Worth The Risk

Yep. I think raising taxes on the wealthy is dumb. I also know it sells well to the masses. Especially in times like these. But bottom line…taxes are…well taxing. Like when an out of shape person climbs too many fights of stairs. They huff and puff, and say,”My breathing is taxed.”
Taxes to a financial system are like friction to an engine. While some may be good for creating heat and comfort for the passenger compartment, too much friction will destroy the engine.

Financial systems work best when capital is allocated rationally by individuals at risk. This is fact.

Governments are neither individuals nor when they tax, take other peoples’ money, they allocate it irrationally (wastefully) and no one individual or small group, say partners or limited share holders bear the risk of failure in governments.

Governments market security. They sell a promise to you and to me that they can and they will protect us. For conservatives, this security notion looks like the military industrial complex. For the liberals, security looks like the social justice complex.
Suggesting to either the left or the right, we haven’t the money to pay for such things is blasphemy. You’ll be accused of being either unpatriotic or un-compassionate. Yet we are in a financial conundrum exactly because when either team amasses enough political power to implement policy, they do so through corrupt means – debt montezation, money printing, dollar devaluation. A stealth tax on all of us.

Now I know you and your like minded fellows on the left think a flat or fair tax the antithesis of progressive tax policy, yet every time the Federal Reserve prints another dollar, we are all taxed equally according to the number of dollars we own and the dollar value of all of our assets. When Obama goes to congress in the next few days to ask congress to raise the debt ceiling another $1.2T dollars to fund his 2012 vote buying operation, he will use you and the left and the #OWS crowd to sell his wedge issue about (R’s) not wanting to raise taxes on the rich, but don’t be fooled.

I predict Obama’s request will pass. The dems and the establishment repubs have the Tea Party R’s quarantined for now. Once passes, Obama will take his mandate to Tax-Cheat-Tim-Geithner who will then issue bonds, (Debt to the tune of $4,000 for you me and every man woman and child in the US) which will then be sold. Some to China and some to Japan, but more importantly most will be sold to the biggest banks in the world. These banks will then flip the bonds the very next day to Fed Chair-Satan-Ben-Bernanke in a very thinly veiled attempt to make it look like the Fed is not buying our debt directly. But let me be clear, the Fed is the biggest buyer of our debt. Ben buys it with newly minted dollars which then devalue the dollars in our pocket via a very stealthy flat tax.

Ironic don’t you think? Obama gets his base to carry his water, amass political power, on the notion that he is sticking it to the rich guys when in the end, he’s screwing you with a flat tax.

People who understand this would call this tyranny.

But wait there’s more. Remember the banks who help flip the bill to the Fed? Well they get the money to buy the US Bonds in the first place from the Fed’s discount window. Only the biggest banks have access to this window where you can get dollars for virtually zero interest. Then they buy the bonds from Tim, they loan him their free money, but they charge him 2% for the loan to the taxpayers. 2% on $1.2T is $24B in what amounts to money for nothing. A riskless transaction. Yet the bonuses will be flowing down at the big banks of Wall Street. The very same fuckers who fucked up the system in the first place. This is their reward.

Here’s a little thought experiment. We spend 40% more than we take in. We have near zero growth in GDP. Let’s say if you made $100k. Nice hunh? But your wages are frozen, not going up next year or the one after that and so on for the foreseeable future. Sucks I know having settle for $100k. Now, let’s say you spend $140k and you have no intention to cut spending. At what point does your banker cut you off? That’s the situation in the US. It’s not sustainable. We have to cut spending.

Raising taxes on the rich, to the extent you can collect it, is dumb. It’s dumb because the rich have many more options for tax avoidance than joe-sixpack (another thing totally lost on progressives). As soon as Obama squanders his political capital on winning the point over the rich paying their fair share, the rich will reallocate and recharacterize their income to reduce and or avoid taxation, and progressives will have to wait another generation for the coming of their next messiah to win the point again. Meanwhile, so long as it costs millionaires thousands to save tens of thousands in taxation, and so long as it costs billionaires millions to save billions, it just makes economic sense to avoid taxation. Nothing will be gained except another four years of financial lunacy for management of our economy. And any effect taxing the rich has will come at the expense of that rich person investing far more wisely and prudently than the government; investment which leads to job creation – job creation which leads to growth in GDP.

What I think would be smart, is if all your pals on the left would get a clue about how money is born, how both the establishment left and right have abused the privilege of money creation to buy votes, that they have grown government, the military industrial complex, and the social justice complex as monuments to their political bases; to the point of tyranny over the individual. Learn that they are debt addicts, and thus we are their enablers to our own destruction. In my opinion the only solution is to get off debt. This of course will threaten our security, a primal desire for individuals and so for groups. But this is the path of recovery. If it were easy, we would have done it long ago.

Elect politicians who will either pass a balanced budget amendment, or abolish the Federal Reserve, or both. Right now, those candidates are Tea Partiers, to the extent they have not been co-opted by antigay defense at any cost wing nuts. But I believe the #OWS movement can bring candidates who get this as well, so long as they are not co-opted by left-wing unionist and socialist BS, but the ones who get that central bankers are at the center of what is wrong; that they need to be stopped. And Ron Paul is the only candidate for president who advocates ending the Fed.

Here’s what you get when you limit spending in Washington. Both the left and right have a grown up conversation about how to allocate our limited funds. It would be the first time in many a year, perhaps many a decade. Isn’t it about time? What do you think?