Snip!

15+

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.


15+

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
jb00212000
23 days 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 23 days ago by jb00212000
VekTor
VekTor
22 days 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
Barry Rose
22 days 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 22 days ago by Barry Rose
JC10
JC10
22 days 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
David Krieger
22 days 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

Deep Sociopathy

By Ben Hunt | August 6, 2020 | 6 Comments

Is murder bad? Hmm, I dunno. What are the chances I will be caught and what price will I pay if that happens? If the odds are high enough and the price steep enough, then yeah, I guess THAT would be bad. But the act of murder itself? I mean, I’m sure whoever I murdered – if I were to murder someone, that is, because I really don’t think you can prove that I did – was getting in the way of something that was very important to me. When you really think about it, they were doing the bad thing! Why do you ask?

Welcome to the world of commodity trade finance.

Read more

Taiwan is now Arrakis

By Ben Hunt | July 27, 2020 | 18 Comments

“He who controls the spice controls the universe.”

The world’s principal supplier of semiconductors – the spice of OUR global empire – is now Taiwan.

Thanks a lot, Intel. Thanks a lot, Bob Swan. Thanks a lot, Jack Welch. Thanks a lot, all you Wall Street wizards of financialization.

Taiwan is now Arrakis. And we WILL fight over it.

Read more

Overserved

By Ben Hunt | July 20, 2020 | 13 Comments

Everyone is in a tizzy about day traders and Robinhood. “Ooooh, they’re going to have such a hangover when the bubble pops.”

Pffft. They’ll be fine.

The investors facing a hangover are small family offices, plied with endless offerings of fee-heavy SPVs and SPACs by multi-billion dollar asset managers.

Read more

An Advantageous Contagion

By Rusty Guinn | July 14, 2020 | 17 Comments

Sometimes good news comes from unexpected places.

And sometimes it’s best just to go with it.

Read more

The Lost Art of the Jawbone

By Rusty Guinn | July 7, 2020 | 4 Comments

Market propaganda used to be an art form, I tell you! What happened to us?

The transformation of capital markets into political utilities happened.

Read more

The Lystrosaurus

By Rusty Guinn | June 17, 2020 | 12 Comments

There is practically no information in knowing that everybody is talking about something. There is some information in knowing that everybody is using the same language to talk about something.

But there is a lot of value in knowing that people and publications with no underlying connection are simultaneously inspired to use the same language to talk about different angles of the same issue.

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.