America's Puny Investments in the Future as Stark Contrast to Investments of our Greatest Presidents Jefferson, Lincoln, and FDR

1Q GDP equates to annual GDP of $26 trillion.

As a component of that, non-defense federal government investments are 4% of private investments.

That's incredibly puny if the game is to grow the economy.

Thomas Jefferson wanted a smaller federal government. (3rd president of the US, he died considering Virginia his country.) Yet even Jefferson was willing to invest in the future. Jefferson spent 2.5X the annual federal budget to make the Louisiana Purchase - an amazing investment for Jefferson (that represented needed financing for war for Napoleon). In the two generations after Jefferson's presidency, the US grew faster than any country in history.

Lincoln not only waged the costliest war in the nation's four score and seven years history, at the same time he funded an incredibly expensive transcontinental railroad and land grant colleges and other major investments. In the two generations after Lincoln's presidency, the US economy grew faster than any economy in history.

FDR increased government spending more than the GDP of most nations, with everything from social security and unemployment insurance to massive investments in the factories and science needed to win WWII. In the two generations after FDR, the US economy grew even more than it had after Lincoln's presidency.

Outside of defense, our national government is investing an amount that Jefferson, Lincoln, and FDR would consider rounding errors. It shows a pathetic lack of interest in future potential and suggests that Americans are more driven by fear than hope.

RWorld's 3,000th Post - We Make Our Institutions and Then They Make Us

We make our institutions and then they make us.

The political crisis we face is so pervasive that it is almost invisible: Americans have lost confidence in institutions. Every institution. Church. State. Media. Schools. On average, the portion of Americans who have confidence in institutions has fallen about 60% since the late 1970s. It's tough to sustain a society in those conditions.

Right now we have two response to this crisis. One is the Trump response of tribal impulses, cynically decrying every expert and the institution he rode in on as corrupt or misguided.

The MAGA crowd's take on institutions was articulated by Rush Limbaugh in 2009.
"So, we have now the four corners of deceit, and the two universes in which we live. The universe of lies, the universe of reality, and the four corners of deceit:
government,
academia,
science, and
the media.
Those institutions are now corrupt and exist by virtue of deceit.”

Rejecting the institutions that define our modern world is akin to embracing a Hatfield and McCoy kind of world where you can't do much more than live like early Americans from a time when it took about 90% of the population to feed us. It is a world that excites survivalists. 

That's a crazy path championed by crazy people.

The other option currently offered is essentially to pretend that these institutions are fine and people should appreciate them more. That actually works far better than societal collapse but it seems to consistently succeed at making more people more angry. Life is pretty good in this world but a growing percentage of people fail to believe that.

There is a third option that no one seems to be talking about.

Thomas Jefferson was part of radically redefining politics and government in 1800. Lincoln did the same about 1860, and FDR in the 1930s and 1940s. Along with Washington, these three presidents consistently rank the highest in historians assessment of great presidents. 

One thing that defined them is that they had far less regard for tradition than they did for future potential.

Our next great president will be the one who creates a way to redefine our institutions so as to restore trust in them and to realize our own potential, showing little regard for institutional tradition and a great deal of regard for institutions' ability to shape our potential. An inventor creates or improves a product. An entrepreneur creates or improves an institution. The next president to successfully change our country as much and as well as Jefferson, Lincoln, and FDR will popularize entrepreneurship, leading to a change in our institutions and our experience of them. Among the many shifts this will represent is a world in which our institutions conform to our potential rather than requiring that we conform to their traditions and constraints.

It won't just require someone who is looking more to the future than the past. It will require a shift in power akin to what Jefferson and the founding fathers made. By 1800, the US had shifted power from aristocrats to the people. (Okay. That admittedly is the 30,000 foot view of this nation's founding but still contains key truths.) This next great leader will do something similar within the institutions we rely on, shifting the power over shaping them from legislators who see them as something to be built once into the customers and employees using them to be continually shaped. Like previous, great democratic changes, this will shift power from elites to everyday Americans, making our democracy more democratic. 

Why Bitcoin is a Bad Investment and Futures You Should Buy Instead

Markets will eventually come back from last year's dismal performance. For those of you tempted by bitcoin rather than stocks, here are some things to consider.

One, bitcoin can never scale as a medium of exchange. It is scarcely able to process the number of transactions you'd need for a shopping mall much less a national or global economy.
The VISA network can process 24,000 transactions each second.
Bitcoin can process 5 to 7. It is not designed to support actual transactions and will never become a widely used medium of exchange.

So if it is not viable as a currency, can it be considered an asset? No.
If you buy a share of stock, you get a share of its future earnings, or profits. Bitcoin has no profits, represents no claim on any asset or wealth.
If you buy a bond, you are buying a right to interest payments and / or principle on debt held by a government or company. Bitcoin offers no interest payments or future payoff.
Assets have underlying value. Bitcoin does not.

Well, is it not - at least - a form of money or legal tender?
Again, no. The lowly dollar is legal tender. What does that mean? US dollars have written on them, "This note is legal tender for all debts public and private." If I owe you $1,000 for the really fancy shoes I bought from you, you are obligated to accept my $1,000 in currency or VISA transaction. It is the law. No one is obligated to accept your bitcoin for payment any more than they're obligated to accept a shiny rock or curious leaf you found on your walk.
Bitcoin is not designed to support transactions and thus replace currency, is not an asset and is not fiat money people are obligated to accept.

And finally - most importantly - it does nothing to move us towards a better future. One of the things I love about stocks is that I'm buying a future. 3d printing could enable companies to manufacture one custom part as cheaply as they might manufacture one of millions of the same part. That is a very cool future to buy.

mRNA promises not only vaccines for new viruses but the treatment of genetic diseases, cancer immunotherapy, and the development of personalized medicine that are tailored to your personal genetics. That, too, is a very cool future to buy.

Urban Air Mobility promises transportation that - among other possibilities - allows vehicles to travel above rather than through cities. It could effectively increase traffic through cities without any new construction, dependent on advances in advanced navigation and propulsion rather than billions of dollars in construction costs through and around existing buildings and infrastructure.

These and other possibilities are all uncertain investments and any specific investment you make might be in the wrong company even if it is the right idea. (In 1914, there were more than 250 automobile companies. Even if you KNEW that cars were going to be a big deal, you could easily lose on investments in the industry.)

When you buy bitcoin, you are not investing in any future. You're just hoping that someone comes along after you willing to pay more than you did. Given bitcoin has no intrinsic value and serves no purpose, the parade of people willing to pay more than the last guy is going to end soon.

And that's a great thing because there are so many exciting possibilities that need and deserve capital, futures waiting to be realized that actually make life better. The $3 trillion put into crypto could have been put into real technologies and companies that actually promise a better world. What you're trying to do with any investment is buy a future in which you're more financially secure and the world has better products or services at better prices because of the investment you made in a better future. Bitcoin is not that. So many other ventures, technologies and companies - by contrast - might be.