect is to cheapen the value of the currency . . . i.e. a dollar buys less. You Marxists blame employers for "not keeping wages consistent with the price of goods." What you miss is that the material economy is constantly playing "catch-up" with the price of raw goods, while the tariff economy thrives on rising prices. The net effect is to drive domestic manufacturing and value-added wholesale into a price-driven death spiral. Not Smith, Hayek, or Keynes . . . just supply curve reality.
Clark, you should be a panelist on Fox and company. You, along with Nugene Rant, Dorothy (crazy as the) Moon, Paul (Eat my incestuous a..ss).
Are you allowed to post such disgusting and vulgar slurs on this site? Even the most Keynesian economists agree that $1T in debt service is a huge stumbling block for the economy, taking up more of the federal budget than R&D, infrastructure and education combined. If only they delved into substance as serious on Fox & Company.
He's admitted to having sex with his granddaughters......he's a sick puppy.
The Biden family doesn't exactly appear to be eating Ramen noodles.....it's good to be the crook. Menendez with a half a million in cash
Scattered around his house. These democrats have been getting away with this for decades.
These continuing resolutions need to end....
Because otherwise the wasteful spending will
Never end. Maybe a default would be good and
A bankrupt US government the best result. We
Will be fine.....and simply switch to a barter system to survive when the dollar is worth a 1923
German mark.
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