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Buying Passivity With Food Stamps and Unemployment Checks – How Much Longer Until the Status Quo Unravels?

July 13th, 2011 | Filed under Economy, Feature, News, Politics & Government . Follow comments through RSS 2.0 feed. Click here to comment, or trackback.

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By Charles Hugh Smith, Of Two Minds

Buying Passivity With Food Stamps and Unemployment Checks - How Much Longer Until the Status Quo Unravels?Poverty is on the rise in America, and buying passivity with cheap bribes has limits when applied to a fraying middle class.

If jobs are not coming back, then we as a nation need a conversation about poverty in America. The Status Quo assumption is that this is just another garden-variety recession, and that employment will bounce back, along with the “animal spirits” that drive borrowing and spending.

As of August 2011, it will be three years since the global financial meltdown. In three years, the Savior State has borrowed and blown $6 trillion maintaining the Status Quo, and the Federal Reserve has printed almost $3 trillion and shoveled that vast sum into “risk assets” to keep housing on life support and the stock market rising. The Fed has also devalued and debased the dollar, stealing wealth from the citizenry and holders of U.S.-denominated debt in the process, to serve two goals: 1) spark inflation and thus avoid deflationary deleveraging of the nation’s fast-growing mountain of debt, and 2) to enable servicing that debt with cheaper dollars.

None of these grandiose manipulations has healed the economy or fixed the structural problems which made the meltdown inevitable. The irony here (among many) is that so many people believe the Power Elites controlling the nation have some sort of god-like ability to maintain their grip on the levers of power.

While it’s certainly true that the wealth of the Power Elites has increased as a result of the meltdown and Fed/Savior State response, ultimately the Financial and Political Elites’ power depends on the passivity and complicity of the citizens. This means the Power Elites must buy off or co-opt the majority of citizens to keep them politically neutered and malleable.

The Status Quo has two basic methods of buying the citizen’s complicity: a vibrant economy that supports a middle class that thus has a stake in maintaining the Status Quo, and cash bribes to everyone else to keep quiet, i.e. “social benefits” a.k.a. entitlements and welfare. This renders everyone either dependent on cash payments from the Savior State or a stakeholder in the Status Quo.

Corporate welfare is not a bribe but a mutually beneficial power grab. The Cartel Corporatocracy seeks to eliminate competition from below and guarantee low-risk profits via cartels and quasi-monopolies. It achieves these goals by purchasing the partnership of the Savior State, which smothers competition with thickets of regulations and greases the quasi-monopolies sought by the Corporatocracy. But it’s hardly a one-way exchange; in extending its control over the economy and society to serve the Corporatocracy’s interests, the Central State’s own Elites gain more power, too.

Some observers see the middle class as the natural enemy of the State and Corporatocracy, but this misses the essential relationship of the Power Elites to their citizenry: the need of the Elites to buy complicity and passivity by the cheapest methods available.

It’s certainly possible to use repression to keep a populace under control, but repression is expensive and it doesn’t encourage productive “buy-in”; rather, it encourages opting out and resentful compliance. This leaves less for the Elites to skim off.

Over time, it’s rather obvious that regimes that rely on heavy-handed repression tend to fall while those that offer a small, low-cost stake to citizens are much more profitable to the ruling Elites and also more stable.

The crumbling of the credit-bubble economy has mortally wounded the middle class, and this has created a serious problem for the Power Elites. In extending the credit-bubble economy–that is, “wealth” is created via exponential expansion of debt–to housing, the Power Elites undermined the multigenerational bedrock of middle class wealth.

With housing equity stripped away, the erosion of middle class income and non-housing wealth has now been exposed.

The Power Elites’ other wealth technique, globalization, has also gutted the middle class below the top 10% level of technocrats, and decimated the working class that had aspirations of joining the middle class, i.e. the lower middle class.

We Don’t Need No Stinkin’ Jobs (in the U.S.) (February 9, 2011)

Global Corporate America has decoupled from the American middle class; its interests are now international rather than domestic.

The Power Elites’ response–borrow and blow trillions to prop up the engine of their own wealth, the banks, borrow trillions from future taxpayers to maintain the current Status Quo, and devalue the U.S. dollar–have all failed to reflate housing or middle class incomes. Rather, these actions only succeeded in enriching the top 10% who own the majority of stocks. The prop-job in stocks has yielded a propaganda coup, as the Status Quo has successfully identified a rising stock market as “proof the recovery is here,” but this propaganda is starting to wear thin as 90% of the populace are realizing they are still poorer than they were three years ago.

Buying Off Washington To Kill Financial “Reform”.

The Power Elites cannot understand why making credit cheap isn’t creating jobs. Like decrepit generals fighting the last war, they keep sending waves of credit into the system to overpower deflation and reignite “animal spirits,” but the waves of credit are being mowed down by deleveraging and the exhaustion of credit as a stimulus.

In other words, they are clueless to the reality that conventional economics has failed. They have no Plan B. Their only plan, such as it is, is to borrow more money and spend it propping up the current Status Quo. Unfortunately for them, the middle class is unraveling at the edges, and the surest evidence of that is the loss of middle class jobs.

Without good-paying jobs with benefits and rising housing equity, then the citizens have no stake left in the Status Quo.

That leaves entitlements and welfare as the cash bribes for keeping quiet. What’s remarkable about the current pastiche of social benefits is how cheap it is to the Power Elites; extended unemployment ($158 billion), food stamps ($68 billion), Section 8 housing ($20 billion), and Veterans Administration medical care for vets ($47 billion)–all together that’s $293 billion, a mere 7.7% of Federal spending.

[These statistics are drawn from:
Is the Recovery "Self-Sustaining"? Here's a Test (March 22, 2011)
Social Welfare, Socialism and Healthcare (May 19, 2009)
Can We Please Stop Pretending the GDP Is "Growing"? (June 2, 2011)]

And of course it’s the taxpayers who will foot the bill for the deficit spending, not the Elites.

The ideological political-theater stages faux “combat” over welfare, but this is for show: outside the circus, cash bribes for complicity and silence work equally well for both flavors of the Status Quo political Elite.

The “Left’s” concern for the poor is transparently phony; the “Left’s” only concern is to keep the underclass fat, dumb and distracted while enriching its own private fiefdoms such as education: public school fiasco in Atlanta. What terrifies the “Left” is the same thing that terrifies the “Right”–that the citizenry might break free of the bonds of dependency on the Savior State and start demanding a real stake in the economy rather than just a cash bribe to keep quiet.

This is why welfare and middle class entitlements (in various flavors) have continued growing for decades, under both “Left” and “Right” regimes.

It’s been quite a scam: the Savior State borrows immense sums from future taxpayers to bribe the current crop of citizenry, and these same citizenry pay the rising interest on that growing debt via their taxes.

In other words, the debt-serfs pay for the bribes that keep them complicit.

The problem is that the Status Quo has overshot systemic equilibrium. To keep the game going, the debt load is rising at almost $2 trillion a year at the Federal Level, and the Fed’s manipulations are requiring a cool trillion a year in printed money shoveled into risk assets.

The interest on that skyrocketing debt will eventually crimp the borrowing binge, and the Fed’s games are igniting not job growth but inflation, which further saps what’s left of middle class purchasing power.

The Fed’s manic manipulations are losing their effectiveness. Like insulin in a pre-diabetic patient, the Fed’s massive injections of money are not stimulating jobs or productive investment; each new announcement of “easing” generates a smaller jolt of ever-shorter duration. At some point the economy will respond to the Fed’s “easing” injection by going straight into diabetic shock.

There are two cultural issues in play as well. One of the key characteristics of the middle class is high expectations for future power and prosperity. The poor have lower expectations and so it’s relatively easy to buy them off with small sums.

The middle class, however, is less satisfied with crumbs, and getting paid to stay home and watch TV does not appeal to their values or expectations of life in America.

The other issue is the destructive nature of dependence on the Savior State, a dynamic I explored in The Cycle of Dependency and the Atrophy of Self-Reliance (July 2, 2011).

Making people dependent on the Savior State is not “ending poverty”–it is creating a deeper, more pervasively destructive poverty of lost opportunity and shriveled enterprise. People naturally want to contribute to something meaningful and to be respected, and being paid to sit home watching TV does neither. What it does do is fuel a low-intensity resentment against dependency and a pathological incentive for victimhood, neither of which are healthy for the society or those reduced to dependency on the Savior State.

The Power Elites are slowly losing their grip on the middle class. Once people no longer have a stake in the Status Quo, then they might become dissatisfied with the cheap bribes to stay home and rot away, consuming Pringles and “entertainment” on the telly.

Those citizens who are paying the tab for the Power Elites’ debt excesses are also seeing their stake in the Status Quo slip in value: being reduced to a tax donkey does not fulfill their expectations.

The bottom line is poverty on several levels is rising in America, and cash bribes are not a stable “solution,” though they certainly are a cheap one to the Power Elites.


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  1. The answer is to find a place where one can be effective and begin to do the work needed, truth telling. Inspire others to join in and make a good stand telling the truth. By working with housing poverty and rejection issues nodes will be constructed and by using the tools such as internet in a suitcase, Xbox communications and alternative banking we can challenge those left behind, shut in and in home detention. Self liberation is an important concept, it’s like jailbreaking the phones.

  2. ectoendomezo said:

    HOW MUCH LONGER DOES THE “PASSIVITY” LINGER?

    I CAN ACTUALLY…TELL YOU…EXACTLY “HOW LONG THE PASSIVITY WILL CONTINUE”!

    THE PUBLIC WILL CONTINUE TO REMAIN PASSIVE..AND….AND HERE IS THE CRITICAL “DISTINCTION/CLARIFICATION”…..UNTIL THE MASS DENIAL BEGINS TO ERODE.

    AND HOW LONG IS THAT?

    THE MASS DENIAL EPIDEMIC..NAY..SCRATCH THAT….PANDEMIC…WILL CONTINUE JUST EXACTLY AS LONG AS THE TOTAL…UNMITIGATED….DENIAL REGARDING THE ABSOLUTE, TOTAL…COMPLETE AND………..OBEDIENT…

    ………COMPLICITY!

    AND MORE ACCURATELY..MORE SPECIFICALLY….ALL OF THIS DENIAL AND PASSIVITY WILL CONTINUE UNTIL YOU…..STOP PAYING.

    WHEN YOU……YEAH….YOU….EXPERIENCE THAT “MOMENT” IN YOUR MIND…IN YOUR ACTUAL…..MIND…WHEN YOU EXPERIENCE THAT ACTUAL…….EPIPHANY…OR THE ‘SUDDEN MANIFESTATION OR PERCEPTION OF THE ESSENTIAL NATURE OR MEANING OF OF SOMETHING……….

    ……….WHEN YOU EXPERIENCE THAT…..REVELATORY MOMENT…….IN WHICH YOU REALIZE..THAT IT IS YOU..IT IS LITERALLY..’YOUR FAULT’…THAT ALL OF THIS IS HAPPENING..BECAUSE YOU…ARE PROVIDING THE ONE (1) ABSOLUTELY CRITICAL RESOURCE REQUIRED BY THIS NOW OVERT CORPORATE GOVERNMENT TO CONTINUE EACH AND EVERY SECOND OF EACH AND EVERY ‘PROGRAM’ OR ‘POLICY’ OVER THE COURSE OF EACH AND EVERY SINGLE DAY….

    WHEN YOU EXPERIENCE THAT MOMENT…AND OTHERS DO AS WELL…AS THE ’100TH MONKEY’ BECOMES REALITY AND YOU AL BEGIN TO WASH YOUR SWEET POTATO’S IN THE SAND THE SAME WAY….AND REALIZE THAT NOT ONE…SINGLE..SOLITARY…SECOND..OF ANYTHING THIS CORPORATE GOVERNMENT IS DOING IS OCCURRING “IN A VACUUM”..

    WHEN THAT BEGINS TO HAPPEN?

    THAT IS THE BEGINNING OF REALITY BASED “THINKING” AND WHEN THAT HAPPENS…WELL..JUST LIKE IT ALWAYS DOES….THE CHANGE WILL BEGIN AND IT WIL BE REAL.

    JUST AS IT WAS IN SOUTH AFRICA..AS THEY BEGAN TO REALIZE AND SO TOO DOD THE REST OF THE WORLD INCLUDING..IRONICALLY..MANY OF YOU….AS YOU JOINED IN THE “BOYCOTTS” OF SOUTH AFRICAN GOODS AND AN ENTRENCHED AND VICIOUS AUTHORITARIAN GOVERNMENT WAS ABANDONED….

    JUST AS IT DID FOR GANDHI AND THE PEOPLE OF INDIA AS HE REALIZED THAT TAX PROTEST WAS THE “QUICKEST WAY TO END AN EMPIRE”…

    JUST AS IT DID FOR CESAR CHAVEZ AND THE FARM WORKERS AND THE ‘GRAPE BOYCOTT” AND CHANGED FARM LABOR FOR DECADES..

    AND…FINALLY…….JUST AS IT DID FOR THE FOUNDING FATHERS AND THE REVOLUTION THIS NATION IS BASED UPON…AS THEY REALIZED THAT….MONEY….THE MONEY THEY WERE PROVIDING THE “CROWN”..WAS THE KEY….

    WHEN THAT HAPPENS…WHEN YOU PEOPLE…NO ONE ELSE……YOU…..REALIZE THAT THIS IS HAPPENING BECAUSE OF ONE THING AND ONE THING ONLY:

    MONEY.

    AND MORE SPECIFICALLY…THE MONEY YOU……AND THE ‘CITIZENS’…PAY…BECAUSE THE “RICH”..IRONICALLY…ALREADY…”DON’T PAY”….THAT MONEY IS THE GASOLINE IN THE TANKS OF THE MILITARY VEHICLES BEING USED TO “DEPLOY CROWD DISPERSAL TECHNOLOGY”…TO CRUSH YOUR “DISSENT”.

    AND YOU ARE LITERALLY..NOT EVEN FIGURATIVELY..BUT…LITERALLY…THE “GAS STATION ATTENDANTS” FILLING THE TANKS OF THE VEHICLES AND THEN SOMEHOW “HOPING” THAT THEY WON’T “SHOW UP TOMORROW TO CRUSH YOUR PROTEST”.

    WHEN YOU REALIZE THAT “MONEY = APPROVAL”…WHEN YOU REALIZE THAT YOUR APPROVAL IN THE FORM OF YOUR OBEDIENT “PURCHASE” OF THE LETHALLY DEFECTIVE “PRODUCT” BEING PRODUCED BY GOV-CORP,LLC IS THE ENTIRE…..ENTIRE….E-N-T-I-R-E…..”SUPPORT STRUCTURE” FOR THE VERY FUCKING “POLICIES” THAT YOU…CLAIM…TO SO “DESPISE”…

    WELL..WHEN THAT BEGINS?

    THE “PASSIVITY” WILL BEGIN TO END ‘EN MASSE’.

    AND THE “REVOLUTION” WILL ACTUALLY ENSUE.

    A UNITED TAX STRIKE WITH A LIST OF “DEMANDS FOR MANAGEMENT” IS LITERALLY…”THE ONLY WAY” NOW LEFT AVAILABLE TO “INSIST UPON CHANGES” TO THE NOW OPEN AND OVERTLY CORRUPT AND VICIOUS CORPORATE GOVERNMENT AGENDA.

    AND BY THE WAY….DESPITE MANY “WORDS” AFTER HIS DEATH…THEY ALL…IN AN AMAZINGLY DIRECT AND THUS IRONIC FASHION…PROVING THAT THEY IN FACT..DO NOT UNDERSTAND…..”AT ALL” WHAT HE WAS TALKING ABOUT…..WELL..THE REALITY IS..WHEN THAT “MOMENT” COMES TO YOUR MIND….IT WILL HAPPEN “INSIDE YOUR MIND”..THIS PARTICULAR…”REVOLUTION”.

    AND BECAUSE IT’S HAPPENING “IN YOUR MIND”….INTERNALLY….NOT “EXTERNALLY”?

    WELL…THAT REVOLUTION?

    WILL….NOT….BE….TELEVISED~!

  3. ectoendomezo said:

    THIS IS THE GOVERNMENT….YOU….WANT!

    ERGO…IT IS ALSO…THE GOVERNMENT….YOU…….DESERVE!

    THERE IS A THING CALLED..”RESPONSIBILITY”.

    IT IS IN FACT..CRITICAL….TO “CITIZENSHIP”.

    THERE IS A VERITABLE “RESPONSIBILITY GAP” NOW INFECTING THIS NATION LIKE AN EVIL PANDEMIC.

    YOU PEOPLE….LITERALLY..I CAN ACTUALLY SAY THIS WITH RARE CERTITUDE…FOR IT IS AN EQUALLY RARE..”PERFECT TRUTH”…YOU PEOPLE..ARE THE ENABLERS…THE DIRECT…CO-PRODUCERS….THE ACTUAL…FINANCIERS…..THE ‘BACKERS’….OF:

    THE UNITED STATES GOVERNMENT.

    OR…DO YOU PROPOSE TO “ARGUE” THAT “GOVERNMENT WILL GLADLY WORK FOR FREE!”?

    IS THAT YOUR…”ARGUMENT”?

    IS IT?

    THE DRONE PILOTS WILL MURDER WITH TOTAL IMMUNITY FROM..APPARENTLY…ALL LAW….FOR FREE?

    THE ENHANCED INTERROGATION TEAMS WILL WORK FOR…FREE?

    EVERY BULLET DUG FROM THE CORPSES OF INNOCENT WOMEN AND CHILDREN…IS PAID FOR…BY….YOU.

    NO ONE ELSE!

    YOU!

    YOU ARE THE PAYMASTERS.

    IF YOU “BUY THE GAS AND THE BULLETS AND PAY THE MEN INVOLVED” TO “ROB A BANK”…YOU…ARE INVOLVED.

    IT IS LITERALLY..THAT SIMPLE.

    FRANKLY THE NOW OVERT ILLEGALITY THAT IS THE UNITED STATE GOVERNMENTS “POLICY AGENDA” FROM ROVING WIRETAPS TO BOMBING LIBYA “UNILATERALLY”…HAS CREATED A “RICO” LIKE SITUATION IN WHICH YOU…THE ONES STILL PAYING…ARE LITERALLY…”FINANCIERS OF A GLOBAL ROBBERY HOMICIDE”.

    YOU ARE THE FINANCIAL BACKERS.

    OR DO YOU ACTUALLY INTEND TO “DEBATE”:

    “WHERE THE MONEY COMES FROM”?

    IT COMES FROM…YOU!

    PERIOD!

    THESE PEOPLE WILL NOT……WILL…NOT….W-I-L-L….N-O-T…..

    “WORK FOR FREE”.

    THEY DEPEND UPON YOU…TO PAY THEM TO IN FACT…DESTROY YOUR…FREEDOM.

    HOW…..SILLY!

    YOU PEOPLE WHO COMPLAIN AND/OR OFFER UP ‘SOLUTIONS” THAT DO NOT INCLUDE “TAX STRIKE”?

    YOU ARE AT THIS POINT…..

    “COUNTERFEIT”.

    YOUR “IDEAS”…YOUR COMPLAINTS”…ARE FAKE.

    THEY ARE LITERALLY………FAKE!

    THEY WILL NOT WORK.

    THEY ARE NOT REALITY BASED.

    ONLY MONEY IS LEFT AS THE POWER REQUIRED AND NECESSARY TO INFLUENCE REAL CHANGE.

    THIS IS THE “CITIZENS NUCLEAR OPTION”.

    SO EITHER YOU WAKE UP…REALIZE THAT “MONEY TALKS! AND BULLSHIT WALKS!” AND IMPOSE YOUR OWN “CITIZEN BASED ECONOMIC SANCTIONS” AND JOIN WITH OTHERS IN A LITERAL “BOYCOTT OF THE UNITED STATES GOVERNMENT” AND PROVIDE A LIST OF “DEMANDS FOR MANAGEMENT”..OR LITERALLY..”SHUT THE HELL UP”.

    BECAUSE ANYTHING LESS THAN UTILIZING THE “LEVERAGE OF MONEY”…IS LITERALLY………..FUTILE.

    IT IS THE DIRECT UNEQUIVOCAL, INCONTROVERTIBLE….IRREFUTABLE…….EQUIVALENT…OF:

    “SILENCE”!

    THOSE OF YOU “PAYING AND COMPLAINING”?

    ARE LIARS!

    YOU ARE LYING TO YOURSELVES AND EVERYONE ELSE.

    TO PRETEND THIS IS ALL HAPPENING IN A “FINANCIAL VACUUM”..IS A LIE AND IF THAT IS YOUR BASIC CONSCIOUS/SUBCONSCIOUS POSITION? THEN I’M CALLING YOU A LIAR!

    LIARS!

    HYPOCRITES!

    YOU WHO STILL FINANCE THIS OVERT AND NOW OPENLY CORRUPT CORPORATE FASCIST GOVERNMENT?

    YOU ARE LIARS AND HYPOCRITES! AND YOUR “SOLUTIONS” AND “IDEAS” ARE…COUNTERFEIT.

    (((AND BY THE WAY…OR..”P.S.”:)))

    I REALIZE SOME OF YOU WOULD LOVE TO HAVE THIS RARE IRREFUTABLE TRUTH (THAT YOU ARE THE ONES MAKING IT ALL POSSIBLE…CANNOT BE REBUTTED..IT CAN ONLY BE DENIED AND RATIONALIZED)…CENSORED…BUT…THESE PEOPLE HERE? THIS SITE? AMPED STATUS? THOSE PROVIDING THIS SITE? THUS FAR SEEM..”REAL”..BUT…YOUR…DESIRE TO HAVE THIS REALITY CENSORED AND HIDDEN IS A VERY REAL “PROOF” OF WHAT YOU ARE.

    HYPOCRITES.

    IT HAS NOW REACHED THE POINT WHERE “TAX PROTEST/BOYCOTT” IS “AUTOMATICALLY CENSORED”..OOPS..MY BAD..”MODERATED OUT OF EXISTENCE” ON:

    THINK PROGRESS.

    HUFFINGTON-AOL

    DEMOCRATIC UNDERGROUND

    DEMOCRACY NOW

    AND THE WORST..MOST..HOSTILE…FAKE “LIBERAL SITE”?

    “COMMON DREAMS”.

    RABIDLY CENSORING ANY AND ALL DISSENT FROM THE FAILED AND POINTLESS CONTINUATION OF THE BIG LIE.

    THAT THE “LEFT” IS ENGAGING IN THIS BEHAVIOUR…IS TRULY A TRAGEDY.

    THE CUBICLE LEFT IS NOW SURPASSING THE “RIGHT” IN HYPOCRISY AND FAILED “IDEAS” AND ABSOLUTELY “TAKING THE LEAD” IN AN UTTER AND TOTAL LACK OF INTELLECTUAL AND MORAL INTEGRITY.

    CRYIN’ SHAME TOO…TRULY IS!

  4. David H said:

    It’s ok, ’cause 2012 is going to changeevrything, as well as the global earth changes taking place, society/culture/civilization is going to be rearranged regardless. Forget about trying to hold onto your possessions, adapt to homelessness, and get your body in shape to prepare for the coming Hard Times..it is a neccesary CLEANSING of materialism, narcissism (middle class), and EGO-centric thinking…and no, Jesus or Allah ain’t going to save your behind!

  5. D.L. said:

    Excellent! On my old Something Happening Here blog I said basically the same thing: the power elites are shooting themselves in the foot, and, furthermore, these INBRED IDIOTS do not seem to realize that their BS “serfdom” scenario in the US WHEN 90 MILLION OF US OWN GUNS is not only counterproductive for them but will end their BS rule of us as well–you can’t get blood out of a turnip…and they have lost all right to rule us. Heck, they don’t even try to hide their stupidity anymore! Hubris! Arrogance! These crinimals and psychopaths will get their “reward” if you know what I mean. Some are getting out of the system. The rest will be forced out sooner or later…and, without a host to parasitize, the power elites, like mistletoe on a dying tree, will die as well…the sooner the better. Then We the People will be free.

  6. [...] Buying Passivity With Food Stamps and Unemployment Checks – How Much Longer Until the Status Quo U… By Charles Hugh SmithPoverty is on the rise in America, and buying passivity with cheap bribes has limits when applied to a fraying middle class. [Read More] [...]

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