This blog post was triggered by my theories on how the tyranny of taking care of elders will encroach upon every expense the state adds to the taxpayer, even our transport.
TLDR
We just witnessed history's largest social experiment — and it bombed spectacularly. For millennia, families cared for their own. Then we outsourced elder care to the state, promising freedom from obligation. The result? 28% of seniors now die alone, birth rates have crashed to 1.6 kids per woman, and a shadow economy of private equity, venture capital, and hedge fund vultures and Wall Street pension raiders extracts trillions while providing worse care than your grandmother would have gotten in 1950. Meanwhile, retirees are fleeing high-tax states for Florida and Texas, breaking the whole Ponzi scheme. Europe already solved this math with 20%+ VAT taxes on everything — that's our future. We dismantled the most fundamental human bond and replaced it with extraction industries that profit from misery. No civilization has ever done this and thrived. We won't be the exception.
The General's Warning
There was a point a few summers ago where I spent time in DC— not the tourist part, the real part where they keep the scary smart folks — I sat across from a marine and a 4 star general who had killed several hundred people on behalf of the US federal government and learned a thing or two.
In a sense, my long and meandering discussions with the marine and the general had me think that "Rome didn't fall because historians could forecast its decline. Rome fell because it was hit by big, nasty, unexpected disasters that it was too weak to stomach."
I think we should call it peak civilization sensitivity. When you're at the top, everything becomes brittle. Every shock becomes existential.
Peak Civilization Sensitivity
That's us, by the way. Peak civilization sensitivity. And we're sitting in the blast radius of something gnarly — we don't know what without extreme speculation — but it's coming within twenty years or less. Maybe sooner.
America's Caste System
Here's something that'll make you uncomfortable at your next dinner party: we created a caste system in America. Not the official kind they had in India — no, we're way too clever for that. We built something more insidious, more deniable, more perfectly American in its ruthless efficiency.
America's Caste System
The Perfect American Lie
The licensed class versus the unlicensed. The credentialed versus the uncredentialed. The leveraged versus the overleveraged. And at the very bottom — because this is America, and we always need someone to look down on — we have the fatherless kids who never had a chance to begin with.
What's brilliant about this system is how it maintains perfect deniability. "Anyone can make it in America!" we say, and we're not technically lying. But try climbing from the bottom tier — say, unlicensed, ex-con, college debt, no assets, no dad — to the top. It's about as likely as winning the lottery.
America: Still the Best Bad Option
But here's the thing — and this is crucial — despite everything I'm about to tell you about how broken this system is, I still believe America offers the greatest upward mobility on the planet. There's no close second that I know of. Yeah, the game is rigged, the deck is stacked, and the house always wins. But at least we have a game. Most places don't even pretend to shuffle the cards.
The Great Outsourcing
Fast forward to this summer — I'm out on Montauk, eating fresh catch in a tribal chief's backyard with a Marine and some other genuinely patriotic folks who actually understand what we're losing. Wild times, honestly. And somehow — maybe it was the seafood, maybe it was the setting — we start talking about Russell Means.
Far less glamorous than this of course, but you get the point.
Russell Means Saw It Coming
Russell Means, the Oglala Lakota activist who co-founded the American Indian Movement, understood what we were throwing away better than anyone. "So Indian policy has become institutionalized and the result has been that American people have become more dependent on government and that the American people have become more dependent on corporations," he warned. The chief — between bites of lobster that tasted like freedom itself — hands me this book: If You've Forgotten The Names Of The Clouds, You've Lost Your Way: An Introduction to American Indian Thought and Philosophy. Required reading, he says, if I want to understand how civilizations actually die.
Russell Means saw the destruction of Indigenous family structures as a laboratory for what the powers that be would eventually do to everyone else. For millennia, Indigenous communities had figured out something we're still learning to our cost: sustainable societies depend on direct, personal obligation, not institutional intermediaries.
The Laboratory of Family Destruction
"Wounded Knee happened because Indian people wanted to survive as Indians and there wasn't any way to survive, so we made a stand and made a statement, but now Indian people are beginning to rebound, rebound according to their [concept of] Beauty. And that's really what's necessary. To understand: Indian people have to become free again."
What Means understood — what both the general and the tribal chief were trying to tell me — is that when you replace blood obligation with bureaucratic process ....then you lose the fundamental human relationships that make a society sustainable.
The elders who once held the wisdom become "clients." The children who once learned by caring become "workers." The family unit that once provided meaning becomes a collection of strangers united only by tax policy.
The $3.2 Trillion Deal
But we had a different vision. In the United States today, that obligation has been deliberately outsourced to the state. Workers surrender roughly 7.65% of every paycheck to Social Security and Medicare — that's 15.3% if you're self-employed, which is what you're really paying anyway since your employer's "match" is just wages they didn't give you. In 2024, this extracted $3.2 trillion between Social Security ($1.5T) and federal health programs ($1.7T).
The deal was simple: we'll take your money now, and when your parents get old, the government will handle everything. You won't have to move back home, won't have to retrofit a bathroom, won't have to drive to doctor appointments or argue with your dad about taking his pills. Just keep paying your taxes, and someone else — someone professional — will do the hard work of caring.
What We Bought With That Deal
You know what nobody talks about? How we've created this bizarre system where your grandmother — who used to matter, who used to be integral — now dies alone in a fluorescent-lit facility that costs more than most people's mortgages. Think about this for a second — really think about it. Your tax dollars built this machine, and now it's eating everything in sight.
Roughly 28% of Americans over 65 now live alone — that's more than 16 million people aging in solitude. Compare that to 1950, when fewer than 10% lived alone. We didn't just outsource elder care; we accidentally purchased mass abandonment.
And here's the kicker — it's primarily a women's problem. After age 75, 43% of women live alone, compared to only 24% of men. Women outlive their husbands and are less likely to remarry.
The Birth Rate Cliff
Our US birth rate hit a record low in 2024 at 1.599 children per woman — well below the 2.1 replacement rate needed to maintain a population. We're tracking exactly like Western Europe, which should terrify anyone who's watched those societies age into economic irrelevance.
The logic was impeccable: outsource the hard parts of family life to the state, free yourself from obligation, pursue your career and your dreams. What we didn't see coming was that when you remove all the reasons to have children — when grandparents are someone else's problem and eldercare is a government service — people stop having children altogether.
The Machine That Eats Everything
But here's what really happens when you surrender the most basic human responsibility to bureaucrats and their spreadsheets: your money gets weaponized against your cost of living and it inflates rapidly.
Nursing home costs jumped 7-9% in just one year, hitting $111,325 for a shared room — and that's the national average. In Alaska, you're looking at $364,452 annually. For a shared room. To park your mother next to someone else's mother in a place that smells like industrial disinfectant and broken promises.
Where Your Money Really Goes
None of that extra money goes to better care. It doesn't buy more nurses or better food or even decent sheets. Survey after survey shows the same cost drivers: inflation, labor shortages, and "economic factors" — which is corporate speak for "we're charging more because we can."
The money flows into what they euphemistically call "financial roll-ups" — private equity firms that can acquire nursing homes individually without triggering antitrust review, because each deal looks small on its own.
Private Equity, VC, and Hedge Fund Death Merchants
From less than 1% in 2005, private equity now owns at least 9% of all nursing homes, though the Government Accountability Office admits the real number is probably closer to 13% because ownership structures are deliberately opaque. And here's what happens when the money boys take over: patient mortality rates jump 10% higher, staffing gets slashed, and cash reserves drop by 38%.
Think about that. Thirty-eight percent less cash on hand. When your grandmother needs something — when anyone needs something — there's just... less. Over a twelve-year period, researchers estimate that private equity ownership of nursing homes killed 20,150 Americans. Twenty thousand people. Dead. Because some fund manager in Manhattan needed to hit his quarterly numbers.
The Pension Heist
Nursing homes are just the visible part of the iceberg. The real extraction happens in the shadows because public pension money is not transparent - a far cry from the ERISA laws that created private pension transparency.
Remember those $5.5 trillion in state and local pension assets? The money you "deferred" instead of taking as wages? Well, here's where the real theft happens — not at gunpoint, but through Excel spreadsheets and deliberately opaque contracts.
400% Fee Increase Nobody Talked About
In Minnesota alone, after teachers crowdsourced their own investigation, they discovered their pension fund was underreporting Wall Street fees by 400%. Think about that. Four hundred percent. Fees jumped from $24 million to $105 million when they finally bothered to look.
The teachers had to use GoFundMe to audit their own retirement money. Seventy-eight thousand dollars raised by teachers to pay Edward Siedle to do what their elected officials refused to do — tell them where their money was going. And this is just one state.
"The Loophole That Is Swallowing America"
Siedle, a former SEC attorney who's made it his mission to expose pension fraud, estimates that public pensions across the country waste "tens of billions of dollars each year" on risky alternative investments. He calls it "the loophole that is swallowing America." In Rhode Island, they'll pay $2.1 billion in fees to hedge funds over 20 years — almost exactly matching the $2.3 billion they're saving by freezing workers' cost-of-living adjustments.
The Demographic Cliff We're Already Falling Off
But let me tell you when this whole house of cards really comes crashing down. It's not some distant crisis we can kick down the road — it's happening right now, in real time, in the spreadsheets of every state pension board that bothers to look.
27.69 Old People for Every 100 Workers
The U.S. old-age dependency ratio hit 27.69 in 2024 — meaning for every 100 working-age Americans, there are nearly 28 people over 65 who need support. That's up from 49.0 total dependents per 100 workers in 2010 to 53.7 by 2019, and the curve is just getting steeper.
Here's where it gets really ugly: the math only works if the young keep moving to where the old live. But something else is happening — something that's going to shatter the whole pension Ponzi scheme faster than you can say "actuarial assumptions."
The Great Escape
The retirees? They're running.
The Great State Arbitrage
Texas and Florida were the two most popular destination states in 2023, with 7.6 million people (more than 2% of the U.S. population) moving to income-tax-free states. And guess who's leading the exodus? California and New York originate almost 30% of interstate retirement moves — exactly the states that need those retirees to stick around and pay taxes to fund the system they spent their working years paying into.
[Suggested image: A map of the United States showing massive arrows from high-tax states like California and New York pointing to Florida and Texas, with dollar signs flowing along the arrows]
The Beautiful Cruelty of the System
Think about the beautiful cruelty of this setup. You spend thirty years funding Illinois teachers' pensions, contributing to New York's state employee retirement system, building up those unfunded liabilities. Then the day you retire? You move to Florida, pocket the pension checks from your old state, and pay zero income tax on them.
Nine states charge no income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. The system was designed when people retired and died in the same zip code they'd worked in.
The Math That No Longer Works
Now? Three of the top five destination states — Florida, Texas, and Washington — don't tax residents' income. Meanwhile, back in the high-tax states they fled? The bills are coming due and there are fewer workers left to pay them. State dependency ratios range from 40.9 in D.C. to 74.5 in South Dakota — and those numbers are going to get way worse as the pension beneficiaries flee to warmer, tax-free climates.
The VAT Trap Europe Set for Us
You want to know where this ends? Look across the Atlantic. Europe figured out this math decades ago, and their solution should terrify every American who thinks we're somehow different.
More than 175 countries worldwide levy a Value Added Tax, including all major European countries. EU VAT rates range from 17% in Luxembourg to 27% in Hungary, with an average around 21%. Meanwhile, in the United States, combined state and local sales tax rates averaged only 7.5% in 2024. Three times higher. That's not a coincidence — that's the price of demographic collapse.
The Tax You Cannot Escape
See, when your birth rate crashes and your dependency ratios invert, income taxes stop working.
You can't extract enough from a shrinking base of workers to pay for an exploding population of dependents.
So what do you do? You tax consumption....everything..... at every stage of production.... whether people like it or not.
The Europeans didn't choose VAT because they're socialism-loving bureaucrats (though they are). They chose it because it's the only tax system that works when your society is dying.
My friend Adam Townsend writes a great blog post summation on VAT taxes here.
We both follow Adam Michel's writing and tweets as well, he's a pro at this stuff. Blog here.
The Coming VAT Reality
We're going to have a federal VAT within the next decade or two. Has to happen. The dependency ratios are moving in one direction, the interstate arbitrage is accelerating, and the pension obligations aren't getting smaller.
The Math That Forces Their Hand
You think Social Security and Medicare can survive when the fertility rate is 1.599 and still falling? When 43% of women over 75 live alone with no children to supplement their care? When every retiree can pack up and move to Texas the moment they stop working?
The states will demand it first — probably Illinois or California, whichever goes broke first.
They'll call it a "consumption tax" or a "transaction fee" or some other euphemism designed to fool people who think sales taxes and VATs are somehow different.
Before it arrives, you'll see weird taxes and tolls show up for everything the broke states can get its hands on.
15% Minimum — Just Like Europe
My bet is that they'll start at 3%, promise it's temporary, and within five years it'll be at European levels. The EU minimum VAT rate is 15%. That's where we're headed. The retirees moving to Florida today think they're beating the system. Really, they're just ensuring that when the VAT comes — and it's coming — it'll hit everyone, everywhere, on everything they buy.
No more state shopping. No more arbitrage. Just a federal tax that follows you wherever you go, embedded in every price, extracted from every transaction.
The Civilizational Question
Here's what nobody wants to say out loud: we conducted the largest social experiment in human history. We took the most fundamental human obligation — caring for those who cared for us — and we outsourced it.
The Deal We Made
We told three generations that they didn't need to worry about their parents, that they were free to pursue their careers and dreams and authentic selves. And what did we get? We got a society where 43% of women over 75 live alone, where private equity firms kill 20,000 nursing home residents for profit, where pension officials hide billions in Wall Street fees from the very workers whose retirement they're supposed to protect.
We got a birth rate that guarantees our own extinction as a people. We got extraction industries feeding off human misery while calling it compassion.
The Numbers Hurt
The fertility rate isn't recovering. It's still falling. The nursing home costs aren't stabilizing. They're rising 7-9% annually. The pension fees? They were never disclosed in the first place.
And the human cost? Sixteen million Americans aging in solitude, their children visiting at Christmas if they remember, their grandchildren strangers, their last years managed by shift workers who speak their name from a computer screen.
The Verdict.
This is the civilization we built. This is the deal we made. History offers no examples of societies that voluntarily dismantled private intergenerational support and then thrived. We won't be the exception.
Tactical Advice for the Young
Look, if you're reading this and you're between 22-35, here's the uncomfortable truth: you need to get real about your position in this chess game, and you need to get real fast. The window is closing, and the rules are changing faster than anyone wants to admit.
Rule #1: Location Is Everything
First: Location, Location, Location. You MUST spend a portion of your life after college living in a center of GDP — NYC, SF, or London — and build network and relationships and trust as a currency. I don't care if your rent is $3,000 a month for a closet in Brooklyn. I don't care if you're eating ramen and sleeping on an air mattress.
These places are where decisions get made, where deals get struck, where the people who matter actually live and work. Your career compounds exponentially when you're in proximity to other ambitious people who give a shit.
Rule #2: Wealth Must Compound
Second: Wealth Must Compound. Your twenties and early thirties are not about lifestyle optimization — they're about building the foundation for everything that comes after. You need to learn to live cheap and be frugal. Not because poverty is virtuous, but because every dollar you don't spend on stupid shit in your twenties becomes ten dollars in your forties.
The math is unforgiving, and time is the only resource you can't buy back.
Rule #3: Financial Literacy Is Non-Negotiable
Third: Financial Literacy is Non-Negotiable. There's no excuse to be financially or tax system illiterate in 2024. None. The information is free, the resources are everywhere, and the stakes are too high to plead ignorance.
You need to understand compound interest, tax optimization, asset allocation, and debt management. Not because you're going to become a day trader, but because the system is designed to extract wealth from the financially naive, and you refuse to be a mark.
Rule #4: Build Your Tribe
Fourth: Build Your Tribe. The atomization I've been describing doesn't have to be your fate. You need to actively, deliberately build networks of mutual obligation and support. Not just professional networks — though those matter too — but actual relationships with people who have covenant and posterity.
The state may have replaced family for previous generations, but you can't count on a good tribe being there for you.
Rule #5: Avoid Financial Cancer
Finally: Avoid Unproductive Bank Debt. Credit cards for consumption, student loans for degrees that don't pay, car loans for depreciating assets — all of it is financial cancer that will metastasize and kill your ability to build wealth. The only good debt is debt that generates income or appreciates in value. Everything else is a chain around your ankle in a system that's already rigged against you.
You're in Control and You've read this blog post
The demographic cliff is real. The extraction systems are real. The civilizational brittleness is real. But none of it has to be fatal if you're smart, if you're prepared, and if you refuse to sleepwalk into the future they've planned for you.
Personal Side Note: What first caught my attention wasn't the economics or demographics — it was watching this civilizational unraveling manifest itself in the physical scientific atomic world of materials energy balance mathematics.
For the first time in human history, we're actively moving against natural human behavior patterns: abandoning higher energy return on investment, accepting increased grid stress, embracing larger geological-chemical-industrial process footprints.
The EV and renewables invasion aren't driven by engineering optimization or thermodynamic reality — it's montauk trustwad kicking the can down the road-engineering masquerading as environmental progress. When a society starts choosing lower EROI systems while simultaneously destroying its demographic foundation, it's a sign something structurally deep is breaking.
The same financial extraction mechanisms hollowing out nursing homes and pension funds are now infiltrating our energy infrastructure, and the engineering reality is getting steamrolled by the same spreadsheet logic that convinced us we could outsource love.
I made solid returns on $POWL, $UAN, and $FCG by understanding the bastardization of natural human behavior and energy.
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