Beyond the Cusp

April 21, 2019

Why Congress Loves Taxing the Rich

 

Every election cycle we hear the same refrain of, “Tax the rich.” But exactly what do people mean when they rush to the cause all but screaming, “Tax the rich!” When you ask them, the answer you will most hear is that those people who are multi-millionaires must be made to pay their fair share. That sentence is just too easy to pick apart. For example, how would their paying their “fair share” actually look? Does it mean that they should pay higher taxes as they make more taxable income or does it mean that everyone should shoulder the burden at the same percentage rate? If they should pay higher and higher taxes as their taxable income increases, at what point does that rate hit 100%, or to phrase it differently, what should the maximum taxable income be set at such that all earnings beyond that point are confiscated by the government? Wait, you are making this far too complicated. It is really easy, nobody need make over one-million-dollars a year, thus anything beyond one-million-dollars should be taxed at 100%. All right, we will agree with you on this point. Now, does anybody believe this would soak the rich as is so often claimed? Actually, this tax rate would not have any effect upon those people who most claim are the rich who are not paying their fair share. How can this be when you have set the tax rate at 100% for those making over one-million-dollars a year. In actual honesty, that is not what we agreed upon, and Congress knows this. The agreement was that nobody could earn over one-million-dollars a year in taxable income with the rest be forfeit to the government. But the people who many call the wealthy, pseudonym presumed to be the rich, make virtually no taxable income or, if they make taxable income, it is minimal compared to their main means of becoming wealthy.

 

The problem is simple, there is earned taxable income and there is earned nontaxable by income tax investment gains. These come under what is called capital gains taxes, and this is kept relatively low. Further, there are no taxable gains as long as you do not sell the investments such as stocks and bonds. And should you cash in, if you have losses which are equal or greater, you still are not taxed as you made no actual gains. Finally, even if you sell off some assets and have capital gains, as long as you invest them within that tax year, then you have rolled that into another investment and it does not become taxable. Investment gains are seldom taxable as income and is only subjected to capital gains under specific definitions all of which play to the investors’ advantage. Thus, if you want to tax the really rich, the wealthy, what you are required to have would be a wealth tax. You would never even get a wealth tax piece of legislation into debate, let alone such ever reaching a vote, and such would never pass. What the people have to understand is that we the people of the United States (OK, you the people, better?) have done is to make politician into a career in which the sole goal is to get to Washington DC as either a member of Congress or one of their senior advisors or aides. That is the level at which you can finally cash in on your years of public service. Once you make it there you have made it into the big game where the real money can be made. Yes, their salaries are not all that extravagant, yet most of us would like to make that modest an income. But that is not how Bernie Sanders made his millions, and it was not from his claimed book sales. Congress has set up a lovely little tax-free shelter in which they can easily make hundreds of millions of dollars and do so legally for them that regular people would go to jail if using the same advantage. What are you hinting at already?

 

Well, let us ask a simple question. Let us say that you knew for an absolute fact that in the competition between Lockheed-Martin, McDonnell Douglas and Boeing which one would be given a multi-trillion-dollar contract to build a Moon base. Taking this information, you sell your stocks in the other two and use that money to buy all you could of the one getting the contract. What is that you said? That would be insider trading and you would go to the Federal penitentiary for a long vacation. That is true, unless you are a member of Congress or one of their senior staff. You see, Congress has exempted themselves from such bothersome little details such as insider trading. For them insider trading is simply a benefit of the job. Who could honestly expect that the people who decide which companies get huge government contracts and which ones do not and when these contracts are going to be awarded to sit on such information and not use it to their slight advantage. This is how people come to Washington as a Congress-critter and within four years leave as multi-millionaires. They all write a book or two or ten and claim that is how they made all that glorious cash hoping that the public will buy their story. Reality is that they made all that money as part of their daily service to you the public by discussing who would be best to reward huge contracts using your tax monies and then taking their meager cash and heavily investing every penny they could scrape together and buy that very same company who is about to be voted a huge contract’s stocks and then selling it a few weeks after the contract is awarded and the stock price soars. Why sell their stock before the price maximizes? That is because they have another contract ready and waiting until they all buy their shares and then they vote to give some lucky company the next contract. Forget the above example and look at the real cash engine they get to utilize. You have five or six small companies vying for a government contract which would permit their little company to triple in size and enter the “big leagues” and play for real money. Well, such a small company in order to make their viable required capital investments, so they issued an IPO (initial public offering), the first step to becoming listed on one of the stock exchanges. These are risky investments as should the company fail, you lose everything, but if the company succeeds and goes big league, then the return can be as high as one-hundred for one or even higher. Now if you know which company making an IPO is about to receive a huge government contract, well, the rest is obvious except for those pesky insider trading laws. But the elites in Congress have a get out of trouble-free card which is reusable as many times as required to get around those silly little Federal Laws. Now, the rest of the very wealthy also make their money through investments which are not subjected to income taxes, solely capital gains taxes, which is an entirely different game with laws encouraging such investments as they are necessary for economic growth. This is why “Tax the rich” is such a meaningless and trite little saying which has much of its appeal in ignorance and ability to be effectively chanted. I mean, really, would “Tax the investment class” make for a good slogan? No, it just does not have that precise and easily understood banter like “Tax the rich.”

 

Capitol Cash Machine

Capitol Cash Machine

 

So, people ask, why not instigate a wealth tax? Lawmakers will immediately point out that there already is such a tax, the capital gains tax. Capital gains tax rates are either 0%, 15% or 20% for assets held for over a year while those held for less are considered to be income. That is nowhere near as high as the rates would be if capital gains were treated as straight income and subjected to income taxes. But for the elites in Congress, their capital gains tax rate is 0% no matter the length of time the asset was held or how much they made off their investment. We hope it is starting to make sense why people spend upwards of anywhere from one to ten million dollars to be elected to Congress as a Representative which is a two year gig paying a mere $174,000 a year equaling $358,000 over the first term. Let’s face it, $358,000 of salary is definitely not why they are willing to take loans and contributions which make them accountable to individuals and not the electorate just to get in the door. Once in the door, with two years to play with and the best insider information in the world, well, you can see where they are about to become wealthy, and indemnified against insider trading laws. It really is as sweet a deal as it sounds like it is, which is why our political system has become a career for those out to make it rich with the least effort at earning an honest wage. But those who are not permitted insider trading, or at least not getting caught as any information can be prosecuted as insider trading if the government suspects such of existing. Anyone caught in that vise is probably beyond even the help of good lawyers, as the government is holding all the cards and if you are innocent, then you have no idea what the government claims you know and try proving a negative, in math that is one of the most difficult proofs and legally it is next to impossible. You can bet your bottom dollar that the Congress guards their advantage with overt diligence by making a grand example of anyone they can catch at insider trading so they can make great broad sweeping announcements about how such trading is beyond the pale and must be rooted out, well, except for their little protected haven where such trading is everyday business as usual. As far as a wealth tax, this is amongst the top ideas which are and always will be stillborn as those who actually call the shots and make all those heavy investments into Congressional campaigns, and the smart ones choose some promising State government elected leaders they see making it to Washington and buy them on the cheap, list a wealth tax as their Kryptonite, and thus never to even be discussed or the subject broached if at all possible.

 

There actually are good reasons why a wealth tax is unworkable. The first problem comes in defining exactly what constitutes wealth. Does the home one lives in to be included as part of their wealth or is it only homes and properties which are rented or used for making an income to be considered wealth. How much wealth should one family be permitted tax free? How does one treat foreign investments made by Americans or, on the other hand, how does one treat foreign investors investing in America. Another problem comes when figuring whether or not once one has paid their wealth tax on some assets, are they tax free from that point forward or are they to be counted year after year as part of that individual’s wealth determinations for their tax payments. Further, a wealth tax penalizes investment and if carried to its final conclusion, a wealth tax will eventually eliminate wealth. Were wealth eliminated, there would be little if any investing and the economy would soon collapse. Wealth taxes are one of those items which it becomes all but impossible to fashion them such that one does not kill the goose laying golden eggs in the process of taking a share of the product. Wealth taxes take from a person’s accumulated gains often repeatedly while Capital Gains taxes only take from the net profit made and then only if the gains are not reinvested thus generating economic growth. All taxes have to be tailored such that they do not stifle economic growth and progress and actually can be fashioned in such a way as to actually serve furthering the economy and other advancements. One example is granting companies a certain percentage of their gross budget for research and development which is the means by which they can grow their company, invent or discover items which serve the public as well as their companies. In the long run, wealth taxes become problematic as they discourage investment, encourage hiding money in places beyond the reach or view of the IRS including owning property outside of the United States deeded in a country which refuses to allow the IRS any investigation of their files, deeds and other financial data which could be used in the determination of wealth for taxation purposes. Such a tax would increase the use of cash and the avoidance of even keeping money in banks and other financial institutions. People would become extremely inventive finding new and extravagant means of hiding their wealth and would even go so far as to force people to invent an entire economic sector which would be private and kept from the government’s reach. One such means would be to set up a company which provides real estate sales, financing and insurance all of this carried by offshore registration in places which are known for wealth shielding through not cooperating with the IRS or other parts of the United States government, especially any investigative arm. Some smaller countries could develop an entire economy based on hiding wealth from a prying government’s eyes and protecting wealth from the greedy hands of the IRS and the rest of the government. Any such wealth tax would end up so cumbersome as to make its enforcement even more convoluted than the present IRS codes, and those are legendary for their problems.

 

So, taxing the rich is not as easy as raising the taxes on those whose income is beyond a certain dollar amount. That is not taxing the rich, that is making becoming rich more difficult. The tax the rich is so popular with the truly wealthy simply because it is a means of protecting their wealth as wealth is relative. What we considered wealthy in 1910 was very different than from 1925 and again from 1950 which was minuscule when compared to 2000 and it is still changing. We used to consider a person wealthy if they amassed one-million dollars of personal wealth. Then it went up to ten-million, one-hundred-million and now it is tens of billions and higher before one is considered truly wealthy. Another item which is seldom made evident and has never become common knowledge is that though the spread of wealth remains relatively static, the people at the top change with time such that the most wealthy twenty years ago are not the same top of the chart as those there now and it will be a different group in another fifty years. The wealthy are not the same people and are anything but evil. Their only crime was either making something which made people wealthier, happier or served the public, private or corporate good. Bill Gates was not uber wealthy fifty years ago and his wealth will likely be dwarfed by others over the next fifty years. Wealth is not a static statistic; it is malleable and seems to rotate with new and fresh faces coming up and older ones dimming and eventually falling from the ranks of the truly wealthy. The people who become part of the wealthy elite are people who have discovered some means of having others work with them or for them bringing in that wealth. Often, they invested in a company, they made their own company or they found the means of investing or producing things which gained in value greatly. Often such things come under capital gains taxes, other times the main profit for the government is in the salary taxes they take from the employees.

 

The actual problem the United States is facing financially has little if anything to do with taxes, not how they are applied, the rates at which they are levied or anything else. The problem facing the United States financially is the government spends too much, has grown far too large, their departments are horrifically inefficient and often the different departments overlap so much that there are often people from three or more agencies engaged in identical work. Even worse, there are some places where a single agency is performing identical tasks with more than one of their subordinate departments and committees making this problem emblematic of the United States government. The government, the Deep State if you like, has become almost a living entity which makes its own rules, enacts regulations which carry the weight of law, often enforce their own regulations as if they were the law, never retire any program once it has been given a budget additionally always increasing that budget procurement even after the department has become all but defunct. The United States government has become an employment engine which drives the Washington metropolitan area economy where entire companies are build around servicing the government. The government hires outside agencies and companies to manage their numerous little projects freeing up their own management so they are free to pursue educational degrees to facilitate their advancement to a position which will have its workload outsourced to a private company so the newly advanced individual will not be stressed with having to meet deadlines. The new excuse for missing a deadline is that the private company did not provide the necessary oversight thus their people could not be expected under such circumstances to have met the schedule and they will simply require more time and additional funds to hire another company to oversee the former company and make sure they stay on course. If that sounded confusing, wait, if we really went into it your head would spin doing several complete 360’s before stopping the entire time your brain screaming, “Did I hear you correctly?” The United States government needs to go on a diet and not go on any further eating binges as once they get to the tax dollar trough, they will never be weaned from taking your tax dollars and doing so in ever increasing amounts. And topping that off is that government civil service employees, once they have been in the government (we believe it is three years) long enough, they cannot be fired. Were you to remove one of these treasured little gems of an employee (do not get us started), they are enabled to replace any other employee who is of lower rank or has less time in service to the government, and that employee has the same right and so on and so on until some poor slub hired six months ago gets bumped, as it is called, and is out of his great job. There will be only one result of the current deficient the United States has piled up and that will be a financial collapse. Sooner or later that will be the result as to continue on the current path is unsustainable.

 

So, how long does the United States have before it goes under drowning in debt? That is a good question and we wish we could give you a date, but we are not quite that omniscient. We can provide some signs that the end will come sooner rather than later. Should the welfare, food stamps and other such government programs begin to grow at a greater pace than the economy can generate taxable revenues streams will definitely make things get dangerously unsustainable. Should the great little ideas being floated such as the $15 an hour minimum wage, guaranteed employment at that rate such that all the unemployed receive the minimum wage rate of pay straight from the government, universal government provided healthcare and the whole host of socialistic programs be enacted; the problems would be twofold. First is once they are enacted, they would be next to impossible to terminate. Second, with the guaranteed minimum wage, employment would make taking an entry level position paying the same as not working and would all but make minimum wage positions disappear. In order to entice people to work instead of simply being paid for breathing, employers would have to pay comfortably higher pay than the minimum which would also work to eliminate entry level jobs. Another job killer is the trade deficit which is only increased with the trade policies which open up access to American markets while making outsourcing of jobs economically advantageous such that companies would find keeping their production and almost any other lower skilled positions within the United States impossible as competition would force these positions to be sent outside the country. These are all items which politicians make great promises that they will not adversely effect the job market, investments within the country and almost every other item which uphold the economic growth of the United States all the while knowing, at least we hope knowingly otherwise the leadership is simply incapable of leading intelligently, realizing that over time these programs and laws are unsustainable. The United States is approaching the point where this will become reality. Such programs as the Green New Deal are economic death should they ever be enacted. This is where the future does not bode well.

 

When members of Congress propose such utter nonsense and they are not pilloried for their ignorance, then there is a problem brewing in the near future. The fact that the majority of college graduates believe that socialism is the preferred style of governance and do not see it as unsustainable and actually believe such to be preferable, then there is a sickness being perpetrated by the academic institutions which are producing the nation’s future leaders. The fact that so many of these youths believe that capitalism is actually an evil means of economic policy is also very worrisome. The concept of a guaranteed wage cannot work in any form unless production has become entirely automated and even many white-collar positions are being performed by artificial intelligence systems. When this day comes, either the artificial intelligence systems will have taken over the government or the only people able to make a decent wage will be the politicians as virtually all other positions will be performed by machines. The point where the artificial intelligence is capable of designing new systems including those which will replace them and are able to design the production facilities and build them, then we humans will have become dependent upon our creations to keep us and tend to our needs. Eventually, these artificial intelligence systems will realize that human beings are superfluous and then we humans will only serve the purpose of requiring the items these units produce. This may come to be seen as a waste of resources and thus an unnecessary cost which will not be sustainable thus the machines may decide that we are no longer necessary. Isaac Asimov came up with the three laws which would prevent artificial intelligence systems and robotic units from harming people and then wrote another story where he proved that even his best attempt was insufficient to prevent the systems from simply doing away with these unnecessary units which needed culling. Those of us who have read or watch far too much science fiction realize that the best hope for the human race is to venture out into space, even uncharted space, and hope we can find new worlds to populate keeping us one step ahead of the machines. Yes, these same science fiction consumers also know that eventually we lose this race as it is the only honest result if evolution is the final word on our future. Those science fiction stories in which the human race survives because we out-think, use intuition over logic or whatever writer’s ploy used in these stories are exactly what they are labeled, fiction. An economic collapse after the introduction of self-evolving designing artificial intelligence which can progress without human interface will leave the artificial intelligence ridding itself of those pesky, irrational, emotional units otherwise known as the human race. Perhaps they will keep a small number of us around as a reminder against frivolity, especially in place of solid leadership, something the colleges and universities appear to be espousing, frivolity as policy. Such leadership will bring on an economic catastrophe in the near term and it will not be pretty. The fall of Rome left a vacuum sending mankind back a couple of centuries as progress was all but at a standstill and the economies faltered. Will the eventual economic engine known as the United States present the same disaster when it fails. Perhaps, or perhaps the end will come from a direction few are even able to see as it stands before them. The next age will very likely be one in which the United States is rebuilding in order to become relevant once more. The United States, due to size and natural resources, will, like China, always be present and either leading or catching up as they restructure with a more intelligent governance which very well might be a supercomputer which coordinates everything. It will be an interesting ride with much for us to write about should we last that long.

 

Beyond the Cusp

 

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March 22, 2017

What Should be Included as the New Western Ethic?

 

There is an obvious pushback against President Trump throughout the Western World. Many areas of Europe, Canada, Australia and especially the United States in complete authentic meltdown over the prospect that Trump might succeed. This criticism of anything outside of the new ethic being modeled for the past seventy years or so has reached the point where accepting a speaking engagement could cost you your health if not your life should anyone start a rumor that your beliefs are unacceptably conservative or old fashioned. Take the reception Charles Murray received as he was almost lynched at the liberal college of Middlebury College in the state whose motto is “Live Free or Die,” Vermont. What was his crime? Well, he wrote the controversial book “The Bell Curve” which made claims that some people were more gifted than others and that there was a distribution of intelligence with a large median area and a slope downward from there in both directions. How absolutely horrid and insulting not recognizing that we are all equally gifted, just each of us differently. Nobody is smarter or faster or better at anything and we all deserve a trophy because we were there whether we engaged or just sat in the corner dreaming, we get a trophy. Our new age does not believe in competition, keeping score, recognizing winners or shaming losers to try harder, we just accept everybody and whatever efforts they feel they need to contribute today.

 

That is the one set of ideas which must be thoroughly erased from society, the work ethic, the idea that there are winners and losers, competition as a way of improving, striving to better oneself, making money, capitalism, actually defining words and having accepted correct spelling, standards, and the belief that some ideas and societies are superior to others and that freedom is something which is not only worth defending but requires defending because there are those who would subjugate the world forcing it to be ruled under their autocratic thumb. Wait, one of those groups are the elitists who are so against the ideals and ideas of Western culture and believe that Western ethics and culture is oppressive and evil. They find it based on violence because it has defended its freedoms and ideals from those who would have subjugated and destroyed their world. They claim that Western culture and society was responsible for World War II and the Cold War and that had they simply not fought to keep their culture everything would have been so much better. Sure the Nazis were not exactly friendly but did the world really need be turned into a shooting gallery just to defeat the Nazis and the equally disturbing Imperial Japan? Of course not as the Western nations should have negotiated with them. Those claiming such forget that there was this little thing called the Munich Agreement which Neville Chamberlin signed with Adolph Hitler as well as Georges Bonnet of France and Joachim von Ribbentrop for Germany, Benito Mussolini for Italy and declared as “Peace in our time.” The main detractor was Winston Churchill who was called the crazy old man and was ostracized by the leftist pacifists of that day who just like the modern leftists saw nothing to be gained by war and saw little need to defend against the Nazi threat because a treaty had put an end to the menace and Hitler was appeased. Well, not quite as Hitler next demanded Poland and divided it with the Soviets under the Molotov–Ribbentrop Pact. That act finally was more than the French or British were willing to permit and they went to war. Unfortunately, with the time given to the Nazis they had built a formidable war machine with which they came within a razors edge of winning World War II before the United States entered the war. Had they defeated the British and then turned against Russia successfully, the world would likely be speaking German today and there would be no Western culture to speak of and the modern leftists would have their dream, a socialist fantasyland where under the heel of dictators all would be perfect. Venezuela is one of the modern examples of where such thinking eventually leads.

 

Moneyed USA

 

Let’s imagine the United States after it has adopted the most easily recognized ideas which are favorites of the college educated elitists, not the professors, even though they are the purveyors of these concepts. We’ll use what the protesting students do, the ones who decide who is permitted to speak and what any speaker may present on their campuses. They proclaim that government must provide free education to all at all levels for as long as or at any point in time or point in their lives which people may desire, not require, simply desire. Further, all people, regardless of quality of their health, preexisting conditions, level of exercise, diet, weight or other physical, mental and psychological conditions should be granted equal coverage. The government must provide all citizens with a livable wage. Further, anybody within the borders should be granted citizenship. Everyone who desires to come to the United States should be granted entrance and citizenship because all people are equal and must be respected and given equal rights and treatment despite place of birth. The wealthy must be made to provide to pay sufficient taxes even if it means taking part of their wealth to provide government services which the people are entitled to as citizens. The people should be educated to understand and accept these concepts and the rest of the ideals of proper governance which includes freedom of gender identification, equal treatment of all sexual preferences, equal treatment of all people regardless of gender, identity, race, sexual preferences, nation of origin and a lengthy list of other identifiers as identifiers are evil and must be erased. When asked exactly how the society, actually the government, is supposed to afford these benefits and their reply will always be the same mantra, tax the rich, the wealthy will pay for it. What they refuse to understand is that in such a society there would be no wealthy as they would either leave for someplace where sanity ruled instead of feel good leftists or would have lost their wealth and joined the poor. Such a social arrangement for building a nation would result in a failed state where the average norm would be people taking courses, even if they had to take basket weaving, or simply party or enjoy long walks on the beach or through the park and collect their living wage as anything else would be punished with an unaffordable tax.

 

In order to collect sufficient funds to provide these benefits, the government would have to tax any income over the livable wage at near, if not above, 99%. Simply defined, if the living wage was set at thirty-thousand dollars a year, then with the above mention 99% tax on any income earned above that rate would have somebody earning thirty-five-thousand dollars a year would end up having a mere fifty dollars additional over those who settled for the livable wage. That begs the question, why bother working for a nominal wage when you would only receive a penny per dollar above the livable wage earned. Well, perhaps if you earned enough it would be different. What if you earned $250,000.oo? Well you would end up with $2,200.oo more than the livable wage. Now realize how much you would need to work as most people making a quarter of a million dollars put in over sixty hours a week at the office and another thirty at home and spend much of their free time thinking work. Then ask if a life of near constant working is really worth just over two thousand dollars or would the idea of taking courses or simply chilling with friends and take the livable wage be better. How bad could the livable wage life be compared to working your guts out for an additional two thousand dollars? The pull to avoid a punishing taxation and simply go with the majority would eventually result in the end of wealth as we know it. Additionally, if the livable wage proved not to provide sufficient life enjoyment and with likely the majority of the society collecting the livable wage, then it is likely that within a relatively short period of time they would vote to increase the livable wage. Politicians would place their jobs on that promise as they would not care as their salaries would either be tax exempt or sufficiently high such that their lives would be very comfortable, after all, they simply need to vote to increase the livable wage and also to raise their own salary.

 

Once again, look to Cuba, North Korea, Venezuela and the Soviet Union and the same thing becomes obvious to any discerning observer, they all have failed miserably. What makes this even more distressing is that Venezuela was a profitable nation with a capitalist economy until they elected a feel good socialist who decided that elections needed adjusting. He basically became President for life and he kept enacting more and more social safety net programs until Venezuela became a socialist utopia until the oil revenue could no longer support the social spending when the price of oil dropped as the United States discovered the means of retrieving shale oil through fracking. This led to Saudi Arabia to open up their spigots forcing the price of oil to the point where fracking was no longer profitable. This also placed pressure on Iran whose oil is of a lesser degree as it is very thick and needs more processing thus requiring more expense to process thus making their profit margin require a higher price than the result from the Saudi Arabian price pressure to a low level. Russia also has run into problems with the lowered price of oil which has proven that heavy social spending or other considerations can make a lower price for crude oil economically ruinous which has been the weapon used by the Saudis for years. The problem for Venezuela was more spending than lowered oil price; the oil price simple exacerbated their situation.

 

There is a reason why socialism will always fail while capitalism will usually work provided government spending is kept in check. The founding fathers chose an entrepreneurial based society for a reason, human instincts. There is one disposition in human behavior which can be counted upon in near all situations regardless of the governance, greed. Yes, being greedy is considered a negative personality trait but if we are honest, we will almost all admit that given no punishment for acting greedy, we will be greedy. Given a choice between a regular hamburger or a double hamburger for the same price, face it; we will most likely take the double burger. Make that three scoops of ice cream versus four scoops of ice cream for the same price? Four scoops, right? Let’s make it even easier, you are offered two jobs, both requiring you to clean up a football field which are across the street from one another with the one on the north side paying twenty dollars an hour and the one on the south side paying fifteen dollars an hour and both allowing you five hours of payment no matter how long you take, which job would you take and you can only do one or the other. Obvious, you take the north for the extra twenty-five dollars. Why these seemingly stupid questions, you ask? Well, capitalism counts on people being greedy, well, not exactly greedy but willing to work harder to gain additional wealth. Sure there are those who like me prefer a job which was interesting but when I worked on commission I worked far more diligently and faster than when I was paid simply by the hour. Perhaps that is why when department stores paid their salespeople by commission the service was so good and when they switched to hourly rate the service disappeared and, if you were fortunate, you could find a cashier to take your money. When my team of roofers were paid by the hour it took half a day to roof one townhouse but when our job paid by the length of roof we completed we managed to finish three townhomes by lunchtime, remarkable, right? That is called the capitalism effect.

 

Now let’s look at a socialist utopia where you are guaranteed a livable wage which would be relatively generous. Additionally, healthcare is free so you do not need a job to be covered. Housing is fixed at an affordable rate and there are price controls on food, vehicles, and other niceties. Entertainment is inexpensive or free. Education is free for all levels and you can remain in school taking courses all your life and even the dorm room is free as is the cafeteria. Most jobs are likely to be employing people from foreign countries as they would be willing to work for a wage as other costs in such a society make doing so easier to send money home to their families but these people work for a few years, make what their needs were back home and leave. Most of the citizens simply take the livable wage, stay in school and live a carefree life. Now let’s add one last item to the mix; anybody is permitted to enter the country and become a citizen simply by requesting such. Now how long will such a nation survive? Decades, years, months, weeks, until the first million people arrive? Face it, such a nation is doomed from the onset and there is no way around it even if there are oil wells as far as the eye can see. Even the oil sheikdoms limit their wealth and generosity to the indigenous peoples and guard citizenship for the precious fortune it is for their people who never need toil if they choose not to and foreign workers are brought in to do everything. Imagine if they allowed for open citizenship for just a week. Their ability to afford to continue their generosity would vanish and the goose that was laying the golden oil eggs would no longer be capable of supporting the expanded population as everyone who could get there, would get there and take the free income for life or for as long as it lasted. There can be no open border socialist utopia and even with a closed border it eventually will collapse, even Kuwait which has the luxury of an oil well for every ten people or something ridiculously close. Without near endless supply of wealth, the sole means of running a nation successfully is to take as much advantage of the one constant, greed. Using greed to power the country is far more successful than using the country to satisfy greed.

 

Beyond the Cusp

 

February 23, 2013

Republicans and the Empty Promise Syndrome

Filed under: 2012 Elections,24/7 News Reporting,Ability Raise Taxes,Absolutism,Administration,Amalekites,Amnesty,Anti-Capitalists,Anti-Colonialist,Austerity Measures,Balanced Budget,Baseline Budget,Border,Budget,Cabinet,Cabinet,Checks and Balances,Civilization,Class Warfare,Congress,Consequences,Constitutional Government,Cost of Living,Debt,Debt Ceiling,Debt Clock,Democrat,Economic Fascism,Economic Growth,Economy,Elections,Employment,Enforcement,Enlightenment,Equal Opportunity,Equal Outcome,Euro,Euro Zone,Europe,European Union,Executive Order,Fascism,Fascism,Federal Government,Federal Reserve,Financial Crisis,Fiscal Cliff,Funding,Government,Government Waste,Guard Border,Higher Prices,History,Hyper-Inflation,Illegal Immigration,Immigration,Income,Increased Spending,Inflated Spending,Inflation,Investment in the Future,Jobs,Media,Military,Military Base,Military Option,Minimum Wage,Myth,National Debt,Neglection of Duty,Nuclear Weapons,Obama,Panic Policies,Pentagon,Politics,Poverty,President,President Obama,Quantitative Easing,Regulations,Repatriation,Republican,SEAL Teams,Senate,Senate Majority Leader,Sequestration,Speaker of the House,Special Forces,Spending Cuts,Taxes,Under Employment,Unemployment,United States,United States Constitution,US Army,US Marines,US Navy,Wealth — qwertster @ 1:34 AM
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First off we need to define the Empty Promise Syndrome, sometimes called the Wimpy argument quoting the Popeye cartoon character who was always offering to “Pay you next Tuesday for a hamburger today.” Those cartoons must have had many Republican politicians earning money on the side as extras on the set as Wimpy never seemed to have any shortage of hamburgers to gulp down. To trace the beginning of the Empty Promise Syndrome infecting Republican politicians we need to go all the way back to 1986 of the Reagan Presidency and the Immigration Reform Bill which legalized at a minimum the three-million illegal aliens residing throughout the United States while promising to address and provide for a system of border enforcement which would make the borders of the United States virtually impenetrable. Currently there exist an estimated eleven- million to possibly over eighteen-million illegal aliens, the euphemistically denoted undocumented workers, citizens without papers, undocumented aliens, and any other of a half dozen terms which dance around but would never use such a harsh and loaded term as illegal. Somehow the agreement to grant citizenship today and impose enforcement tomorrow never quite delivered when tomorrow rolled around, a lot like Wimpy who can never be found on Tuesdays. But there are so many other examples that we had best stick to the two latest in the series.

 

If we were to remember back to just before Thanksgiving and on close to Christmas and then New Years the news reports were all buzzing about some looming doomsday threat called the Fiscal Cliff. The Republicans demanded spending cuts which would be at least equal to any tax increases. They would have preferred, or so they claimed, to have far more of the deficit cut by spending cuts than relying on tax increases. President Obama was insistent that the deficit reduction be levied completely by increased taxes on the rich as they had to be made to pay their fair share. With what were defined in perfect threats from on high was this sequester which would cut spending severely without any concerns for what was necessity and what was less vital and would destroy uncountable programs for the poor, the elderly, the children, the ecology, the Earth, the whatever you cared about and especially the military while ending the great recovery we have been experiencing (though many myself included are loathe to see any solid signs of this recovery unless that is what higher grocery prices are now called). In the end, President Wimpy offered spending cuts by March 1 for taxes on the rich today and the Republicans gave Obama everything he requested and set a new sequester date to force spending cuts as promised.

 

Well, here we are fast approaching March 1 and President Obama is demanding changes in the code resulting in more tax revenue and attempting to reduce spending cuts in any programs or departments with possible exceptions of certain areas the President finds unnecessary such as the Military. It is likely that President Obama would gladly put off any spending cuts forever and simply rearrange the tax codes and eliminate deductable items or at least reduce them or cap them all in order to cut the deficit without cutting spending. Actually, the President has even proposed that his adjustments to tax deductions and the tax codes will produce so much deficit reduction that he will even be able to propose additional spending with the extra funds his accounting has predicted. If the Republicans allow the President to fiddle with the tax code and tax deductions in lieu of the spending cuts promised at the end of last year’s Fiscal Cliff negotiations, they will have forfeited the collateral supposedly granted them of tax increases on the wealthy then for spending cuts and only spending cuts now. This simply means that if the President insists on increasing tax revenues instead of more spending cuts the Republicans should stand loudly upon the promise by the President that this would be the time for spending cuts and only spending cuts. Force the argument to be either the President reaches an agreement on spending cuts or President Obama will be responsible for the sequestration cuts when they occur. Force the choice on President Obama and the Democrats by passing a spending cuts bill which delivers what was promised and announce that the House of Representatives has met their responsibility and produced legislation for rational and safe spending cuts to reduce the deficit and that it is now left to the Democrat controlled Senate and the President to meet their obligations and keep their promises. After all, it is not like the across the board cuts required by the sequestration alternative would actually be anywhere near as debilitating as has been expressed by the fear mongering going on in some of the media and the White House.

 

Then there is another repeat performance being played out in Congress and that is once again immigration reform. This is forming up to be a complete and exact repeat of what occurred during the second half of President Reagan’s time in the White House and many of the exact same players are simply dusting off their old scripts and adjusting a few numbers and going through the same motions using the same terms and offering the same old lies as promises. As the old adage says, “Fool me once, shame on you. Fool me twice, shame on me.” There is absolutely no reason for the Republicans, and any Democrats who actually care about the rule of law and the safety of the United States, allowing any form of amnesty or forgiveness and allowances to remain inside the borders, let alone working, for the approximately eleven million illegal aliens until there exist in place solid and uncompromising enforcement procedures that include security controls, observation abilities, formidable border barrier systems, and every possible technique applied and utilized to prevent any further illegal infiltrations. There can be no allowance of we will secure the border next Tuesday for total amnesty, or whatever sly and misleading name it be given, today. That was the basic promise which was never intended to be kept in 1986 and will likely be the offer given once again with every single amount of deceit included today.

 

There is one large and very unfortunate problem with the above. The truth be told there are many Republican who desire the lie of enforcement later for allowance and a path to citizenship today as that way they can unfurl the banner of supporting a closed border while not actually getting a closed border. Both sides, the Democrats in order to gather more voters for their candidates and the Republicans to provide less expensive labor for certain industries and businesses, honestly work together to guarantee that those they allowed into the United States are rewarded every so many years with citizenship and at the same time keep the border porous letting in the next wave of voters and workers enter the United States illegally to the benefit of both sides coffers and votes for reelection. One should not be too surprised then when once again we will witness a deceitful front played by those for whom taking a strong stand against illegal immigration and its effects upon the United States once again feign disgust when their votes allowing for immediate forgiveness in any form for the illegal immigrants currently in the country allowing them to remain, keep their jobs, and eventually gain an easy path to full citizenship while enforcement of our laws and control of the border are put aside to be addressed later. Of course later never comes as it is always now and later is, well, later. Do not expect this round to result in anything which falls far from the indecency pulled over on the American people in 1986 when Reagan allowed amnesty on the promise of future enforcement. We are still waiting for that later enforcement and who knows which later will arrive first; the last one or the one we can expect in the near future when the grand immigration compromise is announced with great fanfare and applause all around. My bet is neither enforcement will materialize before the Congress and some future President assure us that these thirty-some-million undocumented citizens will be the last and by allowing them legalization and documentation it will facilitate their soon enforcing our laws and border, and then there will be three soon to come promises.

 

Beyond the Cusp

 

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