Why you should panic about the US Deficit

*Note: This is an informal note that is not directly related to my last essay. The second part of that is still to come.*

Notwithstanding the headline, I don’t really think that panic accomplishes anything useful. But I am amazed that we are looking at a catastrophe and hardly anyone is talking about it. The current situation is the opposite of the “food crisis” that I addressed last year. At the time I talked about how even though there were a lot of bad headlines when you looked into the actual numbers there was no crisis in the immediate near term (it might be different now at least in terms of rice, but I have not really dug into the numbers yet for this year). But in terms of the US deficit, very few people seem to be panicking and yet when you dig into the numbers they are really bad.

So I thought I would write a short informal piece to break down the headlines that I have been linking to and explain why they represent a catastrophe in the making that will directly impact your life. Let us start with a recent CNN story titled “Federal budget deficit expected to nearly double to around $2 trillion.”

Now, if you are a typical American redneck, you will see a head line like that and sagely tell whoever is next to you “the politicians are going to bankrupt this country” and then go on with your business without giving the headline another thought. And who can really blame the typical redneck for reacting like that? In 2020 the Federal Government ran 3.1 trillion dollar deficit and in 2021 the feds ran a 2.8 trillion dollar deficit. It is true that in 2022 the deficit was just over a trillion dollars but if the world did not come to end back in 2020 or 2021 then, why should a mere 2 trillion dollar deficit be a cause of panic today?

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The 80 Year Crisis Cycle of The United States

Life in the United States has changed dramatically every 80 years since the country’s founding. There was about 80 years from the end of the Revolutionary War to the end of the Civil War (81 years 3 months and 25 days if you want to be autistic about it). It was about 80 years from the end of the Civil War until the end of World War II (80 years 3 months and 24 days from the end of the Civil War if you want to be precise). And it has been exactly 78 years (and one day, this essay was supposed to go up yesterday for cool points but I failed) between the end of World War II until the date of this essay going on line. If the 80 year pattern holds, we are on the cusp of a profound change in America.

In the context of this pattern, the profound change is the appearance of something brand new and never experienced before by Americans. Superficially, these changes are obvious. In the case of the Revolutionary War, the brand new thing was the creation of a new country. In the case of the Civil War, there was suddenly no slavery in the United States whereas before it had been a major economic force. And after World War II, America went from being a country that had no “entangling alliances” and a small federal government to being a nation that was embedded in a worldwide network of alliances with a massive federal government. But the superficially obvious changes conceal deeper changes that lay the ground work for the next crisis and attendant profound change.

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A real life evac

So much of what they tried to teach me is in the below video from Ukraine. Granted, were were being trained to do things in austere environments and not combat but we were taught to improvise litters and we did do carries and how to swap out while in motion. Our evacs were easier but I am not sure what my teachers would have made of the splint. Hard to tell from the video but it does not look like they put much effort into forming it. But then, they were under fire…..

Old Man’s War

Ukraine as a culture and a people are going to cease to exist in a couple of generations regardless of what Russia does. It was for this reason that I did not believe that Ukraine would fight so hard against the Russians. Why would a nation that was going extinct voluntarily react so strongly to the loss of their sovereignty? I never figured that so many only sons would lay their lives down with their soon to be childless mothers cheering them on. This was one of the things on my mind when I stated in my last post that I have been almost completely wrong about the human element of the Ukraine War.

But being wrong about the human element does not change the underlying demographic realities that I based my opinion on. And those demographic realities have consequences even if people don’t react to them like I think they will.

Below is the what the current demographic structure of Russia looks like (you can click on the picture to get a bigger view). Pay careful attention to how many people are between the ages of 16 and 26 compared to the number of people between the ages of 30 and 40.

By Rickky1409 – Own work, CC BY-SA 4.0

Compare the above graphs with the one below (again you can click on it to get a better view). The below graph is what Russian demographics looked like before the Germans invaded. You can see they had a large cohort of young people just waiting to come on-line and get thrown into the meat grinder.

By Rickky1409 – Own work, CC BY-SA 3.0

But the above demographics are still messed up. That is because Communists are bad people and they had a great famine followed by a great terror. The below is a more natural population pyramid and it comes from 1929 which is just before the commies really messed things up with famines and terror. It still has a gap in it from Word War 1, but it is the type of population pyramid that the idea of mass conscription was built around.

By Rickky1409 – From excel file, CC BY-SA 3.0

We have been looking at Russia because it is easier to get historical data. But Ukraine is practically the same. If anything the disappearance of the youngest children is even more pronounced but that may be because Russia has more ethnic minorities still having kids.

By sdgedfegw – Own work, CC BY-SA 4.0

If you really want a dramatic demonstration of the destruction of the Ukrainian nation (prior to anything the Russia did) click on the below GIF.

By Kaj Tallungs – Own work, CC BY-SA 4.0

This is why when you see videos of the combatants in this war it is striking how many of them are in their 30s or 40s. Neither nation has a choice. If they sent masses of 18 year old’s like the US did in Vietnam, they would not have enough to make a proper army. Even Russia, with its much bigger population, would be at risk of destroying its future if it only sent young people to battle. And Ukraine likely has to destroy its future and pull in older men just to have a chance at staying in the fight.

Long term, it really don’t matter what happens on the battle field. Neither nation is going to be around (at least as we know them today) for very much longer. If you look at the very bottom of both countries population pyramids, there is next to nothing there and that will carry forward into the next generation after that and so on on and so forth. It will only take a couple of generations of that for both nations to have next to nothing in terms of population. And the war will only speed that process along.

Modeling Putin

(Warning: This is entirely too long for the level of insight provided. The only real value in reading this is if you are curious as how the brain of the Ape Man works when confronted by a mystery).

I have proven that I have no understanding of the human element behind the Ukraine war. In fact, my understanding is so poor it has been almost a good guide in reverse as to what was going to happen. In other words, based on my past performance you would do well to think that the people involved will act in a way that is the exact opposite of what I think they will do. So why have I been so wrong?

It is tempting to throw up my hands and say that the Russians (or at least Putin) are irrational and that is why their behavior does not conform to my expectations. But even irrational people are predictable once you get to know them. Putin has been around long enough and lead Russia in enough conflicts that I thought I knew what the pattern of his behavior looked like. If you look at the conflicts in Chechnya, Georgia, Syria, and the earlier Ukraine conflicts it seems like a clear pattern becomes apparent.

The pattern seems pretty simple. First you prepare the justification for what you are going to do all the while denying that you are going to do it. Then you use overwhelming force carefully calibrated to be as risk free as possible to accomplish limited objectives. Last, you seek to reach some kind of accommodation that will end the conflict on sustainable terms. Russianphiles would probably argue with first part of this pattern and Russianphobes would object to the last part of this pattern, but to my eyes it still does a pretty good job of describing all of the recent conflicts that Russia has had save the most recent one.

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How War in Ukraine is Destroying Russia

Basically a Peter Zeihan argument toned down for normal people. Title is a little bit click bate as the destruction of Russia and Ukraine has been baked into the numbers for a long time now (I wrote about it at least a decade ago. To lazy to go back and look at the actual date). That said, the war in Ukraine certainly is speeding the process up for both countries.

Taiwan’s lack of seriousness

The below video makes the situation in Taiwan look really bad and I have no doubt that it is. On the other hand, it is worth remembering that most people (including myself) did not imagine that Ukraine had any fight in them either. You never know what is going to happen when the heat actually comes. It is worth remembering that when Ukraine was first invaded by “little green men” back in 2014 it was rich men funding volunteer groups that first started to really push back against the Russians. This was because the Ukrainian military was seen as inadequate and not serious about pushing back against the Russians. You can see a little bit of that dynamic going on in Taiwan in the below video.

Still, you can’t change the fact that the facts as laid out in the below video are very bad for Taiwan. They are a wealthier country on a GDP per capita basis then South Korea (on purchasing power parity basis, if you look at nominal thy are about the same) so there is no reason they can’t be as serious as South Korea is about their own defense. But it seems that Taiwan is trusting too much in water and the USA or they simply don’t really care at the national level.

Fool, it is the end of your world

I was the 9 years old when the Berlin wall fell. I was 11 when the Soviet Union ceased to exist. My generation never knew the draft and never really knew a world in which the US was at risk. The fall of the Twin Towers was traumatic for my generation because it revealed that there were people in the world who wanted to kill Americans. But except for a few brief days when nobody knew the full extent of what had happened, no one thought America as whole was in danger. On the scale of a brief national history that includes the Civil War and World War II, the Twin Towers do not even register.

Confident in our power, we destroyed nations to make sure no one would even think of attacking us again. Never in this entire process was the thought that America itself was in the balance. Instead, the debates were about dollars and cents. They were about whether the gains were worth the cost. Whether we were killing bad guys faster than were making more enemies for ourselves. It was a consumer nation at war and we made war as if it was just another product to be consumed or not as we saw fit.

That world is dying and may already be dead. Now war carries with it the devil’s choice of slavery or death. America is not longer a consumer. Now America is just a gambler trying to figure which door has the least bad surprise while trying to pretend it can reason its way to the right answer.

Not everyone has figured that out yet. But the educated fools are getting increasingly panic stricken. Now some people in the Pro-Ukraine camp are starting to openly talk about the need to make sure Ukraine gives in before Russia uses nukes. They are not in the majority for sure. But it is becoming more and more real for people the weaker and weaker that Russia appears on the battle field.

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What have we learned about Ukraine?

About two weeks ago, I wrote a post asking “What is up in Ukraine?” in which I tried to figure out how the war in Ukraine was going to go. It was a purely an intellectual exercise in trying to see how much truth I could gather through the fog of censorship and competing ideological blind spots. It seemed like a good place to try to exercise those skills before they became relevant in some issue closer to home. My tentative bet was that Ukraine had the advantage because Russia was holding the line in Kherson with airborne units that should have been in reserves. My logic was that if Ukraine managed to break through anywhere, it would be really bad for the Russians because they would have nothing to contain the break out with.

Needles to say, a lot has changed since then. The Ukrainians did force a massive break out and the Russians had nothing to stop them with in a timely manner. I can’t claim too much credit as I never would have guessed that Ukraine had the forces to pressure Russia in two locations. I was envisioning a grinding war attrition followed by a collapse of Russian forces in the Kherson region. I envisioned Russia holding Kherson itself due the defensible nature of the large urban area as well as their ability to support it with artillery safely a crossed the river.

So what have we learned and what can we see about the future? Granting all the same caveats in the first post, these are my thoughts on what we have learned that is beyond an honest person’s ability to dispute….. Continue reading