The Fiscal Cliff and Peak Government
Charles Hugh Smith-the Fiscal Cliff and Peak Government
Six critical dynamics will trigger the devolution of Peak Government.
With the fiscal cliff looming, it’s time to check in on the Peak Government thesis.
Chris and Adam at peakprosperity.com asked me to revisit my Peak Government thesis, which describes how the expansive Central State has come to dominate both private society (i.e., the community) and the marketplace, to the detriment of the nation’s social and economic stability.
Let’s start by examining the six critical dynamics that lead to the inevitable devolution of Peak Government.
Massive Borrowing
In a misguided attempt to maintain an unsustainable Status Quo, the Federal government is borrowing unprecedented amounts of money that then must be serviced. And the Federal Reserve is expanding its balance sheet by trillions of dollars (“printing money”) and intervening in stock, bond, and other markets for the purposes of managing perception (“the recovery is here!”)
These government funds are not just paying the government’s bills - they are being used to guarantee loans and mortgages that subsequently enter default, transferring what was private debt to the public and subsidizing politically powerful special interests.