Thoughts on Coming Apart and the Coming Great Reset
Turning and turning in the widening gyre
The falcon cannot hear the falconer
Kit Webster
Themes and Theses
Why I'm Contemplating Out Loud
(Initially formulated in the early 90s, following decades of reading history, philosophy, religion, psychology and a lot of contemplation, particularly on the subject of cycles. In the end, this is a relatively straightforward story about human nature and of history rhyming.)
The US will enter a period of crisis in the early 2000s. In the late 90s, I incorporated Strauss' and Howe's terminology of the Fourth Turning (without incorporating their generations paradigm) and agreed with Howe that the end stage of the crisis began with the Great Financial Crisis and would last into the early 2030s. We are now at the beginning of the end stage of the crisis.
The crisis will be serious and could be existential.
Internal strife will increase, up to and including secession and civil war.
International conflicts will increase as the vacuum created by the weakening of the US is filled by other players.
There will be many threads to the crisis, but the primary thread will be debt, deficits and entitlements. Other factors include, eg, demographics, a loss of meaning and myth and a loss of self-discipline.
Politics will move leftward as citizens look for some refuge from the chaos. The US will become increasingly susceptible to a (man) on a white horse, who can come from either the left or the right.
Inflation, as the most likely way to address debt since austerity is not politically acceptable, will significantly lower standards of living, exacerbating the civil crises.
Eventually, the dollar will be inflated away and lose its reserve status.
Once the old rot is cleared out, and assuming continuity, there will be the basis for the establishment of a new order.
There will be what Strauss and Howe calls a First Turning . It will be constructed out of the physical infrastructure, wealth, energy sources, thoughts and values in the culture at the time. At this point in time, those components are unknowable. We can anticipate that the next future will be increasingly chaotic. We can anticipate that there will be destruction, and then reconstruction from some level. We cannot yet anticipate the form of the reconstruction or the level from which it will begin.
(Added in the early 00s) While humans are contributing to global warming, policies implemented to address manmade global warming will create a significant energy crisis, probably toward the end of the Fourth Turning.
(Added around 2020) The loss of faith by our youth in our founding principles means that the new order will at least partially be based on new principles. As yet, I have no visibility as to what those principles might be.
(Added in 2023) The lowering / elimination of standards in education, the judiciary, law enforcement, the military and other segments of our society will create a population unable to adequately comprehend, do or respond to the challenges of democracy and culture.
(Added in 2025) China has won - at least for the next 5-10 years. The US is dependent on China for the materials it uses to create defense items. We literally cannot fight China without China's help. China's industrial base is impressive; the US has to rebuild. China is out-innovating the US. China is turning out more engineers and scientists than the US by far. This does not mean that China does not face challenges - demographics perhaps being its primary challenge. The US military remains stronger than China's, but in an age of drone warfare, that statement means less than it has historically. The US still has bargaining chips and will need to use them to maintain any kind of status quo.
(Added in 2025) AI has the potential to profoundly affect human culture. However, AI faces several significant hurdles, including the demand for massive amounts of electricity, which may not be available, and a cultural revolt against its existence. Since it could be existential, and since China is pursuing it, the US has no alternative, at least in the short term.
(Added in 2026) Maneuvering for control of critical materials will be a primary driver of geopolitics for at least the next decade.
We Are All French - The End Game For The Welfare State
October 23, 2026
Quotes to Contemplate
We all know what to do, but we don't know how to get re-elected once we have done it. - Jean-Claude Juncker
The truth is that, as a group, the developed world stopped getting richer a long time ago, and we've used every credit card we have to pretend otherwise. - Juliette Declercq
Trust is not a soft asset. It is the core operating system of civilization. - Tony Deden
If the Fed was like, "the internet is being hacked beyond our wildest comprehension, and our quarter-point decisions aren't changing anything amid fiscal dominance and energy crises, so we're just going to hold firm and watch the mayhem", that would be a reasonable outcome. - Lyn Alden
Some of the things that are happening in America now are genuinely banana republic type stuff, and if America, this shining city on a hill, has turned into a banana republic, what chance do the rest of us have? -
Grant Williams
Why is the stock market ignoring higher interest rates? Because they’re not high. They were way too low for too long, and we got used to that. - Jim Bianco
Summary of Primary Thoughts To Contemplate In This Issue
The welfare state, as with all things, contains the seeds of its demise when taken to extremes. The riots in France signal the beginning of the end of the welfare state in the West. But it will take a while as part of the Fourth Turning.
After the 2028 election, Congress will have no choice but to focus on the 2032 crisis in Social Security.
We Are All French - The End Game For The Welfare State
As best I can tell about the French riots, because there is so much political correctness involved that truth is difficult to discern:
The French will riot over almost anything, anytime. Rioting is just not as unusual in France as in most places.
This round began in minority school districts in Paris over what seem to be legitimate complaints. Not clear why burning schools down was the answer.
Various groups - the far left, Antifa and anarchists among them - piled on and it was on. Rioting and burning about a large number of complaints, including lowering the retirement age to 60. The destruction is now general and not focused on schools, although some 24 schools have been damaged.
France has debt, deficit, entitlement and budget challenges that have led to a continuing decline in their educational system, including its physical plant.
Outbreaks have spread to Portugal, Italy and other countries.
This is important because it underscores a key dynamic in the West. We have given out free stuff to the point that people expect and demand and depend on more free stuff. And in providing more free stuff, we have neglected maintenance on the previously-provided free stuff, creating frustration. And, in most places, not the US, yet, but close, the money, what Europeans call "magic money," is running out. (Probably the first magic money test in the US will be associated with Social Security "insolvency" in 2032, although the bond market could break prior to then.)
And then various leftist groups pile on their grievances.
This is the end game of the welfare state and integral to the Fourth Turning.
Read that again - This is the end game of the welfare state and integral to the Fourth Turning.
It is a primary example of the general erosion of discipline at all levels of society.
Here is this week's lead editorial in The Economist, tinged by political correctness in what it does not say: "I've seen many riots and spoken to rioters and their victims. A pattern emerges. Young people, some flushed with fury about injustice, others exuberant with the thrill of violence, smash windows, burn buildings and loot shops. In the aftermath life gets worse. Investors and insurers shun the worst-affected areas, so jobs vanish and groceries become costlier. I’ve seen this story play out from Lesotho to Louisiana. So I doubt that the rioters in France will build a fairer society. Torching public schools is an odd way to try.
As we argue in our cover package this week, protesters across Europe have plenty of genuine complaints. Recent riots have not, as MAGA pundits breathlessly speculate, been led by Islamists or masses of rowdy immigrants. They are largely home-grown, and focus on bread-and-butter issues. People are fed up with high prices and meagre job opportunities. They want more subsidies, better public services and someone else to pay for it all.
And therein lies the snag. Growth has been feeble and public finances are a mess, especially in France, despite its clout in Brussels. When Emmanuel Macron, its centrist president, faced huge gilets jaunes demonstrations in 2018-19, he was able to placate protesters with handouts. This time, with public debt perilously high, he cannot meet their demands. So they will stay angry. Worse, they seem likely to embrace the politicians of the populist left and right, who promise goodies for all from the magic money tree, plus early retirement if you don’t like working. Next year France may elect as president Marine Le Pen, who pledges both implausible spending and public order, with a hint that disorder is largely caused by, you know, people whose ancestors weren’t Gauls.
The political centre in Europe is in serious trouble. Voters are frustrated, and tempted to try something radically different. Germany’s pedestrian chancellor has no answer for the nationalist-right Alice Weidel, who wants to cut off support for Ukraine. Spain’s centre-left prime minister will probably be turfed out soon. Italy’s far right is on the march. Europe’s more extreme parties have no serious plans to revive growth and—obviously—no access to a magic money tree. So voters who entrust them with power will ultimately be disappointed. But in the meantime, they can do grave harm."
Luke Groman has a quote that sums up the situation succinctly - paraphrasing - The Western countries have used fiscal policy as the price to buy political stability.
Now that the money is running out, political stability is running out.
So, You Say You Want A Revolution?
> There are rumblings about a Xi, Putin, Trump summit. It may be nothing or the Earth may shake.
> Last week I talked about Trump throwing Hail Mary's in an attempt to salvage something from the midterms. One of those, that I consider despicable, is easing sanctions on Russia in order to get fuel prices down. However, that sword is double-edged. A great deal of disagreement by both Republicans and Democrats for that move.
> JP Morgan CEO Jamie Dimon warned in 2016 that we had 5-10 years until Entitlements would become "a tragedy we can see coming", "creating intergenerational warfare & scapegoating [that] will make for very difficult & bad politics."
And, here we are.
> Elections - abortion. Anybody talking about abortion? Anyone?
> MUST LISTEN/WATCH - Neil Howe on Thoughtful Money - how to prepare yourself for the endgame - here.
> Elon plans to give every kid in America a share of SpaceX.
> Be careful what you ask for - 6.24 million patients in the UK are on a waitlist for hospital treatment. 2.56 million have been waiting over 18 weeks.
> Trump announced a new Department of Agriculture program offering $8 billion to farmers during harvest season, as rising diesel costs strain operations nationwide.
"And when the Republicans win, we will pass even more funding for our farmers," Trump told a standing-room-only crowd of thousands during a rally in the Heartland Credit Union Arena in Park City, just north of Wichita, Kansas.
> The Tocqueville effect (also known as the Tocqueville paradox) is the phenomenon in which, as social conditions and opportunities improve, social frustration grows more quickly.
> George Will captures the moment in the title of a recent article - "The cascading absurdities of a downward-spiraling presidency."
The Market
Interest on the US debt just hit $1 trillion, annually.
The retracement I have been looking for is under way - including bitcoin and gold.
The Iran War and the Ukraine War
> Trump is at it again - vacating bases, moving ships - as if he is getting ready for another strike. He has directly threatened the mountain where the nuclear fuel is stored with the Mother of All Bombs.
Israel has planned another strike and is waiting for Trump's approval. They may go forward without it.
Iran has said they will widen their retaliation if there is another strike. (They say they have the "father of all bombs.")
Most of the time, this is just bluff and bluster.
However, there is the possibility that he is serious.
I believe the Israelis are, regardless of Trump's true position.
> Energy and food crises still intensifying.
> A Russian satellite has been making hostile moves toward a U.S.-registered commercial satellite providing radar data in support of Ukraine, raising urgent questions about Russia’s intentions and the rules governing behavior in space.
> General Sir Roly Walker, Chief of the Army General Staff in the UK, has declared that Britons will be required to make sacrifices for their country in a coming war.
He addressed around 700 soldiers at Catterick Garrison and laid out the coming reality in plain terms. "You didn't know this, but our nation is going to need you," he said. "There was a time that our nation didn't want to think of a time when it would need its soldiers to fight in a war. Indeed, very soon, the political leaders of this country will start to have a frank conversation with the citizens of this country about just what is going on and where the risk lies."
He continued that citizens "have got to consent to sacrifices to prioritise defence and security" and that they will be asked "to play a part in the defence and security of this country." Ultimately, he said, the public must "back us, to back you to do the one thing that you do that nobody else gets to do and that is to take the fight to the enemy."
> AI data centers could soon require blast-resistant concrete, anti-drone defenses, & missile protection as attacks on computing infrastructure escalate worldwide. — Financial Times
> The US military has quietly been evacuating US troops at bases across the Middle East in recent days, reducing the troop presence, with the State Department ordering further staff reductions at multiple diplomatic posts in the region, per two US officials to NBC.
> Zelensky says he is willing to give up 25% of Ukraine to Russia to end the war.
> My daily report from Claude on Iran for today:
The biggest shipping-attack day of the war — framed by Tehran as doctrine, dismissed by Trump as theater. Iran said seven oil tankers were attacked in and around Hormuz Wednesday: the IRGC Navy claimed four vessels engaged in “illegal oil transfers” in the northern Gulf were simultaneously struck and set afire, while three more hit mines west of the strait. This arrived packaged with Tehran’s formally unveiled “offensive doctrine” — the lesson, per analysts, of two years in which pure retaliation failed to deter — and an explicit IRGC threat to strike US bases across the region if the Navy continues escorting ships. Washington’s posture hardened in kind: the US ordered diplomatic staff out of Saudi Arabia, is repositioning personnel at regional bases, and — per ABC and Fox sourcing — the US and Israel have drawn up specific plans for renewed post-midterm strikes on Iran’s energy infrastructure, nuclear facilities, and missile/drone arsenal. Trump’s framing ran both directions in 24 hours: there are “no negotiations” and something will happen “fairly soon” — but also that Iran is “making up fake hits” to drive oil up before the midterms (two weeks after blaming Ukrainian refinery strikes for the same prices). An unconfirmed report of a US strike on IRGC launchers near Sirik would, if true, mark the pause’s first breach. Rezaei kept the exit cracked open: “If diplomacy can create this understanding, we prefer diplomacy.”
The Saudi front deteriorated materially: Houthis hit Dammam’s airport — on the east coast, in the Aramco heartland — killing two, Saudi forces intercepted five drones, and the Houthis captured a key segment of the Taiz–Aden road, their most significant Yemen ground gain in months. Greece began implementing Iran-linked shipping sanctions under US pressure. And the domestic politics sharpened on both ends: leaked audio caught a Republican Senate candidate calling the war a mistake (“maybe we’re going to lose the soft power war”), while in Israel — voting Monday, October 27 — Netanyahu stands accused of wanting renewed war before the election (denied), with front-runner Eisenkot stating flatly there is “no direct, immediate threat... that necessitates a war prior to the election.”
> My daily report from Claude on Ukraine for today:
Witkoff met Putin; Putin answered with cluster munitions on Kyiv. The week’s diplomatic centerpiece — envoy Witkoff’s St. Petersburg meeting with Putin — produced a Kremlin statement of willingness to resume peace talks, the release of American Stephen Hubbard after four years, and Trump declaring the war “as close as it’s ever been to ending.” Within hours, Russia struck Kyiv with three ballistic missiles carrying cluster warheads — one hitting the capital’s historic center — killing four there and seven nationwide, wounding dozens including children, and knocking a major DTEK thermal plant offline. Kyiv’s verdict: “appeasement will not end war.” The material squeeze on Ukraine tightened on two axes: Zelensky confirmed the US is cutting Patriot interceptor deliveries just as Russia telegraphs intensified ballistic attacks, and Kyiv publicly denied reports that Trump and Musk had restored Starlink speeds — the throttling dispute now a standing feature. Meanwhile the Trump-Moscow diesel deal produced its first physical artifact: Russia is sending its first diesel tanker to the United States — Russian refined product sailing to American ports while Russian missiles hit Ukrainian power plants, which is as clean a summary of the moment as exists.
Ukraine’s counter-pressure is working better than the headlines suggest: Bloomberg reports Rosneft executives privately concede the refinery-strike losses are becoming unsustainable, with lasting damage possible within months — independent corroboration of Putin’s own 1%-of-GDP admission. Kyiv launched 630 drones at the Moscow region in a single night (163 at the city), struck a Moscow Oblast weapons plant and an electronic-warfare station, and infiltrated the Russian rear near Kupiansk through 15 kilometers of gas pipeline — the Avdiivka tactic, inverted. The strategic picture: both sides now believe their energy campaign wins by winter; Witkoff’s channel is live but being answered with escalation; and Washington is simultaneously brokering, arming less, and buying Russian diesel.
The Quiet Part Out Loud
One of my long-held theses is that the US would have to withdraw as the world's policeman for the simple reason stated in the We Are All French Now article - we can't afford it.
Following is a Wall Street Journal article in which the Trump administration says the silent part out loud and validates my prediction.
Trump Envoy Tells Nervous Gulf Allies U.S. Can’t Guarantee Security Forever
Regional security officials received a sobering American message as they gathered in the Qatari capital and braced for a potential new round of escalation between the U.S. and Iran: They need to look out for themselves.
Tom Barrack, the U.S. ambassador to Turkey and President Trump’s special envoy for Syria and Iraq, said the grand bargains that have underpinned global security for decades are undergoing major transformation, and countries in the Middle East and elsewhere should focus on securing themselves via regional partnerships.
“America as the guarantor to the world, for the last 80 years, it is no longer there,” Barrack said at the Global Security Forum in Doha, an annual summit that brings together top security officials and experts from around the world. “What’s happening in this administration is not an abandonment. It’s a message for realignment.”
“And that message is like raising a teenager. It’s not easy,” he said.
Arrangements forged in the wake of World War II—essentially a quid pro quo whereby the U.S. provided security in exchange for oil—no longer fit Washington’s imperatives, Barrack said. Americans don’t want to sacrifice their lives for the Middle East, and Gulf states know the U.S. can’t assure their security, he said.
He said the region is right to pivot toward smaller and more diversified alliances like the new defense pact between Saudi Arabia, Pakistan and Turkey. But he acknowledged the transition would be uncertain.
“We don’t have a playbook,” he said. “We’re all on audibles. We can go one play at a time.” Trump administration officials have delivered similar calls for self-reliance at security gatherings in Europe and Asia.
Gulf states tried and failed to talk Trump out of going to war with Iran. Barrack’s message lands as they worry the U.S. will retreat from the conflict, leaving them to deal with an angered and newly aggressive foe. Many are questioning whether they can rely on the U.S. as a partner even as they recognize there are no good alternatives to its military technology and backing.
Barrack said the war launched by the U.S. and Israel in late February brought unexpected consequences, likening the Middle East to a Rubik’s Cube whereby a single move can change the whole picture. He said there are lessons to be learned and limits to U.S. power.
“Every time we try and intervene and change the person or the regime, it seems to have been a mistake,” he said, pointing to Iraq, Libya and Afghanistan. American administrations have long hoped to disentangle the country from the Middle East without success. Even now, the Trump administration is delivering a mixed message.
Short Takes
> I'm avoiding all things Ilhan Omar. However, we may have seen the birth of a new meme. When asked if her husband was her brother, she responded, "Not to my knowledge."
The Bee (of course) followed up with - Not sure you married your brother? Nine signs to look for.
(Kit - I am positive we live in a simulation.)
> I don't know how to put into context the bug that was found in websites, but monumental would begin to describe it.
Things are happening on scales - time and size - that we are simply not prepared for.
> One of the fun, touristy things to do in New York City is to ride the horse drawn carriages around Central Park. They are now banned in 2028.
> A Glasgow museum has pulled Egyptian mummies and other human remains from public view because the long-dead never provided "informed consent" to be displayed.
> What a world we live in - Bernie gives a million dollars to El Sayed for his campaign. As the Bee put it, "Millionaire who hates millionaires gives $1 million to another millionaire who hates millionaires so they can defeat third millionaire."
Gallery
Miscellaneous
The Washington Post ran Cato's ranking of freedom in the 50 states. Here are the top and bottom states.
In case you are wondering, California comes in just above Alabama.
You can access the full Cato article here.
Election Issues Summary
Maybe you are seeing a trend here. A lot of emotional arguments by candidates that, as a practical matter, cannot go anywhere. People are upset, so candidates promise they can do something about whatever is upsetting you, when they actually cannot do much.
Not only can these problems not be solved, they are, imo, the wrong problems in the first place.
What do I think the most important issues facing the US are? What should we actually be talking about?
1. Debt and deficits - there is a severe decrease in living standards in our future. This is the inflation problem, but no one is discussing it in these terms.
2. AI's impact - it is probably both inevitable and life-changing. We need to begin to figure out what that means.
3. The shared premise that election results, court rulings, and the neutrality of enforcement are binding on the losing side. Both coalitions currently believe, sincerely, that key institutions have been captured by the other — which is exactly the condition under which legitimacy erodes fastest, because each side's defensive measures confirm the other's suspicion.
4. Demographics and immigration - getting control of the borders was important, but now we have to create a viable immigration system. Primary points of discussion include that we are not replacing ourselves and we need skilled and knowledge workers.
5. Healthcare - our system is expensive and dysfunctional. We literally need to tear it up and create a new one. "Medicare for all" is not only a bad idea, it is rearranging the deck chairs on the Titanic. There are no other ideas on the table.
6. Redefining our role in the world. We cannot afford to rule the world. The world will become an increasingly unstable place once the US begins withdrawing. And it will fracture into power zones. It is not clear where the US will end up over the next 5-10 years when the first iteration of this change will take place. This process will likely encompass one or more wars of varying magnitudes.
Social media, crime, drugs, loneliness, climate change etc., are important, but don't make the top 6. Also on that second list is the dysfunction of parts of the black community. We are wasting a lot of lives and generating a lot of crime, but not as fundamental as the top 6. Another of my hobby horses - the incompatibility of Western values and fundamentalist Islam - is just now beginning to pop up in the US. Far from important now, but the world may look different in 5-10 years.
People running for Congress are doing so on unrealistic, all-but-irrelevant platforms at a time when Congress is not doing much of anything, anyway.
In the meantime, the beginning of the end of my predicted end game has officially begun.
"There is a tide in the affairs of men" and we are now caught in it and have lost most of our ability to do anything but go with it.
Scorecard so far - political position vs. the real world:
Doing away with the Electoral College - all but impossible.
Doing away with the Senate - all but impossible.
Packing the Supreme Court - doable with control of both Houses and the Presidency and elimination of the filibuster.
DC and Puerto Rico statehoods - Huh?
Doing away with inflation - our economy will have disinflationary and maybe deflationary periods, but the inevitable end game for our debt and deficits includes higher inflation and a lower dollar. In general, allowing for volatility, inflation is inevitable. Look for typical, self-defeating, political tactics like rent and price controls to make everyone feel better as pressures increase and foundations rot.
Medicare for all - highly unlikely and, if implemented, a total shock to the system as severe rationing of health care sets in. Our healthcare system badly needs significant reform, but this is a very, very big, complicated problem.
Taking down prisons - kinda fringy, some justification in the sense of reforming prisons. Overall, bad idea. Expensive and resource intensive.
Shut down ICE - Fundamentally changing immigration law is up to Congress. You can throw actual ICE overboard, but someone will have to take up the slack. Practically, the call to shut down ICE is an emotional response to real events and not a viable platform. Meaningful reform of immigration will take a lot of work, however, the process can be much better managed.
Climate change, in spite of being a valid concern, is falling off the election-subject-matter map.
Gun control - going nowhere anytime soon.
Insider stock trading by Congress and the President - common knowledge corruption; voters do not like it. Any useful bill is unlikely to be passed. But candidates can virtue signal at will.
Term limits and gerrymandering are on the laundry list of pro forma-but-required virtue signals that will go nowhere.
Data centers - hysteria everywhere. Real, knotty problems will likely be addressed after the elections.