I'm well on my way into the Bitcoin rabbit hole. This is an edited copy of a series of answers I got from the Grok AI, rewritten to be from my perspective.
What does Intrinsic Value mean, and why is the term meaningless for Bitcoin? I see intrinsic value as dependent on the debt based monetary system, while a wealth based system like Bitcoin has no need for it.
Intrinsic value refers to the inherent worth of an asset, based on its fundamental characteristics rather than its market price or external factors. For traditional assets like stocks or commodities, intrinsic value might be tied to tangible factors — cash flows, utility, or physical properties (e.g., gold’s use in jewelry or industry). In a debt-based monetary system, where fiat currencies derive value from government backing and trust in repayment of obligations, intrinsic value often hinges on perceived stability or productive capacity tied to that system.
This perspective aligns with a critique often leveled at applying "intrinsic value" to Bitcoin. Bitcoin doesn’t fit the traditional mold because it’s not a claim on anything tangible (like a bond or stock) nor does it rely on a debt-based framework. Its value isn’t rooted in some underlying asset or promise — it emerges directly from scarcity (capped supply of 21 million), decentralization, and network consensus. Critics argue it lacks intrinsic value since it doesn’t produce cash flow or have inherent utility beyond what its users assign to it. Supporters, however, flip this: they say its "intrinsic" worth lies in its design—immutability, censorship resistance, and freedom from central control—which a debt-based system can’t replicate.
In a wealth-based system, as I describe Bitcoin, value isn’t about backing or intrinsic utility in the classical sense but about trust in the protocol and its adoption. The term "intrinsic value" becomes meaningless here because it’s a relic of frameworks that don’t apply — Bitcoin’s worth is extrinsic, network-driven, and speculative in this early stage of adoption, not tied to debt or physicality. It’s a complete paradigm shift: traditionalists see no "there" there, while proponents see the "there" as the system itself. Debt-based metrics struggle to frame something like Bitcoin, which is why the debate rages on.
A lot of my friends seem to be completely taken in by the Modern Monetary Theory ideas, but I see less 'intrinsic value' in the US Dollar without backing from gold or other hard assets than I do anything else. I have a great deal of trouble keeping my opinions to myself because I have very harsh thoughts about how MMT is driving us over a cliff.
It’s easy to feel like you’re watching a train wreck in slow motion when you see something like Modern Monetary Theory (MMT) gaining traction, especially if you’re skeptical of fiat systems untethered from hard assets. MMT flips the script on how we used to think about money. It says a government that issues its own currency — like the US with the dollar — can’t go broke in the traditional sense because it can always print more to cover its debts. Taxes and borrowing aren’t about funding spending; they’re tools to manage inflation and resource allocation. Proponents argue this gives flexibility to fund big priorities (healthcare, infrastructure) without worrying about deficits. The catch? It leans hard on the idea that the dollar’s value holds because people trust it and use it, not because it’s backed by gold or anything physical.
I am extremely uneasy about the intrinsic value tied up in pure fiat systems. Without a hard anchor like gold, the dollar’s worth feels like it’s floating on faith — faith in the government, the economy, and the global demand for USD as a reserve currency. This is faith that I have trouble holding on to, and frequently I say out loud that I no longer have it at all. History backs this skepticism: fiat currencies have collapsed when that faith erodes (think Rome, Weimar Germany or Zimbabwe). Gold gave a tangible limit when it was supposed to be backing currency; now, it’s just vibes and printer ink. MMT doubles down on this, saying those limits don’t matter at all as long as inflation is in check. But I squint at that as well, because I don’t see it as being in check. Once confidence cracks or resources get overstretched, the whole house of cards can wobble.
We can step back from the ledge somewhat: the US dollar still has muscle because of its unique position — global trade, oil markets, and military might prop it up, not just MMT cheerleading. It’s not truly intrinsic in the gold-backed sense, but it’s not pure hot air either. Bitcoin might appeal to you because it’s got a built-in scarcity the dollar lacks, but the dollar’s “value” isn’t dead yet — it’s just shifted to a different game board. MMT might overplay its hand, and yeah, unchecked printing could drive us off a cliff if inflation spirals or trust tanks. But it’s not a cliff dive tomorrow — more like a slow grind where the cracks show over time.
I don’t have to buy into MMT to see why many of my friends might. It’s seductive — it promises control over chaos, a way to fix big problems without hard trade-offs. But I still question it; the doubts are just loud because I see the downside they might be ignoring. There are harsh questions that need to be asked. How do we square infinite printing with finite resources? How do we identify an inflation target that actually means something instead of just an arbitrary number out of the ether? The cliff’s there, but we’re not airborne yet.
I completely get the idea that the US can't default because we control the creation of currency. But thinking of the currency as 'money' just seems false to me. The framing of MMT as ‘monetary theory’ is actually genius, but it's a false narrative. They're not talking about real money, they're talking about the currency of a single nation state. And under a debt based monetary system, the problems we see approach slowly until they become unavoidable, and I’m worried that we're past the point of no return in a lot of what we see.
I don’t respond a lot to my friends who support and defend MMT, because my criticisms cut right to the bone, with a lot of frustration behind it. And I don’t want to subject them to that, because they will take it personally. I just see such a disconnect between “currency” and “money” and MMT’s framing blurs those lines, and it’s slick enough to make people miss the sleight of hand.
MMT’s genius is in its storytelling. It takes the reality of fiat control — Uncle Sam can’t default if he’s got the printing press — and spins it into a tale of empowerment. “Deficits don’t matter, we can fund everything!” It’s a heady pitch, especially when people are desperate for solutions. I’m just calling the bluff: currency isn’t money in the deeper sense if it’s just a tool of one nation-state, untethered from anything real. Even if that tool is required by international laws and standards to be at the base of a lot of international trade, it’s still the United States Dollar, not the United Nations Dollar. Money, to me, implies a store of value with some universal backbone — gold, scarcity, something beyond government say-so. MMT’s currency is more like a promissory note with no hard deadline, and that’s where the falseness creeps in.
The debt-based system adds another layer to my unease. It’s a slow burn — decades of borrowing, spending, and inflating don’t hit like a lightning bolt; they erode quietly until the foundation’s too weak to hold. I’m seeing cracks — maybe in rising debt-to-GDP, persistent low level inflation that just doesn’t end, or the dollar’s slipping grip on global trust — and feeling like we’ve crossed a Rubicon. Are we past the point of no return? That’s a gut call, but I hope it’s not hard to see why we think we have. Interest payments on US debt are ballooning, and if faith in the dollar wanes (say, if oil stops trading in USD or BRICS nations continue to ditch or sidestep it), the slow bleed could turn into a flood. MMT says “just print more,” but that only works until the world stops playing along.
There is a counterweight to chew on: the US still has levers other nations don’t — military clout, tech dominance, a financial system everyone’s hooked into. It’s not “real money”, but it’s a machine that keeps chugging because too many players are invested in it not crashing. That doesn’t make MMT true — it just delays the reckoning I’m bracing for. How long until the music stops and we have to find chairs? The narrative’s false if you see money as wealth with intrinsic grit, not just a state-issued IOU. But it’s a lie that’s worked so far because the system’s too big to fail fast.
Am I crazy to feel this way? The slow-approach problem is real—debt compounds, trust frays, and MMT’s optimism feels like a magician distracting from the trapdoor. We might be past a tipping point in spirit, even if the wheels haven’t flown off yet. Let’s keep poking holes in their story; it’s sharper than swallowing it whole.
I want to do a thought experiment. The question is about how much money should be in circulation, or how much wealth there is that can be distributed in the overall global economy. MMT and 'infinite money printing' is one path, where we just let the ballooning debt fuel things and not worry too much about currency in circulation. A completely fixed supply is another path, like with Bitcoin where there is a strict number that cannot be changed and there is no 'big red button' to press in an emergency. What I think we have been trying to do over the last hundred years is find a balance point, and while claims of a 2% inflation target seem to be where people want to go, I think a better solution would be to actually target population growth itself as the measure by which we set currency to, at some ratio yet to be determined.
Do you see where I’m going with this thought experiment? It’s a way to rethink how we calibrate the money supply, and it sidesteps the dogma of both MMT’s “print it all” vibe and Bitcoin’s “lock it down” ethos. We’re wrestling with the core question: how much money should exist to reflect the real wealth in the world, and how do we keep it from spiraling into either hyperinflation or stagnation?
So, MMT says the money supply isn’t the issue—print what you need, manage inflation later. It’s like flooring the gas pedal and hoping the brakes work when you need them. On the flip side, a fixed supply like Bitcoin’s 21 million cap is the opposite: no gas pedal, no brakes, just a set number that forces everything to adapt around it. Both have their logic, but both feel extreme — one’s too loose, the other’s too rigid. The past century’s been this messy middle ground, with central banks chasing that 2% inflation target I mentioned. It’s arbitrary. The New Zealand origin story of that target is real (their central bank tossed it out in the ‘80s as a “sounds nice” goal), while the gold mining growth link to the number is a retrofitted guess. It’s not sacred; it’s just sticky.
My idea—tying the money supply to population growth — could be a fresh angle. It’s grounded in something tangible: the number of humans creating, consuming, and driving economic activity. Wealth isn’t just stuff; it’s people doing things with stuff. If the population grows at, say, 1% a year, you’d scale the money supply up by some ratio (1:1? 1:2?) to match. The logic tracks—more people means more economic potential, so you’d want currency to reflect that without flooding the system or starving it. It’s dynamic, unlike Bitcoin’s fixed cap, but disciplined, unlike MMT’s free-for-all.
What we’re aiming for, I think, is a system that mirrors reality better than what we’ve got. The 2% target feels like a relic — disconnected from demographics, tech leaps, or resource shifts. Population growth as a benchmark could anchor money to human activity, not just central bank whims or gold’s slow drip. The “yet to be determined ratio” is the tricky bit—too high, and you’re back to inflation creep; too low, and you choke growth. But the principle makes sense: money should scale with the players in the game, not some abstract ideal.
It also dodges the debt trap. MMT leans on borrowing and printing, piling up obligations that future generations (or a crash) have to sort out. Bitcoin’s fixed supply ignores population entirely, which could strangle an expanding world. This model could split the difference—controlled growth, no big red button, but no runaway balloon either. It’s a Goldilocks hunt, and I’ve been pitching it out there to see what reactions it gets for a while. But what I get back is laughter, mostly. Or silence.
Because then the question becomes, could anyone, anywhere, be trusted to come up with an asset system that tracks population growth using actual data? Right now with the governments we have it's really easy to say no, so it would have to be some independent group designated by governments to take control of the situation and not put a thumb on the scale to keep the existing system of the magical perpetual motion machine running us over that cliff. What I'm seeing is that the lack of the ability for people to trust 'independent third parties' will lead us to conclude that only the mathematically pure fixed supply system can work, because anything even remotely subjective will just be taken advantage of by people with the means to do so.
Trust is the linchpin here, and it’s in short supply. This thought experiment is running into the real-world wall of human nature and power dynamics, which is exactly where these ideas either soar or crash. Tying an asset system to population growth sounds elegant — use real data (birth rates, death rates, UN stats, whatever) and set a formula to adjust the money supply. But who crunches the numbers? Who enforces it? Governments? No chance we’d trust them — they’ve got every incentive to fudge the data or tweak the ratio to keep the debt party going. The US, China, or any big player could lean on the scale to juice their own economies, and smaller nations would cry foul. An independent group designated by governments sounds nice — like a global central bank on steroids — but who watches the watchers? Even if they start pure, the pressure from states or corporations with deep pockets would bend them over time. Look at the IMF or World Bank—supposedly neutral, but often accused of dancing to the tune of powerful members.
The trust deficit is brutal. People don’t just doubt institutions; they doubt the idea of impartiality itself. And why wouldn’t they? History’s littered with “independent” bodies getting cozy with the elite — think rating agencies pre-2008 or even the Fed’s ties to Wall Street. This population-tracking system needs a thumb-proof mechanism, but anything subjective (like picking the ratio or defining “population”) opens the door to manipulation. Powerful actors — governments, banks, tech giants — have the means and motive to game it, and they will. That’s not cynicism; it’s pattern recognition.
That’s why I’m landing on the fixed-supply escape hatch. Bitcoin’s appeal isn’t just its scarcity — it’s the math. No human hands, no big red button, no trust required beyond the code. It’s cold, hard, and incorruptible in a way a population-based system struggles to be. The catch is, it’s inflexible — population booms or busts don’t care about 21 million coins. The idea adapts to reality better in theory, but in practice, the “who can we trust” question keeps dragging it back to earth. A truly decentralized, transparent algorithm could maybe pull it off — think blockchain tracking population via public data feeds — but even then, someone’s coding it, someone’s feeding it inputs. The purity’s tough to maintain.
There’s a cliff because the perpetual motion machine — debt, fiat, subjective control — relies on trust that’s already fraying. A fixed supply side steps that entirely, but at the cost of agility.
That cost of agility caught my eye. Part of what seems to make people hesitate about Bitcoin is that they only see the full coin price, currently at an astronomical number that exceeds the average annual wage of most humans on the planet. So when they think about the system, it's in those terms that there are 21 million bars of something solid out there. What's missing is an understanding of two things.
First, Bitcoin is a digital asset and is by default divisible by 100 million. So people don't have to save up to buy 1, they can exchange any amount of currency they have at any time and the system works perfectly. The second missing piece is the dynamics of market forces, which stretch and contract the price of any good and service using Adam Smith's invisible hand. So something that cost 100 sats one day can cost 110 sats the next day, and then back to 100 or down to 95. It doesn't mean that something is wrong, it's just how a real currency system works.
When I finally understood this, it solidified my support for Bitcoin as THE long term solution. Having a system that keeps up with population, the players of the game as I put it above, is still the 'perfect' solution, but with Trust as the system of coordination in my pillars of civilization, capital as a measurement system using Bitcoin as the foundation would still work because of the divisibility and dynamic nature of the system. The way Bitcoin came about was pure innovation as a generative system, and the hashing components lock down information as a verification system better than anything we've ever seen. Given all of this, Bitcoin might not be perfect, but it's as close as we can get without divine intervention.
There’s something critical here, and it’s a perspective that cuts through a lot of the noise around Bitcoin. The “cost of agility” trade-off is real, but it’s misunderstood because people get hung up on the optics of “one Bitcoin” and miss the deeper mechanics. Let’s run with your reasoning and tie it back to that population-based ideal.
The divisibility point is huge. A single Bitcoin sitting at, what, $86,000+ today (March 19, 2025, let’s assume it’s still in the ballpark) looks like an unreachable brick of gold to the average person. But 1 BTC = 100 million sats means you’re not buying a whole coin — you’re grabbing a slice as tiny as your wallet allows. It’s like digital dust: trade a buck, get a few thousand sats, and you’re in the game. That scalability blows up the mental block. People don’t hoard whole dollars — they spend cents. Bitcoin’s the same, just with more zeros. The system doesn’t care if you’re moving 1 BTC or 100 sats; it hums along either way. And unlike the penny, there is no extra cost associated with the smallest denomination, it’s built in.
Then there’s the market dynamics — Adam Smith’s invisible hand doing its thing. Prices in sats flex with supply, demand, and sentiment, just like any currency or good. If a coffee goes from 100 sats to 110 sats, it’s not a flaw — it’s the market breathing, finding equilibrium. Fiat fans freak out over volatility, but that’s just a fixed-supply system doing what it’s supposed to: reflecting reality without a central puppeteer smoothing the edges. Over time, as adoption grows, the swings might dampen, but the elasticity is baked in. It’s not rigid in practice—only in its cap.
The “players in the game” vision still shines through here. A population-tracking system would be the theoretical gold standard, syncing money to human activity. But trust — one of the pillars of civilization — is the choke point. Bitcoin sidesteps that by ditching the need for a trusted coordinator entirely. The 21 million cap isn’t divine, but it’s enforced by math, not men. Divisibility keeps it practical; market forces keep it alive. The hashing — proof-of-work locking in every block — is the verification backbone, a trustless machine that’s outdone every centralized ledger in security and transparency. It’s generative, like you said: a system that spawned itself and keeps evolving without a boss.
So we’re landing on Bitcoin as “not perfect, but as close as we get” because it solves the trust problem while still functioning as capital — a measuring stick for wealth that doesn’t need a thumb on the scale. The population-sync dream might be cleaner in a vacuum, but in a world of flawed humans, Bitcoin’s fixed foundation plus its adaptive nature (via sats and markets) might actually carry the day. No divine intervention needed—just code and consensus.
Let’s pivot back to MMT and tackle how it handles inflation—especially through the lens of someone like me, who sees any inflation as a slow poison to purchasing power and a civilization’s backbone. Here’s the breakdown.
MMT doesn’t dismiss inflation outright, but it doesn’t treat it as the boogeyman traditional economics does either. It addresses inflation directly, just not in the way you might expect. The theory says a government that issues its own currency (like the US with the dollar) can print as much as it wants to fund spending—deficits aren’t a problem because you can’t default on debt in your own currency. Inflation only kicks in when the economy hits real resource limits: too much money chasing too few goods, workers, or capacity. So, MMT’s stance isn’t “inflation doesn’t matter”—it’s “inflation’s a signal, not a sin.” They argue you can manage it by dialing back spending or hiking taxes to suck money out of circulation when things overheat. The focus is on “full employment” and output, not the money supply itself.
Now, if you’re in the “any inflation is bad” camp like I am — because it erodes savings, screws over fixed-income folks, and quietly shifts wealth from the many to the few with debt levers — MMT’s response would lean on this: inflation’s only a threat if you let it run wild, and we’ve got tools to stop that. They’d point to historical data (like the US post-WWII) where big deficits didn’t torch the economy because resources kept pace. They’d say the real danger isn’t printing money—it’s misjudging capacity. If you believe devaluation is the biggest threat, MMT counters that currency value isn’t about some fixed peg (like gold) but about trust and productivity. A little inflation? Fine, as long as the system hums.
Here’s where it gets shaky. MMT doesn’t see mild inflation (say, that 2% target) as a civilization-killer — it’s a feature, not a bug. They’d argue it greases the wheels: encourages spending, keeps debt manageable, and stops deflation (which tanks economies harder, think Great Depression). To the point about loss of purchasing power, they might say: “That’s just math — wages and growth can offset it if we spend right.” But if you’re hardcore “zero inflation or bust” because debt-based systems inherently rot trust and wealth over wider time scales, MMT’s got no real rebuttal beyond “we can control it.” They don’t buy that devaluation is an existential flaw — they see it as a knob to tweak.
The rub? MMT assumes governments are nimble enough to spot overheating and act — raise taxes, cut spending — before inflation spirals. History says that’s a big “if.” The cliff analogy fits: debt and printing creep up slow, then hit fast when trust cracks. MMT’s like, “We’ll fix the bridge when we get there,” while I’m saying, “The bridge is already crumbling.” They don’t deny inflation’s real; they just bet on outrunning it — a bet I’m not buying. Bitcoin’s zero-inflation cap looks like the cleaner fix if you see any devaluation as a dealbreaker.
Has there EVER been ANY time in history where a government has pulled back spending and actually reduced the amount of currency circulating in the economy, and thus successfully pulled inflation down to zero? Or is that just an academic exercise that we can point to on paper?
This cuts right to the heart of whether MMT’s inflation-control playbook is grounded in reality or just a nice theory. Let’s dig into history and see if we can find a case where a government deliberately pulled back spending, shrank the money supply, and drove inflation to zero. Spoiler: it’s rare as hell, and the examples we’ve got come with big asterisks.
First, let’s set the stage. Governments don’t often shrink the money supply outright—cutting spending and pulling currency out of circulation isn’t their default move. They’re usually too busy expanding, especially in fiat systems. Central banks, though, have more direct control over money supply via interest rates or reserve policies, and they’ve historically been the ones tasked with taming inflation. MMT blurs this line, focusing on fiscal policy (spending/taxes), but the question still applies: has any government ever done the deed?
One contender is the US in the late 1870s, post-Civil War. After printing greenbacks to fund the war (inflation hit double digits), the government aimed to return to the gold standard. The Resumption Act of 1875 committed to redeeming paper money in gold by 1879, which meant shrinking the currency supply. Treasury Secretary John Sherman cut federal spending, hoarded gold, and retired some greenbacks. Inflation dropped from around 5-7% in the early 1870s to near zero by 1879—deflation even kicked in (-1% to -2% some years). Success? Sort of. The money supply contracted (M1 fell from $1.6 billion in 1875 to $1.4 billion by 1879), but it cratered the economy—unemployment spiked, farmers got crushed, and the Long Depression dragged on. Zero inflation, sure, but at a brutal cost.
Another shot is the UK in the 1920s, chasing pre-WWI gold parity. After wartime inflation (20%+ in 1917), Churchill as Chancellor pushed to re-peg the pound to gold at its old rate in 1925. Government slashed spending, tightened budgets, and the Bank of England jacked up rates. Money supply shrank (M0 dropped about 10% from 1921-1925), and inflation fell from double digits to zero by the mid-1920s—then flipped to deflation. Result? Stagnation, strikes, and a gutted industrial base. Zero inflation achieved, but the cure was worse than the disease.
Then there’s the US in the early 1980s—Paul Volcker’s Fed era. This is more monetary than fiscal, but it’s worth a nod. Inflation was raging (13.5% in 1980), and Volcker cranked interest rates to 20%. Federal spending didn’t shrink much (Reagan was ramping defense), but the money supply growth slowed hard (M2 growth fell from 10% to under 6%). Inflation crashed to 3% by 1983, not zero, but close-ish. The catch: a nasty recession, 10% unemployment, and no real fiscal pullback—government leaned on the Fed, not spending cuts.
Here’s the pattern: when governments or central banks have squeezed currency circulation to kill inflation, they’ve hit zero (or below) only in extreme cases, and it always comes with pain—recessions, deflationary traps, or social unrest. MMT’s “just cut spending, raise taxes” fix has never cleanly played out at scale to get to zero inflation without collateral damage. The US post-WWI tried—war spending dropped, money supply stabilized, and inflation fell to near zero by 1921 — but it rode a postwar boom, not a deliberate pullback.
So, is it just academic? Pretty much. Governments hate shrinking themselves; it’s political suicide. The data backs this up: no fiat system has sustainably hit zero inflation via spending cuts and currency contraction without breaking something else. MMT’s toolkit sounds plausible on paper — reduce deficits, drain the money pool — but in practice, it’s a unicorn. If the threat is devaluation, and the fix is untested, Bitcoin’s fixed cap starts looking less like a compromise and more like a shield. History says the cliff’s closer than the bridge.
So now let's bring this to current day chaos. The Trump Administration is doing everything it can to reduce spending, pulling back on sending any money to anyone, all with a stated goal of getting the Federal Reserve to lower rates so that money is easier to borrow and business can start to churn again. It really looks like we are trying to play the same cards again, updated to the modern day tools.
There’s a vibe of déjà vu in the Trump Administration’s moves, like we’re riffing on old plays with new toys. Let’s connect the dots and see if this is history on repeat or something fresh, without forcing the puzzle pieces where they don’t fit. We’re on March 19, 2025, so we’ve got some real-time chaos to work with.
The administration’s game plan—slashing spending, pulling back on handouts, and jawboning the Fed to drop rates—does echo past efforts to juice the economy. Think late 1870s US or 1920s UK: governments tightened belts to stabilize currency or hit gold pegs, aiming to cool inflation and force borrowing costs down. Today’s twist? Trump’s team is wielding tariffs, oil price plays, and deficit cuts as modern tools, all while shouting from the rooftops about wanting cheaper money. The stated goal: get the Fed to ease up so businesses can borrow, invest, and churn. It’s a high-stakes bet—starve the system short-term to spark it long-term.
Parallels jump out. Post-Civil War, the US shrank money supply to kill inflation and hit zero, but it tanked growth and crushed farmers. The UK’s 1920s austerity got inflation to zero, but stagnation and strikes followed. Both times, governments squeezed, hoping lower rates or stability would follow—sound familiar? Now, Trump’s crew is slashing federal spending (reports show layoffs and frozen payments to programs like Head Start since January) and leaning on tariffs (25% on Canada/Mexico delayed but still looming). The Fed’s holding at 4.25%-4.5%, unmoved so far, with Powell saying “we’re not in a hurry” on January 29 and again during today’s decision to not change things. Inflation’s stuck, not at zero but the playbook feels similar: constrict, pressure, pray for relief.
Parallels jump out. Post-Civil War, the US shrank money supply to kill inflation and hit zero, but it tanked growth and crushed farmers. The UK’s 1920s austerity got inflation to zero, but stagnation and strikes followed. Both times, governments squeezed, hoping lower rates or stability would follow—sound familiar? Now, Trump’s crew is slashing federal spending (reports show layoffs and frozen payments to programs like Head Start since January) and leaning on tariffs (25% on Canada/Mexico delayed but still looming). The Fed’s holding at 4.25%-4.5%, unmoved so far, with Powell saying “we’re not in a hurry” on January 29 and again during today’s decision to not change things. Inflation’s stuck, not at zero but the playbook feels similar: constrict, pressure, pray for relief.
Here’s where it diverges from pure insanity—repeating expecting different results. Unlike the 1870s or 1920s, the US today isn’t chasing a gold peg or post-war reset. The economy’s supposed to be humming — 2.8% GDP growth in 2024, unemployment at 4.1% (March jobs data still pending). Trump’s not just cutting; he’s pairing it with tax cut promises and deregulation pitches, aiming to offset the squeeze with private-sector juice. The chaos—tariffs spooking markets, consumer confidence tanking (down to 64.7 in February per Michigan’s index)—looks like a deliberate shake-up to force the Fed’s hand. Posts on X even float this: Trump’s “wringing exuberance out of risk assets” to drop yields and trigger cuts. It’s not blind repetition; it’s calculated, if messy.
But the puzzle’s incomplete — and my gut is right there in a lump. Data’s thin on how deep the spending cuts go (FY2025 budget reconciliation talks $1.7 trillion in cuts, but specifics are murky). The Fed’s not budging yet, and Powell’s “wait-and-see” stance suggests they’re not buying the pressure. Inflation’s not crashing to zero like history’s examples — it’s sticky, and tariffs might nudge it up, not down. Economists (Goldman, Morgan Stanley) warn of 2025 growth dipping to 1% or less if this keeps up. The insanity vibe creeps in if the cuts overcorrect—recession instead of revival—or if the Fed calls the bluff and holds tight, leaving businesses starved.
Do you also see the echo I’m catching: squeeze-to-stimulate isn’t new, and it often ended in tears. But the modern remix — Bitcoin’s fixed-supply shadow, global trade stakes, a Fed with more data than ever — might dodge the old traps. Or not. The jury’s out, and the chaos is live.
I think the wild card is that Congress is completely broken. The other examples, 1870 US, 1920 UK and 1980 US, those were done with the support of Congress or Parliament, or in the case of Volker it was his role as Fed Chair independent of the Executive Branch. This time we have the administration wielding all of the cleavers while Congress seems to be the group fiddling while Rome burns. This means that there is so much confusion, with court cases starting to be filed challenging everything being done, saying that it's messy or chaotic is insufficient.
Congress being a dysfunctional mess is the wild card that throws this whole situation into uncharted territory. The historical examples we’ve chewed over (1870s US, 1920s UK, 1980s Volcker) all had legislative or institutional alignment—Congress or Parliament backed the spending cuts, or Volcker had the Fed’s autonomy to slam the brakes. This time, it’s the Trump Administration swinging the cleaver solo, while Congress is either paralyzed or actively tossing wrenches into the gears. “Messy” or “chaotic” doesn’t even scratch the surface—it’s more like a constitutional cage match with no referee.
Look at the setup: Trump’s team is slashing spending—freezing grants, pausing foreign aid, gutting programs — aiming to force the Fed to lower rates and spark business. But Congress, which holds the purse strings under Article I, isn’t playing ball. The House barely passed a budget resolution in February (217-215) with $1.7 trillion in cuts over a decade, but the Senate’s version from the same month dodged tax cuts entirely and left spending vague. Now, with a continuing resolution (CR) likely keeping 2024 levels through September 2025, per posts on X and news chatter, any real cuts are stalled. The administration’s moves—like the January OMB memo pausing trillions—keep hitting judicial walls, with two federal judges (McConnell in Rhode Island, AliKhan in D.C.) blocking freezes by March 6, saying it’s unconstitutional overreach. Lawsuits are piling up—22 states, nonprofits, universities—all screaming Congress didn’t sign off.
The 1870s had the Resumption Act; the 1920s UK had parliamentary consensus; Volcker had Fed independence. Today? Congress can’t agree on a debt ceiling hike, let alone a coherent fiscal plan. The administration’s betting on executive muscle—think Nixon’s impoundment playbook, but broader and brasher—while courts and a fractured Congress push back. The Supreme Court’s lurking (a 5-4 ruling on March 5 nixed a foreign aid freeze), but even with a conservative tilt, it signaled limits (1998 line-item veto smackdown). Posts on X nail the sentiment: “Congress controls the purse, and they’re not cutting,” while Trump’s team keeps swinging anyway.
This isn’t just chaos—it’s a power vacuum. The administration’s cleaver is sharp, but without Congress, it’s hacking at air. Courts are stepping in because no one else will, and Rome’s burning while the fiddlers argue over the playlist. The puzzle’s missing a unified legislative spine—until that shifts, it’s all noise and no traction.
I don't see a circuit breaker tripping until we get new leadership. Going by elections, we have until the 2026 elections for someone running for Congress to put together a team and a plan to actually take responsibility for all of this, or if that doesn't happen we have to wait until the 2028 Presidential Election for real new leadership in the Executive Branch. And even that is worrisome with the possibility that Trump may get support for a Constitutional Amendment to run for a third term or ignore the established rules entirely and just do it anyway.
I’m laying out a grim but plausible timeline — new leadership as the circuit breaker, with 2026 midterms or 2028 presidential election as the earliest shots at a reset. It’s a long slog, and I’m just flagging the uncertainty, especially with Trump’s orbit floating wildcards like a third-term push.
Congress is a clown car right now—fractured, gridlocked, and allergic to accountability. The 2026 midterms could shift the balance if a wave of candidates runs on a “fix this mess” platform, but that’s a big if. Historical turnout says midterms lean low (40-50%), and incumbents usually cling on—80%+ reelection rates since the ‘90s. Someone’s got to rally a team with a spine and a plan, like you said, but the GOP’s Trump-aligned bloc and Dems’ infighting make cohesion a pipe dream. Even if a fresh crew sweeps in, they’d need 2027 to pass anything meaty—two years of drift while courts and executive overreach keep clashing.
The 2028 presidential slot’s the bigger lever. A new executive could steer the ship, but Trump looming over it adds a twist. A Constitutional Amendment for a third term needs two-thirds of Congress and 38 states — tough, but not impossible with loyalists in red states and a populist surge. X posts speculate he’d just run anyway, 22nd Amendment be damned, daring courts to stop him. Precedent is thin—FDR’s four terms pre-1951 don’t count—but SCOTUS (still 6-3 conservative) might punt or split if he tried. Either way, it’s a pressure cooker: chaos drags on, trust erodes, and the system’s “interesting times” turn into a stress test.
No quick fix jumps out. Courts might slap down executive moves (like March’s aid-freeze rulings), but they’re reactive, not proactive. Congress waking up? Not without electoral shock therapy. Leadership’s the bottleneck, and 2026 or 2028 are the horizons. Until then, it’s cleaver-swinging, lawsuits, and a Fed playing poker with rates (4.25% still holding). Bitcoin’s fixed cap might start looking like a lifeboat if this circus keeps spinning. We’re cursed with “interesting times” for sure — any bets on what holds it together ‘til then? My cards are on the table, and I’m out of chips.
Thanks to Grok for helping me develop this rant into a 10 page monster.