The Big Government Show Must Go On

Apparently, Mnuchin and other investors lost $80 million. But in the process, the company’s slate was wiped clean and free of obligations. Several years later the company again filed for bankruptcy. And today, the studio’s once again open for business.

By our estimation, the odds that the U.S. Treasury outright defaults on its debt range from slim to none. An 11th-hour deal to raise the debt ceiling will inevitably be made. But this won’t solve the debt problem. This won’t wipe the slate clean.

The populace still favors an expanding federal government that’s funded solely by greater and greater issuances of credit. The populace still believes the promise that they can get something for nothing. That, somehow, the rich can bail them out.

Yet this isn’t mathematically possible. Not even the stinking rich have anywhere close to the $122 trillion needed to keep the show going.  But the big government show must go on. Thus, you can already sense what’s coming…

When financial markets crack, and the economy collapses, and the populace pleads for someone to “do something,” the President and Congress will oblige with imprudent confidence. QE for the people will be granted with money from nothing. Debts will be paid in full. The currency will go up in smoke.

After that, things will go completely mad.

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