On leadership and leading us out of this morass

Leaders, to the extent that they have any real leadership or authority, tend to be those who create—or, at least, greatly influence—the views of their larger constituencies more than they follow them.

This must be true of any so-called “leader” if he or she is going to have any significant part in pulling this nation out of the grasp of its monumental debt and restoring an economy foundering under a huge dead-load of taxes and over-regulation.

This is an educational and marketing process more than a political one. You must become a teacher of economics in the mold of von Mises, Hayek and others.

We are here to help.

Federal aid to states versus a healthy economy

The theory behind federal aid to state and local governments is that the federal government can operate programs in the national interest to efficiently solve local problems.

Now that whole concept is laughable on the face of it. I’m not sure how any politician can even say that sentence with a straight face! When has the federal government ever operated more “efficiently” than anything with which it might be sensibly compared?

No. No! I don’t think this theory holds water on the “efficiency” factor.

But let’s take a look at this other matter of “programs in the national interest.”

Let’s be serious here!

Outside of those few matters for which the people should truly look to the federal government—such as our national defense—politicians do almost nothing from Washington, DC, “in the national interest.”

In fact, a great deal of the time and money spent by the staff of Congressmen and Senators is not, in fact, spent in “the national interest.”

Instead, they spend a huge portion of their time and energy on “local interests” and (worse) “special interests,” for which the reader might instead read:

“Securing ‘pork’ for their local constituents in every effort to leverage the taxpayers’ money to buy votes from the very taxpayers they have pick-pocketed.”

Federal aid to states and localities is nothing short of politicians hoodwinking the taxpaying public into believing that by giving some of the money they have confiscated from the taxpayers back through “aid,” they have somehow done the citizens a great favor.

In short, through federal aid to states and localities, the politicians have managed to trick voters and taxpayers into believing that, as “political doctors,” they can somehow magically make the patient healthier by draining blood out of the leg of the patient in massive amounts and injecting small portions of the blood back into the patient’s arm.

Our failure to control spending will mean the death of our nation

This might be funny if it weren't so true.

Be sure to read all the way to the end:

Tax his land,
Tax his bed,
Tax the table,
At which he's fed.

Tax his tractor,
Tax his mule,
Teach him taxes
Are the rule.

Tax his work,
Tax his pay,
He works for
peanuts anyway!

Tax his cow,
Tax his goat,
Tax his pants,
Tax his coat.

Tax his ties,
Tax his shirt,
Tax his work,
Tax his dirt.

Tax his tobacco,
Tax his drink,
Tax him if he
Tries to think.

Tax his cigars,
Tax his beers,
If he cries
Tax his tears.

Tax his car,
Tax his gas,
Find other ways
To tax his ass.

Tax all he has
Then let him know
That you won't be done
Till he has no dough.

When he
screams and hollers;
Then tax him some more,
Tax him till
He's good and sore.

Then tax his coffin,
Tax his grave,
Tax the sod in
Which he's laid...

Put these words
Upon his tomb,
'Taxes drove me
to my doom...'

When he's gone,
Do not relax,
Its time to apply
The inheritance tax.

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Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Excise Taxes
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Tax (currently 44.75 cents per gallon)
Gross Receipts Tax
Hunting License Tax
Inheritance Tax
Inventory Tax
IRS Interest Charges on Tax
IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Personal Property Tax
Property Tax
Real Estate Tax
Road Usage Tax
Recreational Vehicle Tax
Sales Tax
School Tax
Service Charge Tax
Social Security Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal Universal Service Fee Tax
Telephone Federal, State and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Nonrecurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax

STILL THINK THIS IS FUNNY?

Not one of these taxes existed 100 years ago, and our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids.

What in the heck happened?

Can you spell 'politicians?'

-- Charley Reese (Orlando Sentinel)

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Please vote in every election for politicians that don’t see government spending as the solution to every problem. We need REAL CHANGE to restore what we've surrendered to the politicians!

The false economy of government “stimulus”

In its ongoing attempts to “stimulate” the economy, the government takes money out of the economy (in the form of cash through taxes or credit through deficits), consumes part of it in waste and administration, and then spends some part of it for a stadium, a bridge or whatever.

All the government can do, at best, is to move some jobs from that portion of the economy where the private sector would have used the money to that portion of the economy for which the politicians can take credit in hopes of reelection. Nevertheless, due to the manifest inefficiencies in government, more jobs would have been created in the private economy had the money not been unceremoniously extracted from the taxpayers' wallets in the first place.

Hence, while the politicians get to take credit for some job creation, the net number of jobs created will always be less than had the private sector been left with the money and regulation reduced.

The punishing Alternative Minimum Tax (AMT)

If Washington politicians don't act, and it is not likely that they will, the AMT (Alternative Minimum Tax) could cost U.S. taxpayers earning just $50,000 in adjusted gross income as much as $10,000,000,000,000 ($10 trillion). That’s $10 trillion taken out of the private economy and subject to more government waste.

In 1997, the AMT punished 618,000 taxpayers. By 2006, it penalized 3.5 million American taxpayers. By 2007, some 17 million U.S. taxpayers would have had to pay the unfair tax had not Congress passed a temporary patch.

But why was the “patch” temporary? The AMT ought to be eliminated completely! Both Democrat and Republican controlled Congresses have had opportunity to do away with the AMT and neither have done so.

Why?

Because the politicians are as addicted to tax dollars to support their profligate spending as a heroin addict is addicted to the needle!

Stop the madness!

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See National Suicide by Martin L. Gross

“I Want Your Money”

Funny! Thought-provoking!

I liked it so much, I bought my own copy!

On political strategy for restoring a healthy economy

The government's role in restoring a healthy economy is primarily to get out of the way and to reduce the economic deadweight loss due to taxes and excessive regulation (which is just a tax in another form).

Therefore, half-measures in reforming and downsizing of government must be avoided. Half-measures will produce tepid or, worse, no improvement, while allowing critics of reform and downsizing to say, "We've tried your ideas, and they didn't work."
Reforms introduced must be bold, courageous, determined and, yes, some—maybe, many—will be painful to some, as well.

Economic activity presently based on government interventions (e.g., subsidies, artificial demand) will cease to exist. Initial price-jumps following the removal of interventions that were actually or functioned effectively as price controls will be unavoidable. Changes in the value of the U.S. Dollar are also likely to occur.

Protecting the U.S. economy against currency values being artificially manipulated by other nations (such as the Chinese Yuan) is not wrong as long as the protection imposed is directly correlated to the amount of manipulation in the estimated true value of the currency.

Recognition that disparities in income and wealth are normal, natural and actually function as a healthy stimulus to production and the growth of the economy is essential and should be articulated to the voters in a clear way.When legislation is proposed, the changes and the impacts of the changes must be announced and explained in advance. Along with the announcement, the long-term vision must also be clearly articulated. The reason for the change must be clearly defended against every onslaught from the opposition, and then the effects of the changes must be "survived" as reality sets in.

The costs the people must bear during the readjustment of the economy should be shared as widely as possible by implementing measures that are clearly stated to be "temporary" to ease the transition. Otherwise, the fragile political support of those suffering the temporary pain of the readjustment will be lost.

Telling the truth and not promising things that cannot be delivered is the only safeguard to the credibility of the reforms and of the officeholders who see that the reforms are imperative to our nation's full recovery and restoration.

We—the many citizens out here who understand what must be endured in the process of turning the “fish soup” our American economy has become back into the “aquarium” it should be—are here to help!

Government spending cannot produce economic growth

Government spending cannot produce economic growth. The reason is that the government must take money out of the private sector economy to spend it on anything.

Let’s test this scenario in our minds:

Imagine, if you will, that the government were to hire all of the workers in the U.S. to build highways, bridges and work on other infrastructure. Doing so would produce a huge amount of economic activity. Many things would be bought and sold and billions, perhaps trillions, of dollars would be paid in wages to the workers.

Even though the president and Congress would undoubtedly tout the fact that “their policies had caused national unemployment rate to fall to zero,” all of this activity and hype would not produce a single ounce of real economic growth for two reasons:

1. The government would have to take the necessary billions of dollars out of the private economy in the form of taxes or credit (deficit spending). Either way, it would shrink the supply of cash and credit available to private sector operations. Therefore, even if it were possible for the private sector to produce goods without labor, businesses would be so strapped for cash, they could not do so.
2. With no workers in the private sector, no goods could be produced. Therefore, even if the wages paid to the public sector workers were exceptionally high, scarcity of goods coming from the private sector would make the prices of goods and services even higher. As a result, the workers would feel more "impoverished." Making $500 an hour makes little difference if a loaf of bread costs $125.00.

It is the production of an abundance of goods and services coming from the private sector, thus driving prices down, that make us feel "better off" (or "wealthier"). If a flat-screen television costs you $1,000 and you make $40,000 a year, you feel much "better off" than if a flat-screen TV costs you $15,000 and you make $40,000 a year. The more options we have to satisfy our needs and desires with the money we earn, the "wealthier" we feel—regardless of the actual dollar-amounts involved.

On the other hand, if government interventions make goods and services scarce (hence, more "expensive"), we feel "poorer" and "worse off" regardless of the level of our income.

Since government must must always take money out of the private economy to do whatever it does—money that would otherwise be used to produce abundant growth in goods and services—the government, therefore, cannot produce real economic growth.

On “Big Oil” and taxes

Between 1980 and 2005, oil companies directly paid more than $2.2 TRILLION in taxes (after adjusting for inflation) to federal and state governments—including excise taxes, royalty payments and state and federal corporate income taxes. That amounts to more than three times what they earned in profits during the same period, according to numbers from the Bureau of Economic Analysis and U.S. Department of Energy.

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For comparison purposes that is…

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$88,000,000,000	per year
$7,300,000,000	per month
$803,103	per day
$33,463	per hour

---

Still, for Leftists—who hate success and are filled with envy—that's not a big enough contribution to make to our American way of life.

But this contribution does not include the other major contribution of so-called “Big Oil.” The firms in that industry employ—directly and indirectly—several hundred thousand Americans. Many of those American earn above-average salaries and virtually all of them pay state and federal income taxes, pay in millions in consumption (sales) taxes, and the vast majority participate in paying millions of dollars into property taxes.

Here are some numbers to think about

In 2010, the U.S. oil and natural gas industry provided $476 BILLION in direct support to the economy. This stimulus did not require an act of Congress nor that billions of dollars in new public debt be foisted upon the taxpayers of this generation and generations to come.

• $266 BILLION was returned to the economy in the form of spending on new energy projects, improvements to existing projects and enhancements of refinery and other downstream operations
• $176 BILLION paid to 2.1 MILLION U.S. employees in wages and salaries, plus benefits and payments to oil and natural gas leaseholders
• About $35 BILLION in dividends distributed to American shareholders

On compulsory education by the state

In 1932 there were 128,000 school districts in the United States. while today there are fewer than 15,000. This shrinkage and centralization of decision-making has gone on at the same time our student population has grown to twice its size. This is to say nothing of the hundreds of billions of dollars, taken from taxpayers and spent by local, state, and federal government on education. Sadly, the result of all of this centralization and excessive spending has been only to diminish the quality education and a grand decline in the results produced for the consumers—the students and their parents.

Moreover, public schools are increasingly imposing politicized, standardized, one-size-fits-all curricula that neither accommodate individual strengths nor correct for individual weaknesses.

Long before "Goals 2000" and its dubious federal education program predecessors, some people foresaw the way in which public schools were being and would continue to be used to impose a political agenda that in turn seeks to reinforce political support for government means and institutions.

Education continues to be one of the most politically charged issues in our national culture, and the conflicts over education in America are likely to grow more polarized and polarizing so long as the political control increases. Indeed, for centuries the political control of education has engendered social conflict, and even led to civil wars and revolutions.

It is time to completely rethink public education, to clearly understand and unashamedly admit what works and what does not work. Return local control to schools; let parents direct their children's education; return school tax monies to the taxpayers and let parents freely choose the schools they want their children to attend. Beyond that, eliminate the stranglehold of teachers unions and the education establishment—both proven failures—on every school in America.

Let's put students first—not the teachers’ unions.

Big Government damages the economy, reduces wages, and more

Without being overly dramatic, it is a fair statement that the presence of government is, in itself, induces economic distortions into the economy. This is true for at least two reason:

1. Taxes, collected in any form to support government operations, change the basis of economic calculation and take resources (e.g., capital, manpower) out of the private economy
   
2. Government regulations take further resources from the private economy, by forcing businesses to employ capital and manpower in efforts to comply with these regulations

The larger government grows, the taxes it takes to support it and the more regulations it promulgates, the greater the economic distortions. However, the effect of government growth (as a percent of GDP) is not linear. Instead, as government grows beyond a certain point, the curve turns upward exponentially.

Texas A&M University’s Edgar Browning, writing in Stealing From Each Other (2008), concludes that out own excessive government reduces average incomes in the U.S. by about 25 percent. The more the U.S. politicians insist on growing spending, the more average American incomes will be squeezed downward.

Mind you, the squeezing will occur only against the middle class. The extremely wealthy—especially those connected with international banking and capital brokerages (Wall Street)—are affected by this squeeze. Similarly, those at the bottom of the economy are not greatly affected. They are sheltered mostly because they are being propped up through (damaging) government entitlements and supports (e.g., welfare, minimum wage mandates).

There’s more damage

As government grows, the more it creates a top-down bureaucracy that was formerly alien to our American tradition of individual liberty. The growth in federal power and over-regulation tends to destroy both diversity and innovation in state and local governments by seeking to impose nationwide uniformity through its rules. Federal aid to states is always accompanied by reams of regulations that reduce freedom and operating choices.

In short—whether we run trillion-dollar deficits or not—cutting federal spending is beneficial because the cuts automatically contribute to the dispersion of power (back to the states) and the expansion of liberty.

Politicians’ addiction to spending, the value of the dollar, and ongoing inflation

Politicians have clearly seen opportunity after opportunity to buy, not only goods and services for the government, but votes for re-election and big bucks for their campaign coffers, without raising visible taxes.

How?

They accomplish this feat through deficit spending augmented by a Federal Reserve System (FRS) willing to print U.S. dollars that have no specie metals backing them up. The Congress authorizes the FRS to print more money to cover their expenditures while the politicians avoid that whole nasty business of increasing taxes.

These actions by Washington politicians (and in Europe, too) are motivated by their audacity in believing one of two—or, perhaps, both—lies:

1. The government is capable of getting something for nothing.
2. The taxpayers are not smart enough to figure out what the politicians are doing to them, or the taxpayers are too involved in their own daily affairs to care.

Of course, if you and I were to print worthless currencies, we would be arrested and thrown in prison for a crime called “counterfeiting.” However, the politicians in Washington, D.C.—especially the radical leftists among them—call their authorizing the production of more and more increasingly worthless currency “a progressive monetary policy.”

What needs to be understood about this matter is this: Whether a private citizen produces currency back by no sound money (specie metals) or the government does it, the result (ultimately) is the same: monetary inflation.

It’s not the “wage-price spiral”

When prices rise—and continue to rise—one frequently hears statements like, “the unions are driving prices up.” Or, some others might say, “No. Management is driving prices up in search for higher profits.” But both of these arguments are wrong, in the final analysis.

Without the collaboration of the Federal Reserve and its printing of unbacked currency, neither labor nor management would be able to force prices upward. Labor would soon price itself out of the market, or management would drive prices to the level that business would soon shift to a competitive products, or competitors offering similar products at lower prices.

No. In the absence of monetary inflation, the so-called wage-price spiral would not be sustainable. So, if you’re looking for someone to blame for higher prices, look no further than the government and the governments’ (almost all national governments engage in the practice) willingness to spend too much while printing currency to cover all or part of their ongoing spending spree.

Ludwig von Mises and Social Security

Mises’ 1949 comments on Social Security and government debt read as
if they had been written yesterday: “Paul in the year 1940 saves by paying
one hundred dollars to the national social security institution. He receives
in exchange a claim which is virtually an unconditional government IOU.
If the government spends the hundred dollars for current expenditures, no
additional capital comes into existence, and no increase in the productivity
of labor results. The government’s IOU is a check drawn upon the future
taxpayer. In 1970 a certain Peter may have to fulfill the government’s
promise although he himself does not derive any benefit from the fact that.
Paul in 1940 saved one hundred dollars.... The trumpery argument that the
public debt is no burden because ’we owe it to ourselves’ is delusive. The
Pauls of 1940 do not owe it to themselves. It is the Peters of 1970 who owe
it to the Pauls of 1940.... The statesmen of 1940 solve their problems by
shifting them to the statesmen of 1970. On that date the statesmen of 1940
will be either dead or elder statesmen glorying in their wonderful achievement,
social security.” -- from Bettina Bien Greaves' "Forward" to Ludwig von Mises'
Human Action (Fourth Edition)

The difference between a million and billion -- or a trillion

"We have a lot of senators in there that have been elected on nothing but a slogan. But what have they cost us after they got in? You take a fellow that has never juggled with real jack, and he don't know the value of it; a billion and a million sound so much alike that he thinks all the difference is in the spelling."
-- Will Rogers

On the legitimate role of government in a free society

“What is the legitimate role of government in a free society? To understand how America’s Founders answered this question, we have only to look at the rule book they gave us – the Constitution. Most of what they understood as legitimate powers of the federal government are enumerated in Article 1, Section 8. Congress is authorized there to do 21 things, and as much as three-quarters of what Congress taxes us and spends our money for today is nowhere to be found on that list.” -- Walter Williams, "Future Prospects for Economic Liberty." Imprimis, Vol. 32, No. 9, Sep 2009: 1-5

Judgment Day: We're out of time

"Over the years we've let negative economic forces [like government spending, government debt, inflation and taxes] run out of control. We stalled the judgment day, but we no longer have that luxury. We're out of time." -- Ronald Reagan

See post below to TAKE ACTION TODAY!

Thank you.

We cannot delay

"We must realize there is no quick fix. At the same time, however, we cannot delay in implementing an economic program aimed at both reducing taxes to stimulate productivity and reducing growth in government spending to reduce unemployment and inflation." -- Ronald Reagan (1981)

Together, we must chart a different course

"[G]overnment policies... [are] responsible for our economic troubles. We forgot or just overlooked the fact that government -- any government -- has a built-in tendency to grow. Now, we all had a hand in looking to government for benefits as if government had some source of revenue other than our earnings. Many, if not most, of the things we thought of or that government offered to us seemed attractive.

....

"It's time to recognize that we've come to a turning point. We're threatened with an economic calamity of tremendous proportions, and the old business-as-usual treatment can't save us. Together, we must chart a different course." -- Ronald Reagan (1981)

Over-regulated and over-taxed

"Regulations adopted by government with the best of intentions have added $666 [in 1980, that is $1,745.57 in 2009 dollars] to the cost of an automobile. It is estimated that altogether regulations of every kind, on shopkeepers, farmers, and major industries, add $100 billion [in 1980, that is $262.1 billion in 2009 dollars] or more the cost of goods and services we buy. And then another $20 billion [in 1980, or $52.4 billion in 2009 dollars] is [taxed away from you and me and] spent by government handling the paperwork created by those regulations." -- Ronald Reagan (1981)

Out of control

Can those who man the ship of state in these United States deny that it is out of control? Can the Obama administration deny this? Can Nancy Pelosi or Harry Reid? Can even any one of our Republican Senators or Congressmen deny that the U.S. government is out of control?

Our national debt is approaching $12 trillion -- that would be a stack of $1,000-bills more than 800 miles high! The budget deficit this year alone is more than $1.3 trillion.

The total of each U.S. citizen's share of the national debt is $38,926 -- for every man, woman and child, while the Gross Domestic Product per citizen barely exceeds that amount ($39,591).

The INTEREST alone on our national debt in fiscal year 2009 was more than $383 billion.

Adding to our troubles is a mass of government regulations imposed on businesses by huge bureaucracies that add more than $250 billion to the price of things we all buy and reduces our ability to produce them.

The government -- at every level -- has become a huge funnel taking money (by force and coercion through taxes) from "producers" (i.e., working people and firms) and giving that money to (mostly) "non-producers." Non-producers are those who contribute nothing to the U.S. economy, adding nothing to the Gross Domestic Product (GDP). Examples would be politicians, bureaucrats, and most entitlement program recipients.