Fourth Turning Economics
The comments below are an edited and abridged synopsis of an article by Jim Quinn
With global debt now exceeding $250 trillion, up 60% since the Fourth Turning crisis began, and $13 trillion of sovereign debt with negative yields, the next financial crisis will make 2008 look like a walk in the park. We are approaching the eleventh anniversary of this crisis period, with possibly a decade to go before a resolution.
Economic catalysts have initiated all previous Fourth Turnings. There is nothing currently that points to a different outcome this time. Immense debt, stock and real estate bubbles, created by feckless central bankers, corrupt politicians, and spineless government apparatchiks, have set the stage for the greatest financial calamity in world history.
Rather than purging the system of bad debt and allowing zombie banks and corporations to die, the ruling class has chosen to ramp up the debt and reward themselves with ill-gotten gains, while impoverishing the masses.
Trump’s election was a reaction to the pillaging of Main Street by the greedy psychopaths on Wall Street and in Washington. The average hard-working American has seen eight years of government of the bankers, by the bankers, for the bankers.
Wall Street was bailed out and rewarded with the ability to borrow at 0% from the Fed. Zombie corporations were kept alive with low interest debt, with no adjustment for risk. Politicians drove the national debt from $11.5 trillion to over $20 trillion, with minimal GDP growth, and enriching mega-corporations and the top 0.1%. Risk-averse senior citizens were thrown under the bus by Bernanke, Yellen and Powell.
Well-paid manufacturing jobs with health benefits have been replaced with low paying retail and service jobs with minimal benefits. Retail store closings continue to accelerate, while credit card debt hits all-time highs, surpassing the 2008 levels.
Trump has been a disappointment regarding the budget. After promising to eliminate the debt and railing against the low interest rate driven stock market bubble, Trump and the Republicans have added $2 trillion to the national debt.
The two parties have no interest in reducing or slowing spending. They agreed to a two-year deal that will add at least $200 billion more to the annual deficits and increased the debt ceiling so they can keep borrowing. And this is before the mandatory spending for Social Security, Medicare and Medicaid kick into high gear in the coming years.
The president and Congress no longer pretend to be fiscally responsible. They didn’t even pretend to try and pay for the increased spending. Trump’s tax cuts were sold as a way to have mega-corporations repatriate hundreds of billions from overseas and reinvigorate the economy with a surge in job creation.
With half the working public already paying little or no taxes, the tax cuts heavily favoured the 0.1% and gave $200 billion more to the biggest corporations with the most powerful lobbyists. So, the politicians keep spending more on the military industrial complex and corporate tax revenues have plunged by two thirds, which will leave the US with a $1.3 trillion deficit next year, even if it doesn’t fall into recession.