The Real 'Goldilocks Economy,' Part II
NEW YORK (Bullion Bulls Canada) -- In Part I of this series, I presented a mythical "Goldilocks economy," a contrivance of propaganda where B.S. Bernanke attempted to portray the U.S.'s worsening economic collapse as representing some sort of Golden Age. We were also presented with a legitimate definition of a Goldilocks economy: steady growth, stable employment, and muted inflation. Back in the real world we saw a U.S. economy that exemplified the exact opposite of all those characteristics.
In Part II, I expand on the definition presented in Part I, and then show how such an economic dream could be achieved. For this, we look at the three facets of the Goldilocks paradigm individually.
With respect to the propaganda myth of "steady growth," understand as a matter of the simplest arithmetic this is impossible with any economy that embraces the suicidal Keynesian doctrine of perpetually rising debt-levels. Obviously if you begin with an economy spending 1% of each dollar of revenue paying interest on debt, then 5%, then 10%, and now 25% to 30% (as Europe's Deadbeat Debtors prepare to default) you can never possibly have steady growth.
Rather, as the albatross of debt around the throats of these economies becomes heavier and heavier, it is inevitable that growth will become more and more anemic as a greater percentage of resources is wasted servicing debt. These economies become so saturated with debt that further "growth" is impossible. This is where our Western economies are today.We thereby arrive at our first Goldilocks Principle: Steady growth requires a solvent economy, and (at the least) a balanced budget. Here it's important for readers to realize that even the massive "Debt Jubilee" rapidly approaching for our debt-saturated Western economies will not restore solvency. Thanks to the relentless (and unprecedented) transfer of wealth from the bottom-80% to the top 5% (and most particularly the top 1%), our tax-base has been destroyed. Those on the bottom have nothing left to tax, while those at the very top refuse to pay taxes. Without a viable tax-base, immediately after Debt Jubilee we would simply begin a new debt-spiral -- and then (literally) mortgage the future for the succeeding generation.
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