U.S. Debt Crisis, Proof that 1975 was the year it Began

By: Brian_Bloom

Note from the chart below how US public debt began to climb from 1975 onwards. Source: eh.net/encyclopedia/article/noll.publicdebt

I tried to look up debt on this latter site as at 1975 only to discover that the Treasury has now deleted historical records prior to 1993. A few weeks ago I was able to get information dating back to at least 1980. What does that tell you about the state of mind of the authorities?

The above chart is evidence that the US has been living off capital since 1975. In my mind, this is also evidence that it was the US consumer who facilitated economic growth in third world countries. Eventually, it all spiralled out of control because the real estate bubble – driven by Greenspan – encouraged the US consumer to increase consumption to the point of hedonism.

But, by 1979, the driver of global wealth creation – energy – had lost its potency. Global energy output per capita peaked in 1979. Therefore, all that happened was that the US impoverished itself whilst the industrialising nations enriched themselves. It seems that the size of the overall pie – on a per capita basis – did not increase. The mirage began to evaporate when the real estate bubble burst and the US consumer started to “feel” poor once again. Injecting cash into the economy is not going to change that. That’s why the Fed will not continue with QE3 etc. It’s pointless. Real Estate prices are still heading south. The US consumer will not continue to rely on credit for hedonism. QE 3 will be impotent. That’s why I have difficulty in empathising with the hyperinflation argument. You can’t “force” people to borrow.

If this is true, then the ability of the US to continue acting as a driver of the world economy is no longer present. The US is “tapped out”.

So, will the industrialising nations be able to take over where the US consumer left off?

Until the energy issue is addressed, wealth will continue to be redistributed. The rich will become richer and the poor will become poorer and the overall pie will not grow on a per capita basis. Paradoxically, the US will remain stronger than many other countries in relative terms. The dollar is unlikely to fall in a heap.

It’s not about which currency is best. It never has been. Yes, monetary discipline is important. But that is secondary to the main question. The main question is: How can we get our energy per capita output up without destroying ourselves in the process? The world economy grows because of wealth generation facilitated by increasing energy output – now made all the more difficult because of climate change. Now made even more difficult by Fukushima.

Our leaders have the wrong mindset. They are not interested in representing voter interests. To ensure re-election and maintenance of their personal power bases/lifestyles, they are representing the interests of those lobby groups who are blocking solutions.

The missing element in all this is “ethics”. That is what has to change as a condition precedent to solving our problems.

By Brian Bloom

www.beyondneanderthal.com

Once in a while a book comes along that ‘nails’ the issues of our times. Brian Bloom has demonstrated an uncanny ability to predict world events, sometimes even before they are on the media radar. First he predicted the world financial crisis and its timing, then the increasing controversies regarding the causes of climate change. Next will be a dawning understanding that humanity must embrace radically new thought paradigms with regard to energy, or face extinction.

Via the medium of its lighthearted and entertaining storyline, Beyond Neanderthal highlights the common links between Christianity, Judaism, Islam, Hinduism and Taoism and draws attention to an alternative energy source known to the Ancients. How was this common knowledge lost? Have ego and testosterone befuddled our thought processes? The Muslim population is now approaching 1.6 billion across the planet. The clash of civilizations between Judeo-Christians and Muslims is heightening. Is there a peaceful way to diffuse this situation or will ego and testosterone get in the way of that too? Beyond Neanderthal makes the case for a possible way forward on both the energy and the clash of civilizations fronts.

Copies of Beyond Neanderthal may be ordered via www.beyondneanderthal.com or from Amazon

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