Why debt?

.
.
I keep hearing how federal and state governments have grown through debt in some wild hope that the bill will never come due. At this point, just the interest on those debts is eating far too much of the revenue to be sane, never mind sustainable. It is not as if Americans were ignorant of what their government was doing. By demanding services while declining tax increases, they required their officials to borrow. And, why not? How much debt is the average American trucking around with all by himself?

Now, why is the average American carrying $84k in debt with an average income of about $40k? Well, let's think a bit. First, the dollar has been in serious decline for about 70 years. At some point, consciously or not, people realize saving money in banks is losing money no matter the interest rates. Of course, many neither know nor care, so long as they have beer and eggs. But for the rest, they begin looking for other, more secure, more sure, methods of growing wealth.

Other financial instruments include commodities, stocks, bonds, municipalities, foreign currencies, land, and manufacturing and other capital. I am sure there are a few others, not being an economist I don't have the full scope of things. For example, art. A Picasso might be an idiots version of art, but it is rare, more readily identifiable, and no more are being made. I am not exactly sure where to place such an asset. In any case, one of the biggest currency exchanges was a dying dollar for land and houses.

The problem with all of those wealth building alternatives is that they have all proven easy to manipulate. Quite often our government has directed wealth in whatever direction if felt would be best for the state. Expanding housing prices lead to a greater revenue stream, for example. This one is safer from taxes, that one usually offers a better return, the other one is slow but sure. Or so it was thought.

How much wealth has actually simply ceased to exist is difficult to tell. The truth is, much of what ceased to exist never existed in the first place. Much like the federal government indicating the debt ceiling would be hit by now, it turns out through tricks and schemes, the debt ceiling will not be hit until August. Just jazzy. The truth is, we could not raise the debt ceiling and play with things indefinitely, at least this and other dishonest administrations could.

So, what does the government do about all the debt? Why, since it is based on debt, it tries to force banks into offering easy terms for borrowing, loosening supply, and adding to the number of available notes. While this seems to be a part of the post-game wrap-up, this is only being noticed now because of the grandiose nature of it's implementation. The truth is, this is exactly what has been happening for over half a century. It is the definition of stupid, that being; if something fails, and continues to fail, the only thing to do is to repeat and harder in order to achieve a favorable result.

Every bubble and bust has been an attempt to find a safer or better return on investment than what the dollar would produce. That the U.S. dollar is still attached to oil means oil is nearly as worthless, in truth, as the dollar. I did note OPEC considered changing the measure of the price of oil to a number of currencies and financial instruments... right before the Euro proved too hot to handle and gold started to become untouchable and unmanageable. Coincidence? Better a slow death of wealth than an abrupt collapse I suppose.

While I do not believe wealth, it's movement and creation, are within the purview of a single man or group of men, I do think it is harnessed and ridden by a number of "crown princes". If there is one other thing I am sure of, these crown princes spend as much time fighting each other for the pickings as stealing from us. Big bankers? No, but the families behind them indeed. The CEO of Bank of America is... merely an employee. If one who would sell you, me, and the family(ies) which own BoA for a single huge payout, in cooperation with the board of trustees and federal regulators mind you.

So, where does that leave Six-pack Joe? It probably means that as the dollar shrinks, investment money flees, and foreign startups take hold, he will become Chinese. While I do see manners in which this could be easily avoided, to America's favor, I don't see the political will among politicians. Not even "conservatives". Global warming hysteria, for example, is code-word for world-wide financial equalization. I am not sure tea-party elect even have much say, even if we filled the house, senate, and president's office with such. I am not sure they have the will, or power, or resolve. There is nothing like sipping whine in gay D.C. to forget the whims of the peasants. We will see, I suppose. And probably shortly... if the American mind has a longer attention span than the average gold fish that is.