Americans Are Losing Faith in the System

 

California has banned singing in church.

Here’s CNN:

Three northern California churches have gone to federal court to challenge the state’s ban on singing and chanting in houses of worship, arguing that it unfairly singles out religious services while ignoring protests against police brutality.

Gov. Gavin Newsom issued the ban earlier this month in an attempt to curb the spread of the coronavirus, with state health officials noting that singing and chanting ‘present an increased likelihood for transmission of COVID-19 through contaminated exhaled droplets.’

The Los Angeles teachers’ union threatens to hold students hostage (under the smokescreen of COVID-19) until a whole list of demands is met — including defunding the police, Medicare for all, no more competition from charter schools, and so forth.

And of the 32 million people collecting unemployment benefits, nearly two-thirds are now getting more money from not working than they earned on the job.

 

Losing faith

 

Our beat here at the Diary is money…filthy lucre…and dead presidents. But everything costs money — lockdowns, bailouts, and boondoggles, too.

Sometimes, the dead presidents allow you to do what you ought to do. Sometimes, they make it possible for you to do what you ought not to do.

And fake money is practically guaranteed to blow up in your face.

This morning, Yahoo! Finance reports that consumer spending is back to where it was before the pandemic:

Retail sales are all the way back.

Sales in June jumped 7.5% over the prior month and 1.1% over the prior year, topping expectations for a 5% rise.

But there’s a big difference. Before the pandemic, consumers were spending money they earned. In June, they were spending money with a fuse attached.

Our hypothesis: When the money goes, everything goes.

And with the feds printing up trillions of worthless dollars, people are losing faith in the whole system — its rules…its institutions…and its principles.

Here’s the Trump administration, for instance, with a $4 trillion deficit this year, equating to about 20% of GDP.

The old North Star for fiscal conservatives — balanced budgets — disappeared from the firmament 50 years ago, when President Richard Nixon took the U.S. dollar off the gold standard.

The USA is entering into some rough waters, with the waves already splashing over the gunnels. But instead of turning around and heading towards a safe harbor, Mr. Trump steers into even deeper water, with another $2 trillion COVID stimulus proposal expected next week…and a tax cut, too! Here’s Politico:

President Donald Trump has signaled to Hill Republicans that he will not sign a new coronavirus stimulus package without the inclusion of a payroll tax cut, according to three sources close to the issue.

How could he even think of cutting taxes with $8 trillion in deficits expected through 2022? Like everyone else, his brain has been addled by phony money.

 

Plan for everything

 

Over on the other side of the poop deck, Captain Joe Biden seems as sans souci as Fleet Commander Trump. Instead of battening down the hatches, he wants to put out more sail…From the Washington Examiner:

Throughout the Democratic presidential race, Joe Biden has been described as a leading ‘moderate’ within the party. But the truth is that Biden is only moderate when compared with Sen. Bernie Sanders and those candidates who embraced key aspects of a socialist agenda that will cost tens of trillions of dollars.

Like former presidential candidate Elizabeth Warren, Biden seems to have a plan for everything…especially the big-ticket items: Climate change ($1.7 trillion)…Infrastructure ($1.3 trillion)…Healthcare ($750 billion)…Education ($1.5 trillion)…Housing ($640 billion)…

Whew!

 

 

Modest prediction

 

How would he pay for all these things? The Tax Foundation calculates that his tax increases — if enacted — would raise $3.2 trillion.

But wait…You can’t raise taxes without reducing ‘demand.’ The Tax Foundation:

According to the Tax Foundation General Equilibrium Model, Biden’s tax plan would reduce the economy’s size by 1.51 percent in the long run. The plan would shrink the capital stock by 3.23 percent and reduce the overall wage rate by 0.98 percent, leading to 585,000 fewer full-time equivalent jobs.

And here, we offer a modest prediction: If Biden is elected…and has a sufficient majority in Congress…he will pass much of his Build Back Better program…

…but not much of the tax program.

The Democrats are addled, too. And their donors, cronies, and lobbyists will angle for taxes that punish the super-rich…but leave most of their own wealth intact.

Besides, it’s not possible to pay for all the feds’ boondoggles with tax revenue.

 

Sail on

 

The only possible way…and the reason both parties get away with such numbskull spending programs…is that they have a ‘printing press’ in the basement.

With it, they think they can afford programs that the American people would never willingly pay for…

So, they can sail on…until the fake money blows a hole in the hull…and the economy, the political system…and the social integrity of the whole country…all sink to the bottom.

Stay tuned…

 

Regards,

Bill Bonner

Daily Wealth

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Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance.


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