If you haven’t yet listened to Bill King, I’d highly recommend his recent interview with David McAlvany and Kevin Orrick on their McAlvany Weekly Commentary. King shares his take on the global economic mess, and what he think it will take for the world to hit the coveted Reset button.
The Tea Party keeps saying, “We want to cut government spending.” That is so abhorrent to the vested interests of big government and the welfare state that they go out of their minds. But it is coming. It’s going to happen. The mathematics tell you that the spending is going to get cut, it’s going to get slashed, it’s going to disappear in a huge way.
If you have the right leaders, you prepare the country for this, but you also have to prepare the means to get out, which again, is to unleash the private sector. We all know what that means. It means that you crush government – government regulations, the structure of government, government workers, government spending, etc. That’s how you get out of this. Everybody understands this, except, again, the diehard dependents of the state, and if they had any sense they would understand that that is all going to disappear, and that they are better off getting a productive economy.
That’s the thing here in the U.S. The U.S. had such an enormous economic and financial advantage after World War II that it was just incredible. Never in the history of man had we had a nation as powerful and had such an industrial and financial base. So by the mid and late 1960s the welfare state was unleashed, in an enormous way. It was the same thing in the cities – all these deals, it was just ridiculous. And you struggled in the 1970s. Then Reagan and Volcker unleashed the U.S. economy again and you went berserk in the 1980s, and into the 1990s, and you got away with this, and now that all the global economies are rolling over with this massive transfer of wealth from the western world to emerging markets, and you can’t support the socialism anymore.
It’s just like in a family. If you have a family of five, and two are very productive, and the other three live off of them, that’s great. All of a sudden, if you have only one productive, it starts to become a struggle, because you have four living off of one, and when the one that was productive all of a sudden is getting reduced, then the whole thing comes down. That’s the western world. It cannot afford its social welfare state that it has created over the last 70-80 years. We are unwinding a social, political, economic system. That’s what is going on. It’s huge. Beyond secular. This is Kondratiev type of stuff. And that’s why we are stuck in this, and we have been stuck in this for years.