Last week, the credit rating agency Fitch downgraded the US national debt.
Predictably, senior officials like Treasury Secretary Janet Yellen claimed Fitch’s “flawed assessment was based on outdated data” and that the downgrade was “entirely unwarranted.”
What a joke.
Just consider the US government’s surging interest payments on the national debt—
This Fiscal Year (which ends on September 30) the Treasury Department expects to spend a whopping $897 billion just to pay interest on the national debt. That’s up SEVENTY PERCENT over the past three years. It’s an unbelievable turn for the worst.
The national debt is already more than $32.6 trillion, and it’s climbing rapidly thanks to unrestrained spending.
Fitch called attention to this reality in citing the government’s “high and widening deficits”. And this doesn’t even factor in looming emergencies like the insolvency of Social Security.
The Social Security Administration itself admits that its key trust funds will run out of money within a decade… forcing the government to either default on the promises they’ve made to millions of retirees, or to engage in the largest bailout in the history of the US government.
Also factoring into Fitch’s US economic outlook is the absolute horrific level of governance in America.
Political institutions have lost the ability to cooperate, compromise, and make sensible decisions for the good of the nation. Obvious risks are ignored until they balloon into major crises… yet politicians only implement a band-aid fix that kicks the can down the road a few more years.
Bizarrely, socialism is becoming more and more popular even though the federal government has an objectively horrible track record when it comes to spending money wisely. And yet there is a growing contingent among voters that the answer is more government.
Another key issue denting US credibility is the rapidly deteriorating rule of law.
It’s ironic that a former President has been charged with “conspiracy to defraud the United States” by lying in order to disrupt the lawful function of government.
I’m curious why that standard has not been applied uniformly to other government officials.
It wasn’t that long ago when Senator Chuck Schumer disagreed with a Supreme Court decision and announced (rather menacingly) to Justices Gorsuch and Kavanaugh, “You have released the whirlwind and you will pay the price. You won’t know what hit you if you go forward with these awful decisions.”
Schumer’s words helped spark death threats, protests, and the attempted murder of a Supreme Court Justice. Was this not an attempt to disrupt the lawful function of government?
The same can be said of people like Fauci who told multiple lies and censored scientific debate, thus disrupting the lawful function of government during the pandemic.
Then there was Congressman Adam Schiff, who waged Holy War based on the Russian Collusion false narrative. The investigation was full of lies and was meant to sway a Presidential election. Was this not an attempt to disrupt the lawful function of government?
This list is truly endless. But it shows more and more that the weaponization of government, from the IRS to federal police agencies, makes people less free.
Ironically, however, it’s a great time to be a criminal in America. Or simply ‘illegal’ in any sense of the word.
The immigration system is a mess, and rather than simply fixing it to make legal immigration more efficient, politicians gaslight anyone who thinks it’s a problem to have millions of people flowing across the border unchecked.
Woke prosecutors are downgrading or refusing to prosecute serious crimes; many have implemented ‘catch and release’ bail policies which immediately put criminals back onto the streets.
Yet they do prosecute good Samaritans who step up to protect themselves and others around them.
The level of lawlessness and overall disregard for basic human decency is just astonishing; we’ve all seen the videos of brazen shoplifters in California, or chaotic mobs on the streets in Philadelphia or Chicago.
Just don’t call it a ‘mob’. After several hundred teenage looters stormed downtown Chicago last weekend, the Mayor berated a reporter and said it’s “not inappropriate” to call it a mob, and insisted they should be called “large gatherings”… just like the “mostly peaceful” protests of 2020.
This level of youth crime is not surprising given that 69% of American 8th graders aren’t proficient readers. 73% don’t know math and science. But who can blame them given how quickly math and science are being rewritten through the lens of diversity and inclusion.
While individual teachers can be amazing human beings, the same cannot be said about the bosses who control major teachers unions. The last thing these bureaucrats seem to care about is educating young people. They’re far more interested in indoctrination.
And this leads to an extremely polarized society which is hilariously ignorant about their fanatical beliefs.
I recently saw a video of a white kid being threatened because he had ‘culturally appropriated’ his dreadlock hairstyle; little did his accusers know that dreadlocks were worn by Bronze Age civilizations in Europe, and not invented by Bob Marley.
But why let truth get in the way of petty anger.
People are enraged, intolerant, and can’t seem to cope. Shootings, road rage incidents, and general violence are on the rise, and there’s very little sense of national unity.
Even a national emergency like the pandemic didn’t unify the nation; in fact, the irrational government response, nonstop propaganda, and politicization of science made people even more divided.
I’ve been writing about these issues since I started Sovereign Man more than 14 years ago. Back then it was ‘fringe’ to talk about Social Security’s insolvency, bank failures, huge debt problems in America, rising social chaos, decline in freedom, etc.
Today it’s all mainstream.
In downgrading US debt, Fitch’s arguments look like they have been taken directly out of these pages, and they’re echoed in publications like the Wall Street Journal.
All the above said, however, I think it’s also important to see all sides and be intellectually objective. Not everything is negative.
For example, the US still has a highly diversified economy with extensive capital markets, tremendous natural resources, and a deep pool of talent.
It’s curious to me that so many “experts” tend to choose one side or the other. There’s a lot of doom and gloom on the Internet, as well as mainstream voices who obsessively chant “USA #1”.
Warren Buffett is one of America’s most famous cheerleaders. Along with Joe Biden and Treasury Secretary Janet Yellen, Buffett seems dismissive of any problems in the US economy.
So which view is correct? Well, both of them.
For centuries, scientists (led by Isaac Newton) believed that light was a special particle of energy. But eventually Newton’s ‘particle’ theory of light was disproven, and scientists concluded that light was actually a wave.
It was’t until the early 20th century that physicists began to accept that light behaves both as a particle and a wave. Albert Einstein summed this up when he said,
“We are faced with a new kind of difficulty. We have two contradictory pictures of reality; separately neither of them fully explains the phenomena of light, but together they do.”
Similarly, there are two contradictory pictures of America. One is that the nation is still strong. The other is that it is in terminal decline. Just like light, they’re both right.
The ‘America strong’ reality is still valid. In fact I would argue that most of the world would still prefer US leadership over Chinese hegemony.
And despite such debilitating economic problems, I’ve written several times before that these challenges are still solvable.
There’s at least one historical instance we’ve talked about in the past of a superpower (Britain in the 1800s) that was able to grow its way out of terrible economic, social, and national defense challenges.
But I wouldn’t want to bet the house on this happening again. And that’s why it makes so much sense to have a Plan B.
Have another place to go. Take steps to reduce your taxes. Safeguard your retirement. Diversify your savings and investments outside of your home currency. Protect your assets. Etc.
That way, whatever happens, you will be able to respond from a position of strength.