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In last week’s episode, I did something quite out of character… I suggested that we all need to stop bashing our politicians. Or at least stop bashing them until after we look in the mirror and think long and hard about what We The People continuously demand of them. Generally speaking, we continuously demand two things:
- Do something!
- Don’t make me pay for it. Make somebody else pay for it.
We also regularly get both these things. On average, every year, government spends, i.e., controls, a slightly larger percentage of our total economy. In 1880 it was about 3%. Today it’s pushing 50%. Check out last week’s episode for a look at the results of our “Do something” demand. To what’s there, I’d like to add a few questions for you to ponder…
Would you be creeped out if Big Oil had the power to control half the economy? Or if Google, FaceBook and the rest of the High Tech bunch had the power to control half the economy? Or if some other industry – any other industry – had the power to control half the economy? Yeah. I think that would cause every politician and pundit on both the right and the left to totally lose their shit.
How then, can I, you and they not be creeped out that government controls literally half of the economy? If I knew with certainty that ALL politicians and ALL government officials were some combination of angel and genius, maybe I’d feel better. But I doubt it. That’s still WAY too much concentration of power. And besides, in reality, the concentration of angels, geniuses and slimy sleaze-balls among politicians and government officials is no lower – or higher – than in any other group.
This week, let’s take a closer look at the second thing we demand and get from our politicians. I’ll be blunt about it and call it deceit. We insist that the politician MUST deliver goodies, but must NOT make anybody pay for it. Since that simply cannot and will not ever happen, since there really is no such thing as a free lunch, what’s a politician to do? Well… Hide the costs of course. Obfuscate! Not to be repetitive, but they have no choice but to deceitfully tax us. We demand they do so.
We – all of us – Democrats, Republicans and Whatevers – force politicians to tax us more and in ever more deceitful ways.
Last year, I did an IV episode about two types of “Deceit Taxes.” The first is referred to as “Corporate Income Tax.” I won’t go through all the logic again here. Check out the link. But bottom line, corporations don’t pay taxes. Corporation merely process tax payments on their profits and pass every single penny of that expense back onto the backs of individual citizens. It’s either their customers, their employees or their stockholders. EVERY PENNY comes from one or more of those individuals. A corporation pays no taxes! Never has. Never will. Individual citizens ultimately pay ALL taxes. Taxes on corporate profits is a deceitful scam to make We The People think we’re paying less.
The second deceit tax example in that episode was excise tax on gasoline. Bottom line, about 22% of what you pay for a gallon of gas is tax. It’s not, however, called tax. Instead, it’s baked right into the price you pay. And just for contrast, the “money-grubbing” oil companies get only 4%. Tell me again who it is that’s gouging us??? There are also the same sort of excise taxes on alcohol, tobacco and a host of other products and services.
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And that’s only 2 examples of how government sneakily picks all of our pockets to fuel its own growth. Turns out there are lots and lots and LOTS of additional examples. And don’t forget… They deceive us because we demand they do so!
Want three more examples? OK. How about inflation, debt and regulation? Let’s take a closer look at those…
Inflation is the most interesting and insidious of the three. Lots of folks have a hard time getting their minds around it, due to the utterly preposterous, near unbelievable role played by the Federal Government. One way “get it” is to pretend you’re an ancient Roman Emperor, and you want new wheels for your chariot.
These are very cool wheels and cost 10 Denarii, which in ancient Rome was a lot of money. You happen to have 100 Denarii in your pocket, but you don’t want to pay. So… You take each of your 1-Denarius coins – which are each made from 1 ounce of silver – and punch a hole in every one equal to 10% of its weight. You now have 100 coins and 100 silver “doughnut holes” from which you can mint 10 additional coins. So… You still have the exact same 100 ounces of silver, but now you have 110 coins. You decree that the coins with holes are worth the same as the ones without holes, and you buy your new wheels with 10 punched-out out coins.
See the magic? You still have your 100 denarii AND you get your new chariot wheels. “Free” wheels by declaring that “a Denarius is a Denarius” even though in reality a Denarius is now only 90% of a Denarius.
The chariot wheel dealer went along with accepting the denarii with holes, because who’s going to argue with the Emperor? He does, however, realize he got screwed. That he got only 9 ounces of silver and not 10. That he needs to charge 11 denarii from now on for the exact same set of wheels that require the exact same amount of raw materials and the exact same amount of labor in order to stay in business. TA-DA! Inflation.
Inflation for everyone except you the Emperor that is. As first mover, you get free stuff. Everyone else soon catches on though, and the price of everything goes up by 10%.
You may want to go through the story of the Emperor’s Chariot Wheels again to make sure you thoroughly understand it, because guess what? It’s the exact same story that’s played out over and over and over by the Federal Government via the Federal Reserve System. The Feds get free stuff with so-called dollars they create from thin air, and the rest of us get stuck with higher prices for everything.
Seriously! The Federal Government regularly buys stuff with shiny new dollars they obtained by simply declaring that they exist.
The Romans did it by punching holes in and shaving metal from around the edges of coins. Our pals in Washington, DC do it more elegantly with the wave of their magic “dollar-wand” and the willingness of the rest of us to go along with it. Or should I say we go along because we’re oblivious to it?
And by the way, I’m NOT bashing the Federal Reserve here. They just happen to be part of the machine Congress uses to implement its deceit taxes.The Federal Reserve does all kinds of other important stuff to keep our economy chugging along. With that said though, I’m not a fan of central banks at all, but will save that rant for another time.
Backs to inflation… Want proof that the federal government is constantly conjuring up new dollars? OK! Without getting into the gory details, something called M2 is the primary measure used for how much U.S. money exists. The following graph – wonderfully enough provided by the Federal Reserve itself – shows how many dollars have existed since 1981.
Just to be clear… In 1981, in total, $1.6 Trillion dollars existed. Today there are $14.5 Trillion. That additional $12.9 Trillion exists because the Federal Government said so, and we all went along with it. Got that? An additional $12.9 Trillion exists ONLY because the Federal Government said so, and we all went along with it.
If you haven’t studied this stuff before, it can be difficult to get your head around it. It is, however, exactly what has happened and continues to roll merrily along every single day.
Inflation by declaring the existence of new dollars is a magnificently cleverly deceitful deceit tax!
(For the record, what I’ve just described is just one form of inflation. There are also other types of “demand-pull” inflation, and a variety of types of “cost-push” inflation that are NOT political shenanigans. If you’re a glutton for punishment, have at it. You can read and learn more about inflation non-stop for the rest of your life if you want!)
Anyway… You know what? I’m thinking maybe digging into government debt and regulation right now might be a bit much. For sure I want to rant and wax eloquent about both. The deceit and BS rhetoric we all hear about both of them is friggin’ maddening! I’m gonna’ save it though. I think that makes sense. I figure why rant it all out at once when I can parcel it out? Might turn into three rants for the price of one!
So therefore… I’m your Intentionally Vicarious host Todd Youngblood – Mad at me. Mad at you. Mad at all of us… For constantly pounding on our poor, pitiful, beleaguered political class to DO STUFF for all of us. All the time. At NO COST to any of us. And therefore for badgering them into being massively creative at deceiving us as they pick out pockets with things like inflation via declaration of the existence of new and additional dollars. And finally, as I hold onto my wallet, I continue to have more fun than anyone else I know.
If this episode got your brain working and/or your blood pumping, please tell all your friends and colleagues about it..
Thanks for paying attention…