The U.S. is not like 1930s Germany, or is it?

 Progressive Democrats are tirelessly accusing the Trump administration of being a fascist regime and comparing it to 1930s Germany.  Kamala Harris insinuated that  Trump is a Fascist during the 2024 presidential campaign. Vice Presidential candidate Tim Walz recently compared ICE agents to the Gestapo. Al Gore compared the Trump administration to Nazi Germany, and Illinois Governor JB Pritzker made a similar comparson last February.

This is bold talk coming from the Democratic Party, which hoodwinked the American people by installing Joe Biden, a cognitively diminished grifter, as the leader of the Free World, and then backed perpetually befuddled Kamala Harris to succeed him. 

Nevertheless, these gasbags are right to compare contemporary America to the Weimar Republic during the years that saw Hitler come to power.

First, the Weimar Republic was racked by political violence fomented by both the Left and the Right. Similarly, our country has seen a rise in political violence in American cities--most notably the George Floyd riots.

Second, like Germany, America is wracked by vicious antisemitism in the nation's universities. Who could have foreseen this ugliest form of racism springing up in academia, which has been obsessed for more than three decades with diversity, equity, and inclusion?

Finally, and most disturbingly, the United States, like Germany between the World Wars, is seeing the frightening specter of political assassinations, including two assassination attempts against President Trump and the recent murder of a young Jewish couple in Washington, DC.

Our nation has endured periods of violence, bigotry, and racism before. Americans weathered the Salem Witch Trials, the rise of anti-Catholic Nativism in the 1850s,  the Klan eras of the nineteenth and twentieth centuries, and McCarthyism. Those were ugly times, but American democracy survived.

However, the present unrest, which progressive Democrats have misdianosed, is different. This time around, our political malaise is stewing in an inflationary economy, and inflation, like a match thrown into a barrel of gasoline, threatens an explosion that can destroy our society.

When Money Dies, Adam Ferguson's masterful study of the German economy in the years before Hitler came to power emphasized the existential threat that inflation posed to Germany:

Undoubtedly, . . . inflation aggravated every evil, ruined every chance of national revival or individual success, and eventually produced precisely the conditions in which extremists of Right and Left could raise the mob against the State, set class against class, race against race, family against family, husband against wife, trade against trade, town against country. It undermined national resolution when a simple want or need might have bolstered it.

 Drawing on the German experience after the Central Powers lost World War I, Ferguson concluded that the collapse of a nation's currency is catastrophic.

If what happened to the defeated Central Powers in the early 1920s is anything to go by, then the process of collapse of the recognized, traditional, trusted medium of exchange . . . unleashes such greed, violence, unhappiness, and hatred, largely bred from fear, as no society can survive uncrippled and unchanged.

Today, while progressive Democrats indulge in incendiary rhetoric, the dollar is running the danger of being replaced as the world's reserve currency. At the same time, President Trump confronts a ballooning national debt and stubborn inflation.

I'm pessimistic about the prospect of Trump getting inflation under control. Nor do I think he'll be able to rein in the national debt. Indeed, it is probably politically impossible for him to do so.

When it becomes clear to the average pensioner, Social Security recipient, and Medicaid beneficiary that their standard of living is plummeting and they cannot purchase their basic needs, we will see big trouble. God help us if the United States stumbles down the path of the Weimar Republic.

Income-Based Repayment Plans for Student Debtors: Flushing Money Down the Toilet

Congress has been dropping "helicopter money" into the national economy--adding significantly to the national debt, which now exceeds $25 trillion.

That's a lot of money for our grandchildren to pay back. My own grandkids are ambivalent about this situation. My four-year-old says he thinks he can do it if his dad will increase his allowance, but my six-year-old doesn't think it's fair for him to pay for his ancestors' wars in the Middle East.

Now let's look at another economic crisis our grandchildren will pay for--the federal student-loan program.

According to the U.S. Department of Education's own numbers, approximately 43 million Americans have student-loan debt totaling $1.5 trillion.  And, if DOE can read its own balance sheet, it will see that it has basically given up on collecting about a third of that debt.

As of the first quarter of this year, 8.1 million student borrowers are in income-driven repayment plans (IDRs). By the very terms of those plans, these borrowers make loan payments based on their income, not the amount they borrowed. Under most of these plans, borrowers at similar income levels make the same sized monthly loan payments regardless of whether they owe $20,000, $50,000, or $100,000.

Virtually everybody in an IDR is making payments so low that the underlying debt grows larger due to accrued interest--interest that is capitalized.  In other words, virtually no one in an IDR is going to pay off his or her student loans.

How much money are we talking about? DOE's recent report tells us that a half-trillion dollars ($507 billion) are owed by people in IDRs.  In fact, 400,000 people in IDRs owe $200,000 or more.  And--inexplicably--300,000 student debtors are in IDRs who owe less than $5,000.

As Education Secretary DeVos publicly acknowledged in late 2018, the federal government carries student-loan debt on its books as performing loans, which a commercial bank could not do. In fact, she made the astonishing admission that outstanding student loans make up 30 percent of all federal assets!

But in fact, at least 8.1 million student loans are not performing. On the contrary, the IDR programs were designed in such a way that borrowers never pay them back.  

Education Secretary Betsy DeVos announced last year that she was hiring McKinsey & Company, a private consulting firm, to determine just how big the student-debt debacle really is.  So far, she has released no report.

But we don't need a high-priced consulting firm to tell us what is going on. The student-loan program is bankrupt. And while Betsy DeVos sails along on her private yacht, DOE lawyers are hounding desperate student-loan borrowers through the bankruptcy courts, demanding that they be put into IDRs. Those IDR plans can last for as long as a quarter of a century, and virtually no one in such a plan will ever pay off their student-loan debt.

References

Ferguson, Adam. When Money Dies: The Nightmare of Deficit Spending, Devaluation, and Hyperinflation in Weimar Germany. New York: Public Affairs Publishing (2010) (originally published in 1975).

Hyperinflation is coming to the United States: You're not going to like it

In olden times, middle-class people had checking accounts; and they kept close track of their account balances. No one wanted to inadvertently write a "hot" check that would "bounce" back to them. Oh, the shame! The embarrassment!

Those days are gone. Today, many Americans don't pay much attention to their checking account balances. If they don't have money in their account to buy a suitcase of Miller Lite, they just put their purchase on a credit card.

That's basically what our government is doing. The national debt tripled between 2008 and 2019 and reached about $20 trillion when Trump came into office.

By the third year of Trump's term in office, the national debt had risen to $22 trillion. Last summer, Congress passed a two-year deficit budget at a time when America had a booming economy with historically low unemployment.

Then came the coronavirus pandemic, and our government whipped up more than $2 trillion to deal with that. State and local governments are running massive deficits because tax revenues are down, and the Democrats want to dole out another $1 trillion to send to the states.

So that brings the national debt to what--$24 trillion? Folks, we can never pay back this money, and no one believes we can.

If the federal government can't pay its debts—and it can't—it only has two choices: It can default on its obligations or inflate the money supply.  It will choose inflation, and the consequences won't be pretty.

Inflation, the wise economists tell us, is a way for the rich to steal from the poor. When hyperinflation starts, the people who will be hurt are the elderly living on fixed incomes and young people whose wages won't be enough to pay for the inflated price of necessities like food and rent.

Germany suffered hyperinflation in the 1920s as it struggled to pay war reparations to the Allied powers after World War I.  The German government responded to this onerous burden by printing more money. This triggered hyperinflation that soon drove the value of the German mark to virtually zero. The mark became worth so little that people had to carry baskets of paper currency to pay for their daily needs.

Historians tell us that this period of hyperinflation destroyed the German economy, causing massive hardship for the German people, whose lives devolved into a day-to-day struggle for food. The anger and bitterness that resulted laid the groundwork for Nazism.

Adam Ferguson wrote a book about Germany's inflationary period titled When Money Dies. Ferguson warns us about the existential danger of hyperinflation. "The question to be asked," Ferguson wrote, "is how inflation, however caused, affects a nation: its government, its people, its officials, and its society."

If the experience of Germany is anything to go by, Ferguson cautioned, "then the collapse of a national currency unleashes such greed, violence, unhappiness, and hatred, largely bred from fear, as no society can survive uncrippled and unchanged." In Germany, racial passions were unleashed, and nihilistic sexuality prevailed in 1920s Berlin.

Already, our national politicians make hysterical and groundless charges of racism against their political opponents. State and local governments refuse to abide by federal immigration law even as they demand more federal money to prop up their sagging budgets.  Our elite intellectuals have cast off almost all sexual norms and obsess on transgender bathrooms.

Is contemporary America exactly like Germany in the 1920s? Of course not. But like 1920s Germany, our government is running up debt that it can't repay. Will this lead to a 21^st century Hitler?  Probably not, but our future is definitely going to be unpleasant.