“The descent to hell is easy...But to retrace the way and return to the upper airs; this is the task, and where the mighty labor lies.”

-Virgil

Easy to gain weight, but hard to lose it.

Easy to start a bad habit, but hard to quit.

Easy to get into debt, but hard to get out.

For the last 100 years the US has been on a debt binge. Fueled by the desperation of a twice destroyed Europe, we found ourselves in a unique situation. Having first accumulated vast sums of money (Europe’s gold and silver coins) during the wars – as a supplier of goods – we found ourselves in possession of the majority of the world’s money. Without gold or silver to back their currencies, Europe and the rest of the world chose to peg their currencies to ours with fixed exchange rates.

And we could literally print all the dollars we wanted. And we did – for the Korean War, Johnson’s Great Society, the Vietnam War, and the nuclear arms race. Then the French called us out. Since then (1971) we’ve still been able to take great liberties in the amount of currency we print (the Great Recession in particular), but at a far greater cost. Without its gold backing, the only way to print US currency is by issuing debt – treasuries. Combined with runaway deficits by the left and right, we find that we can no longer afford to pay our bills without cheap, easy credit. And that is why we kept rates so low for so long during this last crisis.

We, both as a nation and individuals, need to “return to the upper airs” – and the longer we wait, the harder the journey will be.

Why do we keep kicking the can down the road?

1. We would have to stop living extravagantly with gobs of government entitlement programs.

2. We would have to default on all existing treasuries, making a lot of nations angry and crippling retirement funds.

3. We would have to give up possession of the world economic system.

That’s a high cost, and one no nation has chosen in the past. Instead, they allow their nation to collapse, which destabilizes their region, and ultimately results in war. And then they unwillingly do everything above.

It happened most notably to Rome, France, and Germany. And we’re doing the same right now. Runaway spending and a divided people, trade wars to destabilize the world.