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Monday, January 07, 2019

Beware the Ides of June 2040: Death of the Welfare State

Martin Armstrong is a financial analyst who believes in cycles. In a recent online post discussing the desire of government to convert us all to cashless payments, he says:

"Governments are going broke. They will not listen and instead, they are obsessed with just a solution for the next quarter. They lack any vision of the future and will NEVER [take] responsibility for their own mismanagement. Their single solution is to always raise taxes rather than reform. The more they press toward this cashless society the greater the economic implosion. What comes after the elimination of cash and the budgets are never balanced with institution starting to shift to private assets rather than government bonds that pay nothing and present huge risks, will be the default on social programs without the corresponding reduction in taxes. This all leads to the inevitable collapse of Western Society just as we witnessed the collapse of Communism in 1989.

"Our model is famous for forecasting the collapse of Communism and even the fall of the Berlin Wall (November 9, 1989; 1989.857). The likelihood of Western Socialism surviving as some benevolent government will come to an end by 2041.457. The 1989 Tiananmen Square protests that culminated on June 4th, 1989 (1989.424). This means we should begin to see a sharp rise in civil unrest cyclically speaking beginning October 28th, 2020 going into the US Presidential elections."

This is a thing I fear, for the UK.
  • Taking the long view, we are overpopulated: research published some years ago on populationmatters.org estimated that we can only support around 17 million people from our own agricultural resources, using sustainable methods
  • We have lost much of the industrial base that multiplies labour power, allowing for high wages and a tax base that can support the "social programs" we have become used to since 1945, such as free education, health, help with housing, unemployment benefits, family and earned-income supplements
  • We have a high level of disguised un/under-employment
  • Social bonds are under strain and massive, expensive inputs from social workers, police, teachers etc are barely coping - at a time of bogus (debt-fuelled) prosperity
  • Public and private indebtedness continues to increase
  • At least half the Conservative Party wants us to stay in the EU, which has weakened our economy by acting as a scale model of globalism and undermining working-class prosperity with cheap imported/offshored labour; the other half wants out of the EU in favour of full-scale globalism, which may work on paper (looking only at GDP) for a while but exacerbate other problems including widening inequalities
  • Half the Labour Party wants to remain in the EU, under some illusion (against evidence) of the latter's benevolence; and has been happy to loosen controls on inward economic migration because it would "rub the Right's nose in diversity" (note the focus on political party, rather than consideration of what might benefit the country)
So far, I see only a handful of old Labourites (plus the recorded voices of some of their deceased comrades) who understand that we need to be free of the EU and at the same time resist the destructive forces of global cattle-raid capitalism (which some call corporatism so as to distinguish it from the long-term business-building capitalism that made us a rich economy.)

I am altruistic for selfish reasons: if our labouring classes can be employed at good wages and the Welfare State can be sustained, then I will be able to live and move around in my country in relative safety. 

If Armstrong (and Kondratieff, and others) are correct, though, we cannot hold back the tide of history. Note above that Armstrong predicts social unrest in the US in late 2020; another cycle-theorist, Charles Hugh Smith, forecasts a financial crisis in c. 2025. Time will tell.

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