Survival__ Structuring Prosperity for Yourself and the Nation - Charles George Smith [143]
This decline forces the State to borrow and/or print vast sums of money which eventually negatively impact the national economy on which the Plutocracy depends for much of its income. Facing drastically reduced revenues, the State finds its powers to impose regulatory and taxation schemes on the citizenry have weakened. In desperation, the State fiefdoms begin eyeing the vast reserves of Plutocratic wealth and income as untapped sources of tax revenues.
Like the middle class, the Plutocracy will increasingly view the State not as protector or partner but as an unproductive parasite that provides less and less even as it harvests a rising share of the dwindling national income.
Once the State alienates the Plutocracy, the State's days as a solvent enterprise are numbered. The mainstream media will turn against the State (being owned by a handful of global corporations, the mass media will do its masters' bidding) and the Plutocracy will speed the global sheltering of its remaining assets and income, in effect planning to profit from the inevitable collapse of the U.S. sovereign debt and currency.
But without the State to protect it from an aroused citizenry, the Plutocracy may find itself the target of widespread ire and insurrection. Even as it follows the pathway taken by the Roman Elites as their empire crumbled--retreating to well-defended enclaves--the Plutocracy will find its own freedom of movement, capital and monopoly restricted by the State's attack on its assets and the public's awakening to the coming collapse in entitlements and other State services.
The State and Plutocracy share the same hubris: each believes there should be no limits on its own over-reach.
The irony is that once their interests diverge and the partnership crumbles, each is left too weak to control the forces unleashed by their mutual over-reach.
As states around the globe seek to borrow their way out of insolvency, private borrowing is squeezed; this intense competition for dwindling surplus global capital forces interest rates to rise to levels few anticipated. (Readers of oftwominds.com were of course fully aware of both the rising trajectory and its enduring nature.)
The Plutocracy, having engorged itself on profits reaped from the artificially low interest rates engineered by State manipulation of financial markets, will be less than pleased with the sudden disappearance of cheap surplus capital. The direct consequences of much higher rates globally--the destruction of equity, bond holdings and real estate valuations--will also negatively affect the Plutocracy's wealth and income, widening the rift between what the State fiefdoms see as in their best interests and what the Plutocracy views as in its best interests.
Even as what is understood by the State and Plutocracy as "the common good" diverge, the interests of the crumbling partnership (State and Plutocracy) are diverging from those of the general populace.
Facing the erosion or even dissolution of their concentrations of power, capital and labor, the State fiefdoms and the private-capital Elites unite in one last-ditch campaign to preserve their perquisites and shares of the national income via simulacrum reforms marketed as "preserving our institutions" (see chapter Fourteen, "Interlocking Traps").
The State and Plutocracy will never voluntarily reduce their share of the national income when simulacra of reform (funding State largesse with more debt, masking the approaching insolvency with accounting trickery, announcing bogus "grand compromises" which will save the status quo without any visible sacrifice, etc.) can put off the inevitably catastrophic consequences to a future day. When that moment finally arrives, reforms of any type will be as inconsequential as the many edicts issued in the waning days of the Roman Empire.
Asymmetric Stakes