FDR's Great Depression Proves Socialism Does Not Work!

Some things have really been poking me in the eye lately, and it's time we face the facts head-on! Stay tuned as this will be a series of posts since the material comes from comments I see posted around social media that range from misinformed, to execrably stupid. Unfortunately, the material is abundantly plentiful.

How about we start off with a little bit of Bernie Sanders's so-called “democratic socialism” … as if that in itself doesn't provide enough material to fill an entire book. With that in mind, let's begin with this quote: “President Franklin Delano Roosevelt used socialist systems to fix the social problems he saw in America.” Okay, now let's see how that worked out for America.

FDR's ballooned the national debt by 11.5 times taking it from $22.5 billion to $258.5 billion. Even when allowing a major chunk of that for the cost of World War Two, nearly $90 billion, or four times the national debt when he entered office, was caused by FDR's socialist program failures.

In 1933 FDR shut down all of the banks and forced Congress to pass the Emergency Banking Act, which gave the government police-state powers over all American banks and double-down on the socialist Federal Reserve Act of 1913. The Federal Deposit Insurance Corporation (FDIC) created by FDR, forced the already economically destitute taxpayers to bail out the banks. The result of this socialist plan drove inflation through printing more devalued paper money, and reducing the buying power of the few American who were still working.

FDR's Agricultural Adjustment Act (AAA) of 1934 was essentially rooted on the same central-command ideals as the 1933 national-socialist Nazi Reich Entailed Farm Law, as well as similar programs in Russia and China. The failed idea was to increases taxes on people who were already taxed into poverty to support a bunch of new bureaucrats who would give a small portion of the tax monies to farmers who destroyed crops and animals while many of their fellow Americans were literally starving to death.

Contrary to what was claimed in the sales pitch, Roosevelt's socialist programs such as Civil Works Administration, National Industrial Recovery Act, and Works Progress Administration caused the prolonged stifling of the American economy, and subsequently the prolonged suffering of the American people. While the world felt the effects of the 1929 Stock Market crash, only the American people suffered the extended ravages of the Roosevelt-Socialist “Great” depression. Like all socialist programs, what sounds great in the sales pitch, will most assuredly leave you with buyer's remorse. Just as the 1934 AAA increased taxes on, and reduced the amount of food available to starving people, the so-called “works” programs removed the ability of the private sector to generate wealth.

To follow this, one must understand that government has no wealth, and government has means of generating wealth. Therefore, everyone employed, or otherwise funded, by government is a consumer of wealth. In order for government to support its employees (bureaucrats and politicians) and dependents, government must confiscate money from the people who actually generate wealth. All wealth originates solely through the efforts of wealth generators; the people who actually make or grow things, and the people who assist the people who make and grow things by providing necessary services. In fairness, we must exclude from the “bureaucrat” label, all those government employees who fall into the “wealth-neutral” category such as the military, fire and police because they provide the services that benefit all of society.

Thus, for the purposes of discussing the mythical utopia that's being called “democratic socialism”, let's see what we've learned over the years from Roosevelt and other US presidents. The more government sticks its nose fingers into wealth-generation, less wealth is generated. FDR's Great Depression should not only be a learning tool, but the visible results should scare the crap out of anyone who thinks government is the answer to anything!

The top five points:

1. Government can only survive if there is sufficient private sector wealth-generation.

2. Government work/job programs hinder private sector wealth-generation.

3. Government wage and price mandates cause inflation.

4. Increasing taxes on wealth-generators hurts the overall economy.

5. Reducing government's consumption of wealth, benefits the economy.

In closing, the next time you encounter someone who thinks college and other things should be provided for “free”, please take the opportunity to remind them that government doesn't have any money until they confiscate it from someone who is working. Ask them to demonstrate their conviction to the cause by giving the government 88% of their pay so it can be redistributed to others. Yes, that's right folks, when one calculates the total tax burden on working people in socialist countries, it averages 78%! Compare that to how many complain now about the United State average of just 38%. Putting numbers to it, the median average household income of a working Americans is $51,900; under the alleged democratic socialism being proposed by Bernie Sanders and the Democratic Party as a whole, you're income after taxes will decrease from $32,178 to $11,418 Oh, yes … kinda hurts when you put the numbers on it, eh?  

The Same Old Dog & Pony Show...

If this blog had been penned with a real quill, the ink would not have been dry on the “Hillary In The Hot Seat!” post when the media was running the headline: No Charges in IRS Targeting Scandal”.

Just as I spoke about the massive seventeen million dollar waste of taxpayer money producing nothing more than a dog and pony show when it came to the Waco Siege Slaughter investigation, and over sixty million dollars was wasted on the Cattlegate investigation where, as we expected, the criminal evidence was simply ignored, and the politicians went about business as usual.

And, mark my words, the Planned Parenthood investigation will be played the same as every other Congressional dog and pony show. As soon as the interest fades, all will be dismissed and things will return to business as usual. 

For-Profit vs. Charity and CEO compensation

In light of all the hoopla surrounding the CEOs of not-for-profit organizations, it is necessary to point out that there is a night to day difference between monies derived from "for-profit" enterprises and "not-for-profit charities". "Charities" are not the same as "clubs/organizations", nor should clubs/organizations that are not "charities" be granted special privilege at the expense of the taxpayers.

For-profit enterprises are limited only by what they can sell to people who are willing to buy their product/service. For-profit enterprises are compensated according to the marketability of their products or services as determined by their customer's willingness to purchase.

A club or organization is limited only by those who choose to purchase social status within said club/organization and all taxes should be applied the same as with any other for-profit enterprise because they're selling something. Purchasing membership in some so-called "professional organization" amounts to nothing more than buying social status.

A not-for-profit charity is a not only a different critter, it's a complete different species from a for-profit entity. Any group/organization that accepts donations for the purpose of redistributing that money, or turning it into services, for the needy, is a "charity" and as such, they need to play by different rules. Any group that doesn't redistribute at least 80% of it's intake to the needy, should not be considered a "not-for-profit". So point number one, there are way too many groups claiming not-for-profit status that shouldn't be. Political and social activist groups should not be considered the same as a "charity", and no matter how creative the marketing, they're still nothing more than private "members only" clubs.

Nonetheless, all not-for-profits need to be held accountable by their donors; therefore, their accounting needs to be an open public record. Any not-for-profit that isn't willing to be open, and honest. with their books, isn't worthy of donating to. They need to show exactly where the money goes without any 'creative accounting'. The CEO of any charity should never accept more than thirty percent above the national average wage; if they want to rake-in big bucks, they need to seek employment in a for-profit enterprise.

Not-for-profit organizations should also be held accountable to maintain reasonable expense accounts. They need not be using charter aircraft, first-class fares, and limousines to ferry the CEO, or anyone else. Coach gets there the same time as first-class; a taxi functions the same as a limo; shower and sleep are the same in Motel 6 as they are in the Waldorf. In fairness, a reasonable "expense account" for the CEO doing charity business, should not be considered "compensation" provided it is used only for legitimate business expenses just the same as on the for-profit side.

A step further ... if the CEO of a charity wishes to produce products to be sold for-profit, then there needs to be a clear and concise separation between "personal" and "charity" related works. If the CEO produces a book about his/her life, then it should be considered a for-profit work and subject to all the for-profit rules; however, the profit is the CEO's personal money. On the other hand, if the CEO produces work related to, or directly affected by, the charity they're in charge of, the funds derived from sales of those works should go directly to the charity and not the CEO, because without the charity, the CEO would not be able to produce said works. IE: Joe Schmo writes a book about his life, the profits are Joe's to keep and claim as his personal income. Joe Schmo writes a book about his time as CEO of Megacharity, the profits should go to Megacharity, because without Megacharity, no one would care about Joe Schmo.

Transparency, organizational accountability and personal accountability are not just important to a charity, they're essential! I refuse to support any for-profit, or charity that violates my core principles. I don't make any donations to any charity until I know where my money is going, and there isn't complete transparency, there's no money transferring from my pocket to theirs. When I give one in need food or money, I know exactly where one-hundred percent of my donation went.

I will digress a bit further to say that any group or organization that receives taxpayer money is neither a charity, nor not-for-profit; as soon as one penny of taxpayer money is accepted, they are by default a government agency and should be held accountable as such by the taxpayers. If we want separation of Church and State, then the State must be prohibited from giving money confiscated from the taxpayers to any group or organization outside of the government as defined in the US/State Constitutions. Why is no one pitching a fit about sports players who are turning millions of dollars personal profit annually solely because the government forced taxpayers to provide them with a place to operate their business? Let the NFL, NBA, philharmonic, gallery, etc. build their own places of business and jump through all the nonsensical oppressive government hoops that every other business has to! Why is there no outrage over the government confiscating money from taxpayers and using for the personal benefit of others?

Blessings!

Donald Trump's Tax Plan and Trench Economics

No doubt you've heard party-machine pundits, and talking heads on both the left, and right, condemning Donald Trump's tax plan. Some condemn it because they're opposed to Liberty, and other oppose it because they don't understand it. One can easily dismiss the foolishness of the leftists who oppose anything that even remotely resembles Liberty, let alone economic empowerment of the individual; thus, in this post we're only going to look at the arguments that at least have the appearance of reasonable concern.

Based on what I've heard in the media, the most prevalent argument against Trump's plan concerns the “zero percent bracket” for individuals making under $25,000 or $50,000 for married. People who oppose this fail to understand that these low-income people are not currently paying any income taxes, yet the majority are getting refunds of money they never paid. Therefore, under Trump's zero percent bracket, these people would no longer be getting refunds, they will just be allowed to keep what they make.

The biggest problem demonstrated by the opposition is that they simply do not understand how economics work down here in the trenches, because they have never built a business from the ground up. No one can build a successful business from nothing, without understanding what I call “trench economics”. Trench Economics are how things work down here in the trenches of day to day life for the majority of society. The trenches are where you find the primary producers, the butchers, the bakers, the candlestick makers, and everyone else who plays a part in making society function as a unit.

The second most prevalent opposition argument is that the zero percent bracket limits will be an incentive for people to not exceed the income limits. While this argument may sound nice, reality proves that it is complete nonsense. No matter what the incentives, or disincentives, every society is going to have a slacker class. All societies that have come before ours, and all societies that come after ours, are all going to have a slacker class. There is no amount of incentive you can give a slacker to cause them to have the desire to be productive; they will only do what is necessary, and no more. People in the slacker class will always have below average income, and most will not even consider the consequences if they exceed the limits, because they're typically more interested in watching TV or playing a video game.

Trench Economics 101:
The more money the slacker class has in it's pockets, the more money they will spend on goods and services. The slacker class does not consider economics, nor much of anything else for that matter. Most live paycheck to paycheck, and the vast majority typically have a whole lot of month left at the end of the money. The slacker class hasn't changed in thousands of years, and these people are never going to change until society as we know it comes to an end. If you give them all the money withheld from their paychecks at the end of the year, they're going to blow it as soon as possible. If the slacker class does any thinking at all, the only thing they're going to think about is what they're going to buy with their tax refund money. While they're not going to pay any income taxes either way, under Trump's zero percent plan, all of that money is going right back into the economy.

In certain circumstances, a small minority of people may benefit by not exceeding the income limit for a particular year, but people in this category will typically exceed the limits in subsequent years. Simple fact of the matter is that anyone having the intelligence to apply such careful consideration to tax law, will certainly have the intelligence and drive to better themselves by being more productive. Even if these people carefully plan to remain under the tax liability limit, history shows that they're going to either save or spend what money they have. If they save it, they'll usually invest it and therefore lessen the future burden on the taxpayers because there's less people trying to get a handout from the government.

Trench Economics 102:
The up and coming class may play the tax liability avoidance game for a time for a year, or even a few years, but in the end they're not going to deny themselves any longer than is necessary. They're going to want the fancy car, fancy house, and other things that feed their lust of social status more than they want to avoid a tax liability. Greed and lust are very powerful economically motivating factors; people will pay whatever it costs to feed these addictions.

Trench Economics 103:

Applying taxation as a penalty does nothing more than increase people's desire to avoid paying all taxes as much as possible. Things like the Alternative Minimum Tax, Marriage Penalty, Death Tax, Capital Gains, and so forth, are all looked upon as “punishments”. When a tax is viewed as a punishment, it gives people more incentive to avoid the taxes altogether. If you want to increase tax revenue, don't use taxes as fines.

Trench Economics 104:

Business pays no tax. That's right, when you hear about government sticking it to a corporation, understand that the tax liability is added to the price of the product or service. No matter if it's the local craftsman working alone in his own shop, or the mega corporation, their tax liability is viewed as any other businesses expense and added to the consumer cost. Politicians try to hide behind the smoke and mirrors, but despite the attempted deception, consumers are paying for all the taxes levied on businesses.

Trench Economics 105:
The more money people have, the more money they will spend. The more money they spend, the more products and services they purchase. More demand, creates more jobs. More jobs reduces the number of available workers, which makes businesses offer higher wages in order to get the best employees. The lower the combined tax liability, the more the economy grows. Tax revenues will necessary increase proportionally to economic growth. This is a vicious cycle we call “capitalism”, and it works every time it's tried.

At this point I must digress to comment on a key point that is not currently a part of Trump's plan, and that is the necessity of eliminating the rewards and punishments associated with one's marital status. If we must insist on punishing achievement by fining people for productivity, then all such taxation should be applied equally. Married or single, taxation should be applied exactly the same to every individual such that even married people will file individual returns. Give people a standard deduction for themselves, and each dependent they support. Simple enough plan whereby people are not punished for being single, and they are rewarded for supporting someone else rather than making the dependent, along with a host of bureaucrats, a giant burden on all the other taxpayers. Rewards should be giving to one who is single, but chooses to support a child in an orphanage, or foster home. Rewards are a great productivity incentive, while punishments stifle productivity.

The ideal tax system would be based purely on consumption. All people would be free to make as much as they desire with being punished, because the more money they make, the more money they want to spend. Thus, if one chooses to be frugal, they can put a whole lot of money into savings or investments, either way, they're going to be self-supporting rather then becoming a burden on the producers. Others will choose to buy things and pay the sales tax. Just the same as an income-base tax, the playing field of a consumption-base tax system must also be level via a fixed rate. Under the current sales tax system, the higher the cost of a product, the lower the percentage of tax; therefore, the lowest income brackets are paying the highest percentage of consumption taxes. Under a flat-rate consumption tax system, one buying a two-million dollar yacht, would pay the same percentage as one buying a two-thousand dollar bass boat.

What with all the fuss these days over 'equality' … isn't it about time we have equality in the tax system?

Blessings!

Please pardon my absence for family and health reasons.

Shaking My Head!

Headline from a recent industry news story:

"SPI Lauds Obama for Highlighting Economic Growth in State of the Union Address"

Seriously? Has no one noticed the deliberate war Washington has been waging on the American manufacturing base? The forced closures of coal-fired power plants by the EPA, and the EPA/DEP refusal to allow utilities to construct or upgrade grid infrastructure is setting us up for an electrical disaster. Excessive Obamacare costs are driving the labor force to part-time and reducing available healthcare, yet Washington does nothing to stop the flow of illegals or transmission of infectious diseases. The lower oil prices are temporary at best. More jobs being available does nothing to put contrast on the reality of the unemployment number propaganda where those who have exhausted their Unemployment Compensation, and those who are not eligible to claim UC are simply not counted by the government. Of the jobs coming available, the majority are part-time so as to skirt the Obamacare mandates. Considering the tax increases that went into effect January 01 including the new capital gains and medicare punishments; the looming increases in fuel and other transportation taxes; the looming increases in state & local taxes; increasing raw materials costs from metal to wood; increasing food prices as government's war on family farms goes into overdrive ... the only thing Washington is setting the stage for is a major socioeconomic disaster!

Denying the truth does not change what the truth is.

Ignoring the facts does not make them go away.