Maybe just start with the national debt, nearing $34 trillion. You’re tired of hearing about it. It comes across as somehow abstract – after all, million, billion, and trillion all sound alike – making it hard to get your head around the enormity of the number until you realize the cost of just servicing it rivals the entire military budget. Triple that number to account for the country’s additional but uncounted financial commitments e.g. Social Security and Medicare.
Then, of course, it’s subject to what Einstein described as the most powerful force in the universe i.e. compounding interest. Anyone with a pocket calculator can readily see there is absolutely no chance of our growing out of this black hole. Free dessert to anyone who can come up with a credible scenario outside of outright default, whether it be literally or in some other guise e.g. reset (CBDC), debt jubilee, or hyperinflation.
Our discussion, though, is not even about the national debt per se. It’s something bigger – it’s about a mindset that’s been seduced by decades of magical thinking about debt in a hyper-financialized world. No one can even describe what money even means anymore. The financial system has long become detached from the real world. Start with that massive amount of money that’s “printed” by the central bank, far in excess of what’s needed to support normal economic activity.
That financial excess works its way through so many intellectual abstractions – derivatives, tranche packaging, off balance sheet financing, special purpose entities – that the very idea of risk is lost. It has given birth to perverse incentives. Those outside the money-creation system can only stare in blank incomprehension as debt levels have continued to pile up at every level, in every sector.
Our focus piece, a documentary well worth its roughly one hour duration (The Great Taking), punctures the illusion. We are invited to see the world through a different lens. View the piece as a working hypothesis delivered by someone who has served and survived the hardest edges of the financial world i.e. hedge funds, M&A, and private equity. He is now on the outside looking in, with nothing left to prove other than to deliver a message. Be aware…
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