Empire of Debt

Reflections by Katharine C. Otto


Empire of Debt:
The Rise of an Epic Financial Crisis

by William Bonner and Addison Wiggin, 2006

Tuesday, January 9, 2007 – I read Empire of Debt, by William Bonner and Addison Wiggin, until 2 AM.  This, by the authors of The Daily Reckoning, is an easy read of the history of empires, especially of their financial excesses.

            Wednesday, January 10, 2007Empire of Debt never defines “democracy” and uses the word in a fuzzy way.  It makes general statements about democracy, using the word to string different government models together.  I question the authors’ assumption that democracy hasn’t been tried, or if it was, failed.  What form of government has ever lasted and been “successful”?  By what standards do you measure success?  People come and go, tribes, cultures, governments.  Each runs its course and self-destructs or transforms into something new.  Some, like the Mayans, seem to have self-destructed.  Centralized power – rather the illusion that the individual has no power – acts like a black hole, sucking all the life force toward it, rather than the other way around.  The definitions reveal themselves in the direction of energy flow.

Thursday, January 11, 2007Empire of Debt reads as easily as a novel.  The authors, William Bonner and Addison Wiggin, have the cynical sense of humor I bring to these studies, but even they are susceptible to testosterone poisoning.

They gloss over terms like “democracy,” and give short shrift to significant historical events, like the creation of the Fed.  They bounce around in time and from war to war.  The book fills some historical gaps for me – such as the French possession of Vietnam before Ho Chi Minh.  But it leaves out, or takes for granted, the facts that Johnson got us in and Ford got us out of Vietnam.  That Truman authorized the nuclear bomb on Hiroshima and Nagasaki, that the 1929 stock market crash was the result of Fed policy (if Milton Friedman is to be believed).

History claims America is great because of its people, independent spirit, and innovative approach.  I claim Americans are the descendents of imperialists, opportunists, debtors, thieves, religious fanatics, prisoners, and slaves, who for one reason or another, couldn’t make it in their own countries.  So they moved here and took over the greatest store of untapped resources in the world.  We exterminated those who lived here, who had squatter’s rights if not the paperwork to prove stewardship of land the Europeans claimed with guns and attitudes.

What’s so great about that?  We have plundered the resources, wasted, sold, and polluted them, all under the naive impression that we are somehow more evolved, smarter, or otherwise better equipped to deal with the complexities of life than others.

The slave who aspires to be a slave owner remains a mental slave to ambition, because he accepts the slavery system.  The poor who aspire to be rich are just as money-driven as those they seek to replace.

A fool and his money are soon parted.  A foolish nation and its wealth are easily parted, too, as we are seeing.

The American Indians had freedom, possibly because they recognized no individual property rights.  They were stewards rather than owners of the land, a concept Europeans overlook.  They left few traces or scars on the land.

William Bonner and Addison Wiggin, in Empire of Debt (2006), claim democracy hasn’t been tried.  I claim it hasn’t been recorded, simply because there were no official guidelines to guarantee what truly democratic cultures took for granted.  Western history is largely military history, so these accounts overlook or discount peaceful societies, or those so amorphous in their structures as to be invisible.

Not to romanticize the American Indian.  I know little about the cultures, except there were no vast empires or other monuments to dead heroes, no evidence of large-scale bloodshed, no traces other than arrowheads, burial mounds, and encampments to show that the Indians even existed, so light was their step across the land.

What more proof of democracy do we need, because when all people are treated equally, no one role assumes falsely inflated importance.

The Founding Fathers did not bring freedom.  They brought European values to a free land and tied it up with strange notions of laws and property rights.  Freedom and democracy were extinguished or at least submerged when the European mindset clashed with native cultures.

Warring over land and territories destroys the assets both parties want. While Indians may have skirmished over hunting grounds, their mobile lifestyles prevented the greedy acquisitiveness that burdens travel.  It was not in their economic best interests to accumulate more than they needed, recognizing that nature is a great storehouse of raw materials, as long as she is allowed to function in that capacity.


Thursday, January 11, 2007 – The US was started by vagabonds, scoundrels, and schmoozers, but they represented the outgrowth of warlike cultures – cultures where democracy didn’t have a chance.  Books like Empire of Debt acknowledge a portion of my beliefs, validate some of my suspicions, answer some questions.  They do not give practical advice to those most affected by this monumental theft disguised as leadership and enforced by police.

Sunday, January 14, 2007 – Reading Empire of Debt shows how badly I got scammed, and continue to get scammed, by using honest cash.   The problem goes much deeper than authors Bonner and Wiggin realize, because they don’t acknowledge what crooks Americans have become, especially among their own.

This is nowhere more obvious than to the honest woman, who has become a rare treasure in today’s environment.  You don’t find honesty at the corporate or government level, because the decision makers have offices out of town and are not directly accountable to the person with a beef.  Legitimate complaints get deflected to talking heads who earn their money by keeping mine.  They have little incentive to earn my money, because the government has stolen it from me and given it to them.  They feed it back to taxpayers in dribs and drabs, forcing Josie Taxpayer to work for it, while the Shape Shifting Alien Reptiles (SSARs)* keep most of the profit.  Freedom is self-employment, without debt, claiming my right as a taxpayer to earn my living in peace.

The money churners fear other people’s freedom most of all, because the free are flexible, able to make quick decisions and change course in unstable times.  Corporate bulk limits flexibility, leaving many natural markets open for development.

“Freedom” implies the flexibility to choose, but also demands accountability for outcomes.  Problems delayed, ignored, or discounted ultimately create so much drag that freedom becomes slavery to unintended consequences.  A country in debt cannot be free, capitalistic, or democratic in the true sense of the words.

If you perceive problems as challenges, you will look for solutions within the problem and thus maintain freedom.

“Democracy” is the natural order of a free society, but the US wasn’t founded as a democracy.  At that time, most of the population was uneducated, distances large, and communications slow and unreliable.  Governments are inherently socialist and serve to limit freedom, democracy, and capitalism at every opportunity.

Democracy assumes an individual is her own highest authority, so it threatens centralized power.  Rather, it strives for organization within its ranks, a give-and-take that facilitates cooperative effort in lieu of cash.  An economically sound base of taxpayers seeks solutions from within before paying government to solve its problems.

“Capitalism” is perhaps the most misunderstood of all American concepts, because it is now linked to historical figures that exploited human capital for power and profit.  We associate capitalism with greed or avarice, but no true capitalist is either.  She recognizes the value of fair trade and the costs of disrespecting trading partners.  Capitalism knows you lose a client when you cheat, mistreat or underestimate her.  Genuine capitalists are the strongest defenders of individual rights and freedoms.

History blames capitalism for the powerful multi-millionaire – and now multi-billionaire – power brokers America has created.  But these people – like the oil tycoon John D. Rockefeller –  could not have amassed so much wealth without lots of government and Wall Street help.  The opposite of “capitalists,” these men were flagrant socialist opportunists who used presidents and Congress to pass monopolistic laws, bleed public coffers, control public land and resources, and obtain enormous and diverse subsidies and favors.  Taxpayer money and public assets apportioned by government paid most of the overhead for wars that expanded the US military-industrial empire and for the highway system that sold oil and cars.

A true capitalist values her independence as highly as she values that of others.  She will not obligate herself to others or them to her without careful consideration, because obligations come at a cost to freedom.

A true capitalist will not waste or hoard resources.  She is conservative in the old-fashioned sense of the word. She conserves resources and allocates them sparingly, hoping to maximize return on investment.  She believes in value given for value received.  Resources become more valuable as they are developed and sold.

Capitalism understands the difference between natural and artificial markets.  It also seeks its own turf rather than compete for “market share” in glutted fields.  It does not overburden itself with more responsibility than it can comfortably carry.  This is more cost effective and more creative, and it ensures ongoing freedom.

True capitalism looks for unfilled needs or desires, and recognizes opportunities to profit by satisfying them.  While this is perceived as exploitive, it only becomes that if the entrepreneur is not sensitive to the market.  She will not risk more than she can afford to lose, and she will not compromise on principle.  Desperation breeds dishonesty and undermines business relationships.

Sunday, January 14, 2007 – More on Empire of Debt:  It doesn’t define terms like “capitalism.”

It is cynical with respect to Americans, who trusted the so-called leaders who led them into this trap.  We feel betrayed by those who have made a mockery of our ideals and our trust, unscrupulous manipulators who have used false promises to make economic war on our values.

The disillusionment can potentially inspire a return to common sense and simple values.  Americans aren’t as stupid as the authors believe, just overly complacent.  A little financial awakening is headed our way.

The concept of government as paid protector, a la Mafia, needs to be addressed.

The book indirectly makes a strong case for investing in tangible assets, like jewelry or hand tools.

It completely overlooks how the tax code favors large over small, and groups over individuals; but the individual does the work, pays the taxes, and has to live within the constraints imposed by government.

Income tax deductions on interest rather than principal payments, for instance.  The income tax itself, as a matter of fact.

What do the politicians promise foreign governments to sell these debts?  My future earnings.  Shame on the buyers if they trust these creeps.  They don’t represent me.

The idea that living standards are rising in the US is so ludicrous that only an economist can believe it.  Look around to see antiquated and decaying cities, cheap commercialization, destruction of ecosystems, crime, violence, sloppiness, filth, pollution, and a general sense of zombieism with no mind or will of its own, following some blind initiative generated by TV.

Rather than blame taxpayers, ask why were they foolish enough to believe the worldly wise would make good on their promises?  The media spinners took valid concepts and twisted them into their opposites, leading the public to believe the talking heads were as honest as the public was gullible.

Meanwhile, the public, which has been led into a trap, is now blamed for following their leaders’ examples?

Government by the people has become government over the people, but the people are paying for their own oppression.  This is because they have been seduced by modern media into pretend versions of news and current events.  They are under informed, misinformed, and otherwise closed out of decision making processes that affect their lives.

Not only is government overspending.  It is actively spending in the wrong areas, almost as if it is committed to making the worst possible investments.

We have a government that wants to privatize without acknowledging a bottom line.  A good business model is a great idea.  Fire the government, and the private sector will take off.


* A term inspired by David Icke’s Tales from the Time Loop, 2007

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