Category Archives: Taxes

The Young Have Nothing to Lose But Their Chains, by Robert Gore

The road to freedom is paved with repudiation.

Tuesday The Burning Platform website posted an article, “Your Government In Action,” that had a Twitter video of a long line of cars in Albuquerque, the people in them waiting for coronavirus tests. I posted the following comment:

I live in Albuquerque and was not one of the idiots in line. Yesterday was a beautiful day and I rode my mountain bike for 40 minutes in the sun. It was just right, not too cold, not too hot. We have an arroyo near our house and I did some dirt biking on the loose sand, great exercise for the legs. My gym sent an email last night and it’s closing for an indefinite time. Looks like mountain biking will be the exercise for awhile. but I could tell that the fresh air and sunlight were doing me more good than time spent in my hyper-sanitized gym or cooped up in the house. I felt great. The schools have been closed and I found it disturbing that I didn’t see one kid outside playing. Sunshine and fresh air are known disinfectants, but parents are keeping their kids indoors and the world is locking up people in quarantines. No sunshine, no fresh air, only insanity.

Read a Wall Street Journal article this morning about the younger generation in Europe rebelling against the insanity, going to bars and restaurants and having dinner parties. Why not, they aren’t getting coronavirus, and when they do it amounts to a cold or minor flu. My son is 22 and has the same attitude. What all the grim statistics no longer categorize is the age of the people dying. The media still begrudgingly admit that it most severely afflicts those with compromised immune systems, i.e. primarily older people. Our gerentocracy is panicking because they’re the most at risk. One among many issues most boomers refuse to face is their own mortality. I’ve told my son several times that if his generation sits still and pays the taxes and debt service that’s going to be required to fund our generation’s “entitlements” without repudiating the debt, slashing the entitlements, and perhaps out and out revolution, his generation will deserve its fate and its shame. Boomer removal indeed. Party on kids, maybe the coronavirus will lighten the load my generation has foisted on you.

Yojimbo, a Burning Platform commentator, posted the following:

Maybe since you are against Socialism, write a simple, concise argument in an essay about why repudiation of the debt is a far better answer than the Socialism that Bernie is advocating.

Perhaps if it were short, simple, and cogent, it might circulate among the young and truly inform them and turn them away from Socialism?
Just a thought.

I replied:

That’s a good idea. I’ll see what I can do.

Here’s the article. It’s short, by my standards; I hope readers find it “simple, and cogent.”

The Young Have Nothing To Lose But Their Chains

According to usdebtclock.org, the on-the-books’ debt of the US government is almost $23.5 trillion, or over $72,000 per citizen. The four biggest items in the government’s budget are Medicare/Medicaid, Social Security, defense, and interest on the debt. The government’s unfunded liabilities are over $128 trillion, or over $397,000 per citizen. Now it is true that national assets stand at $151 trillion, or over $468,000 per citizen. Unfortunately, many of those assets are debt, equity or contractual claims (like insurance and pensions) on insolvent governments or businesses, or real estate, often subject to a mortgage. The problem is that all these assets are valued at current market, which can shift dramatically in a very short time—as we’re now seeing—while the nominal value of the debt doesn’t go down, it just continues to grow, and with the coronavirus outbreak its growth rate will increase.

Taking a cue from their parents and grandparents, the younger generation wants to grant itself new entitlements—higher education, medical care, guaranteed incomes, etc. They’ve flocked to Bernie Sanders, the most prolific promiser of free stuff. The older generation owns most of the assets and because they’re retiring, whatever they “contribute” towards taxes and debt services will be far outweighed by what they’ll draw in Social Security, Medicare, and Medicaid. Consequently, for whatever it grants itself, the younger generation will be either be paying taxes or adding to its already staggering debt and unfunded liability burdens. It will be shooting itself in the foot.

There is another way that will do much more for them. Instead of voting for supposedly “free” stuff for which they’ll wind up paying, the younger generation would be far better served by repudiating the older generation’s debt and unfunded liabilities. By refusing to be debt slaves to pay for their elders’ entitlement promises to themselves, and for the forever wars they’ve waged since World War II (which the younger generation is now expected to fight), the younger generation could opt for a clean slate. There is already an undercurrent from the fringes promoting debt jubilees and the like.

For the young to be truly better off after a debt repudiation and to solidify its moral basis, they would have to swear off entitlements for themselves, to be paid for by their children and grandchildren. However, that seems like a fair trade—no entitlements, but no crushing debt service and tax loads either, and undoubtedly a far healthier economy than what now lies in prospect. In other words, more freedom, much more so than if their elders’ schemes run according to plan.

The growing debt load is not sustainable; repudiation is going to happen one way or the other. If the older generation wants to make its oft-expressed bromides about the “children,” “grandchildren,” and “future generations” anything more than self-serving pieties, it will support repudiation in a way that benefits their posterity. If they oppose it, they should at least quit lecturing the young about Sanders and “no free lunches.” They’ve been giving themselves free lunches for decades.

As for that posterity, instead of voting for an old guy who’s only going to enslave them more, the younger generations should coalesce around candidates who promote debt repudiation, rescind or eliminate taxes, and freedom. Unite and repudiate, you have nothing to gain from the bankrupt and corrupt status quo and nothing to lose but your chains.

 

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The Looming Financial Nightmare: So Much for Living the American Dream, by John W. Whitehead

America’s debt will inflict misery on Americans for this and many generations to come. From John W. Whitehead at rutherford.org:

“When plunder becomes a way of life for a group of men in a society, over the course of time they create for themselves a legal system that authorizes it and a moral code that glorifies it.” ― Frédéric Bastiat, French economist

Let’s talk numbers, shall we?

The national debt (the amount the federal government has borrowed over the years and must pay back) is $23 trillion and growing.

The amount this country owes is now greater than its gross national product (all the products and services produced in one year by labor and property supplied by the citizens). We’re paying more than $270 billion just in interest on that public debt annually. And the top two foreign countries who “own” our debt are China and Japan.

The national deficit (the difference between what the government spends and the revenue it takes in) is projected to surpass $1 trillion every year for the next 10 years.

The United States spends more on foreign aid than any other nation ($50 billion in 2017 alone). More than 150 countries around the world receive U.S. taxpayer-funded assistance, with most of the funds going to the Middle East, Africa and Asia.

Meanwhile, almost 60% of Americans are so financially strapped that they don’t have even $500 in savings and nothing whatsoever put away for retirement, and yet they are being forced to pay for government programs that do little to enhance or advance their lives.

Folks, if you haven’t figured it out yet, we’re not living the American dream.

We’re living a financial nightmare.

The U.S. government—and that includes the current administration—is spending money it doesn’t have on programs it can’t afford, and “we the taxpayers” are the ones who will pay for it.

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Why Governments Hate Secession, by Ryan McMaken

Governments hate secession because it means fewer tax donkeys and businesses to tax and fewer people to push around. From Ryan McMaken at mises.org:

When the Soviet Union began its collapse in 1989, the world witnessed decentralization and secession on a scale not seen in Europe since the nineteenth century.

Over the next several years, puppet regimes and states-in-name-only broke away from Soviet domination and formed sovereign states. Some states which had completely ceased to exist—such as the Baltic states—declared independence and became states in the own right. In total, secession and decentralization in this era brought about more than twenty newly independent states.

This period served as an important reminder that human history is not, in fact, just a story of ever increasing state power and centralization.

Since then, however, the world has seen very few successful secession movements. A handful of new countries have come into being over the past twenty years, such as East Timor and South Sudan. But in spite of many efforts by separatists worldwide, there have been few changes to the lines on the maps.

This has certainly been the case in Europe and the Americas, where from Quebec to Scotland to Catalonia to Venice demands for independence have been met with trepidation and sometimes outright threats of violence from central governments.

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So Long, California? Goodbye, Texas? Taxpayers Decide Some States Aren’t Worth It, by Ben Nelson and Laura Kusisto

Trump’s tax reform increased the pain in high-tax, high-property value states. From Ben Nelson and Laura Kusisto at wsj.com:

Larry Belardi and Bobbie LaPorte are longtime San Francisco residents, but they are planning to leave California for Nevada next year.

A turning point was the federal tax overhaul that Congress passed in late 2017. The law made it costlier to own a house in many high-price, high-tax areas, reshaping the economics of homeownership in those slices of the U.S.

Two years after President Trump signed the tax law, its effects are rippling through local economies and housing markets, pushing some people to move from high-tax states where they have long lived. Parts of Florida, for example, are getting an influx of buyers from states such as New York, New Jersey and Illinois.

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Two Different Americas, by Jacob G. Hornberger

There have been two different Americas, and the big split came in 1913. From Jacob G. Hornberger at fff.org:

There have been two completely different Americas in U.S. history. Let’s examine twelve ways in which they differ.

1. For more than a century after the United States came into existence, there was no income taxation or IRS. People were free to keep everything they earned and decide for themselves what to do with it.

Today, income taxation and the IRS are a core feature of American life. The government essentially owns everyone’s income and decides how much people will be permitted to keep, much as a parent permits his children to have an allowance.

2. No Social Security. Earlier Americans rejected the concept of mandatory charity. People were left free to decide for themselves whether to help out their parents and others.

Today, Social Security is a core feature of American life. The federal government forces younger people to help out seniors by forcibly taking their money from them and giving it to seniors. Social Security is a classic example of a socialist program, one in which the government forcibly takes money from people to whom it belongs and gives it to people to whom it does not belong.

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The blue-state exodus gains momentum, by Merrill Matthews

People are voting with their feet, leaving blue states for red states. Unfortunately, many of the new arrivals bring their blue-state politics with them. From Merrill Matthews at thehill.com:

Nine years ago I published a piece that asserted, “Voters around the country are concluding it’s better to be red than dead,” applying almost the exact opposite meaning to an old phrase referring to communism. New Census Bureau figures appear to confirm my prediction — mostly.

My point was that many voters were, and are, increasingly fed up with the high taxes, heavy regulations and increasing social wokeness that have come to characterize most blue states — i.e., those dominated by liberal politicians and policies.

I argued that voters wanting to live in a business-friendly, fiscally responsible state that minimizes its tax burden would either vote out the liberals destroying their state’s economy or flee to a red state. The latest Census Bureau report highlights the red-state shift.

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New IRS data reveals winners and losers of wealth migration across 50 states, by Ted Dabrowski and John Klingner

From and to where the tax donkeys are fleeing from Ted Dabrowski and John Klingner at wirepoints.com:

Nearly 7.5 million people moved from one state to another in 2018, boosting the economies of some states while straining the finances of others.

The winners of the battle for people and their incomes included states like South Carolina, Arizona, Texas and Florida. Those findings are based on a Wirepoints’ analysis of the latest 2018 domestic migration data provided by the Internal Revenue Service.

The stakes are large. A growing population for the winners means an increasing tax base, economic growth and investment. And as baby boomers age and pressure to fund pensionsincreases, a growing workforce is a windfall.

On the other end of the competition are states that have become perennial losers. Connecticut, New Jersey, Illinois and New York have experienced some of the nation’s biggest drain of people and their money.

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