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David Galland - We're Living in a Degraded Democracy
Stefan: Hi everybody, its Stefan Molyneux, host of Conversations with Casey. I have on the line David Galland. Thank you so much, David, for taking the time to chat today.
David: Nice to be here.
Stefan: So, we are seven-tenths of the way towards fascism in the United States. I wonder if you could expand upon that. I sort of get a sense that thats probably true, but you have a little bit more than my gut instinct you actually have some pretty professional opinions to work with on that.
David: Well, all the elements for fascism are in place. We have a monetary system that is accountable to no one and thats a very good start. If you think about it, the way that the monetary system is structured, the government at this point can literally spend money on anything. They talk about capping the federal deficits and all that, but theyll get past that in no time at all. Probably by the time the viewers are watching this they will have announced a big deal, you know, that they have raised the debt cap. And you know, once you have if you pin your money to nothing, if you have a monetary system that is based on nothing, then you can afford anything. You can afford all the wars you want, you can afford all the bureaucracy you want; and so they have. Thats a first step.
I mean, weve just as an example, here in the little town in New England where Casey Research is located, they have a theyve just finished building a massive new Homeland Security center. This is a town of roughly 4,000 permanent residents; its a tourist town. Its the kind of place where the worst crime youll ever see is somebody stealing skis from a ski slope, and yet we have something like 36 policemen. Weve got this huge, brand-new Homeland Security center. Why? Well, because after 9/11 and the overreaction of 9/11 the government made this money available because it could make the money available, because there is nothing stopping it from doing that. And theres all these local police departments, which should have an Andy of Mayberry type police force, took the money and they spent it, and now weve got a semi-militarized local operation. So this has gone on and this is multiplied right across the country and the world.
Stefan: And of course, the decisions that people make in expanding the public sector have immediate implications in payroll, but I think what America is really facing are the long term implications of unfunded pensions that just run into the hundreds of billions of dollars. Its a lot of the stuff that is not really counted in the public calculation of the debt, which is more immediate obligations, but the unfunded liabilities run $75 to $100 trillion according to many estimates. Thats not something that you see, which makes the whole conversation about should we have two trillion here or there ridiculous to anybody in the know.
David: Oh, absolutely. Again, on the point about whether were sort of on the way to a fascist state and I this isnt just the US its important that, you know, people understand this is all over the world. At this point, none of these governments is operating on anything that remotely resembles sound principles. Theyre operating on a number of different priorities and a number of different interests self-interests, because politicians after all are just people. So whatever it takes to kick the can down the road, theyre going to do. You mentioned $75 trillion in unfunded liabilities, absolutely. Because at this point, this is essentially sort of a rising tide of bureaucracy over the last hundred years that is cresting at this point. And they have done this because there are no real operating principles other than buying the votes that they need to get re-elected and to stay in office for as long as they can, and then they pass the baton to the next bureaucrat and the system continues. But its reaching the point where, I think, within a relatively short period of time its got to come to an end.
Stefan: Now youve written an article recently which I found very interesting I just shared it through my Facebook as well its called The Greater Depression. So you have the Great Depression and now were looking at the Greater Depression. I wonder if you could talk about the mechanics and the future as you see it as we go into this abyss.
David: Ultimately, what were faced with right now and this is, I think, just some fundamental principles because there are so many aspects of whats going on in the economy today that it makes it for most people for virtually all people it makes it very hard to really understand whats going on. So sometimes you just have to sort of step back and ask a few questions to try to get some sort of a compass, if you will. And first and foremost the crisis were in right now is caused by debt, too much debt. As you mentioned before $75 trillion in government obligations everybody knows that money is never going to get paid. So weve been brought to this point of extreme government borrowing. Who would have thought wed see $1.5-trillion deficits? I mean, nobody five, six years ago if you would have asked anybody on this planet if the US government could run a $1.5-trillion deficit they would have said no way. Well, here we are. So all of the conditions of what this you can call it a debt-induced depression, all of the conditions that sort of brought us to this place have not improved since the beginning of this crisis; theyve only gotten worse.
So whats the ultimate outcome of this? Well, whats the one thing that a heavily indebted person or an entity like the government cant handle? And its rising interest rates. You cant afford for the bank to bump your payments up to, you know, 20% because youve missed a payment. Well, the same things true of the government and we are now we are still the US interest rates are still bouncing around, you know, all-time lows. Its completely its a complete aberration. And it cant last. So why things are going to get worse is because interest rates have to go up. Even if they return to sort of a more normal five to six percent range, from a historical standpoint it would be devastating to the US economy. So the government is doing everything it can to try to get out of this trouble but there really is no way. They have very limited impact on long-term interest rates and if it wasnt for the fact that Europe was such a basket case and that Japan was such a basket case right now, interest rates in the US would already be taking off but I dont think were going to have to wait long for that and then things are going to get interesting.
read more http://www.marketoracle.co.uk/Article30331.html
David Galland - We're Living in a Degraded Democracy
Stefan: Hi everybody, its Stefan Molyneux, host of Conversations with Casey. I have on the line David Galland. Thank you so much, David, for taking the time to chat today.
David: Nice to be here.
Stefan: So, we are seven-tenths of the way towards fascism in the United States. I wonder if you could expand upon that. I sort of get a sense that thats probably true, but you have a little bit more than my gut instinct you actually have some pretty professional opinions to work with on that.
David: Well, all the elements for fascism are in place. We have a monetary system that is accountable to no one and thats a very good start. If you think about it, the way that the monetary system is structured, the government at this point can literally spend money on anything. They talk about capping the federal deficits and all that, but theyll get past that in no time at all. Probably by the time the viewers are watching this they will have announced a big deal, you know, that they have raised the debt cap. And you know, once you have if you pin your money to nothing, if you have a monetary system that is based on nothing, then you can afford anything. You can afford all the wars you want, you can afford all the bureaucracy you want; and so they have. Thats a first step.
I mean, weve just as an example, here in the little town in New England where Casey Research is located, they have a theyve just finished building a massive new Homeland Security center. This is a town of roughly 4,000 permanent residents; its a tourist town. Its the kind of place where the worst crime youll ever see is somebody stealing skis from a ski slope, and yet we have something like 36 policemen. Weve got this huge, brand-new Homeland Security center. Why? Well, because after 9/11 and the overreaction of 9/11 the government made this money available because it could make the money available, because there is nothing stopping it from doing that. And theres all these local police departments, which should have an Andy of Mayberry type police force, took the money and they spent it, and now weve got a semi-militarized local operation. So this has gone on and this is multiplied right across the country and the world.
Stefan: And of course, the decisions that people make in expanding the public sector have immediate implications in payroll, but I think what America is really facing are the long term implications of unfunded pensions that just run into the hundreds of billions of dollars. Its a lot of the stuff that is not really counted in the public calculation of the debt, which is more immediate obligations, but the unfunded liabilities run $75 to $100 trillion according to many estimates. Thats not something that you see, which makes the whole conversation about should we have two trillion here or there ridiculous to anybody in the know.
David: Oh, absolutely. Again, on the point about whether were sort of on the way to a fascist state and I this isnt just the US its important that, you know, people understand this is all over the world. At this point, none of these governments is operating on anything that remotely resembles sound principles. Theyre operating on a number of different priorities and a number of different interests self-interests, because politicians after all are just people. So whatever it takes to kick the can down the road, theyre going to do. You mentioned $75 trillion in unfunded liabilities, absolutely. Because at this point, this is essentially sort of a rising tide of bureaucracy over the last hundred years that is cresting at this point. And they have done this because there are no real operating principles other than buying the votes that they need to get re-elected and to stay in office for as long as they can, and then they pass the baton to the next bureaucrat and the system continues. But its reaching the point where, I think, within a relatively short period of time its got to come to an end.
Stefan: Now youve written an article recently which I found very interesting I just shared it through my Facebook as well its called The Greater Depression. So you have the Great Depression and now were looking at the Greater Depression. I wonder if you could talk about the mechanics and the future as you see it as we go into this abyss.
David: Ultimately, what were faced with right now and this is, I think, just some fundamental principles because there are so many aspects of whats going on in the economy today that it makes it for most people for virtually all people it makes it very hard to really understand whats going on. So sometimes you just have to sort of step back and ask a few questions to try to get some sort of a compass, if you will. And first and foremost the crisis were in right now is caused by debt, too much debt. As you mentioned before $75 trillion in government obligations everybody knows that money is never going to get paid. So weve been brought to this point of extreme government borrowing. Who would have thought wed see $1.5-trillion deficits? I mean, nobody five, six years ago if you would have asked anybody on this planet if the US government could run a $1.5-trillion deficit they would have said no way. Well, here we are. So all of the conditions of what this you can call it a debt-induced depression, all of the conditions that sort of brought us to this place have not improved since the beginning of this crisis; theyve only gotten worse.
So whats the ultimate outcome of this? Well, whats the one thing that a heavily indebted person or an entity like the government cant handle? And its rising interest rates. You cant afford for the bank to bump your payments up to, you know, 20% because youve missed a payment. Well, the same things true of the government and we are now we are still the US interest rates are still bouncing around, you know, all-time lows. Its completely its a complete aberration. And it cant last. So why things are going to get worse is because interest rates have to go up. Even if they return to sort of a more normal five to six percent range, from a historical standpoint it would be devastating to the US economy. So the government is doing everything it can to try to get out of this trouble but there really is no way. They have very limited impact on long-term interest rates and if it wasnt for the fact that Europe was such a basket case and that Japan was such a basket case right now, interest rates in the US would already be taking off but I dont think were going to have to wait long for that and then things are going to get interesting.
read more http://www.marketoracle.co.uk/Article30331.html
