Archive for December, 2010

Western World Collapses

Thursday, December 16th, 2010

In 2010 the Greeks may be the most notorious of the world’s profligate nations, but they are not the real problem. The real problem is much larger and more complex.

“The State ought to sit in the center of Society”  is the concept that is the root of the problem. This is simply a very bad idea.  The last 100 years (since 1914) saw not only the end of the classic gold standard, but also the fantastic ascendancy of the nation-state.  These two trends are inherently and dangerously related. 

Until World War I, the central government of the United States played a small role in the lives of its citizens. Its powers were strictly limited as were its revenues. It was specifically barred from taxing citizens directly. It was a humble government that interacted with the individual states in the union, but didn’t interact much with individual citizens.

The first signs of change came after the civil war. “Progressive” ideas began to emerge. Most of these ideas came from Germany, from philosophers like Karl Marx and Friedrich Engels. The core of these ideas was the State itself was superior to its citizens. Therefore, the argument went, society ought to be organized to better accomplish the goals of the State.

Today, most Americans have no idea that the foundations of our modern State are based – nearly verbatim – on the demands of Karl Marx’s Communist Manifesto.  In 1848, Marx threatened to organize a worker’s revolution unless European governments:

1. Abolished property rights and applied all rents towards public purposes. [Modern corollary: Don’t pay your property taxes, lose your house. So you really “rent” and not own your house.]

2. Levied a heavy, progressive income tax to equalize wages. [Modern corollary: Combined federal and state marginal income and payroll taxes approach (or surpass) 50% in many U.S. states.]

3. Abolished all rights of inheritance. [Modern corollary: The estate tax.]

4. Confiscation of the property of all emigrants. [Modern corollary: The 2008 “Hero’s Act” which forces people leaving the U.S. to pay the equivalent of their estate taxes on the global assets before they turn in their passports.]

5. Centralize access to credit in the hands of the State by means of a national bank and an exclusive monopoly. [Modern corollary: Fannie Mae and Freddie Mac, which make more than 90% of all of the mortgages in the U.S. and have dominated the market for mortgages for decades.]

6. Centralization of the means of communication and transport in the hands of the State. [Modern corollary: AT&T was a legal monopoly for decades. Amtrak is a ward of the states. The government owns all the roads. And the State controls all air traffic.  Broadcast radio and TV do so only with government’s blessing.]

7. Free education for all children in public schools. [Note the emphasis on public schools. Paying for education isn’t enough. What counts is indoctrinating the kids in glorifying the State.]

8. A common agricultural policy to maximize the productivity of the land. [Modern corollary: Massive ethanol and agricultural subsidies.]

Imagine trying to explain to your neighbors that public education is a communist idea that’s meant to indoctrinate children. Imagine trying to convince them that the estate tax is a bad idea, or that progressive income taxes are the key to communism in America.

To most Americans, these aren’t bad ideas at all. No one will believe you when you explain that these ideas make up the core values of communism. And no one believes these functions can be handled vastly more efficiently by a free market. And that’s the real problem with these ideas: The bigger the governments get based on these mandates, the more inefficient and uncompetitive an economy becomes.

Even so, most people in democracies like these ideas for one simple reason: They hold the allure of getting something for nothing. They are the siren song of living at the expense of your neighbor. These ideas became extremely popular over the last 100 years, all around the world. As a result, as democracy spread, so did these ideas. Politicians of each party and persuasion throughout the western world quickly adopted them as their own (and never mentioned Karl Marx).

As these ideas took hold, one big problem developed… How do you pay for them?  Progressive politicians believed they had the answer. They just took Marx’s big innovation: A progressive income tax. Let the rich pay! It’s a popular idea – but it never works because decisions to add more benefits don’t take into account the expense of paying for them. It doesn’t take long for the budget to get out of control. Or said another way, everyone can’t live at the expensive of his neighbor. His neighbor can’t afford it… and he moves.

More serious, the flaw in communism is obvious. Communism doesn’t account for the fact people expect to control the fruits of their labor. People don’t like their assets being stolen and their wages being heavily taxed by a government that regulates their businesses and sends their children off to war. Incrementally, people stop working. Wealthy people flee… or hide their incomes. Tax revenues fail to meet projections. Deficits grow. Deficit spending soars. And debts mount.

That’s where paper money comes in. Paper money isn’t only good for financing a war. It’s also perfect for closing the gap between what an economy ought to produce and its paltry real production when it has been beaten into submission by communist ideas. I like to explain it this way…

The central truth of economics is scarcity. There can never be enough of anything to satisfy everyone. The central truth of politics is patronage: promising to give everything to everyone. Paper money is the bridge between economics and politics.

The unpaid debts of an entire generation of people in western countries are coming due. The so-called “baby boomers” grew up in a world dominated by Marxism and Keynesian economics. These are bad ideas. They are destined to collapse.

And the collapse is here……..

Porter Stansberry

Comment #1     Dan Druff (Scotland)  As I read this, I expected a lot of fallout from your citizens.  I saw none.  You folks are just as easily controlled as your Scottish cousins.  American Exceptionalism is dead.                  Danny

Comment #2  Come visit Canada if I you want to see this story live.             Su Noco, Elder Athabaskan Nation

Happy 247th Birthday, celebrate with a cup of tea

Thursday, December 16th, 2010

American Minute for December 16th:

    The Boston Tea Party took place DECEMBER 16, 1773, just three years after the Boston Massacre, where the British fired into a crowd, killing five. The British passed unbearable taxes: 1764 Sugar Act -taxing sugar, coffee, wine; 1765 Stamp Act -taxing newspapers, contracts, letters, playing cards and all printed materials; 1767 Townshend Acts -taxing glass, paints, paper; and 1773 Tea Act. While American merchants paid taxes, British allowed the East India Tea Company to sell a half million pounds of tea in the Colonies with no taxes, giving them a monopoly by underselling American merchants. Disguised as Mohawk Indians, a band of patriots called Sons of Liberty, led by Sam Adams, left the South Meeting House toward Griffin’s Wharf, boarded the ships Dartmouth, Eleanor and Beaver, and threw 342 chests of tea into the harbor. The men of Marlborough, Massachusetts, declared: “Death is more eligible than slavery. A free-born people are not required by the religion of Jesus Christ to submit to tyranny, but may make use of such power as God has given them to recover and support their liberties…We implore the Ruler above the skies that He would bare His arm…and let Israel go.”

GOP Insurrection against Obamacare

Monday, December 6th, 2010

Rep. Michelle Bachmann (R-Minn.) : ‘There Needs To Be a rank-and-file Insurrection’ Against GOP Leaders If They Don’t Hold Straight Vote to Repeal Obamacare

Incoming House Speaker John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va.) will face stiff opposition from within their party, Bachmann said, unless they make repealing health care a priority.

“If they don’t,” she told, “I think there needs to be an insurrection here in Washington, D.C., against our own leadership, because that is the message that’s come loud and clear out of this election: a full-scale repudiation and rejection of the federal government takeover of private industry.”

12-2-10 Terence P. Jeffrey

Death Panels Coming -Paul Krugman (Nobel Prize)

Saturday, December 4th, 2010

November 23, 2010 Paul Krugman, Nobel Prize winner in economics and an influential New York Times columnist, also has a blog, “The Conscience of a Liberal.” On ABC’s “This Week” (Nov. 14), during a discussion on balancing the federal budget against alarming deficits, he proclaimed the way to solve this problem is through deeply cost-effective health-care rationing.

“Some years down the pike, we’re going to get the real solution, which is going to be a combination of death panels and sales taxes.” …the U.S. Debt Reduction Commission “should have endorsed the panel that was part of the (Obama) health-care reform.”

Sarah Palin was one of the first, and the most resounding, to warn us of the coming of government panels to decide which of us – especially, but not exclusively, toward the end of life – would cost too much to survive. She was mocked, scorned from sea to shining sea, including by the eminent Paul Krugman for being, he said, among those spreading “the death panel lie” as part of “the lunatic fringe.” (Summarized in “Krugman Wants ‘Death Panels'” Catholic League for Religious and Civil Rights, Nov. 15).

Soon after he had left the ABC Studio, someone must have alerted Krugman that – gee whiz – he had publicly rooted for death panels! Swiftly, on his blog, Krugman admitted he had indeed said those dreaded words, but:

“What I meant is that health-care costs will have to be controlled, which will surely require having Medicare and Medicaid decide what they’re willing to pay for – not really death panels, of course, but consideration of medical effectiveness and, at some point, how much we’re willing to spend for extreme care.”

“Extreme care,” professor Krugman? To be defined by government commissions, right?

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Cicero of Rome (2065 years ago)

Thursday, December 2nd, 2010

Learn From History Or Repeat It

The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest Rome become bankrupt. People must again learn to work, instead of living on public assistance.   

 Cicero  – 55 BC