Political Man vs. Technological Man

Who Wins? [The Daily Reckoning] January 11, 2024 [WEBSITE]( | [UNSUBSCRIBE]( Political Man vs. Technological Man Annapolis, Maryland [Brian Maher] BRIAN MAHER Dear Reader, We hazard the future hinges upon a monumental race. It is a contest between two mighty men — political man — and technological man. At stake is the destiny of everyman, presently in the siege of political man. Under political man the nation has taken aboard $34 trillion of debt. Under political man the nation’s debt-to-GDP ratio well excels 120%. Heavily because of it… under political man… the nation’s economy lags. Each economic "recovery" this century has underexcelled the previous recovery — as previously assumed debt exerts its sinister drag. Has political man borrowed to invest in a productive American future? No he has not. He has borrowed largely to gratify the consumptive demands of the moment. That, we hazard, is because in the American example political man is democratic man. And democratic man is a very needful fellow. He is, at the very least, a very wantful fellow. And he will plunge himself into debt to scratch his itches. Thus his nation wallows $34 trillion in debt. Productive vs. Nonproductive Debt Here we reprise the insights of Mr. Michael Lebowitz — he of Real Investment Advice: When debt is used productively, the interest and principal are covered with higher profits and sustained economic activity. Even better, income beyond the cost of the debt makes the nation more prosperous. Conversely, unproductive debt may provide a one-time spark of economic activity, but it yields little to no residual income to service it going forward. Ultimately it creates an economic headwind as servicing the debt in the future replaces productive investment and/or consumption... The U.S. economy is overly dependent on unproductive debt. Not surprisingly, secular growth rates have been trending lower for three decades. Political man is an improvident squirrel. He devours each acorn he chances upon in summer — and must therefore starve in winter. He is, in brief, a wastrel and a cadger. [ALERT: Tiny “AI Crypto” Set To Soar?]( Jim Rickards, James Altucher, and Ray Blanco dropped a bombshell on the AI Prophet Mastermind attendees. THREE tiny AI stocks are set to explode during AI’s Second Wave. Stocks that they gave away for FREE at this event. In fact, one is still trading for just a couple of bucks. [Click Here To Get The Ticker Details Now]( The Triumph of Political Man Turn your attention to the guns-and-butter 1960s… Merely 15 cents of each government-spent dollar went channeling toward “transfer payments” — that is, channeling from producing hands to nonproductive, consuming hands. Today the figure approaches a productivity-sapping 50 cents of each dollar. Some 50% of Americans haul in at least one federal benefit. Some 63 million receive Social Security payments. Sixty million receive Medicare. Medicaid, 75 million. Five million American households exist at their neighbors’ expense — in part or in full. Some 40 million Americans take “supplemental nutrition assistance.” In English: food stamps. And the economic reservoir from which they guzzle lacks replenishing rains. Comes a point when the thing runs dry. Is it any wonder then that the nation sags and groans under $34 trillion of debt? We hazard it is no wonder whatsoever. It is the triumph of political man, of democratic man. He can no more resist debt than the drunkard can resist the bottle. Is there a way up? Is there a way out? The Answer If there is a way up — if there is a way out — we hazard it is this: Productivity. We have argued it before. Today we argue it again. Only a vastly enhanced productivity can raise the nation from its economic wallows. Only a vastly enhanced productivity can break debt’s terrible gravity. “Productivity growth over the last 350-plus years,” says the abovesaid Michael Lebowitz, “is what allowed America to grow from a colonial outpost into the world’s largest and most prosperous economic power.” It is true. American productivity growth averaged 4–6% in the 30 years post-WWII. But average productivity has languished between 0–2% since 1980. Meantime, labor productivity averaged 3.2% annual growth from World War II to 2000. And since 2000? Labor productivity has languished under 1%. “Given the finite ability to service debt outstanding,” concludes Mr. Lebovitz … “future economic growth, if we are to have it, will need to be based largely on gains in productivity.” Just so. Yet whence will they springeth? [ALERT: U.S.A. Declares “Act Of War” On China.]( According to the New York Times… The White House recently declared an “Act Of War” on China. It’s all here… …in U.S. Docket No. 220930-0204: [Click here for more...]( This government document CHOKES OFF China’s access to the world’s most important technology… …and it could have a direct and immediate impact on your wealth. Friend, let me be perfectly clear: The White House BANNED China from securing this devastating technology… But YOU can still potentially make a fortune from it. See how to prepare for this “Act of War” — and the technology behind it… [Go Here Immediately]( Technological Man Who can potentially reintroduce American productivity? Who can rescue everyman from political man? The answer is technological man. Galloping strides in robotics, artificial intelligence, biotechnology and related wizardries may yield productivity truly stupendous. Consider “generative AI,” says the crackerjacks at McKinsey & Co.: Generative AI’s impact on productivity could add trillions of dollars in value to the global economy. Our latest research estimates that generative AI could add the equivalent of $2.6–4.4 trillion annually across the 63 use cases we analyzed — by comparison, the United Kingdom’s entire GDP in 2021 was $3.1 trillion. This would increase the impact of all artificial intelligence by 15–40%. This estimate would roughly double if we include the impact of embedding generative AI into software that is currently used for other tasks beyond those use cases. Goldman Sachs believes this generative AI merlin may elevate global growth by 7%. The Brookings Institute — meantime — says we must consider AI’s compounding productivity: If cognitive workers are more efficient, they will accelerate technological progress and thereby boost the rate of productivity growth — in perpetuity. For example, if productivity growth was 2% and the cognitive labor that underpins productivity growth is 20% more productive, this would raise the growth rate of productivity by 20% to 2.4%. In a given year, such a change is barely noticeable and is usually swamped by cyclical fluctuations. But productivity growth compounds. After a decade, the described tiny increase in productivity growth would leave the economy 5% larger, and the growth would compound further every year thereafter. What’s more, if the acceleration applied to the growth rate of the growth rate (for instance if one of the applications of AI was to improving AI itself), then of course, growth would accelerate even more over time. The Silver Lining May Really Be Gray Is this the future? We do not know. We battle yet to know the past. How then are we to understand the future? Yet we hazard the solution to today’s stagnation is the technological solution. That is, the triumph of technological man over political man. Will technological man himself become a terrible fe-fi-fo-fum? Will he come to menace everyman as political man presently menaces him? It is possible he will. Many believe it is certain he will. Political man is an angel of heaven next to him. Yet we hazard that day is distant. It is a concern of the long run. And in the long run — as noted Lord Keynes — we are all deceased regardless… Regards, [Brian Maher] Brian Maher Managing Editor, The Daily Reckoning [feedback@dailyreckoning.com.](mailto:feedback@dailyreckoning.com) Editor’s note: Crypto guru James Altucher made a bold prediction about the SEC. He said it was going to approve the first-ever Bitcoin ETF… And the SEC just did exactly what James predicted. Why does that matter to you? Because when the SEC made similar decisions when it came to tech stocks in the ’90s and gold in the 2000s – [a MASSIVE rally ensued.]( This time, it’s happening in crypto. But the opportunity here isn’t in Bitcoin. James has identified SIX tiny cryptos that could soar 10X, 50X or even 100X over the next 12 months that will far outperform Bitcoin. Please take two minutes to [watch James Altucher’s brand-new thesis update immediately.]( After all, it could add rocket fuel to your retirement in the coming months. [Go here now for details.]( 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]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. 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.](