Five Predictions for the coming Decade of Decline

There is a well-known modern proverb (often attributed to the novelist G. Michael Hopf) that goes, “Weak men create hard times, hard times create strong men, strong men create good times, good times create weak men.”

The saying sums up the cyclical nature of the rise and fall of societies– and it’s a topic in which I have tremendous personal interest.

Having recently reached middle age, I can comfortably say with the benefit of hindsight that I was born and grew up during the American prime time– the time at which the wealthiest and most powerful country in the history of the world was at its peak.

The US is still an incredible country with so much prosperity and opportunity. But it would be completely naive and ignorant to claim that America is not in substantial decline.

Its standing in the world has waned, much of it just over the past few years. It’s hard for adversary nations to take you seriously when your President shakes hands with thin air and embassy employees in Kabul have to be evacuated by helicopter.

Financial challenges keep piling up– from the insolvency of Social Security to the $35 trillion national debt to the inflation problem that just won’t go away.

And social divisions, many of which have been bizarrely self-inflicted, seem to grow more tense by the day.

Fortunately, America’s decline began from a historically high peak. So even in its diminished state, again, it is still wealthy and powerful.

But the real concern isn’t where the country is today. It’s the trend, i.e. where the country will end up in ten years’ time if it stays on current course.

I’ve spent the past fifteen years studying similar cases throughout history– the US is far from alone as the only nation that has ever peaked and declined.

And one of the best works on the subject I’ve ever read is The Collapse of Complex Societies, by anthropologist Joseph Tainter.

“Collapse” is a strong word and conjures images of anarchy and death. But Tainter’s definition is more precise; “collapse” doesn’t mean that a society or nation ceases to exist, but that it experiences a steep decline in political, social, and economic stability.

This is what (I believe it’s clear) the US is going through right now, and the trend is accelerating.

Tainter’s book examines the common factors of how different societies throughout history declined– from ancient Mesopotamia to Western Rome. And his analysis shows that one of the key culprits in collapse is the inability of a government to recognize problems… or to solve them.

Many ancient Roman emperors were legendary for failing to recognize the horrible problems brought on by their policies and incompetence– inflation, invasion,

This pretty much describes the US federal government in a nutshell.

Politicians can barely talk about problems in a civil and rational manner. And quite often they refuse to even acknowledge them.

We’ve seen this over and over again with issues such as inflation, the southern border, crime, and social security.

For example, the Social Security trustees publish a report each year stating plainly that the program is going to run out of money by 2033. But no one in Washington wants to talk about it. Joe Biden has even pledged to veto ANY efforts to reform the program.

Biden’s top officials also repeat the bold-faced lie that “the border is secure”, while actively encouraging illegal immigration. The federal government even sued Texas to stop the state from securing the border on its own.

The people in charge demonize and defund police, decriminalize theft, and elect progressive prosecutors who let violent criminals go free.

It’s the same dysfunction with federal spending. These people can’t even acknowledge that a $35 trillion national debt is catastrophic. Most politicians happily ignore it, and others come up with more outrageous spending to further the debt spiral.

They cannot acknowledge the problem, let alone discuss it rationally. Merely passing a budget now routinely devolves into a crisis.

Our view of where this trend leads is clear:

  1. Inflation is coming.

There is little hope of responsible spending. The government’s own projections forecast an extra $20 trillion in new debt over the coming decade, and frankly that’s optimistic.

History shows that explosions in national debt are financed by the Federal Reserve creating new money– which ultimately causes inflation.

When the Fed created $5 trillion of new money during the pandemic, we got 9% inflation. How much inflation will $20+ trillion cause?

And the worse inflation becomes, the more urgency the rest of the world will have to replace the dollar as the global reserve currency… which will result in even MORE inflation in the US.

It’s a vicious cycle in which inflation will create more inflation. We project this is 5-7 years away.

  1. Social Security is not going to be there for you.

Social Security is not a political problem; it’s an arithmetic problem. And the math just doesn’t add up.

Every year the US Secretary of Treasury signs the report saying plainly that, by 2033, Social Security’s trust funds will run out of money. Benefits will have to be permanently cut by 25% and then become worse over time.

  1. Higher taxes are virtually guaranteed.

Politicians love claiming that people should pay their “fair share” but can never quite define how much that means.

And they have already moved the goalposts on who exactly owes society more— the “billionaires” became the top 1%, then quickly shot up to the top 5%, then 10% and soon it will be the top 25%.

Higher taxes won’t just be federal. State and local taxes— from sales tax to property tax— are very likely to cost more, while your governments provide much less.

  1. Continued social chaos.

Every time it feels like the lack of civility and unity across Western Civilization can’t get any worse, something new erupts.

The latest is university students screaming “from the river to the sea” and “Just Stop Oil” while defacing artwork and public monuments. Rising tides of socialism and racial animosity never seem to ebb, and idiotic wokeness just won’t go away.

These social divisions will likely continue to grow.

  1. Maybe most importantly, major geopolitical disruptions.

As the financial and social decline of the US becomes increasingly obvious to the rest of the world, adversaries are becoming more emboldened.

Nations like China, Russia, North Korea, and Iran are likely to grow more assertive, and there will be significant calls to replace the dollar as the global reserve currency.

Soft war incidents like spy balloons, manufactured pandemics, cyberattacks, etc. will persist— and if we’re very lucky, there won’t be a shooting war. I give it 50/50.

It’s exasperating. Anybody over the age of about 35 remembers a time when it wasn’t like this.

Yet now chaos is the norm. I’m not saying this to be dramatic– it’s important to be intellectually honest.

Part of being intellectually honest means acknowledging that, again, the US is still a great country with an incredibly powerful economy, boasting some of the most valuable businesses in the world.

And Americans still enjoy an extremely high standard of living— albeit one that has been disrupted in recent years by the combination of inflation, crime, and social chaos.

The most exasperating part is that these problems are fixable.

The US government could spend responsibly, encourage capitalism and innovation to grow the economy, and its debt problems would melt away. The dollar would remain valuable. US leadership might even earn back global trust.

But with the current people in charge, I wouldn’t hold my breath. And I also wouldn’t put all my hopes and dreams on the voters smartening up anytime soon.

Yet there are still plenty of solutions that independent-minded individuals can execute without relying on the government.

For example:

Problem: Future inflation will pose a major problem to one’s savings.

Solution: Invest in assets which do well during, or even benefit from, inflation— real assets such as energy, mining, and productive technology. Right now many of these are selling for record low prices, yet poised for substantial growth.

Problem: An overrun border and rising crime rates threaten cities and living standards.

Solution: Obtain a second residency in a foreign country where you really enjoy spending time, or even obtain a second passport. This way you and your family will always have a place to go if the need ever arises.

Problem: Social Security’s trust funds will run out of money within a decade.

Solution: Maximize contributions to retirement accounts— including a special type of 401k which could allow you to double contributions and direct where funds are invested. This lowers your taxable income, puts more money away for retirement, and allows the investments to grow tax-free.

There are solutions for people who, unlike the government, are willing to recognize the problems and actually do something about it.

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