According to the Wilshire Total Market Index, the American stock market has lost $ 7 trillion (seven million million dollars) in value since March of 2000. Tax revenues are falling as more and more Americans become unemployed and as corporate profits and values fall.Our government is now proposing to spend $400 billion dollars (four hundred thousand million dollars) on national defense in 2003. Do we have a problem, Houston?
Barry Carter
With the Agricultural Age to Industrial Age shift, the Revolutionary and Civil Wars were intense breakpoint bangs. Before the short intense bang there was one system and after the bang a completely different system. With social breakpoint, pressure builds for change. This change is resisted and held in check and then, with a bang, it breaks like a dam which has filled for years.
There are many ways that our society could slip into a hellish road warrior era; terrorist attacks on major cities with nuclear weapons, terrorist attacks on our information technology infrastructure, or racial division. The bankruptcy of the United States’ federal government is another candidate. In earlier chapters it was shown that bankruptcy of centralized wealth creation is almost certain unless we have fundamental change. If the United States federal government were to go bankrupt this would be the bang, not just for the United States but for the entire world. How could this happen? Let’s look at a theoretical example.
The following scenario is pure speculation. Though federal government bankruptcy is inevitable unless we drastically change direction, the likelihood that things will unfold as defined here is quite remote. The point, however, is that regardless of how it happens, a federal government bankruptcy would be our breakpoint to either the new civilization or to a hellish road warrior era.
The Scenario:
The politicians have no choice, if they want to keep their jobs, they continue to pander to our wants. We say we want the budget deficit cut. However, when it is cut in our district we vote out the person and replace him with someone who will meet our needs. Our yearly deficit continues to balloon. Few people really think anything is going to happen, after all, we’re the United States of America, “the greatest country in the world”, “we’re number one,” and nothing has happened yet. The interest payment on the debt continues to grow to a point where lenders begin to tighten credit as they begin doubting the federal government’s ability to continue full payment on the debt. This causes interest rates to increase and thus, the monthly debt payment increases.
With credit tightened, the federal government begins raising taxes and cutting services in order to pay the interest on the debt, provide services and maintain credibility. After all, if we begin screwing around with the debt payment, it’s all over.
With taxes being raised and services reduced, people take a stand. “Hell no, we won’t pay more taxes and have services cut. We have real needs to meet today. We have earned our entitlements and they will not be taken away. To hell with the debt. If you won’t meet my needs I’ll vote you out and find someone else who will.” The politicians buckle and delay some of the monthly interest payments on the debt, hoping to push the problem out further into the future and allow it to fall on someone else’s reign. The politicians must continue to deliver most of the services or be voted out of office or impeached. The public will not tolerate cuts in Social Security and jobs in their area. We are to a point of no return.
With the federal government refusing to pay a portion of its interest payment, credit to the government is tightened, interest rates increase and the monthly payment gets even larger. The government now can afford even less of the payment and again reduces payment to debtors. Over time there is much uncertainty. All credit is eventually cut off to the federal government.
Nobody is willing to buy bonds or lend the government anything, since they’re not sure if they’ll get their money back. With no credit, services are cut across the board with the exception of defense. Defense is put on heightened alert in this time of vulnerability and uncertainty and FEAR. With services drastically cut, and people feeling suckered, there is a massive tax revolt with millions of people and companies refusing to pay further taxes.
The revolt snowballs. Services are cut even further. There is demand from the people for all taxes paid to go strictly for the military and defense. The federal government lays off 99.9% of its workforce. The federal government at this point has all but ceased to exist with the exception of defense.
A significant amount of cash has stopped flowing in society and the world, as the federal government ceases operation. The lack of cash flow to the companies that supply the federal government causes many companies to immediately go out of business. The confidence in our economy, which holds it together, is shattered. People stop spending and begin withdrawing their money from banks, bonds and the stock markets, putting them into some hard tangible asset, such as gold or real estate. Markets are out of whack as gold and real estate prices soar while the dollar plunges. Daily there are runs on hundreds of banks, as people panic and try to get their money out. The ripple effects are felt in every organization around the world. Many companies fail because of the slowdown in cash flowing throughout society, the shattered confidence in the economy, and, most importantly, the slowdown of spending as people start buying only the goods and services that they absolutely must have. The world sinks into a massive depression from the ripple effects.
There are now 41 million senior citizens no longer getting government checks. They are back in the workforce, along with millions more from the welfare roles, tens of millions from corporate America, tens of millions of government workers. There are, however, no jobs openings. People begin to search for ways to meet their living needs. There, however, is no lack of work to be done. Thousands of services have been dropped by the government and bankrupt companies.
Though there are no job openings, people find all kinds of niches, nooks and crannies to produce income using their wits and knowledge. Internet is humming as people connect. With an abundance of knowledge, know-how and demand for work and services and a shortage of dollars, other forms of capital begin to emerge. Computer databases are established which allow thousands of people to exchange labor for goods and services through electronic barter banks–electronic capital.
Internet explodes because people are connecting horizontally and trade work at the individual level. There is a hub of thriving decentralized information businesses which are booming, such as computer information services, micro computer hardware, software, programming and training. Growth in the entire information technology field explodes in all directions.
People have found, and are struggling to find, niches for themselves. Many of the people out of work are intelligent, well educated, knowledgeable and technically advanced. Many people finding insecure niches for themselves begin networking and partnering for strength and stability. Networking and partnering between individuals explodes overnight. The networks are able to produce extremely high levels of quality, value and service to their customers because there is real tangible ownership, with real chains of customers and real virtual enterprises.
They are flexible, agile and changeable on a dime. In addition, they realize the urgency of their customer’s needs. People are engaged and focused 110% on their customer’s needs. This is because losing a customer could mean profit or loss. Things are REAL to the individual and there are no zombie clerks.
Manufacturing equipment is dirt cheap with many companies going belly up and investors needing cash. Some of the larger networks of partners venture into manufacturing, using their network structure. These networks begin to grow extremely large and powerful, with people owning their own work. More and more people find that personal computers, information technology and networks allow them to easily link up with others to trade work and produce income. In these partnerships there is natural alignment as people come together where there is a natural fit. The entire area of information technology continues to explode with growth.
As companies reengineer and downsize to cut cost and survive tens of millions of jobs are lost. Though the employees are terrified of losing their jobs, this fear cannot be transformed into the kind of power that the private networks have. In addition, they cannot produce the quality, service, value, speed, intelligence, perspective and flexibility offered by the aligned networks. With the advent of the Mass Privatization networks and the instability of markets, traditional companies can no longer operate with employees and tens of millions more are laid-off. Many companies opt for all-at-once-change and are dissolved and all employees fired. Some of the kingpins of the old company become Structure Partners in the new organizations. Companies offer contracts to the key employees to become partners. The partners are requested to restructure to resemble the aligned private networks. They search the employee ranks and select the best business partners to continue the business operations of the company. The partners develop real visions and aligned compensation structures.
The employees which are not chosen as partners are out in the cold–no pension, no severance pay, no unemployment, no notice, no COBRA health insurance. The company’s partners are given foundations from which to meet market needs and grow and expand. As businesses begin to grow, some former employees are called on as partners by former co-workers to help complete work. Partners own their work and are allowed to expand markets in any directions seen fit in order to create wealth by meeting customer needs.
Former employees are continuously approaching partners with ideas where they can add value, without any risk to others in the enterprise. Some are added on. Some succeed and many fail. Times are hard. Many of the failed partners standing in soup lines thinking, “If I’d only started a part-time private business while I still had the income from my job, and gotten some experience.”
Aligned networks have used the new electronic banks from day one as defined in Infinite Wealth. The newly transformed companies follow this lead. Traditional companies shift much of their capital into the newly formed electronic banks. In the meantime on Wall Street, companies are collapsing right and left. With the stock market and Wall Street evaporating, company managers quickly set up databases to connect partners directly with investors. The investors holding almost worthless paper are glad to trade it for a real tangible income source by going into partnership with individual partners.
Brokers step in to help broker deals between partners and people with cash. Thousands of new decentralized stock markets form overnight through the Internet, connecting investors with capital to partners with knowledge.
As the electronic banks become more sophisticated, they continue to link up to each other. Eventually hundreds or thousands of the decentralized electronic banks are connected nationwide. Explosive growth continues in the decentralized computer industry. Information technology is now driving wealth creation and knowledge is at the center of our wealth creation system.
People in Mass Privatization networks are trying all kinds of ideas to meet customers needs. When an idea clicks it spreads through the network like wild fire because of knowledge leveraging compensation. Entire networks of tens of thousands of people turn on a dime to incorporate new ideas to better meet customer needs. They thrive off of wide and diverse variation, as opposed to the narrowing of variation which was the rule in “controlled” companies. There is no shortage of human needs to meet and no shortage of people working very hard to meet them.
The information superhighway has become our lifeline. The last thing people want to do is get disconnected from the world and lose their ability to trade. It is clearly understood by all that Toffler’s words are reality, When information flows, cash flows.” The new decentralized wealth creation economy has begun to build from the ground up.
Millionaires are being produced by the hundreds daily in the decentralized computer and knowledge industries. At the same time those ill-prepared for the shift to knowledge and Private Work are barely able to eat. With it being apparent that knowledge is the new wealth creator, all kinds of decentralized for-profit educational and knowledge institutions and systems continually spring up.
Book sales and on-line data services skyrocket. Books and “how to manuals” are being published on the Internet overnight. People are devouring information and knowledge as it drives everything. The demand for knowledge which adds value is enormous. Even people who dropped out of high school because they hated school, are now eager for knowledge because it is directly and immediately convertible to wealth, is real and is wealth itself. Many previous gang members and welfare recipients are becoming multi-millionaires as they form and join Mass Privatization networks and begin to trade.
Political parties begin to spring up overnight–right wing, left wing, religious, minorities, separatist, fascist. Most people, realizing the futility of representative government, aren’t hoodwinked by the good intentions and promises from smooth talking individuals who would represent them. “Fool me once shame on you, fool me twice shame on me.” It is now fully realized that the only person who can represent one is oneself. This is so obvious by now that, without it even being explained, most understand. All kinds of organizations spring up interconnected, overlapping and networked together to form Toffler’s mosaic democracy and Drucker’s society of organizations and beyond this to the new mass synocracy civilization. These organizations are interdependent with one another based upon partnership, as opposed to the bare tolerance and dependence of centralized wealth creation. These organizations form the Virtual Alliance, which replaces our old federal government. In fact, representative government is no longer tolerated. People refuse to be governed, managed, supervised, led or ruled–they’re empowered through alignment. People refuse to be dependent upon representation but are now interdependent with one another through networked organizations with local ownership. The symptoms and deficits from our joint mass victimization based past begins to disappear overnight, as people are empowered and emotional intelligence is increased as people are motivated to focus on meeting other people’s needs.
The institution of the United States Presidency continues, but slowly goes the way of the monarchy. Representative Mass Democracy, the Industrial Age, division of labor and the company are all dead.
Other industrialized countries are going through a similar metamorphosis to the Mass Privatization paradigm. The third world, watching what is going on, discovers that the new Mass Privatization based wealth creation is not heavily dependent upon dollar capital or natural resources. They jump on the bandwagon. All types of decentralized educational knowledge systems spring up overnight worldwide.
Again this is only speculation, and though bankruptcy is highly likely, it is highly unlikely to unfold this exact way. There are many, many twists and turns that an explosive situation of this nature could take. Above I have presented the best case. The worst case could include some of the following, starting as the government begins to cut back on services:
With welfare checks gone and no jobs in inner cities, crime skyrockets. Minorities in the cities demand what’s owed to them, by the “infinitely rich,” white society. Most blacks see this bankruptcy stuff as just a ploy and conspiracy to exterminate blacks. Fear reins, new realities are expected, thus seen and created as the natural law of quantum physics dictates. As riots break out, marshal law is declared nationwide, with tens of thousands of inner city blacks being killed. A reality out of fear has been expected, thus seen and created. The riots in most major cities are costing trillions of dollars in damage.
Other scenarios could include a military takeover the government, installing a totalitarian or fascist regime. We could also split into many factions of vigilantes, minority rioters, right wing fanatics, various religious fanatics, youth gangs, death squads, hate groups, militias and terrorists. Literally anything is possible in this fear-based reality. History has proven how insane we can become when driven by fear.
The bankruptcy of the federal government is only one possible trigger for the massive shift to mass privatization. There are many others including the potential Y2K disaster and lose/lose violence.
Conclusion
The fear which will be created from a bankruptcy of the federal government must be avoided at all costs. We must not allow things to go this far. We must prevent bankruptcy by installing the new wealth creation system with the vision, passion, drive and intensity of winning World War II. We can install enough of the new system in time to avert bankruptcy, as well as other potential trigger points. This can happen if we as individuals educate ourselves and begin a massive dialogue in all segments of society and become obsessed with aligning ourselves with the new information society. A negative trigger to breakpoint may occur.
We should not be fooled into thinking that we have plenty of time. Breakpoints occur rapidly and we can make it a positive one. As paradigm shifts reset things to zero, they usually set up the conditions ripe for an explosion. As shown in Joel Barker’s video The Business of Pardigms the Swiss lost the watch market in only a couple of years. IBM cracked in only a few years. The Southern United States went from wealth to poverty in a few years, the old Soviet Union went away overnight. Asked beforehand, most people would have concluded that the Cold War would have to be slowly eroded away over decades. The making for fast radical change in wealth creation has been building for decades. The dam has been holding back water for forty years. We must convert this into positive energy with a move to Mass Privatization through information technology, or face the explosion.
Copyright 2000 by Barry Carter
About Barry Carter.
Infinite Wealth is available at the author’s website, and can be purchased in bookstores everywhere including Amazon and Barnes & Nobel.
There is also an abbreviated free online version, which has been reposed at Future Positive: 1) The Rise of a Win Win Civilization 2) A Personal Journey of Discovery 3) Why Corporations Don’t Work 4) The Emancipation of Capitalism 5) Mass Privatization: Organizing in the Information Age 6) Decentralized Wealth Creation 7) The Infinite Wealth Potential of Liberated Humans 8) The Mandate for Win-Win Wealth Creation 9) Breakpoint: Why You Must Act Now 10) SYNOCRACY: True Democracy Through Synergy 11) THE SHIFT: Awaking to a Win-Win World 12) The Synthesis of a Win-Win World and 13)Vision for a Synergic Transition.