PEAK GOVERNMENT- THE EROI OF FIAT

silver crashThere was a time when $1 of government stimulus money would boost the GDP by $16.  Now we talk daily about it taking $3.8 trillion to run the Federal Government and for each dollar of stimulus the GDP grows 8 Cents.
This equation of how much it takes to run the government and the results that are achieved could be called the EROI.   Today it is less than 0.1. Government is just a sucking black hole of negative returns and dry wells that would make an wildcatter weep.

By SD Contributor AGXIIK:

We’ve spoken regularly about the Peak Oil and the EROI of petroleum.  This could be applied to government as well.
200 years ago this country got a great return from the limited government and small cadre of politicians in the humid swampy realm of Washington DC.  The numbers of government workers was minimal.  Revenues received to run the government was mostly excise taxes and other modest fees. But the country prospered and with a couple of decades was one of the wealthiest nations in the world. The EROI of government was exponential.  It took only a small amount of goverment to achieve great things.
Over the decades the government grew. Million of dollars, then billions of dollars was needed to run the apparatus.  The more money that flow to the center of power the less economic development was achieved.   There was a time when $1 of government stimulus money would boost the GDP by $16.  Now we talk daily about it taking $3.8 trillion to run the Federal Government and for each dollar of stimulus the GDP grows 8 Cents.   This equation of how much it takes to run the government and the results that are achieved could be called the EROI.   Today it is less than 1.  How far into the negative this equation has run is really not calculable because it’s impossible to quantify the the return FROM government for each dollar spent.
But if the EROI of petroleum must be at least 12 to 1 for us to have civilization, art and culture and an EROI of 5 to 1 is scarcely enough to have any sort of economy above subsidence, the shutdown of the government Monday, a $17 trillion debt and 22% unemployment certain means Peak Government has been reached and we and on the far side of the sliding slope some sort of oblivion that is hard to contemplate. 

Got gold?  Got Silver?  Those metals have a an EROI that can be calculation and held in your hand.
Government is just a sucking black hole of negative returns and dry wells that would make an wildcatter weep.

Sunshine Mint Rounds(3)

Comments

  1. Great observation AGXIIK
     
    Reminds me of the movie I watched last week.
     


     
    Hey Canadian Dirtlump, there’s an adult version which is much funnier if you search for This is the End red band trailer #2 but posted the cleaner version above ;-)

    • I have got to watch this movie.  The bastard stepchild of Cloverdale and the Blair Witch Project, mid-wifed by the Exorcist and World War Z. 
      LOL  
      Watch the prepper Cliff Notes version of the movie.  Porn Optional

  2. We, the people, speak the great words: MOLON LABE
    The best our government comes  up with is the mealy-mouthed lukewarm words:  MOLON  GRABE-Y
    I wrote this post on Oct 2, about 5 AM. Not my best time for any type of math. Forgive me,  EdB.
    Charles High-Smith of  TwoMinds Blog wrote a piece called Peak Government about 5 hours later.  His essay is first rate  The math and charts  are far superior.  He speak to the problem the world faces right now.
    Peak debt begets Peak Government.  Peak government begets Peak Debt.
     These mutually unsustainable paradoxes. 
    Peak debt cannot sustain peak government, appearances notwithstanding. More is not better
    Both are completely unsustainable. 
    We, the people, suffer immense damage due to this. 
     
     

  3. AAAAAHHHHH, the black hole vacuum machine, will be turned off by the precious metals and commodities Hurricane!

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