Thursday, November 15, 2012

Four more years

The president's insistence on taxing "the rich" is populist tripe, because he presents an argument that a relatively tiny amount of taxation revenue will make a serious contribution toward solving our deficit and indebtedness problems, while he simultaneously promotes more government spending.

His ideological refusal to stop incurring debt makes a mockery of his argument for any tax increase whatsoever: He's just going to spend it. His plan appeals to the economically ignorant; from Nobel Prize winning "economists" such as Paul Krugman, through welfare scammers, to the truly destitute - for many of whom Barack Obama already bears personal responsibility.

His ideology is cynical, cruel, elitist and dangerous.

Let us look at just two results of the enervating Federal Government spending he promotes:
[T]he amount spent on federal welfare programs last year was enough to mail a $60,000 check to every one of the 17 million households living beneath the poverty line. And that doesn’t include spending by state and local governments.
If a single Federal agency just wrote checks to those who merely express need, we'd use the money more efficiently. Maybe we'd even see an eventual revival of shame, for those who lied about their need. They're currently brazen enough to brag about it. Even though we couldn't completely trust all the claimants, I'll bet half of them wouldn't need assistance by 2014.

We have entrenched bureaucracies who resist the idea that individuals under their care can ever become self sufficient. It isn't about their clients, it's about their own salaries. Not their fault. We created the system rules.

And here's a simple, clear example of what government spending does to the market: Editorial: Federal flood insurance subsidizes risks
...Get appraisals for their homes, write them a check, knock the homes down and just let it go back to its natural state," said Steven Sweeney, a Democrat and president of the New Jersey Senate.

Good luck with that. A huge federal apparatus and powerful special interests are intent on doing just the opposite. The best illustration of this misguided policy is the National Flood Insurance Program, created in 1968 to provide insurance to homeowners on coasts and near rivers who had trouble getting private coverage.
It's why people are still willing to build houses in high risk locations. They get a discount on disaster.

We will not be seen to have been doing these people any favors when we can no longer supply the welfare, or market distorting subsidies. Stein's law applies: "That which cannot continue will stop." A catastrophic stop, the kind our leaders are arranging, will damage the poor most. We will eventually run out of the money we are stealing from our great-grandchildren.

All this brings me to a point about morality. It isn't simply immoral for government to lie to people about the economy, it is evil.

Governments aren't just inefficient at spending, they lie about it. Fiat currency is just governments' way of lying about the value of money and imposing the hidden tax of inflation on every citizen. That hurts the poor most, too.

We've seen this movie several times before. It never ends well.

1 comment:

Mitch said...

Socialists and corporatists have yet to figure out that you cannot refute mathematics, specifically the laws of compund interest.

As Jim Grant once said, monetary arrangements have a limited shelf life as governments manipulate it to create more debt and inflation.

As you said, debt saturation will end up with economic and currency collapse when left to its own devices.