15 Nov 2022

2022 Mid-term Election: A Lose/Lose


The almost concluded 2022 mid-term election can be viewed with any number of outcomes. Republicans lost as their wave was barely a ripple, Dems lost the House and if Nevada and Arizona ever quit dinking around with their ballots both could declare Calvin Coolidge or Tom Dewey have won their electoral votes. But we digress.

Republicans blamed Dems for rising inflation that’s squeezing the wallets and budgets of millions of Americans. Dems apparently scored points by accusing the GOP of threatening democratic governance.

The real problem runs much deeper and is orders of magnitude more insidious. American ideals are being abandoned. The American psyche is now set with expectations that government will take care its citizenry forever — hard work is for suckers and hand over the free lunch…and dinner while you’re at it.

This is clearly the source of inflation and is the key element in determining fiscal and monetary policy. We are now the land of “hand over the free stuff” and no longer the land of free enterprise. Quiet quitting, loan forgiveness, stimulus checks, hands off the sacrosanct Social Security, amnesty for malfeasance during the pandemic are the bleatings of the entitled.

It’s been in the works for some time and both parties are accountable. Government spending by Rs and Ds results in attacks on the value of the dollar. Lyndon Johnson kicked off the spending spree with Great Society programs of the 1960s. They were massive welfare programs that caused such inflation havoc that President Nixon took the U.S. off the gold standard. Inflated dollars were being redeemed for gold at an unsustainable rate. Dropping the gold standard allowed government to print more money. The result? Print even more money and more government spending/giveaways followed.

What we are experiencing today is a replay of the late ’60s and early 70s. The value of the U.S. dollar has been sliding ever since. The 1970 dollar is worth $7.47 today. The 1990 dollar is worth $2.28 today. In 2010 the U.S. dollar was worth about $1.37 today. That means the dollar has declined in purchasing power by more than one-third in just 12 years.

The rate of money printing and government spending brings a clarity that is staggering. The national debt is more than $31.25 TRILLION dollars ($31,250,000,000,000!!!). That equates to $93,700+ for every single person in the USA. That is projected to double by 2030. In 1970 the national debt was $371 billion. That was 1.1% of today’s debt…chump change by comparison. In the 1960’s Illinois Senator Everett Dirksen famously declared, “A billion here, a billion there, and soon you’re talking real money.” That was then. The can has been kicked down the road for 50+ years. it’s not even a can anymore, just microscopic shards scattered in the gutter of political expediency.

Other than William Devane on his tiresome gold and silver commercials., no one is talking about it. Government won’t tell you, the Paul Krugmans of the world, climate spenders and their lackeys in the media won’t either. They can’t stop spending and they don’t want to. The grasshoppers are addicted to government’s largesse. The ants are doing what they always do. This is scary bad, and it’s about to get worse. The inmates are running the asylum like never before.

So, Mr. PolicySmith, you’ve sent out the SOS. What’s the plan?

There is no resident economist here, nor any sort of financial wizardry. We’ve taken our lumps over our investment history. The best course it seems, is consulting with your investment advisor and requesting a professional’s opinion and a professional’s recommendations. Minimizing risk while seeking investment vehicles that will take advantage of an accelerating inflation scenario is a good start.

Three classic options are on the table as they always are: make something happen, watch what happens, wonder what happened. Please exercise option #1. Be the ant, not the grasshopper.

4 Responses to 2022 Mid-term Election: A Lose/Lose
  1. Comment *Mad dog mattis cited this as the number one security threat to the nation Jack.

    • And he’s correct. Interest rates will and will continue to make debt service at these levels untenable. Danger dead ahead.

  2. I was polishing my tin cups anyway due to my personal situation, but reading this makes me feel I really had better step up the polishing and order some more tin. cups for the longer haul……….Comment *

    • A polished cup is off-putting to the would-be benefactor. I suspect a pensive/hang-dog countenance, shabby apparel, dented cup with bent handle, a stray mongrel and a cardboard sign will do the job. However, I believe the look must be licensed and a franchise fee paid or the guild of professional beggars and urchins will sic their attorneys on you.


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