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But as taxpayers find the purchasing power of their earnings declining (theft by other means) then they respond to the incentives presented by the government: borrow to the hilt and speculate in asset bubbles as the only way left to maintain purchasing power.

This dependence by both State and citizenry on asset bubbles to maintain purchasing power leads to over-leverage and over-indebtedness which then leads inevitably to a collapse of asset values (which were based on exponential credit expansion) and the tax revenues which were dependent on asset bubbles.

Now the taxpayers find their post-bubble assets decimated and their purchasing power diminished while government finds its tax revenue base has been gutted. Paying interest on all that debt while distributing unlimited swag was predicated on rising tax revenues. That plan has now been revealed as fantasy.

Interestingly, the original Constitution did not explicitly grant powers of conscription or monetary debasement. Yet the vaunted "balance of powers" has not impeded the State from concentrating monetary powers in order to reward Elites and steal not just from its present citizens but even its future citizens.

But even the State cannot control the cycle of over-indebtedness, collapsing asset values and the impoverishment of its people via inflation. The end-state is insolvency, and as the State's monopolies fail to sustain the status quo then its various Elites will battle each other for the remaining spoils: what I term internecine conflict between protected fiefdoms.

Internecine Conflict Between Protected Fiefdoms

"Internecine" has an interesting and highly relevant history. The Latin source of the word, a derivative of the verb "to kill," meant "fought to the death, murderous, as in "all the way, to the death." Samuel Johnson defined the word in the 18th century as "endeavoring mutual destruction." The word has now come to mean "relating to internal struggle."

These meanings are the heart of my term internecine conflict between protected fiefdoms because they describe how the various fiefdoms, though protected from non-Elite interference by their concentrated political power, must now fight each other to the death for their share of dwindling tax revenues and weakening regulatory perquisites. Rather than accept a reduced share of tax revenues, each fiefdom will endeavor to maintain its own share by cannibalizing the share currently enjoyed by another fiefdom.

This internecine conflict will take precedence over structural transformations which would positively serve the nation as a whole (and even the Elites defending their fiefdoms). As a result, this conflict will demand ever greater resources from each fiefdom and deplete whatever limited resources could have been devoted to structural change. These internecine wars will thus hasten the collapse of the entire status quo.

Each State fiefdom and private-industry cartel which depends on the State for funding or regulatory protection (energy, healthcare, military, etc.) will be fighting a two-front war: one against the taxpaying public (the productive middle class which pays most of the taxes) from which they will be extracting higher taxes and "junk fees" and the other against competing fiefdoms.

An analogy might be a sinking ship on which the officers are fighting each other and the crew. Focused on their internecine struggles for dominance, they pay no attention to the listing deck and other signs of impending catastrophe until the ship is slipping beneath the waves.

When the partnership between the State and Plutocracy unravels, then systemic collapse is at hand.

The partnership was based on a mutually parasitical relationship: the State's elected officials depended on the largesse of the Plutocracy, which depended on the State to protect its share of the national income and wealth.

As the productive middle class opts out (having no other choice), tax revenues continue declining in a positive-feedback death-spiral: the