The majority of citizens are fully in denial of everything that matters.
Their leaders, who are also in denial of everything, except what they need to do to get re-elected, recently passed tax cuts.
David Stockman, a smart guy only partially in denial, here explains that the tax cuts are actually a dangerous and unsustainable debt increase.
Now we need another person, with less denial, to explain that the debt increase is actually a predictable outcome of falling per capita net energy.
And then we need another person, with even less denial, to explain that falling per capita net energy is actually a symptom of human overshoot.
And then we need another person, with very little denial, to explain the severity of human overshoot and how our actions and inactions are actually making the future much much worse than it needs to be.
And then we need another person, with no denial, to explain the need for immediate and aggressive population reduction, austerity, and conservation policies.
And then finally, we need the majority of citizens to agree.
What do we get instead?
The religious among us get many gods that promise eternal paradise in the afterlife if they reject all the other false gods and breed like rabbits.
And the secular among us get Elon Musk promising salvation and eternal economic growth with solar panels and electric cars, or if all else fails, an escape to Mars.
Our larger point is that the GOP tax bill will put the Federal deficit in the $1 trillion plus category beginning in FY 2019, as we shall demonstrate in Part 2. And it will remain in that zone through the middle of the next decade waiting for two more giant, red-ink spewing shoes to drop.
To wit, the new Fiscal Cliff being structured into the GOP tax bill will arrive in 2025, while the next recession is virtually certain to arrive considerably before that date. It would be the height of folly, in fact, to otherwise bet on the prospect that the US economy will go upwards of 200 months without a recession and the resulting plunge in Federal receipts.
Stated differently, in the name of imaginary growth—which will not happen from the $1.8 trillion of business cuts as we will also elaborate in Part 2—the GOP is driving straight toward a fiscal calamity.
You would think they might sense that already—since it appears the best they can agree to on Friday’s CR expiration and threatened government shutdown is a only a two-week extension.
And perhaps they have also noted that November clocked in as month #101 in the current expansion, making it the third longest in US history and not far behind the 118 month expansion of the 1990s under far more beneficent circumstances.
We mention this because as of November 30, the net Federal debt was up by $880 billion from just one year ago!
That’s right. At what the Fed alleges to be “full employment” and what we believe to be a business cycle that is exceedingly weak and long-in-the-tooth, the Federal government’s fiscal posture has deteriorated so badly that borrowing is already approaching the $1 trillion annual level.
Yet now the GOP is on the cusp of opening up a new torrent of red ink for tax cuts, defense spending and much else.
It’s a fiscal calamity in the making by any other name.