Tag Archives: welfare state

The Demographics of Financial Doom, by Charles Hugh Smith

Posted on April 8, 2022 | Leave a comment

There’s not enough of the young to support the old. From Charles Hugh Smith at oftwominds.com:

Whether we admit it or not, collapse is the default “solution.” That destiny has already been written by demographics.

The saying “demographics is destiny” encapsulates the reality that demographics–rising or falling trends of births and deaths–energize or constrain economies and societies regardless of other conditions.

Demographics are long-term trends, but the trends can change relatively rapidly while policies remain fixed in the distant past. This disconnect between demographic reality and policies has momentous future consequences. An appropriate analogy is the meteor wiping out the dinosaurs; in the case of demographics, this equates to the complete financial collapse of the retirement and healthcare systems.

As this article below mentions, extrapolating the high birth rates and falling death rates of the 1960s led to predictions of global famine.

As death rates declined and women’s educational and economics prospects brightened, birth rates fell, a trend that now encompasses most of the world.

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Why Markets Always Beat Central Bankers and Presidents, by David Stockman

Posted on March 21, 2022 | Leave a comment

Economies have never, cannot be, and never will be controlled from above, buy either governments or central banks. From David Stockman at internationalman.com:

Beat Central Bankers
Goodness me, even the Wall Street Journal is catching on. In a piece about the inflationary rebound theory of a former UK central banker named Charles Goodhart, it actually tees-up the possibility of high inflation for a decade or longer due to an adverse, epochal shift in the global labor supply.

He argued that the low inflation since the 1990s wasn’t so much the result of astute central-bank policies, but rather the addition of hundreds of millions of inexpensive Chinese and Eastern European workers to the globalized economy, a demographic dividend that pushed down wages and the prices of products they exported to rich countries. Together with new female workers and the large baby-boomer generation, the labor force supplying advanced economies more than doubled between 1991 and 2018.

He got that right. Now, however, the working-age population has started shrinking for the first time since World War II in developed economies, compounded by an ever more generous banquet of Welfare State free stuff that is shrinking the available labor pool even further. At the same time, China’s working force is expected to contract by a staggering 20% over the next three decades.

Needless to say, as global labor becomes more scarce, developed world workers will finally have bargaining leverage to push up their own previously stagnant wages. In the US leisure and hospitality sector, for instance, where worker shortages are most acute, Y/Y wage gains have averaged 15% for the last three months running.

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Posted in Banking, Business, Currencies, Debt, demographics, Economics, Economy, Governments, History, Trade

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The Writing on the Wall, by Jeff Thomas

Posted on October 27, 2021 | Leave a comment

There’s nothing more dangerous for a society than to believe the political myth that the state can provide for all. From Jeff Thomas at internationalman.com:

Writing on the wall

When you see that in order to produce, you need to obtain permission from men who produce nothing—when you see that money is flowing to those who deal, not in goods, but in favors—when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is doomed.
Ayn Rand; Atlas Shrugged, 1957

Pretty strong words… the last four, in particular.

Ayn Rand knew whereof she spoke. Born in St. Petersburg, Russia, in 1905, she became politically conscious while still a child and did not favour the existing concept of constitutional monarchy. So, it would not have been surprising if, when the Russian revolution broke out when she was twelve, she bought into the proselytising of Vladimir Lenin, as so many did at that time.

Instead, she quickly surmised that the Bolsheviks’ claim to improve life for the average man was, in reality, a plan to diminish the quality of life for all of the people. In doing so, the Bolsheviks confiscated her father’s business and displaced her family. At one point they were nearly starving, but in 1925, she received permission to emigrate to the US. (She later attempted to get her parents and sisters out, but it proved to be too late.)

A Lesson Hard-Learned

In establishing her now well-known beliefs in governmental systems, Ayn Rand had the benefit of having observed the entire progression from a relatively benign monarchical system to totalitarianism. As a result, she not only learned that political leaders can be deceitful in their claims for social improvement, she also learned, first hand, that those leaders (and/or hopeful leaders) who promise that they are going to change the system in such a way that everyone will “have all they need,” are the most deceitful of all.

In my opinion, the greatest possible threat from the fanciful claims by politicians lies in the willingness of the populace to actually believe such claims. Sadly, it does seem as though the majority of people in any country tend to be extraordinarily gullible in this regard.

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Posted in Capitalism, Civil Liberties, Collapse, Economics, Economy, Government, History, Law, Morality, Politics, Propaganda, Tyranny

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The Conflicts of Visions That Shaped America, by Jacob G. Hornberger

Posted on October 27, 2021 | Leave a comment

Do Americans want to be free or slaves and wards of the government? From Jacob G. Hornberger at fff.org:

There have been two conflicting visions in American history that have shaped our nation. As conditions in the United States continue to worsen, it is important that Americans engage in serious soul-searching to determine which vision should be embraced going forward.

The original vision

The first vision was that which characterized the American people from the founding of the United States to the early part of the 20th century. There are various labels that we can put on this particular vision: a free-market system, a capitalist system, a free-enterprise system, and a limited-government republic. Regardless of which label is used, there is no disputing that this was the most unusual political-economic system in history.

Just think: There once existed a society in which there was:

No income tax and no IRS. Americans were free to keep everything they earned and do whatever they wanted with their own money: save, spend, hoard, donate, or invest it.

No government-mandated charity, including Social Security, farm subsidies, welfare, education grants, or any other type of government-provided philanthropy. Charity was considered an entirely voluntary action.

No education grants, foreign aid, corporate bailouts, SBA loans, government grants, or other types of welfare.

No Medicare or Medicaid. No Centers for Disease Control. No FDA. No medical licensure laws. Hospitals were privately owned. Essentially, no government involvement in healthcare.

No immigration controls. People from around the world were free to come to the United States, with almost no questions asked. There were no limits on numbers. There were no required credentials or educational background. There were no literacy tests. Even knowing English was not a prerequisite for entry. As long as one didn’t have tuberculosis or some other infectious illness and wasn’t an “imbecile,” entry was automatic.

Few economic regulations. No minimum-wage laws and price controls.

No gun-control laws. Americans understood that the right to keep and bear arms was a key to a free society. They would never have permitted government officials to enact gun-control laws.

No public-schooling systems. No compulsory school-attendance laws. Education was private and based on free-market principles.

No Pentagon or military-industrial complex. Americans opposed “standing armies.” That’s why there was only a basic, relatively small army throughout the 1800s.

No empire of domestic and foreign military bases.

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Posted in Economy, Education, Foreign Policy, Government, History, Law, Military, Philosophy, Politics, Tyranny

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Life and Death in the Age of Fear, by MN Gordon

Posted on July 23, 2021 | Leave a comment

Overblown fear is driving a lot of idiotic policies. From MN Gordon at economicprism.com:

 

The general mood presently being fortified by the chattering classes is one of perpetual fear.  The basic stratagem includes continuously implanting the populace with extreme panic.  For a fearful populace is a subservient populace.

The current hobgoblin is the delta variant of the coronavirus.  The bug, at this very moment, is dispersing through the population…as viruses do.  And, per latest reports from the front lines, the lambda variant’s now on the loose too.

Nonetheless, there’s something on the loose that’s far more deadly to society than a mutated coronavirus.  That is, the virus of fear.  It originates with the control freak central planners.  Then it’s showered on the populace in rapid succession.

Last Sunday, for example, at the conclusion of a meeting of Group of 20 finance ministers, Treasury Secretary Janet Yellen said she was, “…concerned that coronavirus variants could derail the global economic recovery and called for an urgent push to deploy vaccines more rapidly around the world.”

And to avoid catching the delta variant, Dr. Anthony Fauci – a complete doof – stated that, “…if you want to go the extra mile of safety even though you’re vaccinated when you are indoors, particularly in crowded places, you might want to consider wearing a mask.”

Certainly, the opportunities to spread the virus of fear are countless.  New coronavirus variants.  Cyberattacks.  Climate change.  Terrorism.  The Russian menace.  The China problem.  UFOs.

You name it…the sky’s the limit…

Situation Perpetual Fear

The most advantageous kind of fear in the eyes of the political class is fear that can be tied to some sort of imminent economic calamity.  Such fears are not entirely fabricated.  Rather, they stem from a real threat, which is then whooped up and overblown to the max.

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Posted in Banking, Business, Civil Liberties, Collapse, Debt, Economics, Economy, Governments, Labor, Law, Media, Morality, Politics, Psychology

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The Sexual Left, the Welfare State, and the Divorce Revolution, by Stephen Baskerville

Posted on June 29, 2021 | Leave a comment

How the government destroyed the family. From Stephen Baskerville at chroniclesmagazine.org:

“All politics is on one level sexual politics.” —George Gilder

Extremists break out of the margins and take power when they fool opponents into advancing their agenda. By politicizing the family and sexuality, the left duped conservatives, and all of us, into becoming their accomplices.

Since last fall’s electoral coup, the United States has been well on its way toward becoming a de facto communist government. But it is not the communism that conservative Cassandras have warned against, nor did it come about as they expected. In fact, conservatives bear a huge share of the responsibility for what happened. Misunderstanding the dynamics of today’s left, they helped fulfill their own prophecies.

Americans have long prided themselves on being impervious to socialism. They even avoided creating an extensive European-style welfare state. But the U.S. was not lagging behind Europe; as always, it was leading. For Americans took a unique road to socialism: They created a government engine that bred its own class of insurgents.

Knowing that doctrinaire Marxism held little appeal for Americans, the left did an end run around this ideological obstacle. They enlisted conservatives to the cause of socialism by forsaking the rhetoric of class warfare, appealing instead to a sense of compassion for women and children that compassionate-conservative gallants could not resist.

The liberal left erected a different kind of welfare state: not broad-based social insurance for all, but a “safety net” limited to the poor (which in reality was anything but safe). In doing so, they defied the purists within their own ranks who rejected “welfarism” as a capitalist scheme to co-opt the working class. Operating according to its own innovative dynamic, safety-net socialism literally bred its own quasiproletariat of the marginalized, resentful, and entitled—all managed and directed by a vanguard of radicalized civil servant apparatchiks. At all levels, essential roles in this system were played by women.

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Next Comes The “Turbulent Twenties”, by David Stockman

Posted on March 6, 2020 | Leave a comment

Debt will only take you so far and it looks like global debt is just about out of gas. From David Stockman at peakprosperity.com:

The past 30 years of False Prosperity is over

The coronavirus is now exposing a far more deadly disease: Namely, the poisonous brew of easy money, cheap debt, sweeping financialization and unbridled speculation that has been injected into the American economy by the Fed and Washington politicians.

It has turned Wall Street into a dangerous gambling casino while leaving Main Street buried under mountainous debts, faltering investment in growth and productivity and the hand-to-mouth economics of spending more than you earn.

It has also left the American economy exceedingly vulnerable to external shocks. That’s because 80% of households have no appreciable rainy day funds and businesses have hollowed out their balance sheets and artificially extended their supply chains to the four corners of the earth in order to goose short-run profits and share prices.

However, this unprecedented fragility is becoming evident as public health authorities around the world aggressively move to contain the Covid-19 contagion. This will mean separating workers from their workplaces, consumers from the malls, diners from the restaurants, travelers from the airlines, hotels and resorts and much more like and similar disruptions to the supply-side of the economy.

In short, the world’s supply chains are buckling and freezing-up, thereby causing production and incomes to fall abruptly. In turn, shrunken incomes and cash flows will pull the legs out from under the edifice of debt and speculation that has been piled atop the American economy.

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Posted in Banking, Business, Civil Liberties, Collapse, Debt, Economics, Economy, Financial markets, Foreign Policy, Geopolitics, Governments, History, Investing, Money, Politics

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Trump’s Budget: More Warfare, Slightly Less Welfare, by Ron Paul

Posted on February 17, 2020 | Leave a comment

Bipartisanship: the Democrats okay funds for the Republicans’ warfare state, the Republicans okay funds for the Democrats’ welfare state. From Ron Paul at ronpaulinstitute.org:

Listening to the howls from Democrats and the applause from Republicans, one would think President Trump’s proposed fiscal year 2021 budget is a radical assault on the welfare state. The truth is the budget contains some minor spending cuts, most of which are not even real cuts. Instead they are reductions in the “projected rate of growth.” This is equivalent of saying you are sticking to your diet because you ate five chocolate chip cookies when you wanted to eat ten.

President Trump’s plan reduces the Education Department’s budget by nearly eight percent, leaving the department with “only” 66.6 billion dollars. Cuts to other departments are similarly small, while reductions in entitlement spending consist mostly of reforms that will not affect most of those dependent on these programs.

President Trump deserves credit for proposing an 11.6 billion dollars cut in funding for the Department of State and the US Agency for International Development (USAID). Foreign aid does little to help impoverished people overseas. Instead, it benefits foreign government officials willing to do the US government’s bidding. The State Department and USAID are extensively involved in US intervention abroad, including efforts to overthrow governments.

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Two Different Americas, by Jacob G. Hornberger

Posted on January 25, 2020 | Leave a comment

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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Posted in Debt, Economy, Education, Foreign Policy, Government, Law, Taxes

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Black America Before LBJ: How the Welfare State Inadvertently Helped Ruin Black Communities, from ammo.com

Posted on January 9, 2020 | 1 comment

People get hooked on getting money they haven’t earned, and it ends up making victims of those from whom the money was taken and those to whom it was given. From ammo.com:

“We waged a war on poverty and poverty won.”

The dust has settled and the evidence is in: The 1960s Great Society and War on Poverty programs of President Lyndon Baines Johnson (LBJ) have been a colossal and giant failure. One might make the argument that social welfare programs are the moral path for a modern government. They cannot, however, make the argument that these are in any way effective at alleviating poverty.

In fact, there is evidence that such aggressive programs might make generational poverty worse. While the notion of a “culture of dependence” is a bit of a cliché in conservative circles, there is evidence that this is indeed the case – that, consciously or not, the welfare state creates a culture where people receive benefits rather than seeking gainful employment or business ownership.

This is not a moral or even a value judgment against the people engaged in such a culture. Again, the claim is not that people “choose to be on welfare,” but simply that social welfare programs incentivize poverty, which has an impact on communities that has nothing to do with individual intent.

We are now over 50 years into the development of the Great Society and the War on Poverty. It is time to take stock in these programs from an objective and evidence-based perspective. When one does that, it is not only clear that the programs have been a failure, but also that they have disproportionately impacted the black community in the United States. The current state of dysfunction in the black community (astronomically high crime rates, very low rates of home ownership and single motherhood as the norm) are not the natural state of the black community in the United States, but closely tied to the role that social welfare programs play. Or as Dr. Thomas Sowell stated:

“If we wanted to be serious about evidence, we might compare where blacks stood a hundred years after the end of slavery with where they stood after 30 years of the liberal welfare state. In other words, we could compare hard evidence on “the legacy of slavery” with hard evidence on the legacy of liberals.”

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Posted in Debt, Economy, Education, Government, Law, Money, Politics, race relations

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