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Why Elon And Vivek Want To Crash The U.S. Economy
If everything is too expensive to buy, what happens next?
The economy is both fickle and fierce, both fragile and forceful. A beast to be reckoned with and a scared child who will run at the first sign of a storm cloud.
There are a myriad of forces working for it and against it inside of each passing moment. Investors looking to grow steadily for their retirement income, day traders trying to scalp a quick profit from volatile swings, municipalities selling bonds to pay for public works projects, hedge fund managers navigating decades long trends. It’s a weird, wild, strange place with millions of transactions happening on a normal day.
Elon Musk and Vivek Ramaswamy have a plan to fix all of that. Or erase it. Or something.
Elon Musk is largely a known quantity. He’s CEO of multiple businesses he didn’t start but loves to take full credit for, a pioneer who sets target dates for projects that don’t come to fruition and no one seems to care, and of course there’s the horse thing.
But perhaps one of the most consistent threads throughout Elon’s public life has been his strange obsession with cryptocurrencies.
Now, before we get into this I want to add a sidenote: as a profession, I help people with retirement. I vehemently, at all levels and in all cases, oppose using cryptocurrency for any kind of long-term, short-term, or medium-term strategy. It is reckless, dangerous, and you should never buy any of it. Ever.
Okay, back to our story.
Vivek Ramaswamy is no stranger to crypto either. In fact, just a few weeks ago, the financial services firm he co-founded announced it would start adding Bitcoin into people’s retirement portfolios.
This is a terrible, terrible idea.
As of this writing, Bitcoin sits just below $93,000 per coin. That sounds pretty nice, doesn’t it? Well remember that only one year ago it was $37,000 per coin. What if it returns to that number over the next year and some of your money was invested into it? I doubt you’d be very happy about that.
Two years ago it was about $16,000 per coin. The year before that it was $64,000 per coin.
Volatile doesn’t even begin to explain it.
Bitcoin, and crypto in general, cannot be trusted to remain stable enough to secure your savings or your retirement. It’s dangerous and should be completely and utterly avoided. It’s a fun toy for investors with lots of extra cash who want to do some betting, or a great tool for throwing away your life savings if you’d like to work until you’re 90.
These two men, one of whom offered an employee a horse in exchange for sex and another who really hates it when poor people get medical care, are now in charge of the Department of Government Efficiency. Not only do the letters DOGE refer to another cryptocoin, Dogecoin, but this organization has apparently been tasked with obliterating the U.S. economy in a way that hedge fund managers, like Vivek and his buddies, can make money from the ashes.
Speaking Thursday night at Mar-a-Lago at a gala hosted by the right-leaning think tank the America First Policy Institute, Ramaswamy thanked Trump "for making sure that Elon Musk and I are in a position to start the mass deportations of millions of unelected federal bureaucrats out of the D.C. bureaucracy."
"And I don't know if you've got to know Elon yet, but he doesn't bring a chisel, he brings a chainsaw, and we're going to be taking it to that bureaucracy," Ramaswamy added. "It's going to be a lot of fun."
Vivek has proposed that he can save more than $2 trillion from the U.S. annual budget. However, there is a slight issue with that:
"Frankly, it does need to be done again, so every few decades you really need to look at everything," Elaine Kamarck, a senior fellow in governance studies at the Brookings Institution who managed the Clinton Administration's National Performance Review, an effort to cut government spending in the 1990s, told CBS MoneyWatch.
But Kamarck harbors reservations about Musk and Ramaswamy's mandate, especially after the former recently suggested he could find more than $2 trillion in savings — almost one-third of the federal government's $6.7 trillion in annual spending. Two-thirds of that spending is mandatory through programs including Social Security and Medicare, while discretionary spending is largely spent on defense.
"This is the first warning sign that this is going to be a failed operation," Kamarck said. "That's insane."
There isn’t $2 trillion in spending that can simply be “cut” from the budget. Unless you’re talking about defense spending, I suppose, but even that would have far-reaching consequences.
Money is made in the U.S. economy because of its stability. The economy is stable because we pay the bills we say we’re going to pay.
If that stability vanishes then so does the economy itself.
Which appears to be exactly what Vivek and Elon want to make happen.
They’ll talk about “wasteful spending”, “Medicare fraud”, “entitlements” and all of the other catch phrases Conservatives have lobbed at the Federal safety net since FDR passed the New Deal. None of this is new or innovative.
The Grace Commission, started under Reagan and led by J. Peter Grace, had a familiar slogan “Drain the swamp”.
It estimated that the national debt, without these reforms, would rise to $13 trillion by the year 2000, while with the reforms they projected it would rise to only $2.5 trillion.[5] The report's recommendations that intruded into policy were ignored by Congress, but many other efficiency recommendations were considered and some were implemented.[6]
The US national debt reached $5.6 trillion in the year 2000[7][8] and reached 13 trillion in 2010 after the Great Recession.
So this has been done before, and suggestions came out of it that were followed, and some were completely ignored by Congress. So what’s different here?
Vivek recently stated that DOGE’s efforts would result in Federal agencies being "deleted”. While actually shuttering them would require Congress, the plan here seems to be simply firing everyone who works there and allowing them to wither on the vine. If no one works at the SEC then firms like Schwab don’t have to worry about pesky regulations or renewing their registrations. They can just do whatever they want!
Imagine no one home at the FDA when there’s another listeria outbreak? No one at the DOT when a boat takes out a major bridge? No one around at the FBI when Russia calls in bomb threats to polling places?
The goal here isn’t government efficiency.
The goal is to eradicate the U.S. dollar and replace it with cryptocoins.
Oh, did your boss pay you in Bitcoin this week? Oh no, it dropped in value by 20% and you need to buy eggs! Well I guess you and your child will have to pick up extra shifts at the coal mines this weekend.
Did you earn some DOGE coins downtown shining rich men’s shoes? Oh no, it dropped in value by 50% and you can’t afford gas. I guess you and your elderly parents will have to pick up extra shifts at the emerald mines this weekend.
Vivek and Elon see a golden opportunity to change the way money works not just in the U.S. but globally, with themselves at the forefront of what comes next.
Would this cause massive amounts of strife, pain, and probably death all over the world? It sure would. Do Elon and Vivek care about that? Not even in the least, no.
One thing fascism thrives on is people who are hurt, scared, and needy. They’ll fight each other over the last two crumbs instead of blaming those at the top who sit on mountains of resources.
The big question is: will this even work?
There are a LOT of market forces who can see this plan coming as plain as day and who know it would be bad for them. Millionaires and billionaires in the economy who would lose all of their influence and resources and be left behind.
I’m doubtful they would willingly give it all up simply because Vivek and Elon have been put in charge of some commission that has no real power.
However, cults are funny things and people have a long history of voting against their own interests.
Whether or not they’re successful will mostly be based on how far we’re willing to allow them to go.