Bill Bonner, reckoning today from Baltimore, Maryland...

We float on a “sea of lies,” says Harvard professor Jeffrey Sachs.  

“Most of them come from the government,” he says.

Remember how Donald Trump claimed he had created ‘the best economy ever?’ It was a lie. The economy was getting worse and worse – especially after ‘The Donald’ pumped an extra $5 trillion into the economy to offset the effects of his Covid Lockdown policies.

And then, along came Joe Biden. “The U.S. is in a better economic position than almost any other country,” says the big spender.

But the US economy is an abstraction…what really matters is how the people in it are doing. And here’s the latest from CNBC:

The share of retirement savers who withdrew money from a 401(k) plan to cover a financial hardship hit a record high in October, according to data from Vanguard Group.

That dynamic — when coupled with other factors like fast-rising credit card balances and a declining personal savings rate — suggests households are having a tougher time making ends meet amid persistently high inflation and need ready cash, according to financial experts.

Nearly 0.5% of workers participating in a 401(k) plan took a new "hardship distribution" in October, according to Vanguard, which tracks 5 million savers. That's the largest share since Vanguard began tracking the data in 2004.

Fleeced by the Feds

Staggered by falling real wages. Walloped by rising real prices. America’s middle class families are raiding retirement accounts just to keep up.

But here comes the left hook. Markets Insider:

A recession is imminent but central banks won't be able to support markets this time by loosening policy….

"Recession is foretold as central banks race to try to tame inflation. It's the opposite of past recessions," BlackRock strategists said.

What? Nobody told you that Fed bailouts just lead to more debt…and more problems, down the road? And didn’t someone tell you…that the feds’ stimmies…giveaways…and unemployment boosters would have to be paid for somehow?

And how about all this help we’re giving the Ukrainians? Who was supposed to pay for that?

Nobody mentioned that the middle class would pick up the bill? Must have slipped through a crack in the news cycle. Because, surely, the feds wouldn’t lie to us. They’re “public servants,” doing their level best for the benefit of “The People,” right?

Wrong. Sachs is right. We live with so many lies, we wouldn’t know what to do without them. Covid…the Ukraine…terrorism…the economy – every subject is so fattened on lies it can barely move.  

Intended Consequences

What these lies all have in common is that they are a nuisance to the common man.  All the lies are designed to support ‘policies.’ All the policies cost money. And the poor middle class, salt-of-the-earth citizens must pay for them.  

Should the Donbass be governed by Ukrainians? Or by Russians? Or by the Donbassians themselves? The typical American could care less. But the ‘defense’ industry grows richer and richer by throwing its weight around…and he pays for it.

Was there really any reason to shut down the whole economy to stop the covid virus? Did it make sense to flood the economy with money so that ‘The People’ didn’t mind being locked up in their own houses? No, it didn’t. And now, the middle class is paying the price for those policies too.

And what does the average US citizen gain by cutting off the flow of Russia’s energy to Europe? The Europeans still need energy. And when they buy America’s gas, it just raises the price of fuel for Americans.

Professors of political science talk about ‘man’s relationship with the state (government),’ but that is the biggest lie of all. The ‘government’ or ‘the state’ is just another abstraction. What counts are our relationships with other people – such as the people who run the government.  

Yes, there are the governors…and the governed. Nowhere, except maybe in the smallest township, do ‘the people’ rule. Instead, the people are ruled by a bullying elite. And when these public servants become the masters…with too many laws, programs, policies and lies… the middle classes pay dearly.

Regards,

Bill Bonner

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