The Black Hole that Threatens to Swallow America
The “Fiscal Cliff” due to occur on January 1st 2013 will prove to be little more than a speed bump on the timeline of American financial history. Down the road a little further looms a much larger crisis. Surviving historians may record it as “the Black Hole that Swallowed America.” The devastation could exceed that of the Great Depression a hundred times over. Moreover, the likelihood that we will be able to avoid it is extremely small.
Our potential financial crisis may be summarized as follows: We are the wealthiest nation on Earth, yet our wealth is distributed more unequally than that of any industrialized nation on Earth. The skew is so great that 50 percent of our population have no wealth at all. Of the $61 trillion of personal wealth, $53 trillion is held by the top 20 percent; the remaining $8 trillion is held by the next 30 percent, or the middle class. This unequal distribution is growing wider with each passing day, and there are no checks or restrictions in place to slow it or to reverse it. In 50 years the projected total of the top 20 percent will surpass $1.5 quadrillion. A disparity that wide can neither be sustained nor achieved. In the interim a bloody revolution of unparalleled proportions can and will occur without drastic changes that could prevent it.
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In the scenario outlined above America will become a battlefield from sea to shining sea. And the revolution will almost certainly spread around the world like wildfire. People will resort to the same survival techniques that prevailed 200,000 years ago. We likely will coalesce into small groups, store and guard our survival needs, and kill anyone who would dare to take anything from us. Those with the best survival skills will prevail; all others will die or will be killed. There could be many permutations to this scenario including the use of biological agents, and the ultimate outcome could be death for everyone.
Which outcome is more likely to prevail? The deadly one. Why? There is no evidence at all that those who hold the lion’s share of wealth are willing to change any condition that would result in their sharing any of it. Indeed, the evidence is clear that they will do precisely the opposite. They will fight tooth and nail to the bitter end to hold onto their wealth and even to increase it.
Here is the arithmetic behind the projections: In 1960 Americans owned $1.75 trillion of wealth. Today, that total is $61 trillion. The compound annual growth rate is 7.07 percent. The top 20 percent hold $53 trillion. Apply the same growth rate to the next 50 years and here is the result: $53 X 1.070750 =$1.6 quadrillion. The concurrent real annual economic growth rate for the last 50 years was 1.77 percent. That is the approximate RGDP growth rate that we must maintain in order to achieve similar results.
The social conditions for a revolution are also firming up: The political landscape is divisive—in tone, mood, and actions. Millionaires and billionaires such as the Koch brothers, Sheldon Adelson, Mitt Romney, Tom Donohue, most of the CEOs across America, and most of the Republican Party have dug in and remain locked in favor of the present wealth growth pattern and its allocation that are now place. Across the country in those states with Republican Governors and Republican legislatures in place, a series of laws are being passed that are all focused toward their staying in power. Many key states have had their political maps gerrymandered grossly in favor of Republican candidates (examples are Virginia, Pennsylvania, Ohio, Michigan, and Wisconsin); unions are being dismantled; voting requirements are being changed that disenfranchise poor and immigrant Democrats; and entire towns are being taken over in Michigan with Republican administrators. These actions are all part of a grand agenda to gain and retain political power by the wealthy, and to retain or increase the current allocation of wealth that is flowing inexorably from the bottom and the middle to the top.
In Congress the Right is fighting to retain the inheritance laws that encourage all wealthy residents to leave their wealth to their offspring in perpetuity. They are also fighting to never raise taxes on the wealthy, those who finance their campaigns. The burden for paying for budget deficits that arise from excessive defense spending, excessive trade deficits, and very low rates on high incomes are being shifted onto the poor and middle class via spending cuts in entitlement programs that have not contributed to the deficits such as Social Security and Medicare. In economic terms, this is insanity. In political terms, this is genius. Ultimately, it must result in war. How much destruction will occur before the killing and the carnage stops is a matter for conjecture. I have never before witnessed 250 million angry Americans in action.
When will the breaking point occur? A revolution sometime in the 50-year outlook is virtually certain. Wealth doubles approximately every 10 years. In just 30 years the wealthy will hold $410 trillion in wealth. That amount could be enough to trigger the revolution. It all depends on how outraged and motivated the bottom 80 percent of Americans will have become, and the number of courageous leaders that emerge to lead the revolution.
Personally, I will be dead and gone before it all comes to pass, so I will not get to see the fireworks. But I have written about this subject for more than five years. Now I am too old. Those younger than me must either continue the fight and unite against the forces of greed, or become slaves to it and get caught in the cross-fire when the revolution starts. There will be no middle ground for the ignorant and no antidote for the apathetic.
While some Americans, like Carnegie, have come forth with their wealth––Bill Gates, Warren Buffett, many actors and sports figures--to help the poor, those that you mentioned above hold out for the coming chasm of class warfare.
I do hope that your prediction doesn't come true and that Americans will see the light, and force amendments to the Constitution that will ensure that wealth will be no longer the power in our government and citizenship will prevail instead.
Ron
Simply It Is Destroyed From Within By
Its Own Greed Mongering $ Kind...
Bottom Americans Are To Loaded On Nothing Or
Something Even Care Less Than...Too Busy
Having (Sucking On Cell Phones) Good Time...
TRASK...
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