Financial Cliff, or Lemming Leap?

We keep hearing that the US economy is heading for a 'financial cliff; the confluence of a congressional mandate to cut spending and raise taxes. This 'cliff' was created... or at least promoted from financial 'hurdle' to financial 'cliff'... by the last, desperate attempt of the US Congress to 'kick the can' of fiscal responsibility down the road one more time. In other words, this is strictly a man-made 'cliff'; and 'going over' the cliff is simply a euphemism for going 'cold turkey' on deficit spending.

Of course, the very same Congress can now annul these 'laws', pass new ones, and attempt to 'kick the can' just one more time. Can the 'can' withstand another 'kick'... or is this when the can... that is, the real US economy, shatters? Time will tell, but clearly what cannot continue will not. Von Mises called this situation the 'crack up boom'... the boom will come to an end, sooner or later, voluntarily or not. What cannot continue will not continue.

The question to be answered is whether to 'go over' the cliff, that is face financial responsibility now, or avoid responsibility and grow the cliff ever higher by continuing the 'borrow and spend' madness. The subject of madness brings us to lemmings... do lemmings actually go mad, and hurl themselves over cliffs in a suicidal frenzy, or is this just anthropomorphism?

Another, more materialistic take on lemmings is the recognition that lemmings are simple creatures, with a low eye level, and as they run in packs they do not, cannot see very far ahead. Indeed, those back in the pack see only lemmings directly in front of them; and if the pack leaders inadvertently run over the edge of the cliff, the rest of the pack simply follows them over, unawares, to their collective doom.

Do we as humans go collectively mad, and hurl ourselves over the 'cliff' in a suicidal frenzy, or are we simply, blindly following our 'leaders' to our collective doom? Indeed, does the reason why we seem to go over the cliff actually matter? The answer in either case is the same; abandon collective madness, and retrieve sanity one by one, on an individual basis... look ahead, with wide open eyes, see the looming cliff... and step out of the mad, collective rush to destruction.

The salvation of humanity resides in individual decisions, made in a rational, thoughtful manner... not in a collective, emotional frenzy. As more people get conscious and individually take measures avoid the cliff, fewer will remain to collectively barrel over the edge. Indeed, if somehow we could all wake up and see what's coming and all take action to avoid destruction, there would be no one left to actually take the plunge!

The action each individual must take to avoid the cliff will depend on the circumstances of that very individual, but the crux of the matter is the same; avoid dependence on the collective, as the collective is mad. The collective is rushing, seemingly unawares, ever faster, towards the cliff...

Specifically, each individual must take responsibility for themselves... by avoiding the Fiat world as much as possible. Instead of accumulating more debt in the form of Fiat paper... thereby growing the cliff taller... accumulate more real wealth; Gold and Silver easily come to mind, but so does a lot of other real stuff; barter goods, land, food supplies, fuel, clothing, etc. The kind of stuff any Boy Scout would understand to hold in preparation for a survival scenario.

Above all, avoid the collective madness of borrow and spend. Borrow and spend is the very process that built the cliff in the first place, and continues to build it ever higher and more lethal.

at 11:06 PM
Back to Top