Dear Reader,
We are overcome with gratitude. We might have been born any time. But we were born in 1948, when antibiotics saved our life. We grew up when living was cheap and easy…and what luck!…we were so poor we could only go in one direction — up.
Nor were we burdened by any of today’s confusions. Would we be better off identifying as a girl? The thought never crossed our minds. Did we have a grudge against our parents…did society let us down…should we blame someone else if we were unhappy? We didn’t know it was an option.
We went to school when The Rolling Stones and The Doors were rolling out hit songs…and when it was still possible to ‘work your way through’ college. We started a business with almost zero financing…
…and were able to earn enough money to be able to live comfortably.
And then, more good luck…along came the internet that allowed us to move overseas, expand our business, and explore other places, people, and cultures in depth.
And finally, here we are…wonder of wonders…
…in the eighth decade of our life.
Dumb and dumber?
And now, the feds and the educated elite are putting on such a great show…such a rollicking, frolicking display; every day is a laugh fest! A great Carnival of Claptrap. A Jamboree of Jackassery.
Just read the headlines:
‘Why I Feel Guilty About Being a White Mother’
‘How the Rosary Became an Extremist Symbol’
‘At signing, Biden says IRA bill will fight climate change…’
What a great world. What great fun! Yes…it’s a great time to be alive.
Only…except…but…it’s too bad the feds are ruining it.
Wait. How could that be? The federal government has been around for a long time. So have the two parties. They haven’t wrecked the country yet.
Have they gotten dumber? More incompetent? More corrupt?
Yes, they have.
Hey, big spenders!
In our early career, the federal government was an obvious menace to civil society, progress, and prosperity. But it seemed to be more or less under control. Yes, there were plenty of people who wanted to expand federal power and use it to realise their fantasies of a better world. But there were ‘conservatives’ too — who were usually, or eventually, able to slow them down.
Senator Robert A Taft, for example, led opposition to the New Deal. Ronald Reagan had decent conservative instincts but was hornswoggled by his own allies. Ron Paul continues to be a very lonely voice for restraint.
But the old conservatives have largely disappeared; they’ve been replaced by war mongers, dumbbells, and big spenders.
‘So what’s the problem?’, asks the naïve observer. ‘You say the feds are leading us to Hell in a handcart. But as a percentage of GDP, they’re no bigger a nuisance today than they were under Nixon or Reagan.’
In 2019, the Federal Budget/GDP was 20% — almost the same as it was when Taft died in 1953. Then came the COVID Panic. The feds, from Donald Trump to Bernie Sanders, pretended that the threat of the coronavirus was like the bombing of Pearl Harbor. Without conservatives to stop them, they went on a spending spree. Federal outlays rose to more than 30% of GDP.
Back to the USSA
But that’s only part of the story. Federal regulations determine where and how resources are used too. And the effect is cumulative. George Washington University has the Regulatory Studies Center. It keeps track of ‘economically significant’ regulations, which it defines as those having an impact of US$100 billion or more.
When we were in our youthful prime during the Reagan years, the feds were promulgating about 20 of these regulations per year, with a total economic impact of at least US$2 trillion. Today, Joe Biden’s team is on track to put forth 63 new regulations per year, with a total impact of more than US$6 trillion.
These regulatory edicts represent a huge, and largely unnoticed, creep of federal power. If we average the intervening years at 40 per year, we can assume a total cost of US$160 trillion, or more than six times today’s GDP, since 1980.
That is a measure of how much bossier and more wasteful the federal government has become. It also helps to explain why growth rates and productivity have declined. For the first time in our lives, neither is positive. Both are going backwards.
In effect, the US economy has been Sovietised, shackled by central planning. As we see in the latest boondoggle — the Inflation Reduction Act — Washington hacks increasingly decide what kind of car you will drive…what kind of kitchen stove you will use…where and how you will live. And as in the Soviet experiment of 1917–91, the results are grim.
All we can do is laugh.
Regards,
 |
Bill Bonner,
For The Daily Reckoning Australia
