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The Fiddlers Of Washington…

Emperor Nero was said to have fiddled while Rome burned; perhaps some we’ve elected to run our government are his heirs… America’s government sends its military and its money around the world to govern others while it cannot govern itself. During his Presidential campaign, Ron Paul pointed to some 900 overseas U.S. military installations; we know that foreign ‘aid’ runs about $50 B annually. All of that aims at telling others what to do or not to do. At that magnitude, it’s not defense; the second largest military spender on the planet, China, spends about 1/6th of American military outlays.

This is not only imperial behavior; it’s arrogance looking for a fall since at home, political paralysis holds the government’s spending faucet wide open even while political improvidence has emptied the country of cash, replacing it with debt, credit and Monopoly money.  The U.S. is a Mafia Don who can’t pay his thugs on account of his own mismanagement.

The spending problem—the bottomless holes sucking the fading resources—are about 1/3 military and 2/3’s social welfare spending. Both are economic losers; neither produces wealth—they consume it. This is the same trap that finished the Soviets 22 years ago and many before them in history. Add the governmental  micromanagement of the economy that ‘regulation’ has become and the analogy is complete. It is simply a fact of life: If you keep taking the earnings of those who produce to hand to those who produce little, production slows and stops. Every. Single. Time!  Or if you prefer the simple version, no matter what politicians promise; nobody has ever collected something for nothing. America, Europe and the rest of the world are about to relearn that lesson yet again. It likely won’t stick this time either…

Though it will be said, none will honestly be able to say that we have not deserved what we are bringing upon ourselves. It seems to be in our DNA somewhere that we govern ourselves corruptly, as America’s Founders regularly pointed out. And as citizens, it seems to be in our DNA that when times are easy, we forget the needs for sacrifice and responsibility until we are reminded again by the arrival of the inevitable results of forgetting. Exactly that unpleasant visitor is on our doorstep as our governors crow triumphantly of recovery amidst the first real GDP decline in years.

The Greeks recognized our process; they spoke of ‘Hubris,’ or taking on godly behavior; that was always followed by Nemesis, who brought down the mighty in retribution for their arrogance. Or you can point to their Phoenix legend, shared with Chinese and others: the magnificent bird that self-destructed in fire every hundred years, to rise again from its own ashes. Noting that neither is a lot of fun, take your pick…

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Categories: Budget Deficit, Corruption, Debt, Entitlements, Europe, Federal Reserve, Foreign Aid, Foreign policy, Founding Fathers, History, Iran, Iraq, Israel, Libya, Politics, The Economy, War on Terror

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12 replies

  1. Add the governmental micromanagement of the economy that ‘regulation’ has become and the analogy is complete. It is simply a fact of life: If you keep taking the earnings of those who produce to hand to those who produce little, production slows and stops.

    Wrong.

    http://www.businessinsider.com/study-tax-cuts-dont-lead-to-growth-2012-9

    “According to a new study by the Congressional Research Service (non-partisan), there’s no evidence that tax cuts spur growth.

    In fact, although correlation is not causation, when you compare economic growth in periods with declining tax rates versus periods with high tax rates, there seems to be evidence that tax cuts might hurt growth. But we’ll leave that possibility for another day.

    One thing that tax cuts do unequivocally do–at least tax cuts for the highest earners–is increase economic inequality. Given that economic inequality is one of the biggest problems we face in this country right now, this conclusion is very important.”

    If your statement is true, then how come America grew faster when it taxed the top earners MORE?

    – 1980, Bush Sr raises taxes. GDP growth increases over next five years.
    – 1993, Clinton raises top marginal tax rate. GDP growth increases over next five years,
    – 2001 and 2003, Bush Jr cuts taxes. Expansion falters, followed by Great Recession.

    • Interesting thought but perhaps other factors are involved as when FDR continually raised the upper tax rate in the thirties until it reached 90% and the economy was still stagnant. Along comes WWII and we increased out debt but after the war, we had the materials Europe needed to rebuild and what seemed over night, we became the richest nation and most powerful. After the economic upswing, the upper tax rate dropped eventually to the 30’s. The economy continued up and down with mostly down until Bro Clinton inherited a debt which was wiped out in his second go at sex in DC due to the cell phone and Internet craze that came in like a blizzard from the Great Lakes. It might seem that the economy working to create new technology is more successful than the tax rate.

    • Interesting. I thought Reagan was elected in 1980? Carter was President before then.

      Actually, over-regulation of business IS killing business, good sir.

      Tax cuts most certainly do lead to growth. It’s common knowledge. Hint: Reagan, Kennedy, Bush 43. No President is perfect, admittedly. But these men understood that letting people keep more of their own money encourages them to invest that same capital in the private sector. Bingo! More jobs.

      Economic inequality is a reflection of a varying taste in people for economic productivity over consumption, or vice versa. it CANNOT be legislated out of existence.

    • Thanks for adding your thought. Taxes though, weren’t my complaint with that statement; government planning via regulating, a straight-jacket for business managers as I see things, was the target.Since taxes have come up, though, I’ll inject my general view: The more money government extracts from the private sector, the less productive of wealth it must become, merely because it will have that much less of resources with which to work. .

  2. To Jack’s point, yes we have carried it much too far, even for me and I’m more than a bit of a neocon. I still say we need to patrol trade routes and such and defend allies but unless we really want to be Rome in the 3d century we need to back off this some, a lot actually.

    There is no absolute reason why Europe, for example, can’t defend itself, so why are we doing it on our dime?

    And yes the social programs are even worse, not only are they destructive in and of themselves, they destroy our citizenry as well, turning them into children dependent on their Uncle Sugar.

    And yes tax raises slow business, but regulations which waste both time and money for no useful purpose are even worse.

    • Now that the memories of WWII are fading, it might be worth telling Europe to relearn the art of defense. :) I suspect that’s part of all of it. That and that the Cold War was really fought over there. And it really isn’t over yet. We do need to at least keep an eye on things.

      Social spending…I’d like to see it be changed from direct government aid to grants to non-profits that can distribute services and goods more efficiently and cost effectively if government cash is to be used at all. The majority of the costs are in administration. That’s half the problem.

      On the surface, a lot of it seems very simple, but I doubt it is completely.

      • On defense, I absolutely agree, I have little problem with providing a nuclear umbrella, it’s better than everybody having nuclear weapons.

        On social spending, I hadn’t thought of that, and it sounds better than what we have. My thoughts tend to follow the principle that in our churches we call subsidiarity, if the government must do it (and I’m not convinced) it needs to be done at the county and perhaps state level, not the federal level.

        In fact, I’d like to see the federal income tax repealed and not replaced, let the states raise taxes to fund whatever level of benefits they want to provide.

      • 100 years later, what people forget is that the federal government was financed considerably by the “whisky” tax before Prohibition. The income tax allowed alcohol to be outlawed. Those were the days. I do think a consumption tax would be worth studying.

        Part of the problem with relying strictly on churches for social services is that their capacity and dependability is nowhere close to taking care of the entire problem. Altogether, the network that has grown around the needs of so many is still not adequate. What the government provides for most recipients is a fraction of what they need. It’s an incredibly complicated topic and a lot of it is actually administered at the state level.

        It doesn’t help matters that the corporate donors are all hooking up behind the scenes. Yep, even in charity it happens.

      • I agree, particularly since our churches have (to some extent) gotten away from it. But is some sense, I’m relying more on hard common sense, there are far too many abusing the systems, users yes, but also bureaucrats whose jobs depend on users.

        What I’m positing is the old answer for most, get a job, or starve. If we screw around until the system crashes, that’s what’ll happen then, why not do it intentionally while we can have some control of it?

      • While in general, I agree with the “get a job” sentiment, being on the inside of hunger relief, the two biggest constituencies currently being served are the retired/elderly, particularly widows who’s income was their husbands pensions which died with them, and children of the working poor. These are not people who can just go out and get a job, or the income just covers rent and utilities. It’s not simple at all.

        And then there are the social issues. There are agencies who serve the kids just coming out of the foster system with nowhere to go. In this state, the foster system ends at 17 and kids don’t reach majority until 18. The Salvation Army has been very successful with a men’s shelter and rehab program, There’s numbers of people who are really are at the lower end of the bell curve and the jobs that they are able to do may or may not exist anymore. Battered women’s shelters are part of the system. There’s agencies for people just getting out of prison. Government does not deal with any of this. But, ultimately, all these people are in the hunger relief network.

        It’s really not as easy as it sounds.

    • Outstanding point. There is no reason at this juncture that Europe can’t largely defend itself. There is a time when the baby bird has to leave the nest and take care of itself.

  3. 1. Seems to me, the lid came off the box with the income tax, the Fed and at-large Senate election.

    2. You have, I think, to decide issues involving “the poor” etc. from the standpoint of charity or from the standpoint of available resources. Politicians scrounge votes using the first but pay for them from the reality of the second.

    Churches will never resolve poverty: “The poor, you will always have with you.” But, neither will government, seems to me, since the more it spends, the more reach for their share…and the more it spends, the less those who provide the wherewhithal, have left until they are ultimately impoverished to help the poor….
    But Hell, I don’t know anything.

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