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Authored by Charles Hugh Smith via OfTwoMinds blog,

"Generosity" funded by debt or currency devaluation is the opposite of generosity: it is the ultimate taking.

Now that the air is thick with the burned-rubber stench of politics, let's consider two tidbits of timeless political wisdom from Machiavelli. Though often-maligned as the dark Lord of amoral cunning, my re-reading of Machiavelli's The Prince (completed in 1514, published after his death in 1532) reveals Mr. M. as a practical sort, not so much a promoter of devilish amorality as an observer wise to the vagaries of power.

Let's start with a famous excerpt from Chapter Six. The first is a translation in the modern vernacular; the second is an older more literal translation.

The Prince (PDF):

The literal translation:

The Prince (PDF):

What Mr. M. is describing here is the immense incentive of those who have been well-served by the status quo to fight tooth and nail to defend its current configuration to maintain their share of the gravy train. Those who fear losing will fight far more vociferously than those who hope to gain from an uncertain and risky change of regime.

This generates what I've termed doing more of what's already failed for if the status quo was actually functioning as wonderfully as its defenders' claim, then there would be little need to defend it against calls for a new arrangement.

What Mr. M. didn't describe is the helping hand of collapse: when the status quo finally unravels, those it enriched will embrace the magical-thinking delusion that it can be restored in some sacrifice-free fashion, and that because they benefited so handsomely, everyone else should support this restoration.

But it's too late for a painless restoration, and so the defenders of the old order eventually give way and bitterly accept the necessity for a new arrangement. Short of systemic breakdown, those who have been enriched by the status quo will actually hasten its demise, for in their desperation to cling to "what's good for me is good for everyone," they will devalue the currency, borrow sums that can never be paid, and deploy other artifices to prop up an unsustainable status quo.

Which brings us to the second tidbit of timeless wisdom: the enduring advantage of frugality over liberality. The word "mean" in this contexts refers to frugality, not cruelty, and "liberal" refers to generous spending, not Progressive politics. We start with the modern vernacular translation again:

The literal translation:

In other words, limited-spending frugality allows the ruler to be generous to the many by keeping taxes low. While generosity initially generates a warm and fuzzy feeling for the ruler, the eventual result of opening the spigots of the money reservoir is either the bankruptcy of the currency–the ultimate rapacity, as everyone's money is consumed in a great bonfire–or much higher taxes imposed as the only means to stave off insolvency.

Here is Federal debt–a parabolic increase in "generous" spending, "generous" until the consequences show up:

Here is total public-private debt: Everybody's borrowing and spending "generously" until the banquet of consequences is served, and Mr.M.'s rapacity which begets reproach with hatred is the main course.

In summary: "generosity" funded by debt or currency devaluation is the opposite of generosity: it is the ultimate taking. There is indeed an amoral cunning to this fake "generosity" and the temporary illusion of "wealth" it creates, but Mr. M. is not promoting this artifice, he is making the case against it.

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