THE COMING COLLAPSE OF DEMOCRATIC SOCIALISM

THE COMING COLLAPSE OF DEMOCRATIC SOCIALISM

THE QUESTION IS NOT IF, BUT WHEN? 

 

Watching the news we see economic crises worldwide. While we are not currently in a major downturn, we have been sort of treading water for the last 8 years. The  underlying problems with most economies, particularly western Europe and the United States, have not improved. In fact, the amount of debt and the future ability to deal with a downturn is a lot more unstable than before. The amount of debt held by Western countries, businesses and individuals, has actually increased since 2007. This election year we hear from some who believe if we just raise taxes on the wealthy all will be well. Others contend that all will be well if we can just instill confidence that a solution is near. Sorry. All will not be well. Taxes would have to be doubled in most cases, which will cause an economic collapse, or government spending would have to be cut in half, which will also cause a collapse.

Of course the problem is that there has been an accumulation of extraordinary debt by all governments, corporations, and individuals. There is not a precedent for this situation in human history. While the housing bubble was the symptom that was burst, when gas rose to $4.00 a gallon, in the US the massive debts held by everyone was the real problem. Debts of individuals can be traced to central banks that have not been willing to clear excess debts since the early 1980’s. Instead, they have encouraged and enabled individuals to borrow beyond their means to repay. We now see a classic debt collapse scenario where people are having a hard time servicing the debt they have and banks are raising standards to stop losses...with the economy stagnating until the debts are reduced to normal levels. This may take decades rather than years. 　

A far bigger problem is the debt of governments, particularly in Western Europe and the US. These debts are a direct result of massive spending and the whole idea of democratic socialism where votes were bought by promising unsustainable benefits...to individuals, spending on projects, surveys, studies, ad nauseum... to the well connected. When fulfilling these promises could not be sustained by raising taxes they just borrowed the money to be consumed. The spending on projects, etc. is more easily addressed by just saying "NO"...BUT the spending on benefits is much more difficult to address. The real culprit in all this is that socialism has been a dismal failure whenever it has been tried. I should qualify that by distinguishing between voluntary and involuntary socialism.

Voluntary socialism is self limiting. An example is fire insurance. If the incidence of loss becomes excessive, premiums go up and some people may refuse to buy insurance. If losses become excessive insurance companies may refuse to enter that market. There are natural limits for both parties.

The first instance of collectivist failure was recorded in the New Testament. The early Christians, thinking that the end was near, sold there possessions, dined together and shared with each other. It was not long until Paul, hearing complaints from the responsible members of the community, wrote to them saying, “He who does not work shall not eat.” Human nature and the voluntary basis of this experiment was a natural remedy.

Another example was the Puritans who landed in Plymouth in 1620. They formed the, "Mayflower Compact," an agreement to share all property and work in common. After 3 years of this experiment, they were barely able to survive. The Puritan's endeavor had been financed by investors in Europe who hoped they would reap a profit by the Puritans repaying their debts with furs and other goods. After 3 years of no return, investors refused to send any more support and the idea was scrapped. The Puritans then distributed land to each family and they were on their own - the result was the beginning of prosperity for all.  It was chronicled by William Bradford that while the number of people who were either too weak or incapable of work grew, and the young and motivated were increasingly unhappy with the communal arrangement, many who formally were unable to add much to the community instantly became more productive when they were able to keep the fruits of their labor.

Remember the 1960’s  communes, where a few self motivated people bought a ranch and lived off the land? It was not long until they were supporting a larger and larger number of new disciples, who agreed it was wonderful, except for the motivation part. Again it ended in a natural turn of events and human nature.

Now to involuntary socialism. Of course the greatest example has to be the Union of Soviet Socialist Republics. This experiment was immediate total government control that in the end was a dramatic failure. It may take Russia several generations to recover from the debacle. While touted by Socialists as the wonderful system of the future, (including Eleanor Roosevelt who visited the country many times in the 1930s when the worst atrocities were being committed), Solzhenitsyn and others saw and reported the true nature of the experiment. It's interesting to note that from the revolution in the USSR in 1917 to its collapse in 1989 was 72 years. If we take 1935 as the "embrace of socialism" in western Europe and the US, we end up at 2007. Does it take roughly this long for the failures of socialism to become unsustainable? While we have not had total control by the governments of western Europe or the US, we have been progressing in that direction for decades...hence the term progressivism. It has been a slow incremental movement that has taken control of most industries through regulation and has encouraged dependency by promising a safety net to those displaced by their policies. The part of the private sector that has not been effectively controlled by the government is the food and energy sector. They are in the process of taking over the energy sector and when they can control food they will have complete control of the economy and the people. Remember the winners of socialist economies are the ruling class who often live well off on what they skim off of the redistribution schemes. Even in the Soviet Union they lived well in their dachaus and had access to  travel and benefits that could only be dreamed of by the rest of the population.

While it all appears wonderful in theory, Unchangeable Human Nature has not been taken into account. Humans will help each other to some extent, but most will not jeopardize their or their families well-being for others. On a voluntary basis, many are willing to help those in need, in danger, etc. but as soon as it becomes involuntary, there will be resistance. This is just the nature of human survival instincts. While it may not measure up to the expectations of the ideologues of socialism, it is probably superior to all other organisms on earth. The Soviet experiment ended when there were no longer any incentives left. The Russians who have weathered one form of dictatorship for their whole existence were noted to remark to each other, "We pretend to work, and they pretend to pay us." In the end the only prospering part of the economy was the black market and flea markets.

So what has happened in every case of involuntary socialism?  Those who believe they are taxed too much will resist by finding ways to pay less; those who believe they are restricted in some way will find ways around the restrictions. Too much tax will usually create less revenue, etc. At first this is accepted or minimally enforced, but as the deficits grow, enforcement must increase and we see a cycle of increased enforcement, then less activity, then less revenue and if left to follow a linear path to forced labor and slavery.

In the U.S. there was once a work ethic and pride of self reliance - many would not accept charity, but after decades of increasing regulation and taxation it seems all restraint has fallen off and everyone will take and pursue more benefits, even if liquidating assets and claiming poverty is necessary. The dam has broken. The tipping point has been reached. It will not likely be restored by government action, or by acts of Congress, the same applies to Western Europe.

So what is the solution? At this point there is no easy solution. All solutions will require much pain and suffering. It may be limited by economic suffering and the necessary austerity to liquidate the debt and begin a new start with liberty and self reliance the foundation...OR...it may be that more enforcement will be needed until we return to feudal type society where basic necessities will be provided to the productive and compliant and those that do not conform will be eliminated from society by the powers that be. This is the question that will be answered when the coming collapse reaches its fulfillment.

originally published 2/11/2016

update 9/1/22   We are about to see the fulfillment of this narrative, possibly within months in Western Europe and then on to the U.S.

update 3/10/2023  We see the new budget is increased by 1 Trillion dollars. Debt of over 31 Trillion. Inflation destroying buying power. It is all unsustainable. 

update 11/16/2023, all the problems are now more severe, $34 trillion debt, $2 trillion deficit. Bond market in trouble. Any attempts to fiscal responsibility labeled extreme. 

update 5/24/2024, U.S. now incurring debt at the rate of $1 trillion every 100 days. Gold $2450 oz. While all seems well, it is all unsustainable, Economic crisis on the horizon.

Update 2/19/2025. U.S. debt nears $37 trillion. Gold $2940. Trump and DOGE attempt to reform spending and fraud in budget. Many would rather go down with the ship than change this unsustainable course.

Update 7/21/2025. U.S. debt now over $37 Trillion. deficit near $2 Trillion. Gold $3300 per oz. All unsustainable.

Update 2/25/2026. U.S. debt now near $39 Trillion, deficit near $2 trillion, 25% of budget. Gold over $5100 per oz.  A major economic event could trigger the crisis of the century.

Iran war, more complicated by the day.

 NO UPSIDE FOR THE UNITED STATES

WILL TRUMP MAKE DEAL ANNOUNCMENT TONIGHT?

It seems the world has been on the verge of war with Iran forever, actually it is becoming tiring, just listening to the litany of reasons why a war with Iran is necessary. We hear about Iran being on the brink of being a nuclear power for now 30 years. We hear that they are the number 1 sponsor of world terrorism. We hear that the government is a fanatical doomsday religious cult that is a threat to the world. We hear that they are irrational and can never be trusted with a nuclear weapon. I suspect that it is all bullshit. There are no nuclear weapons, they actually have not attacked anyone who did not first attack them. They have supported groups who are resisting the Palestinian situation, much like the U.S. support of violent groups all around the world.

There are two real reasons why Iran has been on the radar for 46 years, if not 83 years, one is oil, Iran has large reserves of high quality oil, the good stuff, not the marginal oil of Venezuela.  The U.S., with the prompting of Britain, overthrew their first elected government in 1953, because the new government believed that their oil reserves should be used for the benefit of their people, not the fading British empire. They propped up the Shaw of Iran until 1979, 26 years, until the Islamic revolution replaced the dictatorship of the Shaw. 

The Shaw's power was maintained by the CIA trained SAVAK that had unlimited power to brutally keep the Shaw in power and thus insure access by the west to Iran's oil. They not only surveilled Iran but dissidents around the world, likely assisted by western intelligence. It is one reason why Iran in modern times has had real reasons to be suspicious of the U.S. and western powers. It is now hilarious if not so disastrous that the west is now pushing the son of the former Shaw who has neve been in Iran, to now run the country.

The number 2 reason is Israel, Iran historically has been the largest and dominate power in the region for centuries, if not millenniums. Much of that power has been neutralized by western powers in the 20th century. While many don't accept the reality that Israel desires to be the strongest military power in the region, an impossibility without the power of the US. These two reason are the 2 dominate reasons and then there is a third. 

Iran sits geographically in a pivotal position for the evolving trade aspirations of the global south and BRICS economic union. Iran is very important to the nuclear powers of Russia, China and even India in their hope of becoming a independent and alternative world economic system. A system that does not desire the destruction of the present system, except to be free to do business without the intimidation and sanctions that has become the policy of the west led by the United States. These other major powers have real incentives to see Iran free of western dominance and they a closely monitoring the situation and also now providing satellite surveillance and electronic assistance. This makes war with Iran now much more complicated. 

Iran is now in a position that they do not have to prevail over the United States and Israel, all they have to do is survive and inflict substantial damage on their adversaries, a very likely outcome. The prestige of the United States will be damaged if it cannot overthrow the government and partition up Iran. Can the United States easily replace the resources and equipment likely to be lost in this war? Much of the $39 trillion in debt of the U.S. can be attributed to previous military undertakings in the region, this will be the biggest, when the U.S. is the most fragile economically.

Then there was the interview with U.S., ambassador to Israel that stated that U.S. would not mind if Israel ruled the entire region. A political disaster at a pivotal time. To be realistic, the gulf allies of the U.S. are most likely a very fragile bunch, kept in line by military fear and unlimited dollars. Not to mention Turkey and Egypt, who I would not trust their support once there is blood in the water.

Then once the missiles and aircraft are in the air and the chaos of war begins, can the Chinese and Russian submarines feel they can accomplish plausible deniability of some limited assistance. 

So, Iran has made it clear, that they will negotiate terms that can insure, no nuclear weapons, but will not disarm its conventional defense or ability to be self reliant in nuclear energy. This deal was available over a year ago, but vetoed by Israel. Will Trump now proclaim victory, by announcing the deal of no nukes for Iran or risk the complications of war with Iran. We are now going to see his decision making result very soon.

Court reigns in Trump on tariff's.

 CONGRESS NEEDS TO ASSUME THEIR RESPONSIBILITIES

TRUMP HAD IT RIGHT IN FIRST TERM

On Friday the supreme court ruled that President Trump overstepped his authority with much of his tariff policy, it was a good decision. I suspect that Trump could have enjoyed a certain amount of leeway in his tariffs if he would have been consistent and keep tariff's as part of trade policy. His policy in his first term was to use tariff's as a tool to negotiate with trade partners to end their discriminatory tariffs on U.S. goods. It was a quicker way to balance fair trade without years of disputes in the World Trade organization, he had some success with that policy.

The idea of a flat 10% tariff on imported goods could be a good idea, if the revenue  would be used to improve infrastructure that is necessary to faciality trade, airports, ports, highways, all necessary for both domestic and international trade. A better way would be a flat assessment by percentage of trade with those that export to the country with a payment from those countries to the U.S. infrastructure fund, as a fee to gain access to U.S. markets. It would be non discriminatory and would be less likely to be paid by U.S. consumers. That and negotiations based on reciprocal tariffs, could be acceptable to all involved. The original idea was to negotiate to end tariffs.

In this term it seems Trump has gone astray with idea that he can effect foreign policy of both allies and competitors with imposing large tariff's to force compliance with issues other than trade. Some of this was forced by members of the Senate, one has to wonder if they hoped to effect change or damage Trump. Attempting to force others to not do business with Russia, at their economic damage, by oppressive and discriminatory tariffs. Tariffing India, but exempting China because China has more leverage than India, is likely to have a long term result of many just coming to the conclusion that trade with the U.S. is too complicated and even dangerous. The Idea inherited from previous administrations that there cannot be any country adopting a policy of neutrality, is bad policy. The idea that every country has to adopt the U.S. foreign policy objectives, even at their economic peril, will in the long run, force the much anticipated duel world economic systems, that will leave the western world behind.  

After one year of this policy, it is not too late to change course, the court has given Trump the out to move in a better direction, at least as far trade is concerned. If congress would assume their responsibilities, it could give him the out in ending of wars of regime change. Sadly, congress has morphed into efforts of short term political advantage, with little real policy or long term objectives. Most of them are  disgrace to their office.

Ready for WAR, time for congress to decide.

 TRUMP SHOULD DEMAND CONGRESS DECIDES

MAKE THEM VOTE

It seems the U.S. is now positioned to go to war with Iran. President Trump has indicated that it his decision, but constitutionally it is not, it is solely a decision to be made by congress. This should require several days of debate, with testimony from witnesses, They can even bring in some foreigners, like Netanyahu to make the case.

War needs a simple majority in both the House and Senate, but I would demand a 60% vote in the Senate, I think if 60% is required to pass spending bills, it should be required to engage in the biggest war since WW2. 

Trump should defer from making a recommendation, He should let the congress decide. Those advocating for war can be led by blood lusting psychopath Lindsey Graham, I am sure he would just love that job. 

Advocates and those opposed should have several days to call witness's to give their input, then a vote in the House and if passed then send it to the Senate to have a similar debate. That is the correct way to force the nation into a pivotal war that may have lasting consequences for all the citizens. It is their responsibility and it is high time they start to taking that responsibility, that they all seem to want when they decide to be representatives and senators. 

If it it approved, then it should be left to President to decide when such action should be taken or he could  veto their decision, it would then require a 2/3 vote to override, that is the right way to do this.

Trade wars and military action will never restore America.

 AMERICAS DECLINE IS ROOTED IN DEBT AND LOSS OF MANUFACTURING CAPACITY

THREATS AND FORCE ARE NOT THE REMEDY

While the country is in the verge of war, again, in the middle east, with a country that is not a real threat to the United States, but will cost the country billions in resources, no matter the outcome. Winning will not make us safer or more prosperous, but just add to the debt and loss of credibility in the world. 

For many years the United States has engaged in war, economic and military in an effort to sustain its global dominance. That dominance was earned post WW2 when the country was the number 1 producer of goods, the greatest manufacturing country and a dollar that was considered "As good as Gold" Sadly that is no longer the case. Its seems the policy for the last few decades is, that if we can contain, hamper or limit the success of our competitors we can sustain our dominance. It is a delusional and destined to fail policy.

While the  unrestrained rush to globalism has contributed to the problem, it cannot be remedied by attempting to limit others by denying them access either to the U.S. market or U.S. products. One example is that while China has become a dominant producer in certain areas it was willing to buy products from the U.S. that they did not have to expend resources to develop and it helped to limit the growing balance of trade deficit for the U.S., one was computer chips and also grain. Our genius policy makers decided that we should limit our sales to China of products that would assist in their development, the very products that helped us stay competitive at least in some areas. The most obvious was computer chips, which was a massive export by us to China, so we limited those sales in an effort to slow China down and they responded by establishing their own chip manufacturing and out produced and out sold our businesses, which then had less resources to keep up their dominance in that field. Our answer was for the government to subsidize those business's to keep them competitive.  More debt and dependence on government will most likely not keep them competitive. This will also add to the lose of our manufacturing base. Grain sales were replaced by other countries not engaged in containment policies.

China has the financial resources to focus and become competitive and even dominate in any field that they desire. The U.S. has near $39 trillion in resources tied up in debt that has financed prior spending. Until this situation is addressed, the U.S. will continue on a path of decline.

Then there is another group of geniuses who believe we can intimidate the rest of world to submit to our mandates, accept out debased currency, due to deficit spending, as payment, all under the threat of sanctions and military force. While we may have the most advanced and powerful military in the world, we should be seeing that it may be a hollow giant. How is it that insignificant Russia, "a gas station posing as a county" has been able to sustain and even out produce the whole of NATO in conventional weapons. Yet, we see the Defense budget increased and now hoping to increase it by 50% , without anyone asking the question, where is all the money going? A huge expenditure for a sector now considered "too big to Audit", sounds like a very similar excuse for excusing corruption.

U.S. stockpiles are admitted to be very depleted due to massive outlays of ordinance and equipment to Ukraine and Israel. While all this assistance may help the defense sector to be prosperous, will help most Americans? How dependent are we for vital material from the same countries we are trying to contain? Can the U.S. sustain a prolonged conflict without running out of ordinance?  A conflict that endures for months or years rather days? Can we replace ships and expensive equipment? I suspect that real military analysts are asking those questions, but are they being drowned out by donor paid for politicians.

I suspect that many of these questions will be answered in the near future.

 needed and did not have ot expend resources 

We can expect confrontation on the high seas.

 DO U.S. ORDERS TRANSLATE INTO INTERNATIONAL LAW?

LOOKING FOR THE DEFINNG MOMENT FOR WW3

One must wonder were the limits are to the U.S. control of the commerce of the world?   We all understand that the U.S. has the right to refuse to do business with anyone they don't approve. We understand that tariffs can be placed on anyone that the U.S. feels it wants to punish. Now it seems if countries just find other customers or trading partners we believe we can also damage their trading partners through tariff's and other economic warfare, that is possible, but should expect economic retaliation. 

Now since the use of an embargo or blockade of Venezuela and Cuba,  of course under the pretext of obeying international law, that now seems to be manufactured unilaterally by the U.S., we are seeing an attempt to expand the use of blockades and embargos around the world. No one questions that he U.S. has the most powerful Navy in the world. So far, no one has challenged this Navy since WW2. If the U.S believes that it can blockade advanced powers on the world stage without pushback, it has indeed gone down the path of delusional overreach.

It appears that the only nation that is willing to go down the path of WW3 is the United States. We will undoubtedly see either armed commercial vessels that will challenge being taken control of or escorted vessels in the near future. It is very likely that there will very well be an organized effort to preserve the right of navigation around the world. If this attempt to control commerce around the world continues there will be a confrontation in the near future. A confrontation that may be impetus to finally move this economic warfare to the real deal. 

The danger is growing by the day and when you put others in a existential threatening position, war will soon follow.

 Unbited /states.

There will be war, Just a question of who will start it.

 UNREALISTIC NEGOTIATIONS AND OIL EMBARGOS 

ACTS OF WAR, NOW EVERYDAY OCCURANCE

The most likely beginning of the next war is Iran. Indications are that Iran is willing to insure against obtaining nuclear weapons, but Israel has demanded that they must give up all nuclear energy enrichment and also their missile deterrent. While Trump at one time had an agreement with Iran on Nuclear weapons, that was rejected by Israel. It is reported that Trump was told by Netanyahu that either Trump destroys Iran's missile program or they will do it, and that the U.S. will then be forced by public opinion to join in. Under those conditions war is inevitable, Iran can never agree to disarm, especially at the instance of Israel. 

At the same time we have the increasing situation of the U.S. deciding to interfere in oil shipment worldwide. Besides the embargo on Venezuela oil, only to be sold to those approved by the U.S., they have begun to attempt to interfere with oil shipment out of Iran. This is likely to hamper Iran's monetary situation and also put pressure on China economically. These are now all act of WAR, which will inevitably lead to catastrophic results. Not only war with Iran, but China may also feel that interfering with their oil supplies is intolerable. There have also been attacks on Russian oil shipments in many places, some contend that it is a CIA operation.

Objectively, one must wonder why Iran has not yet initiated this war as it now seems inevitable and time is allowing more resources to become available against them, unless they feel time is on their side to prepare for this conflict and world public opinion will be unfavorable to the initiator.

At the same time, one must wonder how long Russia and China will allow interference of their vital commerce in international waters, both have substantial and effective submarine fleets capable of causing significant damage.

Some speculate that taking of Venezuela oil was a first step in preparation for a wide-ranging middle east war that will replace oil from that region. A wide-ranging middle east war will likely spread to a world war, with Russia and China realizing there is no plan for co-existence, only submission. It could be expected that every power in the middle east would quickly need to take sides and be involved, It would be a very unpredictable gamble as to where they would ally. 

It appears that he next few weeks may be a time of decision. Only a backdown by someone can now stop the rush to war. A backdown that is impossible for some and will have severe consequences for others.