The Looming Lost Decade

A Warning From the World Bank [The Daily Reckoning] March 29, 2023 [WEBSITE]( | [UNSUBSCRIBE]( The Looming Lost Decade - "A lost decade could be in the making for the global economy"… - Good debt vs. bad debt… - "Every nation gets the government it deserves"… External Advertisement [New documentary exposes the most terrifying political plot in decades: OBAMA’S REVENGE]( [Click here for more...]( A strange event is about to blindside millions of Americans… send shockwaves through the financial system, and create devastating losses for unprepared investors… [Click Here To Stream This New Documentary For Free]( Annapolis, Maryland [Brian Maher] BRIAN MAHER Dear Reader, "A lost decade could be in the making for the global economy." This is the warning of the World Bank's chief economist. More from whom: Nearly all the economic forces that powered progress and prosperity over the last three decades are fading. As a result, between 2022 and 2030, average global potential GDP growth is expected to decline by roughly a third from the rate that prevailed in the first decade of this century — to 2.2% a year… These declines would be much steeper in the event of a global financial crisis or a recession… It will take a herculean collective policy effort to restore growth in the next decade to the average of the previous one. We believe there is justice here. We do not believe the present economy can push along much. Like a pack mule loaded beyond all endurable limits… the present economy is debt-loaded beyond all endurable limits. The legs are unequal to the burden upon the back. We hazard they are in for a good buckling. Just Look at the U.S. Consider the United States alone… Its national debt presently runs to $31.6 trillion. Its altogether debt — debt both public and private — runs to a spine-busting and leg-collapsing $94.8 trillion. Yet the raw and undigested numbers fail to draw the overall sketch. What they miss is… context. A man stands six feet in height. Is he tall? By the standards of the horse jockeying profession he is tall indeed. By the standards of the National Basketball Association he is not. For context we must glance the nation’s debt-to-GDP ratio. A Future of Gray and Twilight The United States’ debt-to-GDP ratio rises presently to 125%. That is, the United States heaves up more debt than economic output. Evidence indicates — evidence we deem credible — that any figure exceeding 90% represents a menace. It indicates an economy overburdened with debt. This overburdened economy can merely gutter along. In our estimation this economy presents a future not necessarily of collapse but of gray and twilight, of habitual malaise… of a dank and drizzly November… month upon month… year upon year. [Patent #11,219,620: The Most Valuable Patent In History?]( I believe this could over time become the single most valuable patent in history. That’s because this patent is just some of the exciting work being done by a company which is developing treatments for one of the biggest and most common diseases in America… A disease which impacts 54 million people, or about 26% of the adult population in America. Whatever you do, do not let this opportunity pass you by. [Click Here To Learn More]( Where’s the Emergency? Not since 1946 has the United States’ debt-to-GDP ratio summited such impossible heights. Scotching Messieurs Hitler and Tojo was not inexpensive business. And in that context, an extravagantly unbalanced debt-to-GDP ratio — 119% — was an understandable tolerability. Yet where is today’s Hitler? Where is today’s Tojo? If you attempt to inform us he resides in Moscow we will plug our ears. We will not listen. United States government spending underwent considerable contraction in World War II’s wide wake. Meantime, the 1950s represented a “golden age” of American economic might. What resulted? By 1974 the debt-to-GDP ratio of the United States plunged to 23%. The mule could accommodate the load — and plenty, plenty more. By the close of the Reagan years the ratio jumped to 50%. By the close of the Obama years the ratio leapt to 105%. And now, after the debt deliriums and derangements of the pandemic years… the ratio goes at 125%. In reminder: Credible evidence indicates any reading above 90% represents an unsustainable burden. Thus the American mule whinnies and whinges under the load. It can scarcely advance. Off Come the Golden Handcuffs Compare — if you will – today’s debt-to-GDP with 1970’s. In 1970 the United States government was still jailed in, partly at least, by the gold standard. Old Nixon issued a pardon in 1971. Thereafter the United States government was free to go spreeing through the credit markets… and drive teams of wild horses through the Treasury. This it has done: [image 1] Today, some 60 cents of each dollar Uncle Samuel spends, he borrows. The remaining 40 cents he collars in taxes. Contrast these figures with the guns-and-butter 1960s — before Mr. Nixon banged the gold window shut. You will find the mathematics very nearly inverted. Seventy-five cents of each expended dollar the government hauled in through taxes. It borrowed the remaining 25 cents. [Send Me Your Mailing Address!]( [Click here for more...]( The biggest gold bull market in history has just begun. That’s why New York Times best-selling author Jim Rickards has arranged to send his must-read book on gold to any U.S. citizen with a valid mailing address today. [Click Here To Claim Your Copy Of The New Case For Gold]( Productive Debt vs. Nonproductive Debt We concede it at once: Debt is not what an academic man might term a malum in se. That is, debt is not necessarily an evil in itself. That is because debt can be shoveled into productive pursuits. The proceeds from these productive pursuits can repay the loan by many multiples. Yet has our doddering uncle borrowed to invest in a productive American future? No he has not. He has borrowed largely to satisfy the consumptive needs of the moment. That money which enters through the front door goes instantly exiting through the back door. Consider the abovesaid 1960s… Merely 15 cents of each government-spent dollar went channeling toward "transfer payments" — that is, channeling from productive hands to nonproductive, consuming hands. Today the figure approaches a productivity-sapping 50 cents of each dollar spent. Some 50% of Americans haul aboard at least one federal benefit. Some 63 million receive Social Security payments. Sixty million receive Medicare. Medicaid, 75 million. Five million American households claim housing subsidies. Some 40 million Americans take "supplemental nutritional assistance". That is, food stamps. Only during the locust years of the Great Depression — from 1931–36 — did government dolings out exceed taxes coming in… as they do now. Is it any wonder then that the nation sags and groans under $31.6 trillion of debt? We hazard it is not any wonder at all. Do we hector? Do we preach? Do we wag our finger? No we do not. We approach the business with the detached air of the accountant. We merely count beans. Look Yourself in the Mirror Yet one question must be answered. We have raised it before and we raise it again today: How did what was once the world's greatest creditor nation sink so deeply into debt? It is easy to blame the politicians. But if the theories of democracy have anything in them… We the People must be as guilty as the politicians we elect. As we have also asked before: Were the American people humbugged into so much debt? Or have we freely and knowingly put our names to the contract? Two possibilities immediately suggest themselves… 1) The elected officials of the United States are colossal rogues who amassed today's $31.6 trillion debt in full defiance of the thrifty American voter. Or: 2) The $31.6 trillion debt reflects faithfully the desires of the American voter. He has gotten what he wants. At the very least, he accepts it in exchange for the perceived benefits it showers upon him. As we have argued before: Option 1 mocks our cherished democratic theories. Option 2 stands in full indictment of them. "Every nation gets the government it deserves," said 18th-century French philosopher Joseph de Maistre. Alas, we must conclude the United States has gotten the government it deserves. Regards, [Brian Maher] Brian Maher Managing Editor, The Daily Reckoning [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) Editor’s note: About 6 months ago, Jim Rickards [embarked on a rather unusual experiment.]( It involved… - Jim himself. - About 4,500 of my most elite readers. - And a closely guarded money-making secret (formerly classified by the CIA). What happened next was so shocking that Jim had to share the results. You see, these 4,500 Americans had the chance to pocket life-changing gains in a just matter of days, like: - [174% in 11 days.]( - [128% in 28 days.]( - [and 203% in just 17 days.]( How are profits like these possible? This moneymaking secret has nothing to do with: - Buying gold stocks - Buying hard physical assets. - Or waiting for the stock market to crash… Instead… It involves a [secret moneymaking tool]( which taps into the same technology the CIA used to catch terrorists. Sounds crazy? The full story will shock you. That’s explains why Jim put together [this brief presentation.]( You could see the black-and-white proof for yourself. This closely kept moneymaking secret has already changed the lives of 4,500 everyday Americans. Why should you be left out?. [Go here now and watch this brief presentation, while it’s still available.]( --------------------------------------------------------------- [The Daily FWD] URGENT! FREE Report: 6 Ways to Beat a Financial Disaster Another financial crisis could be just DAYS away! That’s why world-renowned macroeconomist Jim Rickards released this brand-new FREE report revealing the 6 most important things you NEED to do right now to protect yourself. Simply click below to sign up for the elite new research letter The Daily FWD – which will give you honest, unfiltered news on EVERY important issue impacting your wealth and security… The moment you do, we’ll rush you this exclusive new report straight to your inbox. [Click here to sign up to The Daily FWD – 100% FREE.]( By clicking the link above you agree to receive email updates and special offers from The Daily FWD. We will not share your email address with anyone. And you can opt out at any time. [Privacy Policy](. Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) [Brian Maher] [Brian Maher]( is the Daily Reckoning's Managing Editor. Before signing on to Agora Financial, he was an independent researcher and writer who covered economics, politics and international affairs. His work has appeared in the Asia Times and other news outlets around the world. He holds a Master's degree in Defense & Strategic Studies. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. This address is for feedback only. For questions about your account or to speak with customer service, [contact us here]( or call (844)-731-0984. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized financial advice. We allow the editors of our publications to recommend securities that they own themselves. However, our policy prohibits editors from exiting a personal trade while the recommendation to subscribers is open. In no circumstance may an editor sell a security before subscribers have a fair opportunity to exit. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. All other employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. Please read our [Privacy Statement.]( If you are having trouble receiving your The Daily Reckoning subscription, you can ensure its arrival in your mailbox by [whitelisting The Daily Reckoning.](