Seven Years Of Plenty Or Famine?

"It is a paradoxical truth that tax rates are too high today and tax revenues are too low - and the soundest way to raise revenues in the long run is to cut rates now."

John F. Kennedy (1917-1963)

Not so paradoxical really. If people can keep what they earn they do things with it! And what they do contributes more to economic activity than what gubment can do with it.

What does the gubment do with the money? Transfers it, usually to people who do not create economic activity.

When more of what a populace earns is left with that populace, it is like a rising tide and all boats are raised. This is the phraseology Reagan used with his tax cut.

What is the first recorded record of a tax cut? You would have to go to about 1750BC and a dream.

We see in Genesis 41 that Pharaoh had a dream, twice, that bothered him greatly. It seems that seven "fatfleshed" kine (beef cattle) came up out of the river. They were followed by seven "leanfleshed" kine, so ill favoured that Pharaoh had never seen such "for badness: And the lean and the ill favoured kine did eat up the first seven fat kind ... but they were still ill favoured." (verses 18-20)

Pharoah could find no one to interpret his dream. He heard about a Hebrew inmate, Joseph, who was known to have interpreted many dreams. And he called for him.

The interpretation was that there would be seven years of agricultural plenty, followed by seven ill favoured years, "and all the plenty shall be forgotten in the land of Egypt; and the famine shall consume the land." (verse 30)

But Joseph had a plan. Starting in verse 34, "Let Pharoah do this, and let him appoint officers over the land, and take up the fifth part of the land of Egypt in the seven plenteous years. And let them gather all the food of those good years that come, and lay up corn (a generic word for any grain) under the hand of Pharaoh, and let them keep food in the cities. And that food shall be fore store to the land against the seven years of famine ... that the land shall not perish." (Underlining mine)

What happened? REQUISITE "OFFERINGS" TO PHARAOH, ESSENTIALLY TAXES, WERE CUT FROM 100% TO 20%. The populace was allowed to keep more of what they earned. And what happened? Plenty. Plenty happened! They had incentive to make more corn!

And Joseph was made CEO, CFO and CIO over all the land. Verse 41 - "I have set thee over all the land of Egypt." And the economy boomed. And Joseph also got some great jewelry and fine linens out of the deal, and a bottomless debit card accepted everywhere.

When has a tax cut not done this? This is not paradoxical at all! Let him hear who has ears to hear...

Need, Greed And Compassion

" 'Need' now means wanting someone else's money. 'Greed' means wanting to keep your own. 'Compassion' is when a politician arranges for the transfer."

Joseph Sobran (1946-2010)

It's hard to understand economics when a people is conditioned to look to the gubment for satisfaction of its needs and thinks it's entitled to whatever the "gubment" provides.

Of course the gubment has nothing it hasn't taken prior from someone else. And to think that this trend is not frightening to these people!

What happens when "the people" are tapped out? Or can't give? Or STOP giving "voluntarily?" (Remember how we're told that paying our taxes is a "voluntary" act?)

We saw that infantile display in Wisconsin where people screamed at and gathered around and did damage to the state capitol building because they were going to be asked to pay a portion, A PORTION, of their medical insurance! And it was certainly less than I pay for my medical insurance! But what was the ultimate result of that Draconian (word used tongue in cheek) gubment reaction to the state's financial problems? Were their any lay offs? No. Is the gubment there now running in the black? Yes.

But that infantile display of entitlement will happen more and more, and grow more broadly nationwide, as we further and further run out of money with no where to go to get it. Then where will the entitled go to get their "deserved" funds?

THEY WILL TRY TO TAKE IT. WHY? BECAUSE THEY THINK THEY DESERVE TO.

London recently demonstrated that. Hence the second quote above, in the box. That will indeed be anarchy.

And when the gubment supports that anarchy it will demonstrate political "compassion."

Creating Wealth

"If the practice persists of covering government deficits with the issue of notes, then the day will come without fail, sooner or later, when the monetary systems of those nations pursuing this course will break down completely. The purchasing power of the monetary unit will decline more and more, until finally it disappears completely."

Ludwig von Mises (1881-1973)

This happened before and after von Mises said this in 1931. This was an article he wrote, compiled later into a book called "Causes of the Economic Crisis."

When he wrote this the collapse of the first and second most powerful countries at the turn of the 20th century was occurring.

Which countries were they? The most economically powerful, and most modern in terms of infrastructure and communication, was Argentina. One certainly does not think of Argentina as a world power. Well, it was. And look it up to see what happened to them.

WE ARE RIGHT NOW FOLLOWING THE PATH THEY TROD EXACTLY!

The second country was Great Britain. Just beginning to follow its path to socialism, finalizing it all after World War II (remember, Churchill warned against it and was drummed out of office). It was said that the sun never set on the kingdom of Great Britain. Now it sets pretty quickly. (Note: by saying this am I condoning colonialism? No.)

WEALTH CANNOT BE CREATED FROM OTHER PEOPLE'S MONEY OR ON THE BACKS OF FUTURE GENERATIONS!

The humongous elephant in the room that nobody is paying attention to is debt. The Democrats love it. The current "crop" of Republicans sent to Washington to turn it back have no backbone to do so.

The debt created in the first year of the current regime was calculated at nearly that created by all previous administrations combined. That is a lot of debt.

How is it paid for?

Much of it is borrowed. And much is paid for with worthless currency, called Federal Reserve Notes. Worthless? Yes, and getting more so every day. It is worthless because it is valued only at what people think it is valued. Its current worth is still there because it is the world's reserve currency. That means that when the Japanese, for example, want to buy oil, which is pegged to the U.S. dollar, they must first purchase dollars to do so. Each time they do this, the dollar is getting cheaper (have you not noticed how devalued the dollar has become in the past two years?) and it costs their economy more and more yen.

DO THEY LIKE THIS? UMMM....

How long will they, and the rest of the world, put up with this? It is said in international circles that for not much longer. If we Americans had to purchase another currency to buy oil from our foreign "friends," our gasoline prices would double and maybe triple overnight! That will make life as we know it unbearable. Society as we know it now will end.

And the borrowed debt? It is paid for in the form of Treasury Notes, which are purchased around the world for their safety. But they are also purchased for their return. The notes this regime have been selling are at nearly 4%. China wants a higher rate.

How quickly will the debt foisted upon us in just two years grow? Employ the old financial 72 rule. Simply divide the interest rate into 72 to see what your return will be on any investment. 4 into 72 is 18. That means that the debt accumulated in these two years will double every 18.

So, my new grandson, born last October, has already inherited a new debt (over and above previous national debt) that will double by the time he is 20.

THAT MEANS IT WILL DOUBLE BY THE TIME HE IS 20!

There is only one way debt is ultimately paid for. By taxes levied on the population that issued that debt.

Read history. This is what happened to Argentina and Great Britain. It is happening in various countries of Europe.

Do you remember how the Beatles moved to the United States when they started making money? Why did they do that? Could it have had anything, anything at all, to do with taxes?

So, where will my grandson be able to go?

Undoing The Teaching Of Self Help

"Government control gives rise to fraud, suppression of Truth, intensification of the black market and artificial scarcity. Above all, it unmans the people and deprives them of initiative, it undoes the teaching of self help."

Mohandas Ghandi (1869-1948)

And he would know. He watched his country dip and dip into super gubment. Currently the second largest employer in the world, behind the Chinese army, is the Indian railroad. And it does SUCH a good job!

And our country, since the Great Depression, has been led by people who preach and foment victimhood and the great spirit of "can't do." And because we are such "victims," and because we certainly can't be trusted to do anything for ourselves, these "leaders" must create legislation and programs to do FOR us.

And of course these things don't work, and when they don't they must be "fixed" with more legislation and a bigger program!

And all of it is free and for our benefit! NOT!!

Oh, by the way, none of those so-called "leaders" above were/are conservative.

We report, you decide.

Supporting The People

"Though the people support the government, the government should not support the people." Grover Cleveland

Cleveland is the only president to serve two nonconsecutive terms. He was of the wing of the Democrat Party called classical liberals, with the word "liberal" meaning nothing like it does today. A classical liberal favors liberty as it relates to individualism, small gubment, free trade, free market economics and a strict interpretation of the Constitution.

Known for his honesty, those beliefs got him into trouble and he lost his first bid at re-election. Cleveland used the veto pen more than any president prior to that time. He favored the Constitution and weighed each bill as it came to him on its relation to the Constitution and if he felt it was not constitutional vetoed it! So he vetoed a lot.

As to the quote above, he got into trouble by vetoing hundreds of requests for pension grants for Civil War Veterans. These had already been rejected by the Pension Bureau, a bi-partisan council made up of war veterans and others. Congress had overturned these rejections as its constituents pled their cases to their congressmen and reissued the pensions. But Cleveland felt that Congress had no constitutional right to overturn the Pension Bureau, considering those rejected pensions to be pork, and vetoed them. He also vetoed the Texas Seed Bill, which provided seed money to Texas farmers whose crops had been ruined by drought. That made him more unpopular. The final nail in his re-election coffin was his favoring low tariffs, which many felt contributed to an economic decline at the end of the century. (Low tariffs did not... what actually did was bank failures due to loosely administered, easy-loan policies. Sound familiar?)

He was true to his principle that the gubment should not support the people. And that the people should be free from gubment influence as much as possible.

Where is Cleveland when we need him?

P.s. As a classical liberal, I am very liberal in my economic thinking and very conservative politically. But you already knew that, didn't you!

The Greedy Hand Of Government

"Beware the greedy hand of government, thrusting itself into every corner and crevice of industry."

Thomas Paine (1737-1809)

One of the most influential Founding Fathers, as regards the populace anyway, was Thomas Paine. He has been called, variously, "a corset maker by trade, a journalist by profession, and a propagandist by inclination."

His famous (or infamous) pamphlets did much to sway public opinion at the onset of American desire to separate from British tyranny.

Having little influence on the Continental Congress or the writing of the Declaration of Independence, his pamphlets were read aloud in groups large and small. We forget, or were never taught, that barely a THIRD of the populace was really behind a revolution! One third was totally against it and worshiped the crown, and another was apathetic.

OUR REVOLUTION CAME ABOUT BECAUSE OF ABOUT ONE-THIRD OF THE POPULATION! And Thomas Paine has a lot to do with that group's fervor!

What we forget is that this group of early Americans had to deal with real tyranny! Not the soft, albeit ever-encroaching, tyranny that is affecting us today. His life was influenced by a self-absorbed, power-hungry, king and Parliament that had no ears to hear its subjects complaints.

AND VALID COMPLAINTS THEY WERE!

We are experiencing a soft tyranny today. One which is indeed thrusting itself into every corner and crevice of industry.

And what gives our three branches of checking-and-balancing gubment the opportunity, or even the over lording ability or "right," to make it so difficult for business to conduct BUSINESS?

Simple! A misused clause in the Constitution, like the "commerce" clause, has grown so beyond its original intent that its legislative use and influence would be unrecognizable to Paine. He would certainly write a pamphlet on that!

An activist court (at all levels) that makes law, rather than interpreting it, because it would not be passed if left to the populace to do so legislatively. Our courts have also grown in power unrecognizable to Paine. He would certainly write a pamphlet on that!

A press that has become the virtual voice of one arm of gubment, intending to influence rather than report. And that part of the press that does try to report is reviled as "reactionary," "dangerous," or "treasonous." It tries to destroy some for minor this and that, while excusing or failing to report others they find "favorable" after major thises and thats! The press has gotten to the point where it is NOT free, and its power would be unrecognizable to Paine. He would certainly write a pamphlet on that!

Today Thomas Paine would for sure be considered a PAIN to our increasingly tyrannical gubment!

Where is our Thomas Paine today? In gubment? On the radio? In industry? Writing our children's textbooks? We need one! WE NEED SOME COMMON SENSE!

Control

"You can travel from one end of the industrialized world to the other and almost the only people you will find engaging in backbreaking toil are people who are doing it for sport. To find people whose day's toil has not been lightened by mechanical invention, you must go to the non-capitalist world."

Milton Friedman

When many people throw around the word "capitalism," they do so probably not understanding what the word means in an economic sense.

It does NOT mean money, or the accumulation thereof.

Capital is something that improves productivity. Productivity is defined as output/man hour.

If my company utilizes mechanical equipment to produce a road, it will do so quicker, more cleanly, with less waste and with a better final product than a company that utilizes man power and shovels. And no matter how many men that other company employs! And my company will, therefore, be employed to build more and more roads, requiring more and more equipment, and more and more skilled operators to handle the increased demand. We will ALL get richer! And so will the communities around us that we serve as they are able to move about more quickly providing their goods and services to others in the community.

Why has the west grown rich? Because its inhabitants are smarter, stronger, better educated, and better able to make money and improve living standards?

Of course not!

The west has grown rich, and the United States has been the city on the hill, a beacon demonstrating how, because it chose a political system (liberty) that best matched the economic system (free-market economics) to produce that wealth and living standard. We have employed the development of capital - or CAPITALISM!

AND SINCE THE INCEPTION OF THE COMBINATION OF THOSE TWO SYSTEMS HAVE COME "LEADER" AFTER "LEADER" TRYING TO TAKE THOSE LIBERTIES AWAY CHIP BY CHIP AND CHANGE THE FREE-MARKET INTO A POLITICALLY CONTROLLED ONE!

We are experiencing just such a struggle at this very moment in this country's history. We are "led" by a committed socialist, who might be better described as a colonial African, who really does intend to change this country's economic system into something else altogether -- something that WON'T work. THAT was the dream of his father - the destruction of the United States and its economy. Will this system he seeks succeed? Has it succeeded anywhere at any time? Of course not!

The richest 8 or 10 countries in the world, those with the best living standards and which produce the most wealth for its people, are those with economic systems that are the closest to Adam Smith's Wealth of Nations concept, circa 1776, of an invisible hand guiding voluntary exchange and the distribution of produced goods and services. The 150 or so countries with the least economic output and the lousiest standards of living are those dictatorships with economic systems the furthest from Adam Smith's model.

So why the struggle to actively take this country, the United States, away from the economic model that made it so strong and so great? The word was used above - CONTROL.

And don't think for a minute that is not the objective...