So
here we are at post #2! My goal is an entry a week and so far I am only 3 days
behind schedule. I have been hemming and hawing regarding the direction I wanted to take with this entry. On one hand I was considering finding the common ground that
most sane individuals could agree with. However, that
is not my intended goal
with my blog and I would rather point out some sacred cows.
There
has been a lot of discussion about a parasitic populace in America. Depending on the statistics that you use and
where you acquire them from, anywhere
between 47 – 53% of households do not pay any federal
income tax. In addition to this lack of tax revenue we have the liabilities of
Social Security, Medicare, Affordable
Health Care, government employee pensions, and that list could go on and on.
Typically when there is a discussion about a group of
people that have become dependent on these particular government programs there
is also a push to characterize those individuals. I don’t necessarily believe
participating in these programs makes a person “good” or “bad”. Sure there are the people that take advantage of the
system and they receive most of the attention, these so called “welfare
queens”. I do believe the majority see this as needed help or in the case of
retirees with social security, an entitlement for
payroll deduction. As a Libertarian, I
do not want to see anyone pay a federal income tax but that is another rabbit
hole to travel down. The main issue we have here is rather than adding wealth
to the economy, we are consuming it. We are now way past the tipping point and have roughly half of our society
consuming wealth and is relying on the half that produces wealth to fund all
the entitlements. If this trend is not reversed we will continue riding the
road to the downside.
However,
while the citizen number is growing and raising
concern what is more alarming is the creation of the Corporate Parasite. Both
major parties feed their respective corporate parasite. The Democrats feed the
so called “green energy” companies which could not exist without subsidies, loan guarantees, and tax breaks. The Republicans
have their military industrial complex and energy in the form of Lockheed
Martin, KBR, Halliburton, the five largest oil companies, and an alphabet of
corporations. There is always a justification, with
Democrats we have the vision of a bright future of rolling back the tides by
switching to mercury filled light bulbs and the Republican fear mongering of
terrorists, USA jobs, and protecting foreign ally Israel. While the big two differ in some areas they both seem to come to agreement that government needs to
step into varying sectors of the economy and subsidize with public money. They
just can’t seem to agree with which sectors to jump into, that is until it
comes to Wall Street and financial institutions.
George
W. Bush, Barack Obama, Nancy Pelosi, Harry Reid, and John Boehner would like
you to believe that they acted heroically in stepping in to save our economy
from depression, or that the “other” guys were destroying the economy, it all
depends on election cycles. Regardless of intent,
which I do not believe was ever noble, what really happened was public money
was taken and given to large institutions to protect them from taking a well
deserved financial loss. In various forms over $2 Trillion dollars were taken from
the public and lined into the pockets of the financial
industry.
Malinvestment is when a firm badly allocates investments
that can’t be returned. There is a lot of malinvestment going on and whats worse is it being encouraged with a low cost of credit and an
increase in the money supply. When an institution can
only remain profitable with government assistance it means that the institution
is using raw resources such as labor, energy, and materials to create a
finished product that is worth less than the inputs used in production. In return, the more that governments choose to support
parasitic companies with public money, the poorer the nation will become. It is
an unsustainable business model and can only be sustained with additional
printing from the Federal Reserve at low interest
rates, an increased tax burden on the public, or a continued deficit. I am
reminded of what libertarian economist Milton Friedman said “If you put the
federal government in charge of the Sahara Desert, in 5 years there'd be a
shortage of sand”.
The
government should not be in the business of picking
winners and losers in the marketplace. Markets when left alone will do a much
better job of innovating and correcting mistakes. I also trust a company that
is willing to place their money on the line, there is a
lot to lose in a situation like that. The risk factor is much lower when it
isn’t your money to lose and it is easier to come by when it is given by the fool or
thief. When subsidies happen that is the government stating that they are
better at investing your money than you are. Whats
worse is they are investing in companies that break the first rule of
thermodynamics and actually destroy energy and wealth in the process. The first law of thermondyanmics needs an asterik,
"Energy can not created or destroyed" *unless a governmental body is allocating resources and then a flaming rat hole will ensue. In the case of a flaming rat hole, throw more money at it to suffocate the fire. If that creates a bigger flaming rat hole blame it on the other guy.
Ya, I feel the first law of thermodynamics is now complete.
Government believes it can create prosperity by destroying resources and wealth
in the process, but then again that is the fiction of
the state.
No comments:
Post a Comment