“I’m Gaining Weight Slower… Therefore I’m Losing Weight!”

I am gaining weight at a slower pace than last year. Thus… I am losing weight!

That, dear reader, is the illogical BS spewing forth from the White House these days.

To be clear, this is not a political dispatch. I despise both parties equally.

But given that the Biden Administration is the one currently in power, well, I have to dig on Biden and his administration’s mathematical illiteracy.

See, the Biden White House recently published its projected budget for Uncle Sam’s fiscal year 2025, which begins October 1. And one of the blatantly nonsensical assertions is that the plan will cut the deficit by $3 trillion over the next decade.

Sounds good.

America’s debts are historic.

Soon, they’ll be economically debilitating, taking down both government and consumer.

So anything that begins to address Uncle Sam’s addiction to debt is a step in the right direction.

Except when the step is nothing more than disinformation.

“If a train leaves Chicago heading west at 45 miles per hour, what’s the name of the horse?”

Apparently, that’s how the White House thinks.

Stick with me while I explain this. It’s a bit complicated…

First: Over the next 10 years, Biden’s budget projects that the government will generate about $70 trillion in revenue. Spending, however, will approach $87 trillion. That’s almost $17 trillion in deficit spending.

Each year’s deficit lands atop the mountain of debt America shoulders, meaning that Biden’s plan would push America’s cumulative debt, now near $35 trillion, to more than $50 trillion a decade from now.

We pause now for context:

• Adding $17 trillion to the debt would imply that Sammy’s debt grows at 4.1% per year for the next decade.
• From 1943 to 2023, America’s GDP grew at an average annual rate of 3.2%. But of course that includes post-war expansion, an unfair comparison really. Between 2000 and 2023, a far more accurate representation of America today, it grew at 2.1%
• So… that would imply America’s GDP is roughly $35 trillion a decade from now, meaning cumulative debt would amount to 145% of GDP, well beyond prudent levels for the Sovereign Territory of the Republique du Bananas.

And of course that assumes $17 trillion in added debt is a legit and conservative number. But we all know it’s a beautiful lie, because government regularly overspends its projected budget so that each year’s deficit is quite often larger than projected.

But what’s most perplexing is the White House’s assertion that because Biden’s deficit spending is projected to be less than current baseline projections, America is somehow reducing the deficit by $3 trillion.

Here’s the logic in homespun fashion:

• A man weighs 250 pounds.
• He’s been gaining weight at the rate of 1 pound per month because of his fast-food addiction.
• He adds to his diet 3 more double cheeseburgers per month, but insists he’ll start walking two days per month instead of the one he originally planned, thereby projecting that he will now gain only half a pound per month.
• Thus, he boldly exclaims to his wife: I am losing 6 pounds a year!

What’s the name of the horse?

Hard to imagine this needs to be said, but any deficit spending is, by definition, adding to the debt. Just because your reliance on debt grows (theoretically) slower, does not mean you are reducing your debt. It just means you’re continuing to add to your debt at a somewhat reduced pace.

Death by a thousands cuts is no different than death by a million cuts… or a hundred cuts.

It’s still death—anyway you assess it.

And, so, America continues her sprint towards death…

In this case, “death” meaning a monetary/debt/fiscal crisis that will destroy lives…

First we had the Great Depression. Then the Great Recession. Next will be the Great Reckoning—when all of America’s profligate ways unwind in a spectacular, empire-ending disaster.

That’s a sad statement to make, for sure.

But there is no way around this.

Best bet: The US adopts a central bank digital currency (a blockchain-based dollar), and as part of that, the voodoo practitioners inside the Federal Reserve and the Treasury figure out a way to radically reduce America’s debts by craftily creating vastly more digital dollars than there are real dollars in the system that they use to repurchase a bunch of debt. Then they magically wipe out all those extra digital dollars at the same time.

Even that’s going to create problems because the deleted dollars have to come from somewhere.

But that’s a problem for another day.

All I can say is to prep for the mess to come.

You know the drill: Buy gold, silver, bitcoin, Swiss francs. I’d be looking to buy property overseas, too, for that moment you see a need to reenact The Great Escape and you want a place to which you can legally flee and pick up your life without missing a beat.

But that’s a bigger story on building your Plan B.

And more on that soon…