By Ron Paul
Imagine being robbed every time you receive a paycheck, but once a year getting some of the stolen money back because the thieves took more than they intended. Would you be happy about it? If you are like most Americans the answer is yes, since most people are grateful when they get a partial “refund” of the taxes the government withheld from their paychecks. A tax refund means more taxes were taken out of your paycheck than you legally owed — in other words, thanks to withholding you gave the government a no-interest loan.
Withholding, which was supposed to be a “temporary measure” to help finance World War II, is an insidious way of minimizing the pain of, and thus opposition to, taxes. Because people never actually get possession of the money the government withholds, they don’t miss it. Imagine how great public demand for an end to the income tax would be if every month we had to write a check to the IRS.
This year, most Americans are owing less in taxes because of last year’s tax reform. Unfortunately, the benefits of the tax cut are going to be temporary because Congress and the President refuse to cut spending. In the two years that Republicans controlled both houses of Congress and the White House, federal spending increased by approximately 7.5 percent, or around $300 billion. Thanks to the GOP’s spending spree the federal deficit will reach $1 trillion this year, while the federal debt is now over $22 trillion dollars. This does not count the almost $100 trillion in unfunded liabilities which includes over $70 trillion in future Social Security and Medicare benefits.
Spending is going to increase for the foreseeable future. House Democrats have proposed increasing welfare spending by 5.7 percent to $630 billion and warfare spending by 2.1 percent to $664 billion. Many Republicans are complaining that the budget underfunds the military, while progressives say it underfunds domestic programs. Few in DC are willing to cut either welfare or warfare.
Government spending diverts resources from the private sector, thus damaging the economy and lowering our living standards. This is true whether the spending is financed by direct taxes or debt. Deficit spending, and the resulting pressure on the Federal Reserve to monetize the debt, increases the hidden and regressive inflation tax.
Government statistics are manipulated to understate the inflation rate. The Republican tax plan helps government hide the true inflation level by authorizing the use of the chained Consumer Price Index (CPI). Chained CPI makes it easier for the government to understate the effects of inflation by pretending that you are not negatively affected by price increase if, for example, you can still by hamburger instead of steak—even though the only reason you are buying hamburger is because Federal Reserve-caused inflation has made steak unaffordable.
Bill Rice, Jr., writing in The American Conservative, blames CPI manipulation for what he calls “shrinkflation.” Shrinkflation is when producers reduce product size to avoid, or minimize, price increases, so consumers pay more for less.
Tax cuts that are not paired with spending cuts are deferred tax increases. Unless the people and the politicians kick the welfare-warfare habit they will soon face increases in inflation and other taxes. The key to avoiding this is to restore a proper understanding of sound economics and the philosophy of liberty among the people. Politicians will only cut spending when the people stop demanding security and start demanding liberty.
Secretary of State Mike Pompeo and National Security Advisor John Bolton have vowed to strangle Iran and cut off all oil exports. They claim it's because of Iran's pursuit of nuclear weapons and missiles and its support for terrorism. In a recent speech at Texas A&M University he finally told the truth about the CIA and the neocons - they lie and cheat and steal. So should we believe him now?
By Jacob G. Hornberger
As most everyone knows, the federal government is now in debt to the tune of more than $22 trillion. Since federal officials are now spending, on an annual basis, around a trillion dollars more than what they are bringing in with taxes, that is going to raise the federal debt by a trillion dollars every year. We are reminded of this phenomenon by the periodic debate on whether Congress should raise the debt ceiling, an implicit acknowledgment that too much federal debt is not a good thing, especially since the feds will ultimately tax the American people to pay back what they have borrowed to fund their welfare-warfare state.
On the welfare-state side, the big-ticket items are Social Security and Medicare, the two crown jewels of the American welfare state. Abolishing them would go a long way toward resolving the fiscal problem.
Yet, to even suggest such a thing brings howls of lamentation, despair, and rage from both conservatives and liberals. These two socialist programs go to the core of their joint statist philosophy. They’re not about to touch either one, especially since that would alienate seniors, who unfortunately have grown dependent on the government dole.
On the warfare-state side, the big-ticket items are the Pentagon, the military-industrial complex, the CIA, and the NSA, along with their foreign and domestic empire of military bases and their forever wars, occupations, regime-change operations, coups, invasions, wars of aggression, and ongoing assassination program. Dismantling America’s national-security establishment and restoring a limited-government republic to our land would go a long way toward resolving the fiscal problem.
Yet, to even suggest such a thing brings howls of lamentation, despair, and rage from both conservatives and liberals. The warfare state goes to the core of their joint statist philosophy. Moreover, there is no possibility that the national-security establishment would ever consent to its own dismantling or to even a major reduction in the amount of tax money that it expects to be allocated every year.
In the middle of this fiscal morass are a multitude of mid-sized or small-sized federal programs, such as the drug war, farm subsidies, education grants, the SBA, and Radio Martí. Abolishing all of them would go a long way toward resolving the fiscal crisis. But conservative and liberal supporters maintain that abolishing any one of them would do nothing significant to reduce overall federal spending and, therefore, they say, each and every one of them should be left intact.
So, where does that leave the nation? On a track toward national bankruptcy, where the federal government lacks the money to cover its welfare-warfare state spending and, at the same time, service the interest on its debt, much less pay down the debt.
Think Greece. At some point, things could get pretty nasty, with the feds desperately looking everywhere they can to seize money, such as IRA accounts and 401k accounts, and replace them with government bonds, much like President Franklin Roosevelt did during the emergency economic crisis in the 1930s when he seized everyone’s gold and replaced it with government bonds.
But here’s an idea: Why not abolish foreign aid, all foreign aid?
After all, foreign aid is really nothing more than welfare for foreign officials. Like other welfare-state programs, it’s funded by money that the IRS extracts from American taxpayers. After covering the expenses of the IRS and the federal bureaucracies that perform this “service,” billions of dollars are sent to public officials in foreign countries.
What do those foreign officials do with it? Some of them line their personal pockets with it. Others use it to help cover governmental expenses.
The obvious question arises: Why should the American people be plundered and looted to subsidize the personal lifestyles of foreign officials or to subsidize foreign governmental operations? Why shouldn’t Americans instead be free to keep that money for themselves, for such things as mortgage payments, children’s education, a new car, or a vacation? Why should the needs of foreign officials have priority over the needs of American citizens?
If U.S. officials were honest, they would acknowledge that foreign aid is nothing more than bribery. The foreign aid is never “free.” It comes with strings. The strings say: Do as we say or you will lose your dole. So, when the U.S. government needs votes in the United Nations, international dole recipients know full well what their duty is. Or when the U.S. government needs a “coalition of the willing” to support one of its imperialist adventures, it knows that it can call on its international dole recipients. Even when the U.S. Empire is going it alone in some foreign escapade, it knows it can count on no criticism from its dole recipients, or else.
There is also a moral element to foreign aid — the fact that American tax money is being used in immoral ways, including oppression of innocent people. Two good examples of this phenomenon involve Israel and Egypt. U.S. foreign aid to Israel helps the Israeli government maintain its brutal system of oppression against the Palestine people. U.S. foreign aid to Egypt enables the Egyptian military dictatorship to maintain its brutal system of oppression against the Egyptian people.
If American citizens want to support the Israeli government or the Egyptian government with private donations, so be it. But why should any American be forced to support either system of oppression through a system based on plunder and foreign-aid welfare?
Abolishing all foreign aid would not, in and of itself, resolve America’s spending-debt fiscal crisis. But at least it would move the United States in the right direction — a direction of morality, fiscal responsibility, and freedom.
This article was originally published at The Future of Freedom Foundation.
The axiom still stands -- Truth Is Treason In An Empire of Lies
Benjamin Franklin said that: “When the people find that they can vote themselves money that will herald the end of the republic.” How prescient and true. Once theft and redistribution by government is considered acceptable, the downward spiral of civilization begins. It can last for decades, or even centuries. But the end result is always bankruptcy as countless factions ruthlessly fight with one another to be on the receiving end of the heist. When theft by government is no longer considered acceptable, the upward march of civilization resumes.
By Ryan McMaken
On Monday, Bernie Sanders released ten years of tax returns, and it turns out he's a millionaire. Thanks especially to revenues from book royalties, Sanders is now, as CNN put it, "in the category of the super-rich." Or, as some might say, he's part of "the 1%."
After years of denouncing "millionaires and billionaires" and a supposed source of America's economic problems, this information is a little awkward for Sanders.
Some critics of Sanders have claimed this makes him a hypocrite. Here's a man who trashes millionaires, and yet is one himself.
"Hypocrite," however, isn't really the right term here. So long as Sanders pays the taxes he says millionaires should pay, his income alone doesn't make him a hypocrite. Moreover, Sanders can (plausibly) claim that when he denounced millionaires, he didn't mean all of them. He just meant 90 percent of them. And he can then include himself in the "good" ten percent.
Nevertheless, Sanders appears not entirely comfortable with his status as a rich man.
When confronted as being among those he has long villainized, Sanders became defensive:
“I wrote a best-selling book,” he declared. “If you write a best-selling book, you can be a millionaire, too.”
Translation: "I made my money fair and square, so quit hassling me about it."
It is at this point that we start to see Bernie Sanders undermine his own claims about millionaires, wealth, and capitalism.
Bernie Sanders, Capitalist
For a normal person, Sanders's defense of his riches would be no big deal. There's little doubt that a great many wealthy people, when asked how they earned their money, would respond with "I worked for it. I earned it."
But, when Bernie Sanders says this, it's quite remarkable.
After all, one of the central myths of the Bernie Sanders wing of the American left is that people who become rich do so on the backs of the poor. As is the case with orthodox Marxists, there is a persistent and widespread belief on the left that wealth is gained by exploiting workers. Moreover, it is believed that market-based economies systematically favor the wealthy while closing off economic success to those who are not already well off.
In this narrative, those who haven't exploited workers directly have likely inherited their money from others have who have exploited others.
To hear Bernie Sanders on the matter, however, it sure sounds like he does believe that wealth can be had through a little hard work: "I wrote a best-selling book. If you write a best-selling book, you can be a millionaire, too."
Translation: "You can make a lot of money if you work at it. It's just that easy!"
This sounds suspiciously like the "bootstraps" argument which the left so often and so vehemently rejects. And it's pretty odd to hear it from Bernie Sanders.
It shouldn't surprise us, though, that when called upon to justify his riches, Sanders ended up resorting to a capitalist cliché.
He did this, of course, because the argument makes sense to a lot of people. Sanders needed to make the case that his wealth was obtained morally. So he pointed out the most common-sense argument in favor of letting people keep their wealth: he earned it.
Assuming we're only talking about income received from book sales, Sanders is right. No one forced anyone to buy his books, and he made money when people voluntarily handed over money in exchange for the books. By this measure, Sanders did indeed "earn" the money.
But Sanders's observations about the origins of his wealth don't stop there. By noting that this was a "best-selling book" Sanders is also admitting that delivering a product or service to a large number of people is a key factor in getting rich.
In other words, had Sanders merely written a book, he would not have made millions. But since he wrote a best-selling book, that brought in a lot of money. But if the key to getting rich is to sell something a lot of people want, doesn't that show that "millionaires and billionaires" are providing a benefit to society? Sanders is recognizing that the extent of one's riches are tied to how many consumers an entrepreneur serves in the marketplace. Sanders apparently thinks at least one millionaire — himself — got rich by giving people what they want. And if this is the case, is it fair to assume that rich people aren't paying their "fair share?"
We might go on to extrapolate even more from this.
As to the matter of inequality, Sanders hints at its origins. What if not everyone writes a best-selling book? Wouldn't that mean some people have millions of dollars and other people have much smaller amounts of money? Wouldn't that create inequality?
The answer, of course, is "yes." And we can see from Sanders's own success in selling books that inequality is not necessarily a result of the wealthy exploiting the poor. It can simply be a result of some people selling more books than others.
We can also conclude that Sanders apparently believes it is possible to produce a good or service without exploiting the workers. After all, his books did not appear by magic out of thin air. Human beings worked to print the books, assemble them, and distribute them. Sanders made money from their labors. In fact, he made a lot more money than any truck driver who delivered his books to stores. He made a lot more than any factory worker who assembled the books. Does Sanders believe he took advantage of these workers? Apparently not. Sanders justifies his wealth as a matter of writing books. He doesn't mention anything about the workers at all.
So, in this one short interview, we've learned a few things from Sanders:
1. He believes that providing an in-demand product or service justifies high incomes for those who produced it.
2. There is a connection between income earned and the total number of customers served.
3. If you do the same, you can be a millionaire, too.
That's quite a little capitalist manifesto from Sanders.
Unfortunately, he's unlikely to take any of these newfound revelations and translate them into decent public policy going forward. Instead, he's likely to keep telling his supporters what they want to hear. Why stop now? It's made him a rich man.
This article was originally published at The Mises Institute.
Today's extraordinary release of the Mueller Report tracks closely with Attorney General Barr's recent summary: no collusion between the Trump campaign or any American with the Russians to help get Trump elected. Do not expect this to improve relations with Russia, however. There are poison pills in the report that ensure the push to war with Russia - in Europe, the Middle East, and Latin America - will continue.
President Trump has vetoed the second bill of his presidency. Both vetoes have strengthened the Executive Branch at the expense of the Legislative Branch (and the Constitution). Yesterday's veto of S.J. Res. 7 means there will be no foreseeable end to US participation in the genocidal Saudi war on Yemen.
By Jacob G. Hornberger
While Republicans continue to profess their opposition to socialism, their love of socialism is being demonstrated in the healthcare arena. Do you remember when they were campaigning for control over Congress and the presidency with full-throated calls to repeal Obamacare? Not anymore. According to an article in the Washington Post, Republicans have come to love and adore President Obama’s signature achievement as president. More important, of course, is their deep-seated, unwavering devotion to Medicare and Medicaid, the two socialist programs enacted during the leftist regime of President Lyndon Johnson.
The Post’s article states:
Even Republicans who furiously fought the creation of the law and won elections with the mantra of repeal and replace speak favorably of President Barack Obama’s signature domestic achievement.
Even President Trump is caving:
Bowing to pressure from some in his own party, Trump recently backed off a new pledge to take another crack at eliminating the ACA and said a vote on a GOP health plan — still unformed — would be delayed until after the 2020 election.
This is one of the horrific consequences of socialism: It creates mindsets of dependency on the government, much like going on heroin. Once people go on either heroin or socialism, they’re done. At that point, they cannot imagine life without their narcotic. And they come to love it.
President Franklin Roosevelt, who ushered in America’s welfare-state way of life, understood this phenomenon perfectly. He knew that if he could just make people dependent on governmental largess, the federal government would own them. That’s what Social Security, the crown jewel of American socialism, was all about it. FDR knew that once he got seniors on the dole, he and successor regimes would own them.
Roosevelt’s protégé, Lyndon Johnson, learned this lesson well from his mentor. Give seniors not only a welfare retirement dole but also free or heavily subsidized healthcare, and they would thereafter belong to the federal government.
That’s how we have ended up with entire generations of older people who have been scared to death of losing their Socials Security and Medicare and absolutely convinced that they would die without them. Equally important, you’ll never see any seniors, except libertarian ones, who dare to challenge the federal government at a fundamental level. They’re too scared that the government will retaliate by threatening to cut off their retirement and healthcare doles.
The Post article says that one reason why Republicans have become enamored with Obamacare is their fear of what will happen if it is repealed. This fear was expressed by former Ohio Governor John Kasich, one of the leading Republicans to embrace parts of Obamacare, who stated that ending the program would bring “total chaos.” Kasich reflects the conservative mindset — that socialism equals stability and that freedom and the free market equal chaos.
In fact though, government involvement in healthcare, including Medicare, Medicaid, Obamacare, occupational licensure, insurance regulation, and income-tax manipulation, have brought America a healthcare system that is best described as “planned chaos.” The Post article hints at the real situation: “Democrats have often acknowledged that the ACA is not a perfect law and can be improved….”
Indeed, if Obamacare was the panacea it was made out to be, there would be no reason for Democrats to now be advocating an expansion of Medicare to everyone in the country. The reason they are doing that is because despite (or because of) Obamacare, the healthcare crisis just keeps getting worse. And the reason it continues getting worse is because each new government reform makes the situation worse.
America once had the finest healthcare system in the world, one that was based on free-market principles. Healthcare costs were reasonably priced, innovations were soaring, and doctors absolutely loved what they did in life.
Medicare and Medicaid succeeded in destroying that healthcare system. That’s when healthcare costs starting soaring, healthcare quality began decreasing, and increasing numbers of doctors began opting for early retirement.
Rather than repealing Medicare and Medicaid, American socialists, including conservatives, instead began enacting reform upon reform, hoping against hope that their healthcare socialism would finally succeed. Nothing worked. Each reform only made things worse. And it’s no different with Obamacare. The healthcare crisis will only get worse.
The same holds true if Medicare for All is adopted. At that point, American socialists, both Democrats and Republicans, will be calling for a full-fledged federal takeover of healthcare, with doctors working for the government and with the government in charge of people’s medical treatment and medical records.
No one should look to Republicans to save our country from socialism. They threw in the towel and made peace with the welfare state a long time ago. The only thing they have left is empty pro-capitalist rhetoric.
The only hope for the future of American healthcare and American liberty lies with libertarianism and libertarians. It is only we who have the correct diagnosis and the right prescription for America’s healthcare woes: Repeal Medicare, Medicaid, and Obamacare and end all governmental involvement in healthcare. Separate healthcare and the state, just as our ancestors separated church and state.
This article was originally published at The Future of Freedom Foundation.