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In an era where political and economic discourse is rife with misconceptions, Guy Swann has had enough, challenging the often-quoted assertions that national debt is inconsequential or, even more perplexingly, that "we owe it to ourselves." As a publication dedicated to delivering truth to the commoner, it is crucial to examine the claims presented by Guy and dissect the implications they carry for our economy.

The central premise of Guy's rant is straightforward: a nation accrues a surplus when it produces more than it consumes, and conversely, a deficit arises when consumption exceeds production. Swann argues that a perpetually growing debt signifies a systematic overconsumption, effectively depleting the pool of available resources without replenishing it. This trajectory, if sustained, inevitably leads to the exhaustion of resources—a stark warning that is artfully simplified with the quip, "Congratulations. You are now more fit to run the government than the average Keynesian economist."

Addressing the oft-repeated notion that "we owe it to ourselves," Swann delivers a scathing rebuke. He asserts that such a belief is fundamentally flawed; after all, debt represents an obligation from the consumers to the producers, not a cyclical transaction within an individual entity. He employs a compelling analogy: if someone borrows your car and issues you an IOU, the debt incurred is not nullified by the fact that it is internal—there is a tangible car that has been lent and must be returned or compensated for. The debtor's assurances that "the debt doesn't matter" are portrayed as not only misleading but dangerously negligent.

Guy further warns that this mass of debt underpins the value of pensions, retirement accounts, and bank savings. The degradation of these values is exemplified through a hypothetical situation where the once singular IOU required to reclaim your car has inflated to necessitate five IOUs just to rent a replacement vehicle. The message is clear: the debt matters immensely, and unless addressed, the public will pay either directly or through the devaluation of currency.

In a historical context, Swann alludes to the downfall of empires, suggesting that excessive, uncontrolled debt has never been the harbinger of prosperity. The conclusion is unambiguous; to avoid the impending financial fallout, individuals should divest from these "slips of paper" and invest in assets that cannot be arbitrarily replicated by the government, like bitcoin.

In summary, Guy's rant serves as a clarion call to reconsider how we perceive national debt, challenging the complacency that has become all too common in economic rhetoric. It cautions that the consequences of ignoring the burgeoning debt are far-reaching and potentially catastrophic.

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Fresh GDP numbers came in and it was a blowout. The kind of blowout that only a $2.7 trillion government deficit can buy while the private economy crumbles around it.

Another couple blowout GDP reports like this and Americans will be living under an overpass.

Biden’s GDP Miracle

First the numbers. The Bureau of Economic Analaysis reported GDP for the fourth quarter came in at 3.3% annualized. Which blew away estimates of 2.0%.

And it brought growth for all of last year to 2.5%.

Which is very healthy.

On paper.

Note the numbers are preliminary, so they're subject to revision.

Still, the regime media rolled out their finest adjectives: CNN called it "shocking" -- in a good way. The New York Times called it "stunning and spectacular."

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So what's the problem? Debt.

Your grand-kids bought it all. And then some.

To see why, in the past 12 months the federal deficit increased by $1.3 trillion. Yet we only got half that in GDP -- about $600 billion.

In other words, everything else shrank.

It's even worse for that brave and stunning Q4 -- there we got just $300 billion in extra GDP for -- wait for it -- $834 billion of new federal debt.

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GDP vs Wealth

Remember that GDP isn't measuring wealth, it's measuring spending -- production which is sold.

As Megan McArdle put it, GDP “counts the dollar value of our output, but not the actual improvement in our lives, or even in our economic condition."

For example, if you dig holes and fill them, it’s GDP. In fact, you could build a missile, blow up the Golden Gate bridge and every house within 5 miles of it, and it shows up as GDP. The missile cost money after all, and the government paid for it.

Of course, mainstream media -- indeed, mainstream economics -- pretends that GDP is identical to wealth. Pumping out articles celebrating GDP as prosperity.

That's close enough when it's private firms or individuals producing more to sell more — in that case, rising GDP means the country is getting richer. Because more stuff is being produced.

But it's actually the opposite when it's government spending. Because government's job is taking wealth and lighting it on fire. That means when GDP is growing from government spending it's not measuring wealth.

It's measuring dissipation of wealth at best, destruction of wealth at worst.

Essentially, the pace at which we're going Soviet, replacing private wealth with government waste.

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So translating that brave and stunning GDP into the real world, we're destroying wealth at rates not seen since 2008.

This actually lines up with what we've seen in jobs -- in a recent video I mentioned that over half the jobs last year were actually government and government related social service jobs.

In some states it was literally more than all the jobs created -- in other words, the private sector is shrinking.

All these government jobs, of course, are unproductive -- they're not making us more prosperous as a society.

On the contrary, they're taking wealth earned from productive activities and squandering them on vote-buying or worse -- think of the wealth-destruction contained in a single EPA bureaucrat.

What’s Next

The lapdog media will keep playing alone with the government statisticians and the gaslighting academics.

They'll keep trashing regular Americans for posting their grocery bills and mortgage payments, praying they can maintain the illusion long enough for the next election.

Fortunately, there's millions of us who can see the emperor is buck nekkid.

I'll be speaking at the Restore Freedom Rally, February 2 to 5 in beautiful Orlando, on the coming Tidal Wave of Taxes: What's driving it. Who they'll go after first. And why they won't quit.

There’ll be great speakers every single day, and you can get tickets at Restore Freedom Rally. Use promo code PJ10 to get 10% off.

I hope to see you there!

Sign up for my free newsletter to get weekly articles on the economy and freedom.

Also check out the weekly podcast rounding up all the week’s videos in a single 20 minute podcast.

Originally published in profstonge.com

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In an unexpected twist that has left fiscal conservatives reeling, the newly-appointed Speaker Johnson seems poised to concede to a substantial budget agreement, much to the delight of Congressional Democrats. The 2024 budget agreement, hailed by Democrats as a significant triumph, raises questions about the necessity of a Republican majority when budgetary concessions are so easily given.

The agreement, which is set to channel a staggering $1.7 trillion into various governmental departments such as Energy, Housing, and Transportation, has been criticized for its minuscule spending cuts. A mere $16 billion has been trimmed from the vast sum, an amount that is less than one percent of the total and equates to roughly five days of interest on the national debt.

via Zero Hedge

Speaker Johnson, in a statement that was far from reassuring, noted that the final spending levels "will not satisfy everyone." Critics argue that this understatement glosses over the deal's failure to address critical issues such as the burgeoning border crisis. The taxpayer burden of illegal immigration, reportedly $144,000 per migrant per year according to New York City's estimates, remains unaddressed.

Furthermore, Senator Lankford of Oklahoma has proposed an immigration deal that seems to prioritize the interests of GOP donors over American workers by offering work visas to illegal migrants. The budget maintains the military spending at $886 billion, ostensibly for foreign conflicts, and $704 billion in non-defense spending, which skeptics view as a means for further government handouts and power consolidation.

Despite the pushback from conservatives within Congress, the deal is seen as a concession that prioritizes military spending and the interests of big donors over a fiscally responsible agenda. Senator Mike Lee of Utah has pointed out that the budget exceeds initial proposals by $100 billion, marking a negotiating failure that hands President Biden nearly all he desired.

As Speaker Johnson's position appears increasingly precarious, critics speculate on the potential for a shake-up in GOP leadership. However, until a greater number of populists and America-first representatives make their way into office, bipartisan budget agreements are likely to persist, perpetuating the cycle of rising federal spending and debt.

In conclusion, the latest budget agreement has exposed deep rifts within the Republican Party and casts doubt on their ability to effectively negotiate and manage the nation's fiscal policy. As federal expenditures continue to grow, the implications for the economy and the future of fiscal conservatism in Congress remain uncertain.

For continued coverage on this developing story, stay tuned to Peter St. Onge's weekday updates.

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Bitcoin celebrated 15 years since the mining of its genesis block this week – a period during which the permissionless, open source, distributed network has achieved 99.99% uptime – by breaking the $45,000 price level for the first time since April 2022 (a level last seen before the implosion of TerraLuna and the cascade of crypto collapses it triggered). Poetically, the US national debt also broke the $34 trillion mark this week, adding another $1 trillion in under three months and highlighting the accelerating fiscal instability that motivated bitcoin’s creation 15 years ago. This anniversary week was also marked by the filing of near-final documents for the launch of many long-awaited spot bitcoin ETFs, which could open up substantial new capital flows to bitcoin (a dynamic we expect to benefit our whole portfolio). 

As the traditional finance world continues its slow but inevitable process of capitulation to the next global reserve asset, the underlying ecosystem continues to push out exciting and innovative new developments, several of which were on display this week in the form of a stable MVP release of the Fedimint open source project (which several Ten31 companies are leveraging to great effect) and a code-complete testing version of Mercury Layer, an implementation of blinded statechains that could offer an interesting scaling mechanism for bitcoin transactions. While we believe potential ETF approvals will drive tailwinds to bitcoin’s price over time, we remain most excited about innovations like these and the overall pace of permissionless development we see in the bitcoin ecosystem, a phenomenon few market participants – even many of those who are bullish on the ETF – have yet understood. 

Portfolio Company Spotlight

Fedi is an innovative platform leveraging the Fedimint protocol to provide a custody solution that aims to support mass adoption and trust-minimized, censorship-resistant use of bitcoin by balancing privacy with usability for less technical users. Fedi's intuitive, user-friendly app uses the Fedimint protocol to offer the privacy of Chaumian eCash alongside a "federation" approach that distributes trust across a variety of parties (who will often be friends and family of end users rather than remote, inaccessible corporations) and eliminates single points of failure while providing a simple UX for users of all technical capabilities. The platform is designed to empower local communities, particularly those in emerging markets, to easily use bitcoin without deep technical understanding or reliance on unaccountable third parties.

Selected Portfolio News

Unspent capacity in Samourai Whirlpool recorded another all-time high, surpassing 10,000 bitcoin for the first time:

Mutiny and Fedi rolled out new updates incorporating the latest feature-complete version of the Fedimint open source project:

Fold added new category rewards boosts for membership clubs like gyms, golf courses, and more:

Media

Ten31 Managing Partner Matt Odell joined the new Final Settlement podcast to discuss the power of open source ecosystems. 

Market Updates

The US national debt eclipsed $34 trillion for the first time this week, an increase of $1 trillion in under 3 months. 

While the federal government continues to borrow and spend at GDP-adjusted levels seen only during the Great Depression, World War II, and Great Financial Crisis, the veneer of a strong economy was bolstered this week with non-farm payrolls data that came in well above expectations. 

Of course, many of the usual caveats apply here, as full-time workers declined by 1.5 million M/M to their lowest level in a year, while multiple jobholders hit another all-time high. It also bears mentioning that 10 of the last 11 NFP reports have subsequently been revised down. 

In similar news, the latest ISM Manufacturing PMI printed at 47.4 for the month of December, the 14th consecutive month of contractionary readings and the longest such streak since 2000.

Minutes from the latest Federal Reserve Open Market Committee confirmed the now-consensus view that rates will come down sometime this year, but committee members were mixed as to the pace of that decline. 

Meanwhile, use of the Fed’s BTFP facility – which is ostensibly set to expire in ~2 months – continued to grow rapidly, and the reverse repo facility – the recent decline of which has been a likely source of increased liquidity in US markets – fell below $700 billion for the first time since early 2021.

On Friday afternoon, the SEC signaled it had “no more feedback” on several spot bitcoin ETF filings, and most issuers filed updated forms shortly thereafter. 

Following on the heels of JP Morgan being named an authorized participant for BlackRock’s ETF, new reports this week indicated Goldman Sachs is also seeking a role as an AP. 

Additionally, a startup founded by Citigroup alumni announced a plan to offer bitcoin depositary receipts to investors, a vehicle that wouldn’t need SEC approval. While we take no view on the probability of success for either Goldman or these new DRs, both developments offer further evidence of institutional capital’s growing demand for bitcoin exposure. 

Regulatory Update

A new tax provision affecting cryptocurrency transactions came into effect to little fanfare this week. The new rules, instituted under the “Infrastructure and Jobs Act” of 2021, require additional disclosures for any transaction exceeding $10,000 in value. 

A member of the Missouri House of Representatives introduced a new bill that would codify legal protections for bitcoin self-custody, transactions, mining, and more. 

Noteworthy

The Fedimint project released a stable, feature-complete MVP that lays the foundation for significant additional development. 

Mercury Layer, another project seeking to scale bitcoin custody by leveraging statechains, also announced a code-complete version available for testing. 

Travel

• Nashville BitDevs and Bitcoin Meetup, January 16-17
• Nashville Energy and Mining Summit, January 18-19
• Austin BitDevs, February 15

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As the festive season's glow dims, Americans confront a sobering fiscal reality: the United States' national debt has surged past an unprecedented $34 trillion, according to a recent announcement from the Department of Treasury. This eye-watering figure was confirmed on December 29, merely 105 days after the national debt crossed the $33 trillion mark in September, marking a breakneck pace of debt accumulation that outstrips projections.

As predicted, federal debt breached $34 trillion on 12/29/23 as Treasury borrows over $90 billion in a single day - even a talented technocrat like Yellen can't hold back this tide: pic.twitter.com/HqFckOUlJ8

— E.J. Antoni, Ph.D. (@RealEJAntoni) January 2, 2024

The gravity of the situation is underscored by the downgrading of America's credit rating by Fitch last August and by Moody's in November, reflecting growing concerns about the nation's fiscal health. Despite these warnings, political factions in Congress, often referred to as the "uniparty," continue to approve spending that exponentially inflates the debt, ostensibly for programs related to diversity, climate change, and military engagements abroad—commitments made in the name of future generations.

The implications of this ballooning debt are dire. During the 2008 financial crisis, the national debt was a third of its current size, with the government incurring over $1 billion daily in interest. Today, that figure has tripled to $3 billion per day. The Peterson Foundation estimates an expenditure of nearly $11 trillion on interest alone in the next decade, excluding potential new debt from additional spending initiatives.

The situation is compounded by unfunded liabilities, particularly in entitlement programs such as Social Security, Medicare, and government pensions, which add at least another $100 trillion to the fiscal burden. This translates to over $1 million per American household, a staggering fivefold increase on the median U.S. household net worth.

Historically, nations have extricated themselves from such debt spirals through massive austerity, as seen in Argentina; hard default, which would involve reneging on debts to creditors like Wall Street; or resorting to inflation. The latter, given its political palatability and Wall Street's influence, appears to be the likeliest path the U.S. might take.

[

Bitcoin’s 15 Years In Perspective | Marty Bent

Today is a better day than most to put the current problems people are facing into perspective. To do this, let’s take a look at what the monetary and debt landscape looking like around the time bitcoin was launched.

TFTC – Truth for the CommonerMarty Bent

](https://tftc.io/bitcoin-15-years/)

As the nation edges closer to a potential debt spiral and point of no return, the critical question remains: how will America navigate this fiscal quagmire?