Why too much optimism is keeping America down

It’s probably unexpected for me to say this, but Arnold Schwarzenegger perfectly summed up one of the biggest reasons America cannot solve its problems right now.

On a recent Jimmy Kimmel appearance, Kimmel tried to bait Schwarzenegger into slamming Donald Trump, but Schwarzenegger took a different approach.

He acknowledged that America has a ton of problems. But he told the audience to “relax,” because when he came to America in 1968, “it was a disaster.”

Martin Luther King Jr. and Bobby Kennedy were assassinated that year. There were protests and riots against the Vietnam War, followed by a decade of stagflation, Watergate, and so on.

Then Arnold said, “and America got out of that mess. America will always get out of this mess… believe me, this will be solved.”

Credit to him for giving a mature and measured response… and you’ve got to admire his optimism. But there’s also a lot of naivety in Schwarzenegger’s statements.

His viewpoint that everything will just work out because ‘Murica’… frankly this is a huge part of the problem because it enables procrastination and lack of accountability.

It’s a way of saying “we can continue to kick the can down the road. We don’t need to take any action today. We don’t even need to acknowledge the problems. We can just be fuzzy about potential solutions, avoid specificity, avoid tough decisions, and pretend there will never be any serious consequences.”

This is just as dangerous to the country as the passionate ignoramuses and inspired idiots who protest mostly peacefully with their Palestinian >> Mexican >> Iranian flags.

If action were taken today— on immigration reform, on Social Security, on cutting the deficit— then these problems could be arrested before causing serious pain.

But if people think they can delay action, all of these problems are more likely to become major crises.

Schwarzenegger is also wrong to compare the America of today to the 1960s and 1970s.

Sure, those decades were socially tumultuous, plus economically painful in the 70s. But today is a whole different level.

In 1968, interest on the national debt consumed about 7% of tax revenue. Today it’s 23%. And both the national debt and government bond yields are rising so quickly that interest on the debt could eat up 40% of tax revenue by 2033.

That’s just eight years away. And this problem won’t simply correct itself. Solutions will require serious, deliberate, and uncomfortable action.

We’ve written about the right approach— thing like deregulation to allow the economy to grow faster than government debt; cutting spending so that the debt-to-GDP ratio starts to shrink; and making obvious reforms to Social Security and Medicare before they run out of money.

It’s not rocket science. Yet none of these things is happening or even being seriously considered.

Throughout history, every society has gone through troubled times.

Even in its early days, the Roman Republic suffered all sorts of social conflict, including civil war.

Yet when you have a strong economy, you can battle back from social upheaval… natural disasters… even military defeats.

It’s economic reasons that drive great civilizations into decline. Because when government finances are too weak, they aren’t able to repel foreign invaders, to recover from famine or plague, or to rebuild anew from social chaos.

Arnold’s way of thinking always gets applause—because he’s telling people what they want to believe about America.

But it’s time to get real.

No country can spend half its tax revenue just paying interest and expect things to end well.

There’s no magic wand, no patriotic speech, no Hollywood ending that makes this debt nightmare disappear.

Only hard math, hard choices—and a reckoning that’s long overdue.

Source

Simon Black is an international investor, entrepreneur and permanent traveler. His daily letter is both educational and entertaining, and we suggest that those who want unbiased, actionable information about global opportunities sign up for Sovereign Man’s free, actionable newsletter at http://www.SovereignMan.com.

From Simon Black of SovereignMan.com

Source: https://www.schiffsovereign.com/trends/why-too-much-optimism-is-keeping-america-down-153047/