Snip!

16+

To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You’ll get two or three of these emails every week, and your email will not be shared with anyone. Ever.



Last December, we published a note titled The Long Now, Pt. 4 – SNIP! , as part of the Long Now series, which is still, I think, the best entry point for someone new to Epsilon Theory to figure out what all the fuss is about.

The note is about the cutting of the cord between taxes and spending, which is pretty much the last thing that keeps us citizen astronauts tethered to the spaceship of non-totalitarian government. And in that note I wrote this:

I think that whoever is elected in 2020, we will see a $2 trillion spending plan enacted in 2021.

If it’s a second term for Trump, it will be the 2021 Make America Great Again Act, and we will call them “Infrastructure Bonds”.

If it’s a first term for a Democrat, it will be the 2021 Take Back America Act or something like that (I suppose if it’s President Biden we can hope for the 2021 No Malarkey Act, although I’m rooting for the 2021 OK, Boomer Act), and we will call them “Green Bonds”.


Since then we got this in April:

Trump calls for $2 trillion infrastructure package as part of coronavirus response (CNBC)

And now this on Tuesday:

Joe Biden Unveils $2 Trillion Plan to Combat Climate Change (WSJ)


LOL. See, this is why you become a paid subscriber to Epsilon Theory. We can’t always write tomorrow’s headlines today. But we do try.

More seriously, though, I want to leave you with the conclusion to Snip! . Once the tether between taxes and spending is cut:

There are no limits to the retributive and malicious use of taxation as a political weapon.

There are no limits to the retributive and malicious use of spending as a political reward.


This isn’t a Democrat thing and this isn’t a Republican thing. It’s a power thing.

The Long Now is going to get a lot worse before it gets any better, and there is strength in numbers. Watch from a distance if you like, but you are welcome to join our pack.


16+

To receive a free full-text email of The Zeitgeist whenever we publish to the website, please sign up here. You'll get two or three of these emails every week, and your email will not be shared with anyone. Ever. It's our effort to spread the word about what we're doing, and allow you to read more Epsilon Theory!

Notify of
5 Comments
oldest
newest
Inline Feedbacks
View all comments
jb00212000
4 months ago

Hey, Ben – I love you, man, but there hasn’t been any tether between taxes and spending in a long, long time.

As long as there is nothing “backing” a currency – gold, for instance – there’s no requirement to “fund” a currency-issuing sovereign through taxes (see Ruml, 1946, “Taxes for Revenue Are Obsolete”).

And let me be clear, I’m not bringing MMT concepts into play here. This is just plain accounting. We use taxes to achieve political purposes (see Ruml), and to battle inflation when needed, but taxes aren’t needed to fund government operations.

If I wanted to put on my MMT hat, I’d tell you that government spending funds taxes, not the other way around. But I won’t put on that hat today.

Last edited 4 months ago by jb00212000
VekTor
4 months ago

“The Long Now is going to get a lot worse before it gets any better”

This reminds me strongly of a scene in the movie “Serenity” (look up ‘Serenity much worse’ on YouTube to see a 12-second clip of it… not sure about the policies here on URLs in comments, or I’d just paste it here).

That scene, and this comment, both break my heart in the same way… because I know they’re both completely true, and that fills me with trepidation.

We need to think like River Tam in this, and try to hold onto hope like Simon Tam, at the same time. That’s… daunting.

Barry Rose
4 months ago
Reply to  VekTor

It is very daunting. It’s especially so when the response by some may be to take off & nuke them from orbit, just to be sure (if you’ll please pardon my sci-fi analogy). Patience, and self-control, are both gifts of the Spirit. These times call for a double-portion of each, so that we (I) don’t get discouraged. Thanks Ben & Rusty, for your excellent efforts to bring clarity of direction out of the chaos.

Last edited 4 months ago by Barry Rose
JC10
4 months ago

Ben,

I lean towards the idea that you & Rusty are writing the headlines in advance.
That’s scary enough.

The scarier idea is that through their underlings they are both subscribers that walk around saying: I love that Ben Hunt guy. He keeps giving me such great ideas! 😉

David Krieger
4 months ago

Your cultural diagnosis and your inspirational call-to-arms call-to-service reminds me of Allen Ginsberg’s poem,”America” which ends:
..America this is quite serious.
America this is the impression I get from looking in the television set.   
America is this correct?
I’d better get right down to the job.
It’s true I don’t want to join the Army or turn lathes in precision parts factories, I’m nearsighted and psychopathic anyway.
America I’m putting my queer shoulder to the wheel.”

The Daily Zeitgeist

Ten Times Faster Than The Sun’s Beams

By Ben Hunt | November 25, 2020 | 5 Comments

The Wall Street narrative machine is in overdrive to create a “Yay, Value!” rally here at year-end.

Like any effective advertising campaign, it will work. I’m not saying this rally isn’t real.

I’m saying that you should reconsider what “real” means.

Read more

You Can’t Handle The Lie

By Rusty Guinn | November 6, 2020 | 35 Comments

Any news outlet that won’t let you see a lie does not work for you.

Read more

We are all MMTers (Still)

By Rusty Guinn | October 22, 2020 | 10 Comments

Stimulus is dominating market news, and even with an election coming up is playing an outsized role in political news. So what is the current fiscal stimulus really about?

Maybe more importantly, what is it absolutely, definitely NOT about?

Read more

How It Started. How It’s Going.

By Ben Hunt | October 20, 2020 | 10 Comments

Once Daryl Morey’s new idea became the common knowledge of the NBA – once everyone knows that everyone knows that the way to win NBA games is to maximize 3-point shots and lay-ups – then it became a permanent feature of the way professional basketball is played. It became an equilibrium.

It’s exactly the same with politics.

Read more

The Frustrated Money Manager

By Ben Hunt | October 8, 2020 | 12 Comments

The frustrated money manager is almost always a smart, accomplished professional in his own field who believes VERY much in the existence of The Smart Money ™.

The frustrated money manager is almost always a liiiittttle bit on the make.

Like a Vatican cardinal.

Read more

Scapegoating the Zeitgeist

By Ben Hunt | October 2, 2020 | 5 Comments

One day we will recognize the defining Zeitgeist of the post-GFC Obama/Trump years for what it is: an unparalleled transfer of wealth to the managerial class.

This Wall Street Journal article is not an attack on that system. It is a defense. It is telling you that the system is fine … we just need to do something about these bad apple CEOs.

Read more

DISCLOSURES

This commentary is being provided to you as general information only and should not be taken as investment advice. The opinions expressed in these materials represent the personal views of the author(s). It is not investment research or a research recommendation, as it does not constitute substantive research or analysis. Any action that you take as a result of information contained in this document is ultimately your responsibility. Epsilon Theory will not accept liability for any loss or damage, including without limitation to any loss of profit, which may arise directly or indirectly from use of or reliance on such information. Consult your investment advisor before making any investment decisions. It must be noted, that no one can accurately predict the future of the market with certainty or guarantee future investment performance. Past performance is not a guarantee of future results.

Statements in this communication are forward-looking statements. The forward-looking statements and other views expressed herein are as of the date of this publication. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements, and there is no guarantee that any predictions will come to pass. The views expressed herein are subject to change at any time, due to numerous market and other factors. Epsilon Theory disclaims any obligation to update publicly or revise any forward-looking statements or views expressed herein. This information is neither an offer to sell nor a solicitation of any offer to buy any securities. This commentary has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Epsilon Theory recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial advisor. The appropriateness of a particular investment or strategy will depend on an investor’s individual circumstances and objectives.