Morgan Housel

In 1970s, everybody got their information from Walter Cronkite.

Now everybody gets their information from their own little custom bubble.

So it's a very different era, right?

Or impact theory.

So it's a very different era.

But I think the general idea that it's very difficult to foresee that the same forces that are causing a lot of problems plant the seeds of their own demise, plant the seeds of pushing in the other direction to move things in the other direction.

That's a powerful trend over history.

FDR was a mover.

you'll get to a point where, I think what's important is that in financial markets, the stock market and importantly the bond market,

You can't threaten the bond market.

You can't scare the bond market.

You can't arrest the bond market.

It's its own beast that's going to do whatever it wants to do, even outside the control of the Federal Reserve.

The bond market is a very gigantic market, and it's going to react however it wants to react.

The reason why deficits have gotten this bad and persisted for so long is because the bond market has not pushed back at all.

By and large.

And so politicians will run any deficit that the bond market will tolerate.

And I think there's virtually no exceptions to that.

And so the correcting mechanism will be when interest rates rise to a meaningful degree and politicians are forced.

They will never act until they're forced to do it.