An Outstanding Assessment

A very insightful piece from Simon Black.  I cannot add to this but to say, Mr. Black is spot on with his assessment of Americans today.

https://www.sovereignman.com/trends/new-poll-record-number-of-americans-want-more-government-in-their-lives-21388/?inf_contact_key=bca43013ae3658dd22297fe0e5837999bd3b2e4d6f6b2a81a9955af064c21ad9

April 24, 2017
Sovereign Valley Farm, Chile

In a poll conducted a few days ago by NBC News / Wall Street Journal, a record 57% of Americans responded that they want MORE government in their lives, and that the government should be doing more to solve people’s problems.

That’s the highest percentage since they started asking this question in 1995.

In fact, 57% is nearly double what people responded in the mid-90s.

Furthermore, the number of Americans who feel the opposite, i.e. responded that the government is doing too many things that should be left to private businesses and individuals, fell to a near record-low 39%.  

Bottom line: people want more government.

It’s hard to even know where to begin with this.

First- more government is nearly an impossibility.

As I’ve written several times in the past, the US federal government already spends almost all of its tax revenue on mandatory entitlements like Social Security, and interest on the debt.

They could literally cut nearly everything we think of as government– national parks, Homeland Security, even the IRS– and still not make a dent in paying down the national debt.

According to the US government’s own financial statements, their net operating loss in 2016 was an unbelievable $1.05 TRILLION.

Think about that– they lost more than a trillion dollars in a completely unremarkable year.

They weren’t waging world war, funding a major infrastructure project, or dealing with an economic crisis.

It was just business as usual. And they STILL lost over a trillion dollars.

More government is going to cost even more money that they don’t have… which means even more debt and even more pain in the future.

The usual refrain is to pay for more government programs by raising taxes on the rich, or big corporations, or whoever the evil villain du jour is.

Anyone who thinks this actually works needs to study history.

Simply put, RAISING TAXES DOES NOT RAISE TAX REVENUE.

I wish every Bernie Sanders voter could understand this very simple fact:

Since the end of World War II, US federal government tax revenue as a percentage of GDP has been nearly constant at 17%.

In other words, while the actual dollar amount of tax revenue goes up every year due to inflation and economic expansion, the government’s slice of the total economic pie is 17%.

Yet during the previous eight decades, actual -tax rates- have been all over the board– sometimes rates were higher, sometimes rates were lower.

Back in 1963, for example, the highest marginal tax rate on individuals exceeded an unbelievable 90%.

I’m sure there are plenty of Americans who would love to see the wealthiest citizens paying 90% again.

Yet in 1963, even with rates that high, the total amount of tax revenue that the US government collected was 16.7% of GDP.

In 1988 when the highest tax rate was slashed to just 28% under Ronald Reagan, total tax revenue 17.3% of GDP.
 
It doesn’t matter if tax rates were high or low– the actual tax revenue that the government collects stays constant at around 17% of GDP.

This raises a point that these socialists never seem to understand:

If the government’s slice of the pie never seems to change no matter how high or how low tax rates are, shouldn’t they focus on making the pie bigger?

Duh.

And it seems intuitive that higher taxes obstruct economic growth (i.e. make the pie smaller) because there’s less money in people’s pockets to spend and invest.

Then, of course, we have to touch on the issue of competence.

It’s absurd to want a government that has a nearly interminable track record of overreach, waste, and failure, to be even MORE involved in people’s lives.

We’re talking about the same institution that wastes taxpayer money to study monkeys on treadmills…

… or spent $1 billion to destroy $16 billion worth of perfectly good ammunition…

… or $2 billion to build a website.
 
It’s extraordinary that these people are already in charge of educating our children, regulating our savings, and now our medical care.

It’s even more appalling that given such dismal performance people want more.

As the old saying goes, the classic definition of insanity is trying the same thing over and over again and expecting a different result.

A final point I’ll mention is that it’s concerning to see people in the Land of the Free and Home of the Brave expect the government to solve their problems.

What ever happened to self-reliance? The pioneering spirit? Good ole’ American can-do ingenuity?

In truth there are countless ways for a motivated person to solve problems. Or at least to make forward progress.

For example, to all these kids that have their hands out demanding free university education, I always ask the same questions:

How many books did you read in the last twelve months?

How many FREE online courses from Harvard and MIT did you take?

Are you actually doing anything to help yourself? Or are you just whining on social media about how no one is giving you anything for free?

America was founded as a place where people take responsibility for themselves.

But this now seems to be an outdated, minority view.

The Land of the Free is truly becoming the Land of Getting Free Stuff.

 

Until tomorrow,

Simon Black

Founder, SovereignMan.com

Basic economic laws should not be thwarted

In the United States of America, the state continues to deploy failed policies that violate basic economic principles to the detriment of the entire society it seeks to control.   This failure can be seen in America’s Welfare State and progressive income tax program. The former subsidizes individual actions and life styles that can contribute to poverty and the later discourages income and wealth generation. Simply put, basic praxeology shows us when you subsidize something you will get more of it. Tax and regulate something you get less of it.

Since the amalgamation of the Revenue Act of 1916 and FDR’s New Deal, (in which the state used taxation, targeted subsidization, and regulation in an attempt to alleviate and or mitigate its definition of poverty among its citizens), the state began to extremely violate the aforementioned basic principles of human behavior.

In FDR’s “First New Deal” (1933–34), many programs were instituted using state subsidies to pay people who did not work and create new regulations for the banking and industrial sector which increased their moral hazard in an attempt to combat the impact and causes of the Great Depression.

FDR’s “Second New Deal” (1935–38) went further and fully institutionalized state involvement in the nation’s personal behavior in an attempt to address the effects of the ongoing economic crisis.  Programs such as Social Security and the Fair Labor Standards Act would change America forever.

The state, in its infinite wisdom, seeing less than satisfactory results from FDR’s New Deal, thirty years later further increased its involvement in Americans’ personal lives with new programs, subsidies, and taxes during LBJ’s Great Society.

Our aim is not only to relieve the symptom of poverty, but to cure it and, above all, to prevent it. No single piece of legislation, however, is going to suffice.”
– President Lyndon Johnson, 1964 State of the Union Address

Recently, according to the 2014 House Budget Committee Report, The War on Poverty: 50 Years Later the state’s return on investment has been less than satisfactory.  Below are some conclusions from the report showing failure of the state to eliminate poverty by not understanding basic human behavior:

The War on Poverty at a Glance
Despite trillions of dollars in spending, poverty is widespread:
• In 1965, the poverty rate was 17.3 percent. In 2012, it was 15 percent.
• Over the past three years, “deep poverty” has reached its highest level on record.
• About 21.8 percent of children live below the poverty line.1
In can be no surprise the state has failed to eliminate poverty if one understands the basics tenets of human behavior and the fundamental principles of economics.   The state’s policy violates them. Government programs targeted at poverty reduction/elimination encourage more poverty by encouraging a person to continue their current situation of being in poverty — receive payments and subsidies for having lower income, receive payments and subsidies for not working, receive payments and subsidies for having more dependents, receive payments and subsides for not completing high school, receive payments and subsides for not living a healthy lifestyle, etcetera.
The state also discourages work and thus wealth generation with its onerous job killing regulations which make it more costly for employers and entrepreneurs to create jobs and thus new wealth.
Additionally, the progressive tax system reduces the incentive to generate new wealth as its marginal income tax rates and capital gains taxes punish those who generate more earned income and investment generated wealth.
The state could easily rectify the current situation by eliminating all subsidies to individuals and corporations and stop taxing income and wealth.
1. “War on Poverty.” Http://budget.house.gov/uploadedfiles/war_on_poverty.pdf. United States House of Representatives , 3 Mar. 2014. Web. 8 Apr. 2017.

Can anyone dispute these statements?

 Walter E. Williams is a professor of economics at George Mason University and well known liberty loving commentator who has long spoke of the injustice of taxation and links it to state sponsored robbery.  His view can be validated in the following statement.

“Government income redistribution programs produce the same result as theft. In fact, that’s what a thief does; he redistributes income. The difference between government and thievery is mostly a matter of legality.”

Can anyone argue that one does not pay taxes under threat of punishment by the federal government?  Imagine, if you refused to pay the state. At best, you would be fined and at worst, you would be both fined and jailed.

Thomas Sowell, another brilliant economist and liberty loving commentator also spoke of the questionable action by the state when they take the fruits of labor from one hard-working individual and give it to another.  https://i1.wp.com/mccluresmagazine.com/wp-content/uploads/2014/09/thomas-sowell-mcclures-magazine-659x412.jpg

“What do you call it when someone steals someone else’s money secretly? Theft. What do you call it when someone takes someone else’s money openly by force? Robbery. What do you call it when a politician takes someone else’s money in taxes and gives it to someone who is more likely to vote for him? Social Justice”.

Are there any flaws in Williams’ or Sowell’s theses?

Getting off of the dole is not popular

An article on ZeroHedge titled, It Was A Pretty Disturbing Briefing”: Why State Governors Suddenly Got Cold Feet About Obamacare Repeal spoke about the difficulty the states see in the new administration’s efforts to repeal Obamacare. The crux of the problem is the statists’ fear of the wrath of people who lose government funded healthcare and the vast amount of federal money in play for the states to quickly repeal and/or replace Obamacare. The article makes it clear as shown in the quote below; governors fear the back lash from those forced off of the dole and of the loss of federal funding for their Medicaid programs if changes are made to Obamacare.

“Tens of thousands who would not be able to afford their coverage and would lose their coverage,” Democratic Governor Jay Inslee of Washington said after the closed-door meeting. “It was a pretty disturbing briefing.”

In non-statist speech, the governor of Washington was simply saying that taking these people off of the public dole would be politically untenable  – the MSM would have a field day reporting how evil politicians are hurting Americans and how irresponsible governors are for ever growing state budget deficits.

I suspect other governors beyond Inslee, both Democratic and Republican, feel the same as they are more concerned with keeping their positions of power by keeping everyone happy rather than face the truth of the debt ridden situation Obamacare places America’s finances into.  This is not a right vs. left issue but one of survival of statist politicians. From the same article:

On Friday, Kasich called House Republicans’ initial plans to replace the health-care law “inadequate.” Kasich, a former Republican presidential candidate, didn’t go into details during brief remarks to reporters after a meeting Friday with President Donald Trump. “To me, it’s not acceptable,” Kasich said. The governor, who opened Ohio’s Medicaid program to more low-income people under Obamacare, has advocated maintaining the Medicaid expansion. He has said the income limit for the program should be lower.

Whether one believes it or not, once the ink was dry on the Affordable Care Act (ACA) the die was cast. With Obamacare as the first step, America is heading towards socialized medicine and likely financial Armageddon.  The Congressional Budget Office (CBO) in their March 2016 report shows this in the large and growing expenditures the federal government is making to support ACA.1

The federal government subsidizes health insurance for most Americans through a variety of federal programs and tax preferences. In 2016, those subsidies for people under age 65 will total more than $600 billion, the Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) estimate. (The government also bears significant costs for health insurance for people 65 or older, mostly through Medicare and Medicaid).

Like the metaphor about the frog in boiling water, Obamacare is mechanism the statists are using to control America’s healthcare system.

  1. Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2016 to 2026. Rep. Washington, DC: Congressional Budget Office, 2016. Print.

I am in awe

While reading quotes of our nation’s founders, I am in complete awe of their wisdom prescience. Let me highlight a few I like.

The source is: http://econfaculty.gmu.edu/wew/quotes/govt.html

My comment: This quote could speak to the last few people occupying the Oval Office

“As democracy is perfected, the office of the President represents, more and more closely, the inner soul of the people. On some great and glorious day, the plain folks of the land will reach their heart’s desire at last and the White House will be occupied by a downright fool and complete narcissistic moron.”
–H.L. Mencken, the Baltimore Evening Sun, July 26, 1920

My Comment: Madison is foretelling the welfare state which has been a destructive force in America since the days of FDR.

“The government of the United States is a definite government, confined to specified objects. It is not like state governments, whose powers are more general. Charity is no part of the legislative duty of the government.”
— James Madison, speech in the House of Representatives, January 10, 1794

My Comment: Jefferson is spot on regarding the current situation. 

“The issue today is the same as it has been throughout all history, whether man shall be allowed to govern himself or be ruled by a small elite.”
— Thomas Jefferson

My Comment: Jefferson is predicting the problem of Judicial Activism.

“…the opinion which gives to the judges the right to decide what laws are constitutional and what not, not only for themselves in their own sphere of action but for the Legislature and Executive also in their spheres, would make the Judiciary a despotic branch.”
— Thomas Jefferson

My Comment: Franklin told us about the Welfare State years ago and yet, here we are today with millions on the public dole.

“I am for doing good to the poor, but I differ in opinion of the means. I think the best way of doing good to the poor, is not making them easy in poverty, but leading or driving them out of it. In my youth I travelled much, and I observed in different countries, that the more public provisions were made for the poor, the less they provided for themselves, and of course became poorer. And, on the contrary, the less was done for them, the more they did for themselves, and became richer.”
— Benjamin Franklin

My Comment: Webster highlights the need for the Second Amendment to the US Constitution.

“The supreme power in America cannot enforce unjust laws by the sword; because the whole body of the people are armed, and constitute a force superior to any band of regular troops that can be, on any pretence, raised in the United States.” .”
— Noah Webster

My Comment: Madison warns of the creeping behemoth of the Federal Government.

“There are more instances of the abridgment of the freedom of the people by gradual and silent encroachments of those in power than by violent and sudden usurpations.”
— James Madison, speech to the Virginia Ratifying Convention, June 16, 1788

My Comment: A prediction of the power grab (production of others) to fund the elites’ power.

“We still find the greedy hand of government thrusting itself into every corner and crevice of industry, and grasping at the spoil of the multitude. Invention is continually exercised to furnish new pretenses for revenue and taxation. It watches prosperity as its prey and permits none to escape without a tribute.”
— Thomas Paine

Government and food

The following graphic clearly shows how entrenched the state is in everyday life.1  They currently provide some level of sustenance to over 43 million people. How much more can the state become involved in Americans’ life; this is food, an essential for the maintenance of human life, that is being doled out by the Federal Government to its subjects.

The growth of the number of Americans participating in SNAP has risen significantly since the ‘so-called end’ of the Great Recession. This is preposterous and violates common economic principles.

A few simple questions come to mind as one tries to understand the need for growth in this behemoth, $70B, state sponsored program in non-recessionary times.2

Question 1: If the Great Recession has ended, why did the SNAP program continue to grow?

Question 2: If the answer to question number one is that the Great Recession is not over is the Federal Government lying to the American people about the condition of the economy?

Question 3: If the Great Recession has ended as the Federal Government has stipulated, is the growth in SNAP due to the statists’ desire to create dependence and thus control over its citizens?

As in the case of most issues, the truth is likely found in the middle ground.  The Federal Government’s economic numbers are often fraudulent or at a minimum, do not reflect reality. Additionally, the state must force dependency upon its citizens to continue to survive.  Simply put, the economic conditions in American are not all that great as they are purported to be and the state, in order to grow its control over its citizens, wants more people dependent upon the state such that they will be forced to choose the state over economic freedom and personal liberty.

Sources

  1. “Food-Stamp Recipients Can Now Order From Amazon, Other Online Retailers.” Zero Hedge. Judicial Watch, 16 Jan. 2017. Web. 16 Jan. 2017.
  2. United States Department of Agriculture Office of Inspector General. “3.10. Administrative Costs.” (n.d.): n. page. US Department of Agriculture. United States Government, Sept. 2016. Web. 16 Jan. 2017.

Do we have socialist influences in our economy and should we follow them?

With the death of Fidel Castro and the end of an era, thoughts turned to the failure of his brand of socialism within Cuba.  In announcing his death, the left in America’s media downplay his brutality against political foes and his economic failures thrust upon the Cuban people in their reporting. This oversight is intentional and is taken as to not diminish Castro’s legacy and their desire for America to become more socialistic in a similar manner of Castro.

Few in the media offer opinion as to what will happen in Cuba going forward and Cuba’s future direction is anyone’s guess, but the Cuban people will likely continue to demand more economic and political freedom.  If this happens, information will be kept beneath the surfaces as it does not fit the lefts’ message for America.

In America, those in the media and on the far left side of the political spectrum seem to have a romantic view of Castro and continue to target the benefits of state controlled economies despite documented failures.  This is their continuous attempt to move America and its economy away from free markets and into the arms of the state.

This dash towards the state is ever evolving but for the foreseeable future, it appears America will not quickly adopt a ‘pure socialist’ ‘Castro like’ society however, our nation has been drifting towards an intermediate step called Democratic Socialism which is a more palatable variant of socialism to the many American people who adhere to the left’s view and even to many who do not but are becoming alienated by America’s current crony capitalism.

Democratic Socialism is well understood and has been documented by academics and in the common mass media as a panacea for all those who experience it.  In the later, the mainstream media thrusts Scandinavia forward as model America should and must follow if we as a nation are to achieve something akin to Maslow’s  Self-Actualization for our nation.

Democratic Socialism can be defined as:

the term indicates, combines democracy and socialism. Politically, it involves a commitment to popular, constitutional rule and the protection of basic rights. Economically, it involves an equitable distribution of the community’s wealth. Democratic socialists maintain that key aspects of economic life must be publicly owned or socially controlled to ensure this equitable distribution. Socially, democratic socialism involves the belief that all human beings, in a cooperative community, should have the opportunity to fulfill their good and creative potential. There are many sources of democratic socialism, including the Judaic-Christian tradition’s concern for the poor, the nineteenth-century utopians, Marxist thought, revisionists of Marxist thought, the Fabian socialists in England, and the trade union movement.1

Reading this definition one can easily see Democratic Socialism at work today entrenching itself deeper within America’s economic and political systems. For example, government forced redistribution of income and wealth is common and growing. Millions of lower income Americans are treated to a plethora of publicly funded government programs and have become dependent on these programs for their very existence. A headline form the US Census Bureau states how large this Democratic Socialistic practice already is:

21.3 Percent of U.S. Population Participates in Government Assistance Programs Each Month

Democratic Socialism is also well entrenched and controlling large sectors of our economic system.  Our medical, education, transportation, and energy industries come to mind as they are already highly controlled by the state.    The the factors of production in these economic sectors are regulated and controlled. Obamacare is a prime example of the states’ hands in healthcare.

Land, Labor, Capital, and Enterprise and managed by the state in other areas and its grip within these areas are growing rapidly.  During the last eight years, government regulation of our economy has grown significantly:

see https://libertarian57.wordpress.com/2016/11/17/is-this-democracy/  for details.

The question America must ask given the reality of Democratic Socialism’s penetration  within the nation is do we want to continue down this path or is there a better alternative.
1. Riemer, Neal. “The Challenge of Politics: An Introduction to Political Science, 3rd Edition.” Barnes & Noble. Cqpress, n.d. Web. 26 Nov. 2016.