Category Archives: Economics

The United States Economy, government intervention etc.

Warnings From The Wise About The Welfare State

March 23rd, 2013
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Below, is a very insightful post, from FEE, in regards to The Welfare State:

“A February 27, 2013, article in The New York Times on last month’s Italian elections included this interesting paragraph:

“Increasingly, experts on both sides of the Atlantic are asking whether politicians in some advanced nations, faced with high debts, aging populations and slower growth, are capable of promoting plans that offer a way out of the malaise—or whether they could be elected if they did.”

So the “experts” are finally beginning to wonder if the welfare State is affordable and sustainable. I guess that’s progress. But in my view, these Johnny-come-latelies aren’t experts at all if they didn’t see it coming.

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Gold And Silver Approved As Legal Tender By Arizona Senate

March 16th, 2013
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Below, is a very encouraging, and insightful, post, from The Tenth Amendment Center:

“Arizona may become the second state, after Utah, to recognize gold and silver as legal tender authorized for payments of debts and taxes.

The Arizona Senate voted Thursday to approve SB 1439, the Constitutional Tender Act, which allows businesses and the state government to accept payments in gold or silver. The vote was 17-11. (see how reps voted here)

The Legal Tender bill specifies that legal tender in Arizona consists of all of the following:

1. Legal Tender authorized by Congress.

2. Specie (containing gold or silver) coin issued at any time by the U.S. government.

3. Any other specie that a court of competent jurisdiction rules by a final, unappealable order to be within the scope of state authority to make legal tender.

BACKGROUND INFORMATION:

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The Income Tax: Root of All Evil

March 1st, 2013
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Below, is a great book, by Frank Chodorov, called, “The Income Tax: Root of All Evil.”

“Frank Chodorov was an extraordinary thinker and writer, and hugely influential in the 1950s. In this classic work, he argues that the income tax, more than any other legislative change in American history, made it possible to violate individual rights.

He argues that income taxes are different from other forms of taxation because they deny the right of private property and presume government control over all things.” – Amazon.com

Enjoy!

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Why We Should Stand With The Two Percent

December 8th, 2012
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For almost 4 years now, since the inauguration of President Barack Obama, we have been hearing a seemingly never-ending attack on rich people in our country. And, for those of us who believe in a free-market economy, free of incessant Government interference, we completely understand that money in the hands of private citizens, used for their own economic purposes, whether it is in the production, or consumption, of goods and services, builds far more value, and economic growth, then in the hands of Government, where wealth is consumed, destroyed, and mostly thrown down a rat-hole. We also understand that rich people, unless their money is sitting in a safe, or under a mattress, put their money to use in some productive manner, which will, inevitably, create more goods, services, jobs, and economic opportunities.

We often hear from the current class of Democrats, and those on the far-left, that rich people are not paying their (so-called) fair share; but, for the objective observer, that notion has been put to rest, many times over, as it is common knowledge that rich people, by far, and by virtue of amount, pay the most taxes in this country; which is used to fund our Government(s), social programs etc. But, even in light of these facts, the rich, to some, are still not handing enough of their money over to Government!

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The Real Reason For Withholding Taxes

November 17th, 2012
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“The real reason for withholding taxes is the unwillingness of workers to share their incomes with the government and the consequent difficulties of collection. To overcome this handicap, the government has simply impressed employers into its service as involuntary and unpaid tax collectors. It is a form of conscription. Disregarding the right of privacy, which is an essential of liberty, the government’s agents may, under the law, invade the employer’s office, demand his accounts, and punish him for any infraction which they believe he has committed; they can impound his property and inflict a penalty for not having collected taxes for the government. This violation of our vaunted rights was highlighted by Miss Vivien Kellems, a Connecticut manufacturer, several years ago. To test the constitutionality of the law, Miss Kellems refused to collect these taxes and notified the government of her intention. She asked that she be indicted so that the matter could be brought to court. At the same time, she instructed her employees to pay their taxes regularly, helped them compute the amounts, and saw to it that they had proof of payment. The government refused to indict her. Rather, its agents, without court order (the government is not hampered by such formalities), impounded her bank account and demanded a penalty from her for not collecting taxes which had been paid. The only thing she could do under the circumstances was to sue the government for recovery of her money. In this she was successful. But the matter of constitutionality was assiduously avoided by the government’s attorneys, by legal tricks, and she was never able to get to it. Laws are made for citizens, not the government, to obey.”

- Frank Chodorov (The Income Tax: Root of All Evil)

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Atlas Shrugged, By Ayn Rand: A Brief Summary

October 16th, 2012
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Below, is a brief, yet very insightful, synopsis, of Ayn Rand’s classic book, “Atlas Shrugged.” Enjoy!

The story of Atlas Shrugged takes place in the United States at an unspecified future time. Dagny Taggart, vice president in charge of operations for Taggart Transcontinental Railroad, seeks to rebuild the crumbling track of the Rio Norte Line that serves Ellis Wyatt’s oil fields and the booming industrial areas of Colorado. The country is in a downward economic spiral with businesses closing and men out of work. Other countries in the world have become socialist Peoples’ States and are destitute. Colorado, based on Wyatt’s innovative method of extracting oil from shale, is the last great industrial center on earth. Dagny intends to provide Colorado the train service it requires, but her brother James Taggart, president of Taggart Transcontinental, tries to block her from getting new rails from Rearden Steel, the last reliable steel manufacturer. James wants to do business with the inefficient Associated Steel, which is run by his friend Orren Boyle. Dagny wants the new rail to be made of Rearden Metal, a new alloy that Hank Rearden developed after ten years of experiment. Because the metal has never been tried and has been denounced by metallurgists, James won’t accept responsibility for using it. Dagny, who studied engineering in college, has seen the results of Rearden’s tests. She accepts the responsibility and orders the rails made of Rearden Metal.

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The Commonly Accepted Theory About Fascism

September 6th, 2012
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“The commonly accepted theory that fascism originated in the conspiracy of the great industrialists to capture the state will not hold. It originated on the Left. Primarily it gets its first impulses in the decadent or corrupt forms of socialism—from among those erstwhile socialists who, wearying of that struggle, have turned first to syndicalism and then to becoming saviors of capitalism, by adapting the devices of socialism and syndicalism to the capitalist state. The industrialists and nationalists joined up only when the fascist squadrons had produced that disorder and confusion in which they found themselves lost.”

- John T. Flynn (As We Go Marching)

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It Becomes Increasingly Difficult To Go On Spending

September 1st, 2012
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“In different countries the basis of resistance takes different forms, but it comes chiefly from the conservative groups. Hence it becomes increasingly difficult to go on spending in the presence of persisting deficits and rising debt. Some form of spending must be found that will command the support of the conservative groups. Political leaders, embarrassed by their subsidies to the poor, soon learned that one of the easiest ways to spend money is on military establishments and armaments, because it commands the support of the groups most opposed to spending.”

- John T. Flynn (As We Go Marching)

The Most Terrifying Aspect Of The Whole Fascist Episode

August 26th, 2012
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“But alas, the most terrifying aspect of the whole fascist episode is the dark fact that most of its poisons are generated not by evil men or evil peoples, but by quite ordinary men in search of an answer to the baffling problems that beset every society. Nothing could have been further from the minds of most of them than the final brutish and obscene result. The gangster comes upon the stage only when the scene has been made ready for him by his blundering precursors.”

- John T. Flynn (As We Go Marching)

Private Property Is The Most Important Guarantee Of Freedom

August 17th, 2012
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“Our generation has forgotten that the system of private property is the most important guarantee of freedom. It is only because the control of the means of production is divided among many people acting independently that we as individuals can decide what to do with ourselves. When all the means of production are vested in a single hand, whether it be nominally that of ‘society’ as a whole or that of a dictator, whoever exercises this control has complete power over us. In the hands of private individuals, what is called economic power can be an instrument of coercion, but it is never control over the whole life of a person. But when economic power is centralized as an instrument of political power it creates a degree of dependence scarcely distinguishable from slavery. It has been well said that, in a country where the sole employer is the state, opposition means death by slow starvation.”

- Friedrich A. Hayek (The Road To Serfdom)

How Fannie, Freddie And Politicians Caused The Crisis

July 26th, 2012
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Below, is a very insightful article, by Edward Pinto, which was posted, online, at Real Clear Markets, on January 12, 2012:

“By mid-2008 Fannie and Freddie (the “GSEs”) had a combined $5.4 trillion in securities outstanding, all of which were backed by the GSEs’ full faith and credit. These securities financed 45% of all the residential mortgage debt in the U.S. GSE securities were viewed as having the implicit guaranty of the U.S government and were aggressively marketed to investors worldwide.

Investors in GSE securities were led to believe that the vast majority of the loans backing these securities were low risk. Thanks to the SEC’s investigation, the GSEs have, for the first time, acknowledged the magnitude of their efforts to mislead investors with regard the true nature of their exposure to subprime and Alt-A loans. Instead of $600 billion in subprime and Alt-A loans, the GSEs’ credit guaranty portfolios contained $1.6 trillion. Thus approximately $1 trillion in subprime and Alt-A loans were misclassified. Given the GSEs’ high leverage–each dollar of capital supported about $80 in debt–their insolvency was inevitable.

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What Is The National Cost?

June 30th, 2012
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For many years, particularly in the area of healthcare, we have heard politicians, commentators, and citizens, talk about the national cost. But, what is the national cost?

Our country was founded as a Federalist system, in which the states maintained their sovereignty, and the domestic concerns of our citizenry were addressed within our respective states. In our Federal Constitution, the framers gave The United States Congress 16 Enumerated Powers, to which they could legislate. These Enumerated Powers were, and should be, the only areas to which there is a so-called national cost, and to which the tax-payers of all 50 states should be contributing to. Anything outside of those Enumerated Powers is unconstitutional, and outside of the limited scope of The Federal Government that was established by our Founders; and the contract upon which the sovereign states, ratified, contingent to forming this Federal union.

We once had a vibrant free-market in this country, which created an unprecedented amount of wealth, and prosperity. This blessing also enabled Americans to be extremely charitable to their fellow citizens, who were the most in need. Then, came The New Deal policies of The FDR Administration, plus the so-called Great Society policies of The LBJ Administration, which greatly changed this dynamic, as our Federal Government created huge Federal programs, and began an unprecedented amount of intervention into our private economy. And, even if we were to put aside the constitutional argument, and give these programs the benefit of the doubt, by saying that they were purely benevolent, and well-intended, the hard reality is that, Social Security, and Medicare, along with a plethora of other Government programs, have well-exceeded their original projections, and are pushing our Government, and country, right over a fiscal cliff!

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What Is True Public Service?

June 23rd, 2012
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Over and over, we hear people, primarily on the left, protect public sector unions, as well as their exuberant benefits, regardless of the fact that states are falling off a cliff, financially, because state Governments have over-promised public benefits, with the tax-payer’s money.

We can have a reasonable discussion as to whether there should be unions in Government, and to what extent public sector workers should be paid, and given benefits. What is particularly upsetting at times, however, is when the union, and BIG GOVERNMENT, protectionists, often use the “public servant” line, in order to advance their cause and argument. In other words, the implication is, if we, as private citizens, believe that public sector workers, unions, and their benefits, should be reigned in, or reduced, then, surely, we must be trying to hurt public “servants.” Nothing could be further from the truth!

Over the years, I have had the pleasure to know many volunteer firemen; and, today, small townships, and communities, still have volunteer firemen. So, this notion that public service is commensurate with compensation, the remuneration of public benefits, or a Government job, is simply absurd! True public service, in my humble opinion, are people who are willing to serve their communities, and country, voluntarily, or for very little money. Self-service, conversely, are those who run for Government, or take public jobs, simply because of the promise of extravagant public benefits, paid for by private sector citizens.

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What Is Our Fair Share?

May 25th, 2012
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Over the last three years, we have heard some people in our country talk incessantly about wealthy people needing to pay their (so-called) fair share. But, what really is our Fair Share?

In The United States Constitution, our Founders wrote these words:

Article 1, Section 2, Clause 3:
“Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers…”

Article 1, Section 9, Clause 4:
“No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census…”

Our Founders, when creating The U.S. Constitution, in Philadelphia, in 1787, largely agreed that, all direct taxation should be in direct proportion to our Representation, in The House of Representatives, in Congress; as it only stood to reason that, no one should be taxed without having proper Representation; neither should they have considerable  Representation, if their requisite, or proportional, amount of taxes were not paid to The Federal Government.

Below, are some words, by two men, who actually participated in those debates:

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What Can Corporations Do To Us?

May 19th, 2012
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Quite often, we hear from people in our country that, big business, and corporations, are running our Government; and by extension, our country. But, how can that be? For example, unlike Government, Corporations do not have the power to make laws; they do not have the power to send us to jail; they do not have the power to vote away our income; they do not have the power to wage war etc.

Government, on the other hand, does have the power to make laws; they do have the power to use force, and to send us to jail; they do have the confiscatory powers to vote away our income; and, they do have the power to wage war.

Government, even when exercising their most basic of functions, is widely considered, a necessary evil; as they produce nothing. All of the money needed to run our Governments, must first be taxed away from the earnings of our citizenry. Corporations, on the other hand, create wealth, they create jobs, and they produce products that are of real value to people – such as energy, food, clothing, homes etc.

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The Broken Window By Frederic Bastiat

May 17th, 2012
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Below, is a classic chapter from Frederic Bastiat‘s classic essay, “That Which Is Seen, and That Which Is Not Seen,” called The Broken Window:  Enjoy!

“Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son happened to break a pane of glass? If you have been present at such a scene, you will most assuredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation: “It is an ill wind that blows nobody good. Everybody must live, and what would become of the glaziers if panes of glass were never broken?”

Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical institutions. Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier’s trade—that it encourages that trade to the amount of six francs—I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is that which is seen.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, ” Stop there! your theory is confined to that which is seen; it takes no account of that which is not seen.”

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Having Surrendered To Militarism As An Economic Device

May 12th, 2012
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“Embarked, as we seem to be, upon a career of militarism, we shall, like every other country, have to find the means when the war [World War 2] ends of obtaining the consent of the people to the burdens that go along with the blessings it confers upon its favored groups and regions. Powerful resistance to it will always be active, and the effective means of combating this resistance will have to be found. Inevitably, having surrendered to militarism as an economic device, we will do what other countries have done: we will keep alive the fears of our people of the aggressive ambitions of other countries and we will ourselves embark upon imperialistic enterprises of our own. ”  …

“Imperialism, too, has come to describe a kind of internationalism, so that one who opposes it is scornfully called an isolationist. Imperialism is an institution under which one nation asserts the right to seize the land or at least to control the government or resources of another people.”

- John T. Flynn (As We Go Marching)

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Did FDR End The Great Depression?

May 8th, 2012
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Below, is a very insightful article, by Burton Folsom Jr. and Anita Folsom, which was posted, online, at The Wall Street Journal, on April 12, 2010:

“He got us out of the Great Depression.” That’s probably the most frequent comment made about President Franklin Roosevelt, who died 65 years ago today. Every Democratic president from Truman to Obama has believed it, and each has used FDR’s New Deal as a model for expanding the government.

It’s a myth. FDR did not get us out of the Great Depression—not during the 1930s, and only in a limited sense during World War II.

Let’s start with the New Deal. Its various alphabet-soup agencies—the WPA, AAA, NRA and even the TVA (Tennessee Valley Authority)—failed to create sustainable jobs. In May 1939, U.S. unemployment still exceeded 20%. European countries, according to a League of Nations survey, averaged only about 12% in 1938. The New Deal, by forcing taxes up and discouraging entrepreneurs from investing, probably did more harm than good.

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Where These Elements Are Found There Is Fascism

May 3rd, 2012
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“We are now prepared to examine some of the forces that are at work here, some of the streams of thought and desires that run in our own society, and to appraise them in the light of what we have seen in Italy and Germany. Before we do this, however, it is well to be clear upon the central point of the foregoing chapter and to be warned about another danger that stands before us.

First let us restate our definition of fascism. It is, put briefly, a system of social organization in which the political state is a dictatorship supported by a political elite and in which the economic society is an autarchial capitalism, enclosed and planned, in which the government assumes responsibility for creating adequate purchasing power through the instrumentality of national debt and in which militarism is adopted as a great economic project for creating work as well as a great romantic project in the service of the imperialist state.

Broken down, it includes these devices:

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As We Go Marching, By John T. Flynn

April 30th, 2012
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Below, is John T. Flynn’s, 1944, classic, “As We Go Marching.” In the book, Flynn chronicles the history of Fascism in Italy, then in Germany. And, finally, how wartime planning, during WW2, brought fascism to The United States. This is a great book for both the historical content, as well as for the objective reader, who is interested in learning the parallels of many FDR Administration policies with those of early, twentieth century, Italy and Germany.

Enjoy!

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Romney Is No Friend To The Free-Market

February 6th, 2012
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As those of us on the right have long known, a free-market economy, free of incessant Government intervention, is a hallmark of Conservatism in American politics. And, amid the skepticism, in regards to Romney’s sincerity on Conservative politics, and Limited Government, he recently made two statements that were very telling:

1. “My view is to allow the minimum wage to rise with the CPI (basically, a measurement of inflation), or with another index…” (video)

2. ”I’m not concerned about the very poor, we have a safety net there. If it needs repair, I’ll fix it.” (video)

Allow the minimum wage to rise? Keep up with inflation? Repair the (Federal) safety-net?

Minimum wage, while on the surface, may seem compassionate, it is actually a policy that keeps the skilled-workers working, and freezes out the less-skilled, and first-time workers. And, Inflation is caused by the incessant printing of money by The Federal Reserve, which devalues our currency, and causes all goods and services to rise in cost. Therefore, if I am not mistaken, Mitt Romney is basically suggesting that, under his Presidency, inflation, the minimum wage, and the welfare state, are here to stay, and will be tweaked, and adjusted, by the Technocratic Manipulators in his Administration!

So, while Mitt and friends, continue to print monopoly money, and prices continue to rise – some of us, who are fortunate enough to be employed, as the minimum wage increases, will be employed, and the rest of society will survive by living in the demoralizing world of food stamps and welfare?

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