American statists are convinced that the modern-day United States is immune from an economic catastrophe arising from its welfare-state, regulated-economy way of life. They say that out-of-control federal spending and debt is nothing to be concerned about. There is no need to slash welfare-state spending or warfare-state spending, they assert, because America is an exceptional country, one that isn’t subject to the natural laws of economics, like other countries are.
Statists hold that the deep economic crises in places like Venezuela, Greece, and Puerto Rico bear no relevance to the United States. Some of them even argue that all that federal spending, debt, and regulation are beneficial and bring economic prosperity to a nation. Indeed, some of the statist university professors still maintain that the federal government’s $20 trillion debt load (and growing) is nothing to worry about because “we owe it to ourselves,” a manifestly ludicrous point that might cause bondholders and taxpayers to raise their eyebrows.
But make no mistake about it: the crash is coming and it’s going to be big. There is no way that a government can continue incurring massive amounts of debt and escape the adverse consequences of such folly. The issue isn’t if it’s coming but rather when.
When the big crash does come, rational thinking is going to be in short supply. That’s what always happens in crises, whether they are foreign-policy oriented (e.g., 9/11) or economically oriented (e.g., the 1929 stock market crash). People panic and start running around like chickens with their heads cut off, unable to think in calm, rational ways. And the tendency is to look to the government to solve the problem, notwithstanding the fact that government has caused the problem. Sort of like chickens looking to the fox to take care of them in times of crisis.
Let me tell you what statists are going to say when the big crash comes. They are going to say: “Another failure of America’s free-enterprise system.” And then they are going to be calling for more socialism, interventionism, economic control, and taxes to save America’s “free-enterprise system.”