The Union Is Rather Weak Than Strong

President Biden says “the state of the union is strong”.
No, the country is split in different directions and stands still
while inner tensions grow. That means the union is weak.

Collage by author of artworks of Wyatt07yeahnoyeah, CC BY-SA 4.0 via Wikimedia Commons and Kelly Sikkema on Unsplash

On February 7, President Biden addressed to a joined session of the US Congress with the president's traditional “State of the Union” speech. This happens yearly and each president tries to show to the nation that “the State of the Union is strong”. G. Ford was the only US President who said that «the State of the Union is not good” in his 1975 speech.

Like all presidents do in such occasions, Mr. Biden exaggerated some things or made factually incorrect statements from points of view of The New York Times and USA Today.

Some Republicans have made rude remarks and heckled during President Biden's speech (Rep. Greene, in particular). That used to be condemned in the US Congress, but now it is not. It's apparently a Mr. Trump’s legacy.

I also found a wrangle between Sen. Mitt Romney and Rep. George Santos very noteworthy. Mr. Santos faces multiple investigations after fabricating much of his résumé and Mr. Romney publicly shamed his fellow Republican for “trying to shake hands with every senator and the president of the United States.” Mr. Santos responded later on Twitter: "You will never make it to the White House”.

I have often seen that while being in Ukraine: people were often ashamed of their elected representative’s behavior while the representative was not a jot. The people couldn’t recall their deputy (and, frankly, were not interested in that), so many scoundrels literally bought seats in Ukrainian parliament from different political parties, and it consisted after a while entirely of people without any honor and conscience. High-ranking Ukrainian scoundrels thought only of their own profits and feuded among themselves, silly people supported different clans (sorry, political parties), the country was divided into parts and became an easy prey for Mr. Putin in 2014.

I assume that the morals of the US Congressmen must be degrading actively in recent years, and wonder how many more frauds like Mr. Santos are in the Congress. Will he manage to get re-elected in 2024?

Ok, sorry for the digression.

Mr. Biden’s conclusion about the “state of the union” was given in the end of his address: “Because the soul of this nation is strong, because the backbone of this nation is strong, because the people of this nation are strong, the state of the union is strong.
Probably, the President shouldn't say in the beginning of the speech “… to restore the soul of this nation. To rebuild the backbone of America, America’s middle class”, if they became “strong” by the end.
I think that the speechwriters just didn't read the text well.

Mr. Biden spent the most time on the country's economy in his 72-minute speech. In particular, he spoke аbout:
- Economy: 8.4 minutes
- Infrastructure: 5.3 minutes
- Policing: 4.7
- Taxes: 4.1
- Democracy: 3.7
- Cancer: 3.1
- Politics: 2.7
- Prescription drugs: 2.7
- Covid-19: 2.4
- China: 2.1
- Guns: 2.1
- Health care: 1.9
- Russia/Ukraine: 1.8
- Opioids: 1.7
- National debt: 1.6
- Education: 1.6
- Climate: 1.5
- Immigration: 1.2
- Veterans: 1.1

Ordinary Americans are also very much concerned about the state of the economy in the country. The recent Gallup study shows that people put inflation (16%) and the economy (12%) as #2 and #3 respectively on the list of US issues they are most concerned about in December 2022. And they are right.

There is nothing other than politics and economy in any country, which are two main components of life and activity. Country's economy (material wealth) is created by the people, politics (politicians) only distribute it. Everything else (foreign and domestic policy, taxes, immigration, for example) is secondary. If the economy doesn't work well for any reason, there is nothing for the politics to distribute. If politics distributes the national wealth ineffectively and wastes money, the economy runs out of funds and the government begins to incur debts. That is exactly what is happening in the US right now (as well as in many other countries). Debts always exacerbate internal conflicts which finally will tear a country apart. Americans, apparently, subconsciously feel all that and correctly put the US government as #1 (19%) on the list of problems of the country in the above-mentioned Gallup study.

President Biden also mentioned the division in government in his speech, but believed his economic initiatives were good and Democrats and Republicans could unite and work together for the good of the country.

Mr. Biden considers the economy to be the most important aspect of the country’s life since he spent 8.4 minutes of his speech for the economic issues. He gave quite a few numbers and examples of his administration's successes in this field, and some of them were truthful, some were not, however I'm not interested in the details here, but in the overall view of the country's economy over time.

It turns out that the President knows that «for decades, the middle class has been hollowed out, and more than — and no one administration, but for a long time.” That's right, I think so, too. However, Mr. Biden explains what happened to the US middle class by “… too many good-paying manufacturing jobs moved overseas. Factories closed down. Once-thriving cities and towns that many of you represent became shadows of what they used to be.” This is a very superficial judgement.

American middle class has started getting poorer after President Nixon’s shock in 1971 because of unilateral cancellation of the direct international convertibility of the US dollar to gold. By 1973, the bunch of current freely floating fiat currencies replaced the Bretton Woods financial system.

What really has happened was a real financial global disaster that no one understood: money had no more intrinsic value and became an easy object for manipulations. The gold filled money with real intrinsic value for millennia. Since 1971, only the fiats (actually, words) of governments and trust of the people in those fiats became guarantees for the new system to work. Thus, money in the US and in the whole world has been stripped of one of its fundamental function - to be a store of value. I called fiat money earlier a “surrogate money”. Banks were already actively promoting credit cards and by the 2000s all fiat national currencies existed mostly in digital (electronic) form in bank databases all over the world.

After Nixon's shock, the impoverishment of the US middle class continued under the leadership of the Federal Reserve which followed the inflation targeting policy of J. Keynes. The Fed began constantly increasing money supply in the form of loans to artificially stimulate demand over supply, which is the essence of J. Keynes’s teaching. Fiat electronic money is very much convenient for that since there is no need even to print it. Thus, the Fed has been creating trillions of dollars out of a thin air. Putting such money into circulation leads to bulging of money supply, literally “inflating” the economy with a thin air, devalues all money in a country and thus decreases the purchasing power of national currency. I called that kind of inflation a “hidden inflation” earlier. The US dollar began to depreciate actively, although remaining the world's reserve currency until now.

The middle class is getting poorer because the people keep their savings in the national currency and do not pay attention to the fact that the Fed is depreciating their money constantly (and publicly!) at a rate of at least 2% a year. Now only the official data show annual inflation of 6.5% as of December 2022.

However, there are other figures available as well. Money supply in the US is measured by M2 indicator. From January 2020 (M2=15.4 trillion) until December 2022 (M2=21.2 trillion), the Fed has issued almost $6 trillion of “surrogate money”, which devalued all existing in 2020 US dollars in the world by 37%. That’s real figure and cause of rising inflation (and consequent devaluation of the national currency) in the US.

The economic game is rigged and it is impossible to win against the Fed because citizens' incomes do not grow as fast and steady as inflation. The task now is how to lose less and not let the Fed to debase your earned money, so the people try to invest in whatever - US Treasury securities, real estate, gold, stocks, but the inflation of 37% within 2 years leaves behind most investments anyway.
In 2020, the time came for bitcoin to become the hedge from money depreciation and its price has gone up from $7K to $30K that year.

Mr. Biden said in his speech that he “can define (America) in one word … : possibilities.” Then, as the president of the United States, he must have great possibilities “to rebuild the backbone of America, America’s middle class.” Ok.
For that, he has to forbid the Fed to issue extra money and that will stop hidden inflation, impoverishing of his “fellow Americans” and devaluation of the US dollar globally. What a chance! The only things missing are the understanding and willingness to do that, so for now...

Despite 14 Nobel laureates advising the president on the economy, Mr. Biden has misled the nation once again by saying in his “State of the Union” speech: “Inflation has been a global problem because the pandemic disrupted our supply chains and Putin’s unfair and brutal war in Ukraine disrupted energy supplies as well as food supplies, blocking all that grain in Ukraine” and “… here at home, inflation is coming down.”

President Biden is speaking here only about the apparent inflation which is really caused by the shortage of goods because of “disrupted supply chains”. He states that due to his consultants’ opinion, but Mr. Biden and his advisers, which obviously belong to Keynesian economic school, do not see (do not want to see?) the hidden inflation which is being created solely by the Fed for a long while.
In November 2021, Mr. Biden has renominated J. Powell to another four-year term as the Federal Reserve chair and said then: “We’re in a position to attack inflation from the position of strength, not weakness.

The President obviously has no clue about all that, but does anyone of the Republicans? World’s leading counterfeiter and the Fed Chairman J. Powell?
The blind lead the blind.

And about the “state of the union”. From my point of view the union is rather weak than strong.

Democrats and Republicans hate each other more than ever. Unfortunately, so do their supporters: the percentage of Americans who strongly dislike the opposition party has gone up by about 400% in just last two decades. Since two major US parties are hardly capable of agreeing on almost any issue, the US government is dysfunctional, the country is practically paralyzed and any (good or bad) decision is almost impossible to implement.

Similarly, the nation is divided along party lines into roughly almost equal parts in its attitude toward the important, but secondary issues that the president mentioned in his speech - immigration, policing, race relations, guns, crimes, etc.

Only some issues go beyond pure partisan strife and are deeper conflicts - between the elites (DP and RP) on one side and the US people on another. Those are poverty, taxes (both have to do with the economy), and, oddly enough, abortion.

In fact, both major parties are not against to the prohibition of abortion. The Democrats' official position on this issue is stated in the Democratic Party Platform: “… Democrats believe every woman should be able to access high-quality reproductive health care services, including safe and legal abortion.” However, many democratic state legislators have their own point of view on the issue and vote against the line of their party. I'm sure that without the hidden support of the Democrats the Supreme Court wouldn’t overturn its long-lasted Roe v. Wade decision in June 2022.

So why do many Democrats support an abortion ban against their party's agenda?
The correct answer is obvious: the US elites (both DP and RP) need more taxpayers because they live off them. I wrote already about Christian morality and women’s right to abortion. The direct interest of the elite in any country is material in nature and aims the increasing the number of potential taxpayers. That is why the government is very much worried about emigration from their country, the growing number of abortions, the "aging" of the population, etc., in their domestic policy. It is correct and farsighted way of thinking for the elites because otherwise who will work for them? The elites are not going to work in any country, they want just to distribute the national wealth.

President Biden also called onto unite the country” in his speech. Apparently, he wanted to unite Democrats and Republicans. However, neither Mr. Biden, nor Democrats, Republicans and other US parties have a unifying idea for the nation.

In fact, there are many such ideas, even in the economy.
It could be, for example, curbing the Fed to curb the inflation and rebuilding America’s middle class in that way (see above) or a simple and inexpensive healthcare for the Americans … People have to be offered with what they really need, then millions will follow the idea. Whoever is able to implement such an idea will become a national hero along with George Washington and Abraham Lincoln. So, “the possibilities” seem to be there, but something important is missing. Something that is hard to see if to look separately at inflation, coronavirus, China, medicine, taxes, police, etc. All those issues are interconnected in the body of the country.

There is no vision and understanding of the Americans that the DP and RP are successful, long-lived political projects of US elites for legal extracting money from the economy. The economy, health care, drugs, guns, education, even taxes, national debts and further down the list of the country’s problems are business projects of the elites who sponsor the DP and RP and appoint presidents, senators and representatives to the US Congress.

Therefore “We the people of the United States” can't formulate for ourselves and our elected officials what needs to be done in order “to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.

By the way, this holistic vision and understanding may be another idea that unites the nation.

P.S. Mr. Biden's speech was quite well constructed, it was friendly to the opponents, and had emotional moments like inviting the parents of Tyre Nichols, who had recently been killed by police. The people who wrote the speech for the President tried to make sure the audience had a good impression of it, and I got it. However, that does not mean I will vote for Mr. Biden if the DP nominates him for the presidential race in 2024.

Joe Biden is a decent person and he is sincere in his delusions. I can see these delusions and believe that every American has to have his own opinion on "state of the union" in the United States of America in order to vote correctly.

P.P.S. Dear Reader! I am very much interested in your opinion on the subject of this article. Please, write a comment or ask a question if you want to clarify something.
Igor Chykalov
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