Engineered Collapse of the Middle Class

The most shocking videos in the world! This video actually shows us what the secret of the Trump family is related to their expressive health!!! Full Video.

The writing is on the wall and the elites are conducting a last-ditch operation to take it all.

Historically, the expansion of the middle class was supported by the balance of power between capital owners and labor. When labor was scarce – such as after the Black Death – the average citizen was able to negotiate better working conditions and pay.

More recently, cheap and abundant energy created an economic surplus that could support policies strengthening the middle class. However, as energy – and resources in general, including food – becomes more scarce, the middle class will become a passing phenomenon.

Why Care About the Middle Class?

A robust middle class reduces disparities between the rich and the poor, which helps prevent resentment, crime, and political unrest. In societies with extreme inequality, divisions between economic classes deepen, fueling instability and disenfranchisement. A broad middle class promotes inclusivity and shared prosperity, encouraging a sense of unity and national identity.

The middle class also helps maintain democratic institutions. When economic power is highly concentrated among a small elite, political influence follows, leading to policies that favor wealth preservation rather than broad-based economic opportunity. A strong middle class balances the political landscape, where policies are created with the broader population in mind rather than serving only the interests of the wealthy.

Without a thriving middle class, society becomes increasingly polarized, with a struggling lower class and an isolated elite. This leads to rising populism, greater social unrest, and an erosion of democratic institutions.

How Wealthy Elites Squeeze Out the Middle Class

For decades, the middle class was the backbone of economic stability. It represented upward mobility, financial security, and shared prosperity. But with the onset of trickle-down economics, this group has been squeezed from all sides – stagnant real wages, rising costs of basic needs, and financial policies that favor asset holders over workers.

Government responses to economic calamities have accelerated this trend, starting with the Long-Term Capital Management bailout in 1998. Every major systemic risk over the past 30 years has been papered over by bailouts and quantitative easing (QE), which disproportionately benefit those who already own assets.

QE, introduced during the 2008 financial crisis, was meant to stimulate the economy by injecting liquidity into financial markets. The theory was that this would encourage investment and job creation, but in practice, it primarily inflated asset prices – stocks, real estate, and bonds – benefiting those who already owned them.

From 2009 to 2021, the stock market saw one of the longest bull runs in history, yet real wage growth remained weak. The top 1% of Americans own over 50% of all stock market assets, while the bottom 50% own less than 1%. When central banks pump trillions into the system, stock prices rise, making the rich richer while the majority see little benefit.

At the same time, low interest rates encouraged corporations to engage in massive stock buybacks rather than reinvesting in workers. CEOs and executives reaped the rewards while wages stagnated. The result has been an economy where wealth accumulation is increasingly tied to asset ownership rather than labor.

Bailouts and QE create a moral hazard by socializing losses and privatizing gains, encouraging even riskier investment decisions and economic policies. Consequently, wealth inequality has reached historic levels, with the top 0.1% now controlling more wealth than half the US population.

Housing, Education, and Healthcare

The ultra-wealthy, with their financial safety nets, have used their excess capital to drive up the cost of essentials – housing, education, and healthcare. With greater disposable income and an expanding asset base, the rich are willing to pay more, pushing up prices for everyone.

Housing has become one of the biggest barriers to middle-class stability. Ultra-wealthy investors, foreign buyers, and institutional landlords have driven up real estate prices beyond what most families can afford. In major cities like New York, London, and Toronto, high-income buyers pay massive premiums for desirable locations, encouraging developers to cater to luxury demand rather than build affordable housing. Families that could have once afforded homes are now priced out, forced to rent indefinitely or relocate to less desirable areas. Institutions like BlackRock have only accelerated this trend, turning housing into an investment vehicle instead of a fundamental need.

Education is another sector where the wealthy have distorted pricing. Families with unlimited resources can pay astronomical tuition fees for elite universities, allowing schools to continue raising prices. Public universities, which once offered an affordable path to upward mobility, have also become prohibitively expensive due to funding cuts and rising administrative costs. The result is a student debt crisis that leaves middle-class graduates burdened for decades, while the children of the elite graduate debt-free and with better connections.

Healthcare has followed a similar pattern. The wealthy can afford private care, giving them better access to top doctors and faster treatment. Meanwhile, middle-class and lower-income families face longer wait times and declining healthcare quality as public systems struggle with underfunding. In countries like the U.S., concierge medicine has made this disparity even worse. Those who can pay for exclusive healthcare services receive premium treatment, while the rest are left with overburdened hospitals and insurance nightmares.

Generally, when the supply of a good or service is constrained, the marginal buyer willing to pay more resets the bar for everyone. Suppliers will cater to that marginal buyer, driving up prices industry-wide.

Historical Example: India’s Rice and Tea Crops

A historical example of economic manipulation at the expense of the majority can be seen in colonial India.

During British rule, rice crops, a staple food for millions of Indians, were increasingly replaced by tea crops that could be sold at higher prices through export to England. Demand from English consumers willing to pay for a more expensive crop diverted cropland away from staples, reducing supply, making rice more expensive for Indian consumers.

The consequences were devastating, as food shortages and famines followed, highlighting how economic policies driven by elite interests often come at the direct expense of the broader population. This is just one of many examples of how wealth inequality has historically been exacerbated across the world.

The Elite are Collapse-Aware

The rich and powerful are increasingly collapse-aware. For years, they made token PR-worthy attempts to slow its progression, but as collapse becomes more imminent, their strategy has shifted from public appeasement to outright wealth consolidation.

Virtually every policy being rolled out today further concentrates wealth and power among the elite. This is amplified by the rise of artificial intelligence, which will soon replace many jobs.

What may have once been an unintended consequence of economic policy is now a deliberate feature. The past 30 years have taught the wealthy that they are insulated from the economic hardships affecting the majority. Indeed, they are the only segment to benefit from policies meant to stabilize society, which instead transfer wealth upwards.

Learning from these lessons, they are now actively engineering economic collapse, believing they will be the main beneficiaries. Financial crashes have become wealth-accumulation events. What used to be unplanned destructive economic downturns are becoming carefully managed opportunities for the elite to grow even richer.

The cycle is clear: A crisis hits, sending markets into freefall. The middle class, living paycheck to paycheck, panics – losing jobs, selling off stocks, or defaulting on mortgages. Meanwhile, the wealthy, armed with cash and credit, buy up distressed assets at fire-sale prices. Then, as governments step in with bailouts and QE, asset prices rebound, making those who bought at the bottom exponentially wealthier.

In the long run, this strategy is doomed to fail. As much as they believe it, the wealthy can’t eat money.

But for now, the elite are paving the way for a neo-feudal society, where a handful of people control remaining resources leaving everyone else behind. Eventually, the masses will vanish into the fog of collapse and the 1% will sit alone comforted only by their stacks of paper. 

Source- collapse2050.substack.com

Why the U.S. is Threatening Greenland and Canada

What if the incoming US administration knows a lot more about climate change than they let on?

Before you shout at your screen that I’ve lost the plot, here me out…

Put yourself in an immoral politician’s shoes. During an election, their goal is to get votes – not share details about their positions on issues. Details don’t trigger emotions. Wild claims do. So every speech, every action is tailored to captivate their audience.

The average voter is ignorant. They spend more time researching a car purchase than a presidential candidate. They vote with their gut, so relatability, soundbites, and easy answers grab their attention.

By saying “climate change is a hoax”, the R party permits its voters to abdicate responsibility, and provides an easily repeated catch phrase. Moreover, by contradicting scientific consensus, they manufacture a wedge issue to drive voters apart and distract from the real issues.

Does he really have the capability to be this manipulative? I mean, he has convinced his followers he’s a good Christian man, so…

Maybe I’m giving him too much credit, but during the election campaign, it was obvious his strategy was to say whatever his voters wanted to hear, regardless of how infeasible. Somewhat like the grade school presidential candidate promising an extra recess.

Now that the votes have been counted, he has since walked back a few wild claims to become a bit more realistic.

Given this behavior pattern, I believe the incoming administration is aware of the changing climate. I’m sure senior staff have been briefed by military and scientific advisors about the geopolitical implications of a melting arctic, droughts, water shortages and crop failures. I’m also positive some of those military and scientific advisors have used apocalyptic terms.

Given this premise, it is clear why “he” is threatening Greenland and Canada. The strategic importance of these countries to US hegemony are known by senior politicians on both sides of the aisle.

In other words, the US has been and will always be on a path to controlling these regions. “He” has simply (clumsily?) broadcast American desires. How these desires are executed – by force, threat or cooperation – remain to be seen.

Why are Greenland and Canada critical to American strategic interests?

Greenland

1. Control Over New Arctic Shipping Routes
   As climate change melts Arctic ice, shipping lanes like the Northwest Passage are becoming accessible, promising faster trade routes between continents. Controlling Greenland ensures the U.S. dominates this emerging global trade network, preventing adversaries like Russia or China from gaining a foothold.
2. Critical Rare Earth Minerals
   Greenland is rich in rare earth minerals, essential for military technologies, renewable energy systems, and consumer electronics. Without U.S. control, these resources could fall into Chinese hands, undermining America’s technological and defense superiority.
3. Military Supremacy in the Arctic
   Greenland’s location is perfect for expanding U.S. missile defense systems and monitoring Russian Arctic activities. Its strategic position makes it an asset for projecting power in the rapidly militarizing Arctic region.
4. Blocking Russian and Chinese Influence
   Both Russia and China are aggressively increasing their presence in the Arctic. U.S. dominance over Greenland would not only deny them access but also solidify America’s claim over the entire Arctic region as the ice recedes.

Canada

5. Arctic Sovereignty and Shipping
   Canada’s claims over the Arctic are an obstacle to U.S. access to valuable shipping routes and resources. As climate change transforms the Arctic into a global economic hub, the U.S. must take control to ensure these assets are used to its benefit.
6. Securing Energy and Food Supplies
   Canada’s vast reserves of oil and natural gas are indispensable for the U.S. to maintain its energy security. Canada’s massive production of principal field crops could also become a critical resource, securing American access to food as global crop yields decline. America cannot afford to leave these critical assets outside its control.
7. Continental Defense
   While Canada shares NORAD responsibilities, the U.S. cannot rely on Canadian cooperation indefinitely. Control of Canadian airspace and Arctic territories would ensure full American ownership over North American defense.
8. Controlling Freshwater Reserves
   As droughts intensify and freshwater becomes increasingly scarce, Canada’s unmatched water reserves will be essential. America could preemptively secure these resources to meet future domestic demands.
9. Aligned Arctic Policy and Enforcement
   Canada’s lukewarm Arctic policies slow U.S. ambitions to assert dominance in the region. Taking over Canada would streamline Arctic strategy and ensure the U.S. leads unchallenged as climate change reshapes the region.

Side Note: Why has the Panama Canal been threatened?
The Panama Canal is a strategic chokepoint that controls 6% of global trade, making it one of the world’s most critical waterways. Its importance extends beyond commerce, as it enables the rapid movement of U.S. naval forces between the Atlantic and Pacific Oceans, solidifying the nation’s position as a maritime superpower. Full U.S. control of the canal would eliminate reliance on Panamanian authorities and secure this vital artery against interference by rival powers, particularly China. Beijing’s increasing investments in Panama’s ports and infrastructure pose a direct threat to U.S. influence in the region, and military control of the canal would hinder Chinese ambitions in the Americas. Additionally, the canal is essential for transporting U.S. liquefied natural gas (LNG) and agricultural exports, safeguarding these key sectors from geopolitical disruptions. Beyond economic and military advantages, controlling the Panama Canal would enhance U.S. dominance in the Western Hemisphere, allowing for stronger influence over Central and South America while curbing adversarial ambitions. Such a move would solidify the U.S.’s position as an unchallenged power in the region, ensuring both strategic and economic security.

John Bolton – a old school conservative hawk with behind the scenes experience – reiterates the strategic benefit of US influence over Greenland and Canada in the following video. And yes, he even says the words “global warming”. If a guy like this knows about it, others certainly do. And this is shaping America’s geopolitical ambitions.

I also invite you to take a look at this site- www.whatfinger.com

COVID & Health News 2/23/25

So much happened again in the United States government this week and much of it is extremely concerning. Please see my separate post from earlier today called “The Pentagon’s Friday Night Massacre & Important Government Updates 2/23/25”.

Respiratory Illnesses

Respiratory illnesses are still HIGH now across the country and Influenza A is VERY HIGH. COVID wastewater levels are MODERATE in most places, but are still HIGH in the Midwest.

COVID, RSV, Flu A and Flu B virus levels in wastewater by US Region per WastewaterSCAN:

COVID

Per JP Weiland, there are now approximately 440,000 new COVID infections daily in the United States with 1 in every 76 Americans currently infected with COVID. COVID levels are higher in the Midwest. Emergency department visits for COVID have just started to decrease after a second bump in cases. Through February 15, there have been 272 deaths from COVID in the US per week and this appears to be decreasing.

Through February 15, CDC (NWSS) data shows VERY HIGH levels of SARS-CoV-2 virus in wastewater in Arizona, Montana, Indiana, Kentucky, Tennessee, Washington DC and South Dakota.

Sara Anne Willette has made a composite map of wastewater using combined data from both the CDC’s NWSS & WastewaterSCAN. Using combined data, we see that Iowa, Indiana and Tennessee all have VERY HIGH levels of COVID in wastewater as of February 20.

Variants

Regarding SARS-CoV-2 variants, the CDC data is only updated every two weeks. As of last week, XEC had decreased to 37% and LP.8.1 was 31% of new COVID cases.

Vaccines

A group from Yale looked at 42 people experiencing chronic health issues after COVID-19 vaccination, known as post-vaccination syndrome (PVS). Compared to 22 healthy controls, PVS participants had distinct immune system differences, including altered T cell populations, lower anti-spike antibody levels, and signs of recent Epstein-Barr virus reactivation. Additionally, elevated levels of circulating spike protein were observed in PVS individuals. While it is important to recognize PVS, it is also important to remember that in general, COVID vaccination is much safer than getting a COVID infection.

Antiviral treatments

Researchers from China identified a shark-derived nanobody 79C11, that effectively neutralizes all tested Omicron subvariants, SARS-CoV-1, and pangolin coronavirus by targeting a conserved HR1 region in the S2 domain. This nanobody shows potential as an intranasal prophylactic agent and could help with the development of a universal vaccine against current and future sarbecoviruses.

Long COVID

INSPIRE is a prospective, longitudinal study of people who had acute COVID across eight US healthcare institutions. “Among participants followed up to 3 years after initial [COVID] infection, those with current Long COVID had worse physical and mental health outcomes. The majority of those with Long COVID did not resolve, with less than 2% having resolved Long COVID.” Those who thought that their Long COVID had resolved were still in worse health than those who never had Long COVID. COVID vaccination was associated with better long-term health outcomes, especially among those who received multiple vaccine doses.

Biomarkers of brain damage and neuroinflammation including UCHL1, GFAP and NFL are elevated in Neuro Long COVID patients who have memory issues and cognitive dysfunction symptoms. A group from Belgium treated 73 Long COVID patients with anticoagulant medications (Asaflow + Clopidogrel), 17 other Long COVID patients with the antiviral medication Paxlovid for 15 days and 16 patients received placebo. A rapid and significant decrease in biomarkers of neurologic damage (GFAP and NFL), and improvement in patient and clinician Long COVID symptom reports was seen in the small group of Neuro-Long COVID patients who took Paxlovid (n=9). They concluded that Paxlovid may help rid a viral reservoir of SARS-CoV-2 affecting the central nervous system in people with Neuro Long COVID. Anticoagulant treatment did not.

Figure 1D: In a subset of patients with longitudinal sampling (n=12 for anticoagulant treatment (top panel), n=9 for antiviral treatment, (lower panel)), markers of neurodamage and neuroinflammation were unchanged (UCHL1, GFAP, p>0.05) or increased (NFL, p=0.017) after anticoagulant treatment.

However, GFAP (p=0.012) and NFL (p=0.0078) significantly decreased after antiviral treatment with Paxlovid for 15 days. (*p<0.05, **p<0.0)

A study from Northwestern used optical coherence tomography angiography (OCT-A) to examine non-hospitalized Long COVID patients with neurological symptoms and found that they had reduced blood flow in the deep layers of the retina compared to healthy individuals. This suggests that Long COVID may affect small blood vessels, potentially contributing to ongoing neurological issues.

Dr. Amy Proal wrote an OpEd in the Los Angeles Times discussing Long COVID. Long COVID may be caused by persistent SARS-CoV-2 viral reservoirs, but more clinical trials are needed to develop effective treatments. Like treatment for Hepatitis C in humans or feline infectious peritonitis in cats, we may need to treat Long COVID with 8 to 12 weeks of antiviral medications. Government and private funding, similar to past efforts against HIV, could accelerate drug development and improve access to life-changing therapies.

Unfortunately, this week President Trump wrote an executive order to terminate the HHS Secretary’s Advisory Committee on Long COVID.

H5N1

A third H5N1 avian flu spillover was reported this week. A dairy herd in Arizona was found to be positive for the D1.1 genotype of H5N1 bird flu on routine milk testing and it is thought that the virus was probably introduced to the dairy cattle from wild birds. So far, the cows are asymptomatic. The D1.1 genotype of H5N1 can be more dangerous in humans.

Cats from 2 different households in Oregon contracted H5N1 avian flu from raw pet food made by Wild Coast LLC, Raw, Feline formula.

The US Department of Agriculture (USDA) has conditionally approved an H5N2 Avian Flu vaccine made by Zoetis for use in chickens.

Canada’s Public Health Agency secured 500,000 doses of GSK’s H5N1 avian flu vaccine for humans- 60% of these doses will be used to protect high-risk individuals and 40% will be placed in the country’s stockpile.

The USDA Animal and Plant Health Inspection Service (APHIS) confirmed more H5N1 bird flu cases in mammals including new cases noted in rats in California. Other mammals who have contracted H5N1 bird flu include mice, foxes, seals, bobcats, house cats, in addition to poultry, cattle, wild birds and humans.

Measles

A measles outbreak in West Texas is spreading with 90 people known to be infected there so far, but given low vaccination rates in that county, many more cases are expected. In a neighboring county in New Mexico, there have been 9 measles cases. On February 21, the CDC’s web page started reporting on Measles outbreaks again.

A person with Measles has about a 1 in 4 chance of hospitalization from serious complications including pneumonia, brain swelling (encephalitis) and severe diarrhea with dehydration. In the Texas outbreak, 25% of infected people have been hospitalized. Measles can be deadly, especially in children.

For a community to be protected against the Measles, >95% of people must be vaccinated with 2 doses of the Measles, Mumps, and Rubella (MMR) vaccine. According to the CDC, the 2-dose MMR coverage for kindergarteners was only 92.7% nationally, ranging from 79.6% in Idaho to 98.3% in West Virginia. In the Texas county with the Measles outbreak, only 82% of kindergarteners have been vaccinated, so that community does not have herd immunity.

Map of MMR vaccine coverage for kindergarteners for 2023-2024 by state:

Measles is extremely infectious. In an unvaccinated population, one infected person will infect on average 12 to 18 other people making it one of the most contagious diseases. Today, a new Measles warning was issued for San Antonio and San Marcos, Texas because a person with Measles visited two universities in these areas.

I posted the infographic below about Measles to my Bluesky page recently. Please feel free to copy and share it. Measles is a vaccine preventable disease that many American doctors have never seen.

Other news:

Epstein-Barr virus (EBV) is linked to various cancers, autoimmune diseases, and chronic infections. Scientists are developing new drugs targeting key EBV proteins and clinical trials show promise, particularly with Epstein-Barr Nuclear Antigen 1 (EBNA-1) inhibitors like VK-2019 and antibody-drug conjugates targeting Somatostatin Receptor 2 (SSTR2).

A new, inexpensive blood test called PAC-MANN-1 can detect pancreatic cancer by measuring protease activity using a fluorescently labeled peptide and magnetic nanosensors. “The nanosensor correctly identified healthy individuals 98% of the time, and identified people with pancreatic cancer with 73% accuracy.” The researchers are working to improve the 73% sensitivity. The assay outperforms CA 19-9 in detecting pancreatic cancer at all stages.

An opossum was taken to the hospital after it ate an entire Costco Tuxedo Chocolate Mousse cake. The “Cake Bandit” has become somewhat of a celebrity and the Nebraska Wildlife Rehab where she was taken has made t-shirts in her honor. She is expected to make a full recovery and will be released back into the wild.

I also invite you to take a look at this site- www.whatfinger.com

BURN, BABY, BURN: Trump's Plan to Make America Burn by Lighting Inflation Back on Fire

Trump was apparently so impressed with the searing inflation that his widespread stimulus checks set up back in 2020 that he is now contemplating a repeat stimulus program that will be even bigger. Trump stated a couple of times in the last 24 hours or so that he thinks it would be a grand idea to give 20% of the savings in government expenses that DOGE achieves directly back to American tax payers as stimulus checks, never mind that whatever DOGE does accomplish is likely to amount to much less than the current government deficit, so there isn’t going to be any surplus to distribute. It’s really just a choice to continue to run a higher deficit than we would have to if we applied 100% of the savings to reduce our enormous overspending.

Instead of cutting back government spending all the way to a balanced budget, Trump would prefer to give out 20% of the savings as candy for some popularity points, but that’s not the worst part. If he follows through with this stated desire, we are back on the path to the same high inflation achieved last time because his tariffs will create the other side of the equation that always assured escalating inflation rates—creating too much money in the face of too few supplies. Last time, lockdowns assured the shortages; this time, much broader tariffs, if actually carried out will assure shortages.

The Trump dump

One liberal economist today has joined me in claiming a deep recession and inflation are coming this year. While that is not the company I would like to keep, the reality spoken of in the article will have to be faced because it’s essentially math. The economist’s concern is that Trump’s hyuge government job cuts are going to start a deep recession. I stated in my predictions for 2025 that the attempt to rectify decades of bad government policy all in a few months time will definitely crush the economy like a bug for exactly that reason.

The article begins,

This is going to be very, very bad.

While I think cutting government way back is essential, there is no escaping the very, very real consequences, which is where this economist is now speaking out to say the same thing I said a couple of weeks ago. 

It’s just math. You cannot cut hundreds of thousands of government jobs along with tens of thousands of government contracts that result in hundreds of thousands of additional non-government jobs lost without creating a huge recession. Even if you do massive deregulation to boost US business expansion and create new factories and new jobs and try to drive business back to the US with tariffs, those benefits will take years to play through, so they won’t help at all with the present job cuts that will start hitting next month. No billionaires are going to start building factories when the Trump Tariffs might all blow away with the next administration. And when they are convinced it is safe to start, it typically takes years to get them approved and build them. Even if the billionaires decide to start building right now, it’s unlikely the could get new factories or expansions built in time to create jobs in the next few years. That is where I say this is wrecking-ball policy. It’s not strategically metered out in time to align the benefits with the initial economic destruction. Not even close.

The economist spells out exactly those points, which are some of the ones I laid out in that Deeper Dive of economic predictions:

"It seems almost unavoidable at this point," Rothstein wrote, "that we are headed for a deep, deep recession."

"The March employment report (to be released April 4) seems certain to show bigger job losses than any month ever outside of a few in 2008-9 and 2020," the professor wrote in his multi-post thread. "Add on to that enormous private market uncertainty — how could you hire in these conditions? — and this is going to be very, very bad."

The secondary economic knock-on effect noted by this economist matches what I wrote in my Deeper Dive, too, which is that a massive surge in unemployment results in a huge downscaling of consumer purchases because fired people do all they can to trim their budgets, and people afraid of being fired down the line also do the same thing to prepare for possible leaner times. That creates a feedback loop that causes even more indirect unemployment and, therefore, even more personal budget trimming, virtually guaranteeing a deeper recession.

It does not appear to me that Trump even begins to grasp all of that.

Moreover, the huge decline of the economy over the course of a year also results in far less tax revenue. All the lost income due to the government unemployment plus the collateral unemployment siphons out of the government income-tax coffers, hampering the amount by which the original cost-cutting can actually reduce the deficit due to the dynamic relationship between broadly expanding unemployment and tax revenues. So, you don’t wind up with anywhere near the dollar-for dollar savings that Musk has been crowing about.

More people getting unemployment benefits while no longer producing anything keeps money flowing to some extent, even as production diminishes. The expanding cycles of unemployment will take months—maybe a couple of years or more—to finish working through the labor force in widening circles:

As Rothstein points out, "I worry that [the US Office of Personnel Management] itself doesn’t yet know how many workers were fired. It may be some time before it can report accurately to the [Bureau of Labor Statistics]."

But the ripple effects of major hiring freezes could be "very large," he argued. "Universities and others are already instituting hiring freezes."

In fact, reporting may become even more flawed than it was during the Bidon epoch because the Bureau of Lying Statistics will have even fewer liars on the payroll, not that I’ll miss their ill-conceived misguidance. Just expect it to get even worse in the chaos.

There is no doubt, with credit agencies already sounding alarms on the US government’s ability to manage its debt now that it struggles just to keep covering the interest costs, that major cost cutting has to happen; but that doesn’t mean we get to ignore the fact that the time has come to pay the piper, and the payment will be very steep. I’ve said for years we’d find ourselves facing this problem … and that the longer we avoided it, the worse it would be when we finally get to where we cannot avoid it because it crashes.

Chances are, it won't be pretty, even according to Musk himself.

The billionaire said during a campaign stop for Trump just ahead of the election that America would likely be in for some financial "hardship" … should he begin trimming the fat, as he saw it.

"We have to reduce spending to live within our means," Musk said, seemingly using the royal we to refer to the hoi polloi despite being a billionaire himself. "And, you know, that necessarily involves some temporary hardship, but it will ensure long-term prosperity."

I have written for years about the need to eliminate the deficit, but Musk is underplaying the pain, perhaps because he is not the one who’s going to feel it. He may take some big financial hits, given that a lowering tide lowers all boats, but he obviously will be doing so on a deep-harbor luxury yacht. The rest of us better get ready for some rocky grounding and listing onto our sides as the tide goes way out from our more humble moorings.

The wrecking-ball approach to downsizing government is certain to make the pain a lot more severe than it might have been if we had a more calibrated approach because I have no doubt that we are also eliminating some jobs (like those nuclear workers) by error that will add to the unintended consequences of turning the biggest economic decisions of our lifetimes over to a gang of high-school pimple poppers. You can be a very bright nerd about computer stuff and not have an ounce of experience with real-world economics, the realities of massive unemployment, etc. You can, in other words, be computer smart but not the least bit wise.

So expect wide rings of unintended consequences on top of the pain we would have had if we used a carefully timed approach that made sure the benefits aligned somewhat in time with the pace of corrections. Of course, Trump want’s to make sure to get in all the corrections he can while he has the power because you certainly can’t trust anyone down the road to continue seeing them through. Nor do we have much time left. Regardless, the haphazard approach will make the pain worse.

The billionaire boys’ club

Some conservatives are ready to trust the billionaire club that is running government right now via their high-school age geek squads because they are infatuated with billionaires. I’m not infatuated with billionaires or their ability to save the rest of us after decades of “trickle-down economics” that never did trickle down, nor do I envy them at all. As Steve Bannon points out today for those conservative hopeful, the “oligarchs will abandon them”:

Those oligarchs – and people on CNN are gonna understand it – just like they’ve turned on you [CNN] now, right? They’ve abandoned the progressive left. They will abandon us and do the same thing. They seek power. Right now, their feeling is they can see the math and they see that we have a built-in coalition. So they’re with us – but only temporarily.

That’s right. They serve themselves. They are not principled men because during the Biden administration all their principles clearly ran to doing Biden’s bidding in censoring people like me at Google at The Washington Post at Facebook, etc. in order to keep in Biden’s good graces so they could keep building wealth for themselves. While Musk didn’t go along with the rest of the billionaire boys on that, Bannon uses his harshest criticism on Madman Musk:

“[Musk] wants to impose his freak experiments and play-act as God without any respect for the country’s history, values, or traditions,” he said in an interview with UnHerd this week while calling Musk a “parasitic illegal immigrant.”

Who can forget the hundreds of thousands of people Zuckerberg sent to Facebook jail for speaking the truth about Covid or for speaking out about Biden’s scandals? Those aren’t principled men. They are opportunists looking to seize the opportunities of the moment for themselves like capable robber barons always do.

Principled men (or women), speak out against bad ideas and bad actors, no matter which side of the political divide those actors stand on. They write things that cause them to lose an audience that doesn’t want to hear the same kind of criticism that the audience revelled in when it was directed at the prior administration. However, unprincipled men, such as Zuckerberg, go wherever the money flows and change their principles accordingly so they can use their money to buy power and influence to make more money.

So, the billionaires and their boys will make sure that all the government cuts inure to their advantage, whether they do to yours or not.

The trouble with tariffs

To make all those job cuts at the same time you impose tariffs, actually doubles down on the trouble you will have to work through. This change in government was going to be enormously hard without having to fight global tariff wars at the same time. Those are being stacked on top with the worst possible timing. The sweeping government cuts and the broad tariff impositions are two very different large-scale economic wars.

We were somewhat immune to inflation under Trump’s first tariff trade war because the tariffs were implemented when the Fed couldn’t create inflation to save its life, even after trying for ten years with monetary stimulus of near-zero interest rates and massive money printing (QE). In today’s world, the tariffs will work like another article describes below now that we are in an environment where we can no longer even manage to lower the inflation we’ve already created and actually see it rising on its own just because the Fed has backed off a meager amount on its tightening of the brakes:

President Donald Trump’s plan to hit imports from foreign countries with sweeping reciprocal tariffs could nearly double U.S. inflation if fully imposed, a study said, intensifying a recent resurgence in consumer price increases.

“My view is it would mean a real shock to the American economy,” said Gary Hufbauer, an economist and senior fellow at the Peterson Institute for International Economics. “Quite a bit of inflation….”

The tariffs would be so far-reaching—intended to match foreign taxes, subsidies and other trade barriers—that imposing even a significant portion of them could notably boost consumer prices, especially if tacked onto the flurry of other import levies Trump has announced.

"U.S. reciprocal tariffs will be a big deal," Capital Economics titled a note to clients on Friday.

The reciprocal tariffs will be set to match up, not just to other nation’s tariffs, but to other nation’s value-added taxes, and that is where they will be quite expensive for Americans, even though Europe does deserve to see it’s own exports to America throttled back:

After tossing in VATs, American imports would be socked with a total tariff of 29% if they’re from India, 28% from Brazil, 25% from the European Union, 23% from Mexico and 19% from Canada.

In the current world where inflation is already rising from the last stimulus checks, the combination of new stimulus checks with new high tariffs is highly combustible. Tariffs tend to raise prices because businesses pass the tariffs they have to pay along to the fullest extent they are able as part of their “cost of goods sold.” Couple that to the fact that tariffs tend to create product shortages by suddenly reducing the inflow of imported retail goods, parts and resources before replacements have been secured, and you have a situation highly prone to be inflationary. Do all of that when we are already in a smoldering world of inflation where the embers are still glowing brightly from the last inflation you lit on fire, and it means any introduction of oxygen or new fuel is highly likely to blow up.

Reciprocal tariffs amp up the inflation fuel a lot more than the original tariffs ever could have because …

Reciprocal tariffs would pose a distinctive challenge for U.S. businesses. With other types of tariffs, companies often could skirt the fees by switching their goods imports from countries such as China that are hit by high U.S. duties to other Asian nations.

“If it’s the entire world” that’s burdened with large tariffs, “it becomes a lot harder to avoid,” Weidner said.

Tariff wars, as I said last time Trump started them, go better if you only start a trade war with one nation at a time, so you do big hurt to that one nation while leaving yourself loads of other supply options; but when you impose tariffs on all nations that have unbalanced trade taxes with the US at the same time, you have no choice but to pay more for almost everything produced outside the country. Because you choke off a lot of alternative supply options all at once, you also place huge new price pressures on the scarce remaining supplies that are not up to handle the volume. So, this will be a super-heated tariff environment.

Of course, how bad all of this gets will depend entirely on how far Trump actually goes with his tariff threats and the speed at which he moves from nation to nation and how many nations he hits at the same time. We don’t know how far or fast he’ll go, but right now, the speed and breadth appear significant. If he actually does all he is saying he will, it will be …

Burn, Baby, burn!

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