The Supreme Court's Dubious Gay Marriage Decision

Only 3% of the population is gay according to Gallup and a fairly small minority (15 to 20%?)  of this minority will get married.   So, we're talking about quite a small group of people when we are talking about gay marriage, or maybe 0.5% of the people.  Because of the small numbers, it's not credible that those unions or marriages is any "threat" to the majority as some claim.

The political process to legalize gay marriage has taken decades to evolve and some 37 States have enacted legislation to legalize unions or marriage. Given more time, the rest of the States would come to some accommodation, one way or another, with the issue through the political process. Here's a good map of the current situation in the USA.

The People make the laws in this country. The Supreme Court merely interprets it. The Supreme Court action this week used legal gymnastics to basically make a new law and force it's opinion onto the 13 States that have not approved such statues, or who are still working through the issue. There is a smelly scent of Judicial activism.  Some States may never have any gay unions or marriages, but that's for the people in that State to decide.   Gay persons might elect to live or move to a State that has approved it, although it's true that might be inconvenient. But in this recent ruling, the Supreme Court subverted all of the political and legal processes underway. This is where I take issue. 

Parts of the Constitution and Bill of Rights are written to protect minorities from the "tyranny" of the majority. This is a unique concept in the history of the world. It's huge!  But, in a way, the concept is now turned on it's head with the subject of gay marriage. The endangered minority suddenly are Catholics or Protestants who have a different view of marriage than the Court.  So, priests are now to perform such marriages against their religious views??   I think they can still do what they want since there are explicit protections for freedom of religion.  If you have a business and refuse to  bake a cake for a gay wedding, can you be prosecuted?  Maybe.  Who is going to protect the rights of this new minority?? Those opposed to gay marriage have now been disenfranchised and subjected to the tyranny of the majority in a way.  

The Court used the 14th amendment which, at first glance, has all the right words to support ANY cause that you might want to support. Here is Section 1 (of 5 sections) from Cornell Law School:

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the state wherein they reside. No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any state deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

But the 14th amendment was written to deny discrimination for blacks in the post Civil War Reconstruction era in 1868.  That's what it was about. The 14th Amendment was CERTAINLY never intended to protect persons with a sexual or gender preference. Nor did it address and permit same-sex marriage!!  But it's vague words fit anyone. Whose not in favor of life, liberty or property?? This, and the equal protection clause, are the loopholes that the Supreme Court used.  It's a bit of a gimmick and subverts the long political process long underway in these issues.

The 14th Amendment didn't protect the freed slaves. Federal enforcement receded and all of freedoms won in the Civil War were lost.  Blacks had to wait 100 years for real protection under the Civil Rights Act.  For this reason, it's extremely ironic that US Blacks today put all of their trust in the Federal Government when it's the government (and the Democratic party) that let them down for 100 years!  The Civil Rights Act more explicitly granted rights to prevent States to discriminate on the basis of race, color, sex, or ethnic origin.  That law worked.  And don't think for a moment that "sexual orientation" was not considered for inclusion in the Civil Rights Act protecting minorities.  It was considered and not put in.  Why?  Because The People would not approve it.

These enumerated protected minorities have differences that are innate from birth-- race, ethnicity and sex -- are qualities that you're born with. So, for the Court to conclude on it's own that "Gay" is genetic is a stretch. They don't know and I don't know for sure.   The court is protecting a group with psychological and adjustment issues. 

The same-sex sexual preferences and 'opposite' gender identifications are formed through unusual family circumstances that results is a psychological "adjustment" where their basic sexual identity becomes the opposite of most.

All boys, even at 2 years old have an attachment, even sexual attachment, to the mother.  It's the "job" of the father to assert his place in the family structure and displace the son, claim the mother and to put the boy "in his place." If that doesn't happen, due to an absent or weak father, the son continues to "possess" the mother which overwhelms the boy with guilt. The boy identifies with the mother in gender at a basic level due to the weak/absent father.  All gay men have a basic feminine identification.  Gay women have a masculine identification.

What is supposed to happen is for the boy to be displaced by the dad, where the boy knows his place and is then is unencumbered by guilt and finally identifies with the father (and his gender).   This is Freud's Oedipus complex "process."  And it feels like it's genetic because it happens at 2 or 3 years old.   It is nearly impossible to change this adjustment since it's so deep-seated.    So it feels like some immutable aspect, but is in fact an "adjustment" to an abnormal childhood.

I use the term abnormal childhood upbringing.  With this, there are many other psychological problems for gay people and there is often alcoholism, drug use, anxieties, addictions including sex addiction and OCD issues to name a few.  Gay people blame it on persecution which is partly true.  But there are deep "disturbances" in the mental health of gay boys and girls.  In short, the psychological health of gay people is troubled -- very troubled.  And that is obvious to most of the population.  That is not meant to be a condemnation in any way, just stating the situation.  And it's very wrong to add insult to injury by persecuting gay people with discrimination.

Given the psychological genesis of gender identification above, it's not clear how children can find their own sexual identity in a same-sex household.  For example, if two men raise a girl, how does the girl find her own sexual identity given the two males in the home?  How this turns out is not completely known yet and argues for a go-slow approach that was underway before the Supreme Court intervened.

 "Gay" is not likely to be genetic --but it feels like that for gays.  And for the court to decide that "Gay" is somehow an innate quality to be protected, and then re-define marriage to include same-sex marriages when there's a 5000 year human history, and 200 years US history of solely defining marriage as between a man and a woman is a very big, big stretch.  It's better left to the States to define this and whether to extend it to gay persons. 

It seems to me that the correct approach was to let the political process continue and/or amend the Civil Rights Act or through a Constitutional amendment, NOT THROUGH JUDICIAL DICTATE. The People make the Laws NOT the COURT.  My argument here is more about process, not against gay persons.

Iran Runs Circles Around Kerry

US Blacks 12 Times More Likely to Die Violently

US Blacks are 12 times more likely to die violently compared to other developed countries.  The problem is that US black (men) are committing gun homicides at 7 times the rate of whites and commit over 50% of all murders.  Unsurprisingly, 90% of their victims are black.

In a recent year, there were 13,000 murders, so Blacks (mostly men) will kill about 6,500 persons per year or about 125 persons per week.  This rate of deaths, week in and week out, dwarfs the number of blacks killed by crazy people like Dylann Roof (Charleston massacre) or by cops.

All of this carnage is due to 6.5% of the population -- the percentage of black men in the US.

In the wake of the Charleston massacre, Obama could only bring out his tired old call for gun control. But Dylann Roof bought a gun illegally at a gun store despite existing gun control laws and regulations.  He had a felony drug charge on his record (drug possession), and he should have be refused a gun after his background check. So, more gun rules would work?  Obama would rather take away the guns of 99.9% of good people leaving only criminals with guns.  He would never, EVER propose to take away guns from black men!  Yeah I know, it isn't impractical.  Or is it??

Idiots like Obama never learn.

Obama: Wrong About Everything

It's almost funny how wrong Obama's Left is, if it wasn't so sad and detached from reality.  Yep, extreme Leftism is a mental illness when it's clash with reality is so striking.  Let me count the ways that Obama is wrong. They are:

Wrong about Russia and Putin, wrong about Libya, wrong about Iran, wrong about tossing Mubarak and Gadafi under the bus, wrong about supporting the Muslim Brotherhood's Morsi (now facing a death sentence in Egypt),  wrong about continued support of Muslim Brotherhood, wrong about trying to restore financial power to Iranian Mullahs, wrong about lending financial support to the Castro brothers (asking nothing in return), wrong to completely abandon Iraq and failing to work with Maliki, wrong about how to fight ISIS and it's entire Middle East (non-)strategy, wrong about Islam and it's ignorance and extremist problem, wrong about Netanyahu and his antipathy to Israel, wrong to insult US allies in Middle East by giving a “big gift” to the Mullahs in Iran.

Wrong to help disarm Ukraine in 2009 (as Senator Obama), wrong not to support the Baltic states after Russian aggression, wrong not to speak up and support Iranian student protests in 2009, wrong to go AWOL during Benghazi attack. Wrong to order the entire executive branch to lie and spin about the real terror nature of Benghazi attack.

Wrong about "they didn't build that," wrong about blaming honest and responsible gun owners for everything, wrong about the VA and his faith in socialized medicine, wrong about IRS abuses, wrong to lie about no 'smidgeon of corruption,'

He's wrong and continues to be wrong in trying to make Congress irrelevant and subverting our Constitutional system just because he's completely incompetent in his job,  wrong about shovel-ready jobs, wrong to heap $8 Trillion in new debt on the next generation (with nothing to show for it!), proven wrong about his unilateral immigration action by multiple Fed Judges overruling his illegal executive order, wrong to ignore public discontent with his immigration policy during the 2014 election, wrong to create chaos at our borders by promising to not enforce existing laws and by promising "free stuff" to the lowest of the low immigrants, wrong about climate change, wrong about wanting expensive energy when we need cheaper energy, wrong about the war on coal and raising income taxes during a recession, wrong about the minimum wage.

Wrong about the UNaffordable Care Act, proven wrong about every supposed benefit, wrong to make non-ACA compliant policies illegal, wrong about mandates, wrong about exaggerating ACA's "success"-- Wrong to destroy America's vibrant free-market healthcare marketplace to help just 1.5% of the US population. Wrong to hide the law’s obvious failures from the public until after the 2012 election.

Wrong about the Cambridge cop, overruled by Zimmerman jury, wrong about thug Michael Brown and overruled by Ferguson cop jury, wrong to secretly agitate in Ferguson and Sanford via the DOJ, wrong to conduct negotiation of trade rules, Iran and climate change treaties in complete secrecy, wrong about drone policy, wrong about claiming a transparent administration. Wrong about Fox News.

Yet, despite being wrong about everything, snubbing Allies, spanked by courts and election losses, this ignorant and supremely arrogant slacker is unapologetic and certain that he's right about everything despite all evidence to the contrary.  Sick, disgusting and disgraceful.

Yes, They DID Build That! The Men Who Built America

Obviously no one in the Obama administration or Democratic Party ever watched the History Channel series "The Men Who Built America."  They mistakenly claim that it is government expenditures that are the key to infrastructure development. They say "you didn't build that!" But, like always, they misread and misinterpret the biggest and most obvious lessons of history.

Instead, America was REALLY built by people such as Rockefeller, Getty, Morgan, Carnegie, Edison, Ford, Vanderbilt and Westinghouse. And it was all private investment. They and their kind built ALL of the pipelines, railroads, industries, and businesses that made America the most prosperous and economically free nation in the history of the world. Their achievements made the US the envy of the World.  It was private enterprise, not government, which radically improved this country's standard of living. In fact, it was success of private enterprise which eventually enabled and funded social safety nets (the first in the world), national parks and environmental remediation.

And all of these men ended up with far more money and power than the Federal government. And yeah, they were monopolists it's true and had too much clout over labor. But labor unions rose to counter-balance the power of the great men. Even here the Federal government had a minimal role.

The Fed government didn't have any money and didn't invest in anything for most of US history.

In fact, the Fed Govt was very, very small until well into the 20th century -- just like the Constitution intended. The main source of Federal government revenue, for the vast majority of US history, was excise taxes and customs duties. The income tax, levied starting in 1913,changed all that.

Showing the evil of government's "mission creep," only 5 years after the institution of income taxes, the top rate of 6% (on income over $50 million in current dollars) soared to over 90% and enabled our country's involvement in our first foreign war (WWI).  And a few short decades later, Eisenhower warned us of the Industrial-Military complex. The top tax rate, which started at 6% for the wealthiest of the wealthy, stayed at 70% or more until the 1980s.

Yeah, the US government built the interstate highways in the Eisenhower administration and there were some infrastructure projects like the Hoover Dam in the 1930s. But even here, interstate roads could have been a private toll road system without any Federal involvement at all.

Federal ownership of Amtrak and the VA hospitals shows the abject failure of Federal ownership or "management" of ANYTHING.  Government ownership is pitifully ineffective, inefficient and outrageously costly.  Government "enterprise" is a total failure. Big government failures are all around us!  Yet, this is what Democrats want!  They don't get it!   In reality, they don't want to see the failures! Obama, raised in 3rd world countries, doesn't want to see it! He's ideologically blinded.

The great heritage of America is lightly regulated capitalism -- not Socialism.

Leftists in the Obama administration and Hillary may have watched that History Channel series, because they are so willfully blind and hard-headed (and remain so all their lives), they obviously learned nothing. They misread and misinterpret the biggest and most obvious lessons of history.  Not only do they not know our history and success of US private enterprise, they remain ignorant about the abject failure of Socialist/Communist economic models. Their ignorance is so stubborn and persistent that it borders on a mental illness or pathology and makes them unfit to govern.

Black People Ruin Another American City

Black persons and their slavish subservience to the Democratic party are bringing ruin to another American city:  Baltimore.  Baltimore is just like Detroit;  another predominantly black city that, like Detroit, is being ruined by black people and black Democratic politicians.  Add Philadelphia, East St Louis, Camden, Ferguson and Washington DC to the list for complete devastation now and in the future.   All of these places are hopeless communities ruined by ignorant black populations, ignorant black politicians (Democratic of course),  failed schools, failed public services, violence and crime.

Of course these people blame everyone else but themselves. They never accept responsibility for their own failures.

Baltimore is 68% black and basically all of the politicians are black and Democratic. Like Detroit, there hasn't been a Republican leader there for 40 or more years. And because they can never blame themselves and Democratic policies on their own failures, they blame lack of "investment" (spending) on education and infrastructure. Even Obama uses this excuse.

But, as usual, they are all wrong.  Spending is not the problem.  Baltimore already spends the 3rd highest money per capita on education in Maryland where costs are for the benefit of excessive union wages and benefits -- NOT spent for the benefit of students!      Detroit, also in recent years,  had the 4th highest rate of per capita education spending in Michigan and results of standardized testing show that Detroit kids score barely higher than random guessing on multiple choice questions. This means that NONE of these kids have any future whatsoever except a life of dependence and/or crime.

Throwing more taxpayer money at this community is NOT the answer. Getting rid of public unions in the school system and police departments is one of the answers.  Getting rid of public unions at all levels of government is the answer for many of our problems.  Getting rid of Democrats is the right answer but the very last thing black people will do.

Welcome to Black America as shown in Ferguson, Detroit, Baltimore, Camden, and Philadelphia. Black culture is actually in a state of collapse in these cities (and elsewhere).  Black communities are a train wreck!    It's a train-wreck that envelopes the entire community including the responsible citizens as well.  And it's not the hopeful state that the media tries to portray.  It's a separate but unequal culture of ignorance, corruption, sexual depravity, immorality, criminality and this culture reflects the failed "values" of the Democratic party.   The Democratic party is clearly a train wreck under the incompetent leadership of Obama.  They all need to be thrown out.

The Death Tax is the Unkindest Cut of All

The Death (estate) tax is the unkindest cut of all. It hits people like farmers the hardest, who happen to hold substantial amounts land. It doesn't take much land to be hit with a huge tax. The inadvertent effect, in just this one case, is that family farms are sold to large corporate farmers so that estates can pay the extortion. That's why there's hardly any family farms left.

Family businesses are ruined in the same way. Parents, if they are diligent, lucky and work their asses off, create a small business that they would like to bequeath to the next generation in their family. The estate tax causes families to sell out to pay the tax.

And for what?

So that those tax dollars are pissed away on useless and wasteful programs or spent on unworthy people? Great country we live in, huh?

And who are the only advocates for eliminating Estate Taxes?  Republicans.

Colin Powell Still Sees "Dark Stain" of Racism in GOP

Colin Powell wrote an article saying that he still sees racism in the GOP and in the country.  There will always be racism, but it's mostly gone now.  The Democrats and blacks just keep playing the racism card when racism is largely an excuse now.  The truth is that blacks are far more racist than whites.

What black persons don't like, and mistake for racism, is that people have a negative view of black people -- but sadly that view is justified by their own behavior and beliefs.   I personally have a much more negative view of black people and black men in particular now that I've had to put up with the outrageous incompetence and failures of Obama, Holder and Rice, but that doesn't mean that I assume EVERYONE to be that way.  In fact, I'm happy to meet black persons who surprise me with values and integrity.  It's not often but, when it does happen, it makes me very happy! 

Maybe that "dark vein" Powell's  talking about are realistic assessments and attitudes by white people in observing the declining state of black culture in America?  

• What the impartial observer sees is that black criminality is as bad as ever with 6% of the US population (black men) committing more than 50% of murders and gun crimes? Nobody ever suggests to take away guns from black men, do they? That would be entirely too real and correct.  
• Or maybe it's because blacks make up 40% of the US prison population- incarcerated at about 7X the rate of whites-- because they commit crimes at 7X the rate of whites. 
• Or maybe it's because black "culture" is in complete collapse in rampant criminality, fornication, drug dealing, misogyny, and STDs at 18X the rate of whites? For example, 70% of new HIV cases are black persons and I'm supposed to feel sorry for them? 
• Or because we have to put with ridiculously ignorant black politicians who are clearly intellectually inferior and beholden to Socialism if not Communism? 

Sorry, blacks (especially black men) are a huge burden to this country. And they are farther than ever from MLK's dream of "being judged by the content of their character." Sorry, there is little " character" in evidence in this group. All I see is racism from BLACK people!

NB, I DO have respect for Colin Powell. I may not agree with everything he says, but I respect him. Oh, and no, I'm not a racist at all -- just tired of all the rampant (and incorrect) political correctness that tries to whitewash the black cultural collapse evident right under our noses

Jobs for Jihadis

Thanks to Zero Hedge, here's some completed job applications for the (ficticious) US State Department's "Jobs for Jihadis" program:

Another Example of Why The Left Is Unfit to Govern

I've indicated before that Liberals are emotional, irrational, unprincipled and therefore unfit to govern.  I guess I forgot to include "hopelessly naive"-- even "dangerous."

Washington, this Administration and the State Department are full of naive Leftists with dangerous -- even ridiculous -- ideas about the world.  Dumb ass Marie Harf, idiot spokesperson for the US State Department, said that we can't win the war with ISIS by just killing them.  That's not so bad, but then says that they need jobs or something!

That's almost as bad as Michelle Obama and fellow idiot P. Diddy's Twitter campaign to "combat" the seriously murderous Boko Haram terrorists who are wrecking havoc throughout Nigeria.  The naivety is stunning.

As if to prove the point, the Leftist President of Uruguay verbally blasts the 6 Islamic Jihadist terror detainees, released from Guantanamo to Uruguay, for being "lazy" after they have repeatedly refused jobs offered to them well after their resettlement.  The Uruguay President actually visited the new immigrants personally!  He left that visit disgusted.  At least they aren't fighting back in the field of battle like most of the released detainees!  So much for the ability of jobs, work, or anything else to reform these people.  Gee, maybe killing them is all you CAN do?

This cartoon goes a long way to explain why Lefties are unfit to govern or even set policy:

World in Flames While Obama Fiddles

You could say that Obama is an AWOL president -- absent without leave.  That's a serious charge since the President is the commander-in-chief.  It's clear that Obama was disinterested and AWOL during the Benghazi attack -- Leon Panetta made that clear. 

Now, as medieval ISIS rampages across the Mideast, Iranian proxies win in Yemen and surround Saudi Arabia, war begins in E. Europe, and every problem in the US unsolved and made worse by this President, President Obama is playing around with selfies, interviews YouTube sensation GloZell and wringing his hands in denial about the world-wide problem of Islam.

"Fiddling while Rome burns" and "re-arranging chairs on the deck of the Titanic" come to mind as the President, supremely confident in his ignorance, declares in the SOTU address that "crisis has passed."  Welcome to the most un-serious President ever in American History:

Here's his "groundbreaking" interview with internet sensation GloZell who is considered "cool" for snorting cinnamon and bathing in a tub with milk and cereal :

The most un-serious President ever elected by a bunch of people because he's "cool."

End of Cheap Energy and Peak Debt Levels Presage Collapse

The huge increase in world population in the past 150 years, the food production to feed those people and the rise of modern specialized society was based on cheap energy, technology and the rise of debt (capital). But the most important thing is energy. In a way, energy is everything. Coal, then oil fueled the industrial revolution and the rapid growth up to 2008. Raw materials, including coal and oil, were very cheap until recent decades.

Cheap oil energy is no longer available for additional barrels demanded. Oil is available but it's not cheap!  If oil prices shoot up to over $100 or more when extra barrels are demanded like in 2008, or in response to Chinese demand in 2009/2010, then we've reached the end of cheap oil.  Remember, world GDP growth and energy consumption go hand in hand.

We're also reaching the end of debt's marginal utility, meaning the amount of growth per unit of debt has declined to nearly nothing. I call it "debt saturation." Here's the point of this blog post: if we've reached the end of affordable energy and debt's marginal utility, then we've reached the "end" of world GDP growth.  And if strong GDP growth is ending, then the debt "edifice" built up to fund recent year's growth may prove to be unsustainable.  In fact, the debt crisis in 2008 is likely to be a prelude to more debt trouble -- even massive defaults -- in the years ahead.

GDP growth requires more energy (oil)

Marginal Utility of Debt Is Nearing Zero; Meaning Debt No Longer "Buys" Growth

In the interest of brevity, I don't want to recap recent world history, but instead focus on recent years.  When oil prices hit $145 in 2007/2008, it caused a recession and triggered financial crisis in the US and the world.   It's entirely possible that $108 oil in 2014 has triggered another recession in 2015--coupled with the fact that China has cut back it's credit-fueled growth (due to the declining utility of debt there).  Further below, I explain why China can no longer ride to the world's rescue.

High Oil Prices Led to Recessions in 1974, 1981 and 2008

The financial crisis in 2008 was due to high oil prices and also the high indebtedness of US consumers. Consumer debt reached a peak relative to incomes, mostly due to mortgages (debt saturation).  High oil prices hurt the economy, left consumers with less discretionary income and many couldn't pay all of their bills including mortgages.  The mortgage and housing markets collapsed which then threatened the solvency of banks -- and the entire financial system.  So, the cost of oil triggered a sudden economic recession in 2008 like in 1974 and 1981 (see chart above).   Financial institutions around the world also faced a panic and world trade ground to a temporary halt as Letters of Credit were refused or unavailable.  It was a near-death experience.  In summary, you could say that world consumers reached a limit in indebtedness due primarily to the cost of energy.  Consumers couldn't bear the cost of energy and debt collapsed. 

In response, the US started it's money "printing" program, countless other programs, and huge deficit spending.  China panicked and embarked on the most amazing debt-fueled spending ever seen in world history.  In 5 years, China's ratio of credit to GDP has jumped by 75 percentage points to 200pc of GDP or more.  How did China do that? They embarked on debt-financed programs to build ghost cities, still-empty malls, millions of units of housing in still-unoccupied buildings.  To do this, they needed huge amounts of energy, raw materials and debt.  Since world oil production is mostly limited (any extra demand causes oil prices to spike to unaffordable levels), China used mostly cheap domestic coal to fuel their breakneck expansion.  China used huge amounts of coal since 2009.

Now even China has reached an indebtedness that is highly correlated with financial crises. Even they realize it and have recently scaled back on new credit growth -- causing their economy to slow.  China's reduction of debt increases and slowdown has caused key world commodity prices to crash with iron ore, copper and oil down by more than 50% since 2011.  Debt growth only slowed there -- it's not declining!  Even slowing debt growth causes commodity prices to collapse!

In the US, in the past 3 years, the shale oil and gas boom increased US oil production by 3 million barrels per day (while the rest of the world's production has been flat to slightly down).  When China started to slow it's debt-fueled expansion, it caused reduced total oil demand by them and commodity-producing countries, and accounts for the big plunge in oil (and other commodity) prices worldwide.  The boom in US oil and gas production was largely responsible for nearly all of the high-paying employment growth in the US since the 2008 financial crisis.  Now that boom is likely over.  Employment will fall in the US unless oil prices rise quickly.  Falling employment means recession.

If Shale Boom Is Over, Then Employment in US Will Drop.  Dropping Employment Signify Contraction or Recession

You might say that cheaper oil will give the world economy room to grow. It's true that some oil importing countries will be helped.  But the plunge in commodity prices is hurting all of the commodity exporting countries, ie., the Middle Eastern countries, Brazil, Russia, Venezuela, Canada, Australia and many other countries in Africa and Latin America.  These countries will likely be in recession and their demand for US exports will drop. This effect has recently shown up in declining US export data. 

Even the long-term future of the shale oil boom is threatened since it was funded by cheap debt which will no longer be cheap enough for many of the companies.  Credit for marginal shale producers may not be available at all. Remember that shale oil and oil sands are the only worldwide sources of marginal production in recent years and were only made possible by extremely high oil prices. If loans to shale drilling companies is not available, it may mean that oil spikes will be even higher in the future should demand "try" to rise.  In the next few years, this may mean that we will see even larger oscillations in oil prices and, therefore, instability in the economy.  This is an effect of "hitting the wall"-- or hitting the limits of resources and growth.

More immediately, reduced demand for US exports from much of the world, reduced employment in the oil patch in the US (the only bright spot in the US economy) may trigger a recession in the US since growth has only been running at about 2%.  It's entirely possible that it's already showing up.  For example, the past two month's retail sales were down sharply (some of that is due to lower gasoline prices).  US exports and durable goods orders were down sharply for the past two months as well.  China is slowing very sharply.  Europe is basically already in recession.  Evidence of world recession is mounting.  Brazil and Russia are likely in recession. Debt defaults may be imminent for Venezuela, Russia and other countries. These defaults and recessions may trigger further financial crises, with massive losses for investors in equities which will further reinforce the recessionary forces.

Since 2009, real median incomes are down for the US (see graph below) and the reduced employment in the oil patch will further reduce it.  Thanks to Obamacare, consumers are under pressure from much higher healthcare insurance costs and are not able to spend the money saved at the gas pump. Food prices and rent prices have also become big burdens for consumers since their incomes are mostly stagnate to falling.

The debt carrying capacity of consumers falls as income falls.  And due to the rising cost of non-performing loans, some consumer interest rates will go up for such loans.  Small shale oil company's cost of credit will go up or dry up.  Interest rates for highly indebted companies will go up as Junk bond interest rates rise (this is already begun).  Recession will aggravate this situation.  Defaults will rise and marginal credit interest rates will rise.  The debt carrying capacity for entire countries like Venezuela, Argentina and even Russia is now in doubt.

Debt levels are at dangerous levels everywhere now.  Slowing growth in economies makes the burden of debt more difficult for corporations and governments.  Eventually even government debt levels may become a problem.  US debt levels have risen 80% to $18 Trillion in the past 6 1/2 year alone with shockingly little effect!  Clearly this trajectory is unsustainable.

Perhaps more ominously, if the world economy tumbles back in recession, then the entire world is ill-prepared to offset an economic downturn.  Other than rising government deficits, there are few effective counter-cyclical policy tools available.  Interest rates are already zero here and in most places.  Money printing has been discontinued in the US as it's continued use has been proven to be ineffective.  As I've mentioned, there's evidence that even increased government deficit spending no longer boosts GDP as much as in the past -- the collapse of debt's marginal utility worldwide.

China has reached dangerous levels of debt due to it's vast and desperate investment program on largely uneconomic projects.  It's difficult to see them re-initiating such a program. Their housing projects and ghost cities are still empty.  There are other limits as well. For example, China was recently consuming up to 60% of the world's coal, iron ore and copper.  If China wanted to maintain 7% growth rates like the past, then their demand for such raw materials would double in 10 years along with their economy -- this means that in 10 years, demand for commodities would exceed 100% of the world's supply of nearly everything!  The cost of those materials would sky rocket!  As mentioned before oil prices would spike dangerously and unsustainably higher!  Their coal use would have to double as well at a huge cost.  Even now, air and water pollution are a serious and real threat to the population in China.  People can barely breath there today.  You can see how they've reached a limit to their growth rate. The same effect applies everywhere else! There are limits to growth in a world of limited low-cost energy and resources! 

And debt loads built up worldwide, especially after the 2008 crisis, may very well prove to be unsustainable at some point as growth permanently stalls. Eventually, confidence could evaporate or, if money printing is re-established everywhere to monetize government debt issuance, then inflation may create the next crisis in market interest rates and markets in general.

If I say to anyone these days "everything is falling apart" I get nods of agreement. It's possible that recession, debt crises, depression, social unrest and war lie in our future. Even now, war has broken out in E. Europe and the Middle East is in flames. China is threatening neighbors in SE Asia. Some of these conflicts are due to desperation of regimes to divert the public attention and boost nationalism at home (Russia and China).  And seven years after the 2008 meltdown, the US (and world economies) are still on life support.  Still-rising government debt is barely keep economic growth in positive numbers. Zero interest rates, vastly expanded money supply, still high fiscal deficits, $8 trillion in new US gov't debt (and growing) haven't worked well except to bide time.  Therefore, no policy tools remain to counteract the next downturn. We're just one economic shock away from the next recession.  And with no effective policy tools remaining, the next Great Depression may be around the corner.