The REAL Power of the Purse
In a time long ago, in a land far away the U.S. House of Representatives had the power of the purse. This was before the abdication of the political class from their fiduciary responsibilities. (That was too much like work.) In a remarkably short period of time the U.S.A. has become the largest debtor nation in history. There is not the slightest hint of a monetary policy that could be called anything other than barking mad. Will there be consequences? Can a fraudulent and irrational monetary policies be sustained? Barry Goldwater once said “Lyndon Johnson went into Congress on a Texas public school teacher salary and came out a millionaire, you figure it out.” If fiscal sanity is not on the horizon and the ruling elite are blatantly contemptuous of the citizenry, are there any levers of power the citizenry hold? Indeed there is with the caveat that it is unlikely to be used. What is intriguing about this tactic is an effect known in military terms as a force multiplier. In this case, it is non-violent with the added benefit of being cost-effective, productive, accessible requiring zero training.
There are many measurements of economic activity and its impact on the economy. Some of them are actually accurate. In any case, what is absolutely true is that there has to be a buyer. There you have it; the Real Power of the Purse. As a sign of discontent of being screwed seven ways from Sunday imagine if a meaningful percentage (given the precarious nature of the economy it wouldn’t take much) of the population stopped spending other than basic necessities?
People at all socioeconomic levels spend. Many businesses would quickly be in dire straits without consumers spending like drunken sailors on perpetual leave. The pressure, my guess, would soon be enormous the political class “do something.” But, what are they to do? Would they criminalize not spending, confiscate bank accounts, seek out the malcontents and intern them? Given the mendacity and malfeasance of the ruling classes they might give it go. But what then?
Granted the above is mere fantasy. Fifty+ years of pervasive and relentless conditioning has ensured that many are Pavlov’s Consumer and will spend come hell or high water at least until the currency is worthless.