Fund Flows and The Existential Bet

Fund Flows

Something else that the response to the 2020 economic sinkhole has accomplished, is to expose the falsehood of the “debt” myth; massively increasing the deficit and national “debt” has not led to hyperinflation, higher interest rates, or currency collapse. But that hasn’t stopped the majority from continuing to worship at the alter of austerity. Both ends of the political spectrum continue to ignore the evidence and deny the need to provide money to the base of the economic pyramid simply because it will increase the deficit and the “debt” — as if the Treasury could run out of money.

On the Right, it is well established that once the financial industry is funded, then there is no more spending needed; they refused to even consider a second virus-relief bill until the very last minute. Meanwhile, the Left ‘talk a better game’, but the reluctance to spend remains foundational, covered up only by a flimsy veneer of largess; the left refused to accept a compromise bill several months ago that was twice what they agreed to before the holidays.

The Left’s ‘golden boy’ economist, Larry Summers (Clinton’s Treasury Secretary who produced the only budget surplus of the last 30-years), has publicly opined that even the $600 individual stimulus checks are too much because he is not sure “we should be encouraging consumer spending beyond what we are now” because “it is not that they don’t want to spend, but that they can’t spend; they can’t take a flight or go to a restaurant”. Did you get that? He thinks people are forming historic line-ups at food banks because restaurants are closed! That gem was produced by one of Biden’s economic advisors. The Democrats are only slightly more amenable to deficit spending than the Republicans, and only in the short-term. Longer-term, they believe in the “debt” myth just as much as the Republicans do. Luckily, changes to spending and taxation take time to implement and will not take us by surprise. For now, the deficit will keep a floor under the market.

An Existential Moment

…when Margaret Thatcher warned the UN of the unprecedented threat to global stability posed by climate disruption — emissions have doubled, accelerating alongside global trade and the rise of developing markets. Since then, climate disruption evolved from an abstract risk to real threats on the ground. Incrementalism is no longer an option. Only radical, even warlike, effort can save the day…..Tom Rand in The Case for Climate Capitalism

We need radical action, not radical political views. The Right must stop denying climate science, and the Left must stop advocating for the dismantling of capitalism itself. We must use the machinery of capitalism — entrepreneurs with vision, and big corporations with engineering and manufacturing might — to build the clean energy giants we need. The existential threat does not belong to any political party. We need to cooperate like we did during WWII.

A war-like effort, however, requires that we debunk the “debt” myth, once and for all. The misinformed belief that the Treasury is fiscally restrained, is the main reason we continue to cause unnecessary suffering in the present, and possible extinction in the future. The Treasury is under an arbitrary budgetary constraint, not a fiscal one; the Treasury cannot run short of money. Understanding that, leaves no excuse for not funding anything that might prevent the collapse of civilization.

We have reached an existential moment; humanity has to spend together to develop the technologies and infrastructure that might mitigate (it is too late to avoid) the climate damage that is in our future.

If a bet on alternative energy technologies and infrastructure fails…then it doesn’t matter anyway, because civilization as we know it will cease to exist.

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