The Great Financial Deception Is Ending, What Comes Next May Be Painful But Much Needed
Imagine that I stole $100 and gave it to you. What would economists call this? To answer the question, one must remember that economists are not moralists. They don’t care where the money came from; they only record what happens with it. In this case, economists would note that your income increased by $100, which you either spent, increased consumer spending, or saved. Either way, the economy would have increased by $100.
(Note that in my fanciful example, I’m excluding the loss recorded by the victim for reasons that will become apparent in a minute.)
As outrageous as this sounds, this is precisely how our financial system has operated for the past six years. Massive amounts of capital have been “stolen” from our children and grandchildren in the form of debt to be paid by them. Hence, these future victims don’t report the crime because many have yet to be born. But upon their shoulders will be placed the debt burden that we’re now constructing — currently, it stands at $323K for every man, woman, and child in this country and is rising rapidly.
None of this comes as a surprise to you, dear reader. You’ve read about the trillions spent on a nefarious emigrant program that brought people to our shores and provided them with transportation and living expenses. You’ve traced the billions given ostensibly to Ukraine but ended up with the military contractors in this country. You remember the trillions in stimulus checks sent to provide support during the COVID-19 Crisis. You understand the trillions in “Quantitative Easing” funds that gave the banks the funds to push loans to even the least qualified.
The Federal Government accomplished all this and more by borrowing funds, funds stolen from the future and future generations.
It’s not something new. We’ve been dipping into the “kitty” since at least the Great Depression of the 1930s. Each time there’s been an expansive money-printing period like we’ve just been through, a recurring pattern emerges: the future comes. And this new, diminutive future always begins when the monetary spigots are shut off.
The last time we had a comparable period was immediately following World War II. That’s right, the previous time policymakers pumped the economy as much as COVID was World War II! Following VE Day (Victory in Europe) and VJ Day (Victory in Japan), there was no longer a need for battle tanks, warships, and all the arms and munitions made in American factories.
Stimulus stopped, and the lost post-war decade began, a period of poor economic growth and deflation. The balloon had burst as the American economy transitioned from a fiscally dominated, Washington-based war machine to a civilian-led, free enterprise system.
Today, that same sort of transition is beginning. The Trump Administration is halting many of the “stimulus” programs started by the prior Administrations, Biden and Trump 1. Trump is sending back the immigrants and eliminating or downsizing many government programs, which you can find delineated on the DOGE.gov website — programs in Education, Foreign Aid, Social Reform, and many others. Regardless of the merits of these programs and departments (remember, Economics focuses on dollars and cents, not values), dropping or eliminating these programs will reduce financial activity and slow the economy.
This week, the current report on the nation’s GDP (Gross Domestic Product) showed how slow the economy is. GDP for 2024 came in at 2.3%, down 0.5% from 2023, and less than half the growth level experienced at the top of the Stimulus in 2021 when GDP grew at an astonishing 6.0%.
But that’s all history now. What’s concerning are this week’s results from the Atlanta Fed’s GDP Now Model. The Federal Reserve Atlanta Analysts developed this real-time tracking model. This report reveals the economy is in recession, declining at 1.5% annually.
Conclusion
It’s well past time that we begin to return our economy to its historic tradition — a steady state where private industry creates the profits and income that drive our prosperity. Our current path of “fiscal dominance” (where the central government becomes a principal influence on the economy) is a sure route to destruction.
The fact that the current administration has begun eliminating the excess and control of the past six years is a welcome sign for those who believe in free enterprise capitalism. However, it may not be an easy or painless path. But let us all resolve to pay that price and bring back this country’s foundation of financial freedom and liberty.
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