EIR LEAD EDITORIAL FOR TUESDAY, FEBRUARY 23, 2021
Better Enact LaRouche’s Economic Laws or Pay the Price in Collapse or Hyperinflation
Feb. 22 , 2021 (EIRNS)—It is astonishing that the countries with the world’s most unstable electricity grids and highest electricity prices, particularly Germany and Denmark, most aggressively and suicidally keep promoting the great technological leap backward called the Green Deal or “Great Reset.” Now look at the United States. After an absolute economic calamity and deadly human disaster due to Texas’ deregulated electricity grid and the widespread failure of its ubiquitous wind turbines in a freezing storm, Wall Street billionaires, Biden’s administration and national media continue promoting the Green New Deal folly as if nothing had happened.
Now this must be stopped, and EIR’s super-timely Special Report exposing the Green New Deal’s “Great Leap Backward,” is only one step in what Lyndon LaRouche would do now. The U.S. economy—and more so, those of Europe—have been thrown into reverse. What LaRouche in 1995 introduced as his “Triple Curve/Typical Collapse Function,” signaling the financial collapse of an economy, had three features: geometrically increasing rise in debt (“financial aggregates”); monetary aggregate rising even more rapidly in an attempt to liquefy good and bad debt alike; and the physical economy in accelerating decline.
At the end of 2020 total global debt reached $281 trillion according to the Bank for International Settlements, up $21 trillion or 7.5% in just a year. Total U.S. debt rose to $69 trillion, up 11% during the past year. The Federal Reserve’s balance sheet has reached $7.6 trillion, indicating it has doubled bank reserves in 16 months by monetizing Treasury debt and buying mortgage-backed securities (MBS) from big banks—including another $90 billion in the past week alone. The U.S. money supply (M2) has increased by 26% in the year since February 2020, the largest one-year jump since 1943. And the physical economy? Some 19 million people received unemployment benefits in the week ending Feb. 7, with 7 million more “out of the workforce but wanting work” according to the Labor Department; that is 16% unemployment.
That is LaRouche’s Triple Curve “Typical Collapse Function”—financial collapse or hyperinflationary explosion. Some market experts like Michael Burry of “The Big Short” fame now foresee the latter coming soon.
Wall Street’s banks continue to go further out on speculative limbs. According to the FDIC, U.S.-based banks, as of Feb. 10, have received $800 billion in additional deposits since July 2020, while their loans and leases outstanding have dropped by nearly $300 billion in the same seven months. Concentrating on the biggest Wall Street banks, they have continued shifting their assets to trading desks and “fixed income” interest rate arbitrage: JPMorgan Chase from 34% of assets last January to 42% now; Goldman Sachs from 63% to 78%; Morgan Stanley from 50% to 56%, and so on.
What must be done in such danger, LaRouche showed, is to use new national credit, to rapidly add new productive employment and increase productivity in production generally by technological breakthroughs in new economic infrastructure—for example, in nuclear power, crash programs for fusion power and space exploration, very high-speed transportation of people, goods, machinery. If, instead, we allow the Green New Deal’s “great leap backward” in human productivity, with such throwback technology as just failed in Texas—if we allow the governors of other states to push through this “Texas model” of wind and natural gas backup—we will pay very dearly in human life.
We know what Lyndon LaRouche said must be done in such a situation. Put through a Glass-Steagall reform to break up Wall Street’s speculative casinos, and quickly create a national credit facility by nationalizing the Federal Reserve or creating a Hamiltonian national bank. Inject that credit into the economy through infrastructure agencies in particular, to create new productive employment and raise productivity with new technologies—exactly what the trillions in so-called COVID “relief” spending has not done. Pay farmers fair prices to raise and process food. Take the breakthroughs of the spacecraft at Mars and put human beings on the Moon again.
EIR just published its special report, “The Great Leap Backward: LaRouche Exposes the Green New Deal,” in order to speed those actions Lyndon LaRouche would have insisted on.