To All Young Americans


by Karl Denninger, Market Ticker:

You have to wonder, really, whether we have any hope for the future in this country.

Deficit spending is often said to be a way to make generations to come pay for the things that people want today.  It’s actually not quite that complicated, and yet it’s more-complicated.

It’s a way to make the young believe they’re getting a free lunch — whether it be health care, a college education or similar — when in fact they’re being told they have to pay twice or more for the same thing.

Consider the so-called women’s equality screed.  The alleged “pay gap.”  It doesn’t exist once you do multivariate analysis.  That is, while it is true that women earn less than men as a sex when you look at, for example, nurses both women and men earn almost exactly the same amount.

It’s just that there are more women nurses than men, just as there are more women teachers than men.

Among the non-college degree folks there are vastly more male welders than women.  Welding isn’t a profession that requires an immense amount of upper-body strength, for example; indeed, it’s a fairly precise thing, and women are perfectly capable of doing it.  It’s a job that can easily make you $100,000 or more a year, but you have to be willing to go where the work is, which is often welding things like oil pipelines.  More men than women choose that job; ergo, there is a skew in earnings.

Vocation, I remind you, is a choice.  

Then there is all the screaming about “family leave” and similar.

But let’s face facts, shall we: Putting your kid(s) in daycare is a crock.  And that in turn means that one of the parents should choose to stay home and raise them.  Maybe they alternate or not, but the entire “invention” of daycare came about because we squeezed people to the point that one person couldn’t earn enough for a decent living to be had by a family of four.

That is where the real problem lies, and it’s all centered in a handful of areas.  Health care, education and housing.

Housing is not just the price of houses it’s also property taxes.  A decent house in a major metro area often comes with a $5,000, $6,000, $10,000 or even higher property tax bill — every single year.  Then you put a $1,500 health insurance policy premium on that for a family of four (if you’re lucky it’s that low) and suddenly just the operating cost of your household has reached $30,000 for invariant and “mandated” costs.

Note that you haven’t actually paid for the house yet.  Nor have you paid for the power, heating and water bills, or bought a single pound of ground beef or bunch of broccoli to eat.

Nor have we talked about that college yet.  College that used to have a per-semester tuition and fee cost in the hundreds — to just over a thousand — dollar cost rather than five or ten times as much in inflation-adjusted money.

All of this has happened because of Washington and its money-printing, along with their allegiance to so-called “Free Trade” and “free immigration” which is nothing of the sort.  No, it’s not the Fed.  It’s Congress and the President, both of whom have run up $20 trillion on the nation’s credit card.  That has in turn forced prices higher and in the places where there is zero enforcement of the rule of law on monopolies and anti-trust it has gone up fastest, along with those places where you are forced to participate in some way.  When it comes to so-called “free trade” go ahead and try to explain how you compete making cars for $30/hour when the Mexican guy gets paid under $5 for the same thing.  The alternative to putting to a stop to that crap is that you either accept getting paid $5 (which you can’t live on due to the above) or you get $0 because the job isn’t here any more!

All of medical, property tax (mostly schools, if you look at your bill), and education are in this category.

Tell me why, if you’re a young person, you accept this?  Why do you allow Washington DC to run up the credit card like this and destroy you and your ability to have and raise a family on one income?  

If you killed the medical monopolies and school property tax abuses, along with the educational game-playing with loans, forcing all three of these down by 80% (and yes, that is very achievable where the market is allowed to workthen you could have a family with one earning party, one staying at home to raise the kids, and a couple of kids.  You’d be comfortable.  We’d have a good economy.  And you would prosper.

Instead we have 30 people grifting off every doctor or nurse in the local hospital — all of them collecting a paycheck but never providing a single second of care to a single patient.  You probably know some of them.  They’re stealing from you, Junior!

Your local high school?  It’s full of non-teaching administrators, and the teacher pensions and costs that are driving up not teacher wages but operating expenses (and thus property taxes by a factor of four or moreare all stealing from you, Junior!  What’s worse is that they intentionally don’t teach you how exponents work in math class because they know you’d broil and eat everyone in there in a day were you to learn how it is an inherent mathematical truth that deficit spending is not actually free and always is put back on SOMEONE, and the SOMEONE is YOU.

Your local university?  How much has Calculus changed in the last 50 years?  NOT ALL ALL!  What has changed is technology (e.g. computer programming) — it’s gotten much, much cheaper.  The old mainframe the college used to need to teach programming cost millions.  The Raspberry Pi you can learn to program on today costs $35 and fits in your pocket.  Circuit-design and layout software that used to require $50,000 computers to run on now works perfectly well on a $1,000 laptop or desktop computer!  The cost of education, especially computer and technology-related education, should have fallen like a stone but instead it has gone up on an inflation-adjusted basis by 500% or more.

There are 536 people responsible for all of this and more.  There are over 300 million Americans and millions of young adults who are being forced to pay for these handouts, never mind the “wink-wink-nod-nod” thefts.

Don’t start with the “tax the rich” nonsense run by Bernie Sanders and others.  That won’t work because it can’t.  The rich don’t have enough money, in short; if you taxed them at 100% you’d close the budget gap and get what you want for one year.  How many of the rich would work the second year when they got to keep nothing?  None.  Then what do you do?

There is one — and only one — way to stop this.  Stop the scams.  Put an end to the medical monopolists — break them up and throw the executives in prison and health care costs will fall to the point that you will be able to pay cash for nearly everything.  Get rid of cost-shifting and “loans” in education — all of it — and college prices will fall like a stone, to 1/5th of what they are today.  Do the above two and extend it to local and county governments and your property taxes will fall by 80% as well.

Suddenly you will be able to live comfortably and raise a family on one income again!

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