Aug. 29, 2011 - Freedomain Radio - Stefan Molyneux
12:54
1987 Conversations with Casey: American Fascism!
http://www.americandebtcrisis.com/ http://bit.ly/psPcTE - Subscribe to Conversations with Casey - Stefan Molyneux has a conversation with Casey Research's Managing Director, David Galland about the state of the United States. David Galland provides an overview of why the debt situation in the US is worse than most individuals know, and why it will crash sooner than most expect. Sooner or later, history shows over and over again, systems break, and we are very close.
It's Devan Molyneux, host of Conversations with Casey.
I have on the line David Galan.
Thank you so much, David, for taking the time to chat today.
Nice to be here. So, we are seven-tenth of the way towards fascism in the United States.
I wonder if you could expand upon that.
I sort of get a sense that that's 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.
Well, all of the elements for fascism are in place.
We have a A monetary system that is accountable to no one, and that's a very good start.
If you think about it, the way 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 they'll 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've raised the deficit cap, the debt cap.
And, you know, but 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.
That's a first step.
I mean, we've, just as an example, here in a little town in New England where Casey Research is located, they have a They've just finished building a massive new Homeland Security Center.
This is a town of roughly 4,000 permanent residents.
It's a tourist town.
It's the kind of place where the worst crime you'll ever see is somebody stealing skis from the ski slope.
And yet we have something like 36 policemen.
We've 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 they couldn't make the money available because there's nothing stopping them from doing that.
And all these local police departments, which should have an Andy of Mayberry-type police force, took the money and they spent it.
Now we've got a semi-militarized And of course, the decisions that people make in expanding the public sector have immediate implications in payroll.
But I think what America's really facing are the long-term implications of unfunded pensions that just run into the hundreds of billions of dollars.
It's 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 dollars, according to many estimates.
That's not something that you see, which makes the whole conversation about, should we have 2 trillion here or there, ridiculous to anybody in the know.
No, absolutely. Absolutely.
Again, on the point about whether we're sort of on the way to a fascist state, and this isn't just the US. It's important that people understand that this is all over the world.
At this point, none of these governments is operating on anything that remotely resembles sound principles.
They're operating on a number of different priorities and a number of different interests, self-interest, because politicians, after all, are just people.
So whatever it takes, whatever it takes to kick the can down the road, they're 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.
But they've 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 The system continues, but it's reaching the point where I think within a relatively short period of time, it's got to come to an end.
Now, you've written an article recently which I found very interesting.
I just shared it through my Facebook as well called The Greater Depression.
So you have The Great Depression and now we're 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.
Well, ultimately what we're faced with right now, and I think there's just some fundamental principles because there's so many aspects of what's going on in the economy.
Today that makes it, for most people, for virtually all people, makes it very hard to really understand what's going on.
So sometimes you just have to sort of step back and ask a few questions and try to get some sort of a compass, if you will.
And first and foremost, the crisis we're in right now is caused by debt, too much debt.
As you mentioned before, the $75 trillion in government obligations, everybody knows that money's never going to get paid.
So, you know, we've been brought to this point of extreme government borrowing.
Who would have thought we'd see $1.5 trillion deficits?
I mean, nobody.
Five, six years ago, if you had asked anybody on this planet if the U.S. 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 could 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.
They've only gotten worse. So what's the ultimate outcome of this?
Well, what's the one thing that a heavily indebted person or an entity like the government can't handle?
And it's rising interest rates.
You can't afford for the bank to bump your payments up to, you know, 20 percent because you've missed a payment.
Well, the same thing's true of the government, and we are now, we are still, interest rates, U.S. interest rates are still bouncing around, you know, all-time lows.
It's a complete aberration, and it can't 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 5 to 6 percent range from a historical standpoint, it would be devastating the U.S. economy.
So, the government's doing everything they can to try to get out of this trap, but there really is no way.
They have very limited impact on long-term interest rates.
And if it wasn't for the fact that Europe was such a basket case, and that Japan was such a basket case right now, interest rates in the U.S. would already be taken off.
But I don't think we're going to have to wait long for that.
And then things are going to get interesting.
Let's take a tour, as you've done in a recent article, around the world in 80 seconds or so.
Because I think you've correctly identified that, I mean, obviously North America is a basket case economically.
South America has always had its problems economically.
Europe is facing catastrophic debt situations.
China is a pretty artificial commanding economy.
Japan has had a 20-year recession slash depression and now is facing all of the problems that have come out of the nuclear power plant meltdowns.
It really seems like it's a perfect storm in a way that there's not a lot of safe havens to go to, even for good news, let alone sort of investor security.
What are your thoughts about how all of this stuff is coming together at the same time?
Well, it's scary. And again, I didn't coin the phrase greater depression.
That was Doug Casey, my partner.
And I think Doug had it exactly right.
I think, you know, there's been so much of a, as I said, the sort of rising tide of bad policy and extreme spending and a takeover of the economy, not just the U.S. economy, but all of the economies, by these governments, the nation states.
That things have reached the point, people tend to think that things are going to stay the same and continue as they are, but they don't.
Sooner or later, history shows over and over again, things break, systems break.
And I think we're very close to that.
And I think it's important for people to understand that they look for the politicians to solve the problems.
But to solve the current problem in America, We require draconian efforts that would immediately cost the politicians their jobs.
It would be, you know, it would be for a politician to stand up there, as everybody watching this knows, and advocate Deep slashes to Social Security or Medicare.
I'm not talking about the stuff they're talking about now where, you know, modest little rearranging the deck chairs over the next 10 or 20 years, but real fundamental changes in the amount of government services being provided because all these government services have grown and grown and grown over years now.
And so to start cutting them back, even one of these government services has a constituency, people that depend upon it.
You know, you start looking for cuts and you say, okay, well, we've got to cut School lunches.
The government didn't use to give away school lunches.
Well, now everybody's up in arms because you can't cut the lunches of people because they'll have malnutrition and so on and so forth.
Every single government bureaucracy has got a constituency.
But the reality is that you can't keep kicking the can down the road indefinitely.
Put it another way, there is never a good time to fix this kind of a problem.
So, politicians will always make the choice to not actually address the problem, but rather to leave it for the next person's watch.
This would be a horrible time, absolutely a horrible time to fix the problems that face the American economy.
Slashing the deficits, slashing the debt, slashing the The government's spending at this point would have catastrophic consequences to the average person.
There'd be riots in the street.
But if you don't fix it now, when do you fix it?
Okay, well, you fix it next year?
No. Do you fix it the year after?
The government will do whatever it can to keep pushing this down the road.
But they can't push it down the road much further.
Well, it's because fundamentally, and there's lots of reasons why, politicians will not tell the truth to the population as a whole and say, look, we're not slashing spending if we go back five years in our deficits.
You know, America and the world was not a Rubble-strewn, anarchic wasteland in 1995.
And if all we do is cut spending back to that, we'll have made massive progress.
And people aren't willing to just tell the truth and say, look, you people have become lazy and entitled and you have lost track of reality.
We have lost track of reality.
We've encouraged you to lose track of reality.
So we really need to make decisions before reality makes those decisions for us in a much more brutal way.
But it seems hard to imagine anyone could get elected without sort of chanting USA number one And actually telling the truth to the population.
So it's almost like the market of the delusional population is driving politics in a way.
Oh, completely. Because again, you know, and this is nothing new.
People watching this know this.
You know, you point the fingers at the politicians, but, you know, the people behind the politicians, the fact that I think Congress's approval rating right now is something like 6%.
I mean, it's ridiculous. But come next election, most of those guys, most of the incumbents will be reelected.
And anybody who's elected to replace anybody who gets voted out will be just as bad as the people that they're replacing.
So you've got a system, you've got a situation here where we live in a degrading democracy.
You have to just face that fact.
It is degraded. People have been trained, just like they were in the Soviet Union leading up to that collapse.
They were trained to look to the state for virtually everything.
And once you stop relying on yourself, once you start relying on The nation state to take care of all the things that you think it needs to take care of or would like it to take care of.
You know, the whole thing comes crumbling down.
We have absolutely reached that point.
If you look at it, and again, very few people.
I would say, you know, it's sort of the fringe, if you will.
The people like yourself, Doug, and the editors at Casey Research, and you know, people that might be considered Outside of the mainstream, we'll talk about things like the $75 trillion of federal obligations.
But it's there. It's a reality.
It's a fact. Yet the mainstream media pretends that it's not there, and they do their calculations about the government covering its costs and debts and all that stuff based upon It's really, really falsified information.
If you can't even acknowledge the scale of the problem, you can't acknowledge the actual reality of the problem, how can you begin to come up with a solution?
You can't. Fortunately for the US, we had a great economy, and it's still better than most.
We've managed to get to this point, or go as far down the path of corruption, if you will, as we have.
Again, the monetary system at this point is absolutely coming unglued, and I don't think we're going to have to wait much longer.
