Sage Advice - What are the True Principles for Making the U.S. National Budget? (1/6)

As President Trump undertakes the urgent restructuring of the economy and the government, Congress remains trapped in British economic ideologies and has only the slightest clue as to how to budget for permanently advancing scientific and technological progress, raising the prosperity of all, including future generations, as the Preamble to our Constitution mandates. 

As usual, Lyndon LaRouche was decades ahead of the game, analyzing this problem, its cultural and epistemological roots, and its remedies in two major papers.  The first was written in January of 2006 and entitled “Deficits as Capital Gains, How to Capitalize a Recovery.”

The second was written for the Congress in December of 2006, “The Lost Art of the Capital Budget.”

We publish here excerpts from “The Lost Art of the Capital Budget" paper and will follow it up in Sage Advice with excerpts from “Deficits as Capital Gains.”  

These excerpts are intended to provoke you to explore the entire papers, an exciting journey through history, the true philosophy of our founders (it isn’t British and Plato and Leibniz played a huge role), and the nature of scientific revolutions.  We present here a kind of Cliff Notes to the Capital Budget paper, necessarily limited in scope.  Unlike others, LaRouche lays out the entirety of his axioms about the nature of human beings, life, and the universe in the paper to justify his conclusions. We’re mostly featuring the conclusions here.

The week, of March 16-22 2025, finds the budget debate at its hottest.

Our goal is simple: compare how LaRouche thinks about this and the principles and issues involved, versus how the debate is presented currently. 

That present mode of thinking, as LaRouche says, will lead to predictable failure. This is part of the understanding our organizers will be bringing to the Congress when we visit Washington the last week of March.

Here is LaRouche from “The Lost Art of the Capital Budget”

Since that notorious uproar of 1968, which erupted in Europe as in the Americas, the mayfly passions of the upper twenty percentile of today's reigning white collar ("Baby Boomer") generation, are frequently expressed as a loss of the desire for the practice of long-term marriages, a loss of caring for the prospects for younger generations, and a loss of any interest in investment in the future of the physical economy of other nations, or even their own. Hence, since that generation dominates our Senate and also much of our House of Representa­tives, our Congress had, in the main, lately misplaced the pivotal conception on which the future existence of our nation now depends: the concept of the capital budget. . .

What has been lost, is a sense of the meaning of "indispensable capital investment in the physical conditions of progress"; it means a loss of the meaning of the investment required, not only to rescue the U.S.A., but to secure the civilized future existence of the world as a whole.

Some among you are perhaps angered by my saying this? Think carefully. Witness the ration of members of the U.S. Congress who count every budgeted dollar of public expenditure as outlays which must be balanced by current tax receipts. From the standpoint of any competent economist, that policy is, in effect, the practice of ruinous, sheer, inhuman recklessness in economic policy of practice. . .

A Dangerous Mindset Introduced by the 68ers 

This was an effect shaped, to a large degree, by the stratum, from among the typical university-oriented Baby Boomers of 1968, which had launched a virtual state of class warfare, warfare of white collar against blue collar. They were, more and more, against farmers, industrial operatives, and physical-science­ based professionals. Many among them were even against anything which represented technological progress in production and infrastructure. That cultural paradigm-shift expressed by the 68ers, became the cultural matrix which has dominated the downward shift in values over more than a quarter-century to date. . .

That generation exported our industries to places abroad where labor was very cheap, and costs of basic economic infrastructure were chiefly disregarded, thus bankrupting not only more and more of our local communities, but also entire federal states . . .

 In fact, this practice, sometimes called "outsourcing," actually lowered the net physical productivity, per capita, of the world as a whole. More of the world's net productivity, per capita and per square kilometer, was actually lost in North America and Europe, for example, than was gained in Asia. . . 

Study our nation's downward plunging physical condi­tion, county by county, since Richard Nixon was inaugurated as President:

• Produce animated chronological representations of even the most common types of census figures compiled more or less regularly by governments, or by standard private agencies engaged in such economic studies.
•  See the shift in employment, from productive work-places, toward a virtually "Third World" quality of unskilled services.
•  See the collapse in revenues of states and counties, county by county, over these decades.

This ruinous trend of the recent thirty-five years, has not been an accident; it has been the product of policy-decisions made in places like Wall Street and the City of London, and imposed, from such places, upon our Federal and state governments . . 

This is the trend in policy-decisions which has now driven the nation into a state fairly described, at this moment, as a national economy teetering wildly on the brink of an abyss. . .

Free Trade and Globalization Are Unconstitutional 

Since the establishment of our Federal Republic, the fun­damental Constitutional law of our nation has been set forth as the Preamble of our Constitution. The promotion and defense of the security and general welfare of our republic, as much or more for coming generations, as for the presently living, is the principle to which all features of that Constitution are, and must be subordinated, including all amendments to the Constitution introduced since the founding, and into future generations to come.

To be continued tomorrow in Part 2.