"Show me the incentive, and I'll show you the outcome."
-Charlie Munger
This is a simple concept, yet possibly the most important thing to understand in 2020.
When we talk about a nation, a government, states, we are talking about complex systems, including millions of people.
The government includes hundreds of thousands of people carrying out the agenda of a select few. And while most working in these systems are trying to do good, they are stifled by the broken system itself.
News organizations have become agenda-spewing machines. You thought it was news? Ha. It's entertainment.
Politics is now the same thing. It's all optics. It's saying one thing then doing something else entirely or not at all.
We can understand this by understanding the incentives.
A politician's primary goal is to protect his/her position. So he/she does things to promote being reelected while avoiding anything that puts that at risk.
If you understand how progress happens, you see how this is the antithesis to change for the better.
Change happens through risk, yet politicians avoid risk as much as possible. Hmm, seems smart.
This is why politicians are just placeholders. More than that, they are defenders of the status quo. So if you don't like how things are, look at those in power—they are the reason. (Especially those that are career politicians.)
This is why it is left to the entrepreneurs to make the world a better place.
In a free market, the entrepreneur acquires wealth by providing value to others. If the entrepreneur can't solve problems, he doesn't get paid. Period.
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The government and politicians do not operate by the same set of rules. These people and institutions have little checks and balances. This game is played in private then uses propaganda and smoke screens to dupe citizens to what's really going on.
The" too big to fail" nonsense is one example of this.
Big corporations take on massive risks then get bailed out when they fail. This is not a free market. The United States is not a free market. A free market doesn't have a controlled money supply, nor does it bail out morons that mismanage their business.
This is literally the opposite of a free market, which is why we've been inching towards socialism for years. In 2020, we are dangerously close to becoming another failed socialist experiment for the history books.
A free market punishes failure and rewards success. Through this never-ending process, things get better for everyone. This is how progress is made.
Progress is never made through governments. It is made through individuals or small groups that challenge the status quo.
Why have most governments failed throughout history? Because of the incentive problem and the lack of checks and balances. (This is also why socialism always fails, mind you.)
The United States used to be different, but then people started ignoring the constitution. In 2020, it looks like we don't even have one. And as long as the public keeps giving up freedoms, the US will become just another failed statistic.
Because governments don't have accountability, and those running them have little, both will always fail.
Each time any government does anything, it makes things worse. Again, this is because it is not operating in a free market. The government is the ultimate monopoly.
This is why the cycle of boom and bust and crisis after crisis goes on forever. The thing about the United States is we have brought the entire world into our game through the domination of the dollar, making the entire world fragile.
Think about that a second: we print money whenever we want, then we use it to buy products and services from other countries.
All they all fell for it, with most countries becoming addicts to our fake money and massive debt burdens.
If I told you I was going to pay you with prices of paper I printed in my basement, you'd laugh. Yet this is exactly what the US has done and does to this day.
This will not last. Everyone knows it.
So the politicians keep kicking the can—the bill—down the street to the next generation.
This is why the young generation is pissed off. And rightly so.
But their solutions, like marxism or socialism, are not solutions. These will make things worse. For as bad as things have become, anything collectivist will be far worse. Any 8th-grade history book will show you why.
The solution is less government. Less regulation. A return to real money—gold/silver/BTC. Personal responsibility. No entitlements. No government intervention.
A truly free market.
It's only a matter of time before the house of cards comes tumbling down.
It's only a matter of time before other countries wise up and stop accepting our fake dollars.
No intelligent person debates whether it's sustainable; they debate when it will happen.
While we can't predict when the "correction" or "reset" will happen, 2020 should show us that it is going to happen in our lifetime.
If you haven't yet prepared yourself and your family, please start now.