The Senate bill also includes a provision intended to avert surprise tax bills for people who lost jobs, waiving federal income taxes for the first $10,200 of unemployment benefits received in 2020 for households earning under $150,000.” —The New York Times
Isn’t that a curious concept from the front page of Re-set Central? How does a couple with no jobs and no income earn $150,000 in a year that they were not working? And if they somehow brought in $150,000 anyway, why do they need the support of the US government? Such are the many mysteries of the Coronavirus 2021 stimulus bill.
What’s actually going on with this monster of legislation? Kind of looks like an attempt to replace what used to be a national economy with something that pretends to be money conjured from a system pretending to tax itself on wealth that was never generated in the first place. In other words: politicians have achieved the final divorce of wealth from production, and thus economy from reality. The USA has become the Big Rock Candy Mountain.
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Whatever else the Soviet experiment was, it was at least predicated on producing stuff, however defective the incentives turned out to be, or how shoddy the stuff was that got produced — and the system finally crashed anyway, because it was based on fantasies of human social behavior that just didn’t comport with reality. Now, the USA, in its own existential climax phase, seeks to re-do the Soviet experiment, only minus that feature of industrial production. Instead, our “wealth” gets generated from the banking system alone, and its subsidiary activities, such as hedge funds, arbitrages, dividends from companies with no earnings, and the fees for swapping digitized bundles of this-and-that. You understand that it’s all an illusion, right?
Bitcoin is the exemplar of that divorce of wealth from production. Its value appears to be derived from two features: the mathematically elegant blockchain code, which is a distributed accounting system supposedly impervious to government meddling. And “mining” Bitcoin using colossal amounts of electricity to churn the blockchain code, a simple dissipation of energy. What is actually produced by these operations? A promise that a set of digits residing on countless flash drives around the world equal X-amount denominated in national currencies, which are themselves spun out of nothing by a process far less complex than the exertions that produce Bitcoin.
It may be true that Bitcoin’s distributed “ledger” is difficult for governments to crack, but governments can just abolish Bitcoin in a few keystrokes by criminalizing the trade of it and confiscating any theoretical profits from it. They have probably refrained so far because the traffic in Bitcoin is still relatively tiny compared to the trade in stocks, bonds, and their derivatives, and because they prefer to keep the Bitcoin model running as a demonstration project in preparation for their own entry into national cryptocurrencies, with all its advantages for tracking individual transactions and targeting tax liabilities. Buy New $32.99 (as of 02:45 EST - Details)
Let’s spell out the more blatant shortcomings of Bitcoin: The blockchain may be theoretically bomb-proof, but the exchanges that Bitcoin trades on can be fiddled, hijacked, and erased from the universe, and Bitcoins with them. Remember Mt. Gox? When it went tits-up in 2014, 850,000 Bitcoins vanished (out of the 21 million that can ever be “mined” under the system as designed). Bitcoins were worth under $1000 when that happened. Also, keep in mind that Bitcoin is meaningless without reliable electric service and the Internet that runs on it. How many Bitcoins were bought-and-sold in Texas those dark days a couple of weeks ago when a blue norther rolled in and the lights went out? Of course, trading Bitcoin might be the least of your problems when the pipes freeze and all the sheetrock in your house gets prepped for a black mold experiment. But just sayin’….
The Schumer-Pelosi gang looks exorbitantly proud of their legislative coup in the stim bill (and Mitch McConnell’s gang, too, which had to play along, or get tagged and cancelled as Dr. Seuss-like creatures of Grinchified parsimony). Obtuse, desperate, and stupid as these grandstanding politicians are, they all overlook the workings of entropy in these foolish expedients to keep the plates spinning in this performance-art economy. Namely: disorder. Everything is groaning and cracking out there.
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One-time $1,400 handouts and even regular $300 unemployment subsidies won’t pay the mortgages or feed families very long, and every day there are fewer families bringing in anything close to that mythical $150,000. For many, it’s more like… nothing. The one-time bailouts of recklessly insolvent city and state governments and pension funds will only postpone their collapse. The varying guaranteed basic income schemes, enhanced child credits, advances on tax refunds, and other gimmicks would turn the former working class into sub-lumpenproles with nothing to occupy them but crime and vice. In fact, we already have a sizable underclass demonstrating exactly what you’ll get from enlarging the social group dependent on government support.
The only other question for now is when do the different population groups in this land explode in violence? The group loosely bundled as “Red” is angry enough with the ongoing insults of Wokery, failed rule- of-law, and abridgments of basic constitutional rights. The states where they dominate are likely to resist any more fiats by the federal government, like the imminent attempt to confiscate firearms. The “Blue” auxiliary armies are beyond their creators’ control. Antifa will be ready to rock-and-roll in the streets with good weather because so many young people have absolutely no prospects to thrive in the collapsing economy, and the streets have become their social space, with so little money for lattes and beers. And BLM need look no further than the Derek Chauvin trial in Minnesota, starting today, for an excuse to resume its characteristic activities.
Does anyone seriously believe that the husk of Joe Biden will remain in office more than another few weeks? It’s obvious that he doesn’t have the mental mojo to work an authentic press conference, and surely not the customary address to a joint session of Congress. Even the news media may seek to know who is actually in charge of the executive branch before much longer. Pay close attention to events unspooling. Get ready for trouble. It’s coming every which way, from money to public order to rollicking spring weather.