Smaller Government Equals Less Civilian Tax Burden

You hear a lot of people calling for smaller government.  You never hear all the reasons why though. Some people are afraid of tyranny and rightly so.  Some people are afraid of more government intrusion of privacy, and rightly so.  Some people are afraid of government corruption and also unproductivity and rightly so.  Competition spells production and the government has no competition so it gets lazy and that laziness spills over as a taxpayers expense.  I'll take that last statement further.  Every government job is paid for by the taxpayer and is a burden to the state.   Speaking again about government competition, we used to have competitors, but now we have "partners".  The only competition a government ever really had was competition with other world governments but with the new world economy and most of our goods produced overseas, it already appears we are losing that and also we "appear" not very competitive.  Our "partners" seem to have the upper hand, particularly our number one supplier and also the biggest holder of our 14 trillion dollar nation debt which is China.  There are many businesses in this country that have went out of business because of China.  There are some products that are not even made here in the United States any more because they can be imported in cheaper.  What if there is a conflict with China.  It is hard to start up a factory overnight to replace a product/industry that should have never shut down to begin with.  Someone, and many years of someones, has dropped the ball.

I am not saying that our government needs to transition into a state of anarchy.  We do need a certain number of government jobs for transportation, education, police protection and for political offices, etc, but what I am saying is that smaller government in contrast to bigger government spells more economic stability, productivity and efficiency.  It also means more money in our pockets because smaller government means less tax burden strain on all citizens.  Smaller tax burden on all citizens means more wealth to spread around for all of us.  A "streamlined" federal and even state government is simply a major first step in repairing the damage of many years of a growing government and amassed federal programs that are long outdated, ineffective, counterproductive, many of which are dumbing down our culture, society, economy, and our effective world political leadership role and even oppressing a large percentage of our population.  I would not say these things if I did not truly believe what I am saying.  I have no doubt in my mind and heart that an increasingly larger government among other things will and already has, severely hurt us and our country.

How do I know this?  Take a look at a graph of our national deficit from 1920 until now, and then compare it side by side with a graph showing the increase in government jobs compared to civilian jobs in the same time period.  Then compare both of those graphs side by side with another graph which compares "percentages" of unemployment and welfare recipients, and social security benefits.  Many people don't realize that neither welfare or social security even existed prior to the great depression.  During the great depression and the collapse of the economic system something had to happen and at that time, measures were put in place somewhere between 1932 and 1935 to help insure that people didn't go hungry, but even then, social security in 1935 was not what it is today.  The media has been prepping us for years that social security wouldn't always be here and now with the first wave of baby boomers hitting the social security system at a time when there are less workers paying into the system, less middle class having children, more welfare and unemployment recipients and less social security tax being paid by the workers (the law was passed just this year to decrease this amount by 2% nation wide), it's a wonder how much longer it can survive at all.

The people in this country prior to the great depression weren't starving to death.  However, natural laws and the "thought" that starvation could happen encouraged them to learn and survive and many times even prosper.  In those days, if there were families in a community that were in dire need of help, the church and community pitched in to help get them back on their feet.  This was core to society, especially in rural communities.  It helped give a sense of purpose in the Church and encouraged people in the faith.  With the modern liberals stretching the "separation of Church and State" into new meanings not intended by the founding fathers of this country, there is no increasing of "faith" received any more from secular government handouts.  This, in part, has contributed to the demoralizing and stabilization of our country.  I am not saying that welfare or social security needs to be eliminated but I am saying that serious thought and study needs to be placed on the shoulders of those in office as to how to turn this train around.  It's my strong opinion that welfare oppresses and holds down those that are on it.  If you've ever seen a child that their parents keep "rewarding" for failure with monetary rewards never prosper and compared that to a family that teaches their child to work and earn money to buy their own car and make their own mistakes and paying for them then you can at least understand what I am saying.  I have drifted off the subject mometarily, but all of this really is weaved together.

When  an economy is in a serious rut, jobs are hard to find and unemployment is very high, one might argue that "bigger government creating more government jobs is good for the economy, but in truth it is terrible for the economy and especially the long term survival of a country.  Trying to shore up the economy by creating more government jobs is worse than sticking a piece of gum in a leaking dam, but more like sticking a piece of unstable dynamite into the hole.  The only person it is good for is the people that received the government job, and it's only good for those people until the economy eventually has a self correction and believe me, that self correction is coming and the early stages of it are already here.  This self correction can and has been artificially pushed and extended into the future by passing the burden of the system to an alarmingly increasing national debt, but eventually the bubble will pop and there will be trouble for all of us, poor to wealthy, like we have never before experienced.  If you can imagine the national debt as being a growing balloon being pumped full of wet horse manure that continues to uncontrollably grow until it "pops" throwing dung on all of us in the process, then you can begin to get a picture of what I am speaking of.

The salary of a government worker is paid by the tax payer.  Who else pays for it?  The government prints the money, but money can not just be printed to pay these salaries and other duties, after all, if it could, why do we have even have to be taxed to begin with?  Couldn't the government just quit charging us taxes and just print extra money to pay for our roads,  irs agents, politicians, state troopers, social workers, government buildings, related upkeep, etc. which would give us all more money to spend?  Couldn't the federal government just print billions of extra dollars to give to our state and city governments to take care of all of those things which would give us more money to put into the economy.  No, as good as it sounds, that's not how it works; at least not without a major imbalance in the economy and inflation that is beyond my comprehension.

If that were the case, there would be no reason for our government to crack down on those producing counterfeit money would they?  Some would argue that the govenrnment's money has been counterfeit ever since they "unhinged" it from the gold standard into a "floating" currency.  Just six years ago gold was going for under $400 per ounce.  Today gold is going for over $1400 per ounce.  If gold was an indicator of the value of our dollar still, that would be a very scary thought wouldn't it?  If I'd purchased $100,000 worth of gold six years ago at $400 per ounce, I could sell it now and receive $350,000.  Optimistically, if I rushed out and bought $100,000 worth of gold right now at $1400 per ounce and the economy turned around and the price of gold dropped back down to $400 per ounce (which I hope is possible) then I'd only be able to receive $28,571.43 if I sold it).  However, you can get great deals on stocks and even buy foreclosed on real estate for half price right now and we all know that the wealthiest know how to work the system and get rich by taking advantage of a terrible economy. As Rahm Emanuel, is often quoted as saying, “Don’t miss an opportunity to take advantage of a good crisis" and the power players on Wall Street and Washington all know that you can get very rich in a sideways or down economy.  One would only hope that they didn't help create the crisis in order to benefit themselves.  Greed does strange things to people.



A breakdown of just a few of the costs for a government worker:

$50,000 salary (or more)
a personal vehicle (for some)
insurance
retirement (and a very good one at that)

If you add in the cost of the building they are housed in, the utility bills, the cost of paper, equipment, desk and many other items they use during the course of the year, I think you'll find that many government worker costs the tax payer around $100,000 per year.  Police officers can at least give out speeding tickets to "help" pay their salary which is in itself a different type of "tax", although I highly doubt that enough revenue is generated through tickets to pay for his/her car, gas, insurance etc.

If the current trend continues, it's my belief that the debt will continue to increase and so will the population.  "Diversity" of cultures in the U.S.  Division will grow as well as the class divide between the poorest and the top 1% of the population.  There will be a "delayed", yet very vocal reaction to the increasing debt and a very sharp divide between the liberals and the conservatives.  The entire country will be polarized as the economy worsens.  Finger-pointing will be coming from all sides and no one will truly understand what happened, blaming the current administration for the problems, when in fact, this has been an increasing trend since the great depression.   Even if a past president was advised of the problems, they were simply not "man enough" to stand up and make some tough decisions to get this country back on the right track.  Instead of listening to "one" economist or to the Federal Reserve Chairman, these guys should have been brainstorming with thirty or the smartest economists in this country.  Unfortunately, all the most recent Presidents appear to be mostly partisan which is very divisive and unproductive for our country.  They have also been about the short term.

During the great depression FDR implemented programs to help teach people to grow their own food so that they could eat but the current administration passed senate bill c-510 making us increasingly dependent on the grocery store and harder on the small farmer which is exactly why Monsonto "genetically altered" seed monopoly and the FDA supported it.  Grow you own food?  One day, a government official may actually fine you for it!  In some states, this has already happened.

The main difference between the worst economic recession (some called it a "depression") since the great depression of the early 30's is that back then, a much greater percentage of the population were more indenpendent and knew how to grow their own food.  People ate more healthy foods.  They worked together more in communities.  They were more patriotic.  There was prayer in schools.  There were less single parents and more stable families.  People were far less dependent on oil.  People were far less dependent on government hand outs. 

We all have been conditioned over the years, and spoiled to a certain degree, and this has occured for generations.  This is exactly why we must pray that someone figures all of this out and puts long term measure in place that will bring people out of poverty, put them to work, increasing the size of the middle class population in the process, create more industry here instead of importing as much from China and other poverty "slave labor" type govenrments, eliminate the national deficit and become self supportive again, break down the biggest of the monopolies which outsource most of their jobs overseas and be more supportive of small businesses that create work in local communities.  Decrease corruption in Washington and Wallstreet and decrease the divide between the richest 1% of the population and the middle class.

Bigger government is bad for the economy.  It didnt' work in communist Russia and it will not work here.

A Patriot

For a patriot is not a title given at birth, or is it based on color, or is it self-inflicted; but patriotism is a title earned through a lot of heart and love of country, while actively seeking the absence of blindness, ignorance, incompetence and complacency.

~Dewayne Allday

January 7, 2011

Dire Straits - Capitalism vs. Socialism

Our country is in a very unique situation.  The entire world is changing right before our eyes.  History is being written.  Some might say, history is being repeated.  Egypt, Iran, Libya, democracy, dictatorships, unrest?

There has been much talk about capitalism and socialism over the last few years.  What do they mean?  It is CRITICAL that we, as a country research and understand the definition of these two political and economic dogmas.

These are not just two simple terms that we can shout at each other saying "you're a socialist" or "you're a capitalist".  It's my opinion that many times those doing the shouting don't even understand what they are saying.  That's where education comes in.

Capitalism and Socialism are more than words; they are a way of life for society as a whole.  They are comprised of a complicated string of events that compose a political and economic system and there are major differences in the two dogmas.  The two can't run together side by side efficiently.  One will prevail over the other one, the end result either being victory or defeat.

It's my belief that we are in a very dangerous and precarious situation in this country.  The majority of people are complacent, but not only complacent, they are distracted, unmoving, uncaring.  Uncaring may be too harsh of a term, because it may not be the uncaring part as much as the "not knowing how to care" part that has us in trouble.  We go to work, we get home, we either work more, watch tv, get online, check up on facebook and read the local newspaper.  More and more people are being consumed by distractions instead of actively participating in their communities.  I've often made the comparison over the years of when you watch TV, you are watching others live their lives (and fictional lives at that) instead of living your own life.  After all, we weren't just put here to be robotic workers who shut down in the evenings, our lives should have meaning.  Yes, there are pros to the information age.  We get information instantly, and we expect it.  Just think about what we've seen lately going on in Egypt, Iran and Libya.  Revolution.  Do you think the internet age contributed to those people wanting to reform or do you think they just finally reached the "tipping point" because they and their families were hungry, without work, and tired of oppression and lack of liberty?

Knowing and understanding the difference between Capitalism and Socialism and even Communism is VERY important.  If you understood communism, you would see that socialism and communism are very similar.  After all, how can government be all bad if they provide you a free education, free healthcare and even a free piece of land?  That's exactly what communist Russia did for  years.  The people had those things but they had to bow down to the government.  Yes, bigger government = communism.  Read everything you can on the three subjects.  There is a lot of information on the internet and there have been books written dating back 200 years or longer.  Also understand that not everyone can understand the complexities of the life force that operates these systems.  Think of them as a complicated political "organism that is alive once a government breathes life into it just as God breathed life into Adam".  A government can breath life into either Socialism or Capitalism or both. The two can exist at the same time. They are alive and well right now.  One will overtake the other if given enough life.  The two can be and actually are co-existing together at this moment and the cons of both and the partisan politics are weakening our economy and souls as I write this.

Two books I have read on Socialism, one by Oscar Wilde (supporting) and one by Ludwig Von Mises (against), were both very "stimulating".  Interesting enough Oscar Wilde was a play-write and Mises was an economic scholar who was almost alone when he predicted the demise of the German economy and the great depression.  If I had to put weight on the two based on their credentials, I'd put it on Mises since he has a better track record.  I really enjoyed Wilde's theory on individualism, but it was incoherently flawed.  His idea that we could become individualists and develop that part of our creative character if we did not have to work and the government gave us all equal shares of land was interesting enough, but in reality, those who do not work get complacent eventually.  Even Wilde had to work, so maybe he was just a complainer, but regardless, I have not read anything that can touch Mises works.  Mises is dead on.

Yes, I have heard about the two and I have researched and I feel like I comprehend them both.  One is a thriving life force and one is a slow and painful death.  I have wrapped my brain around both dogmas and "regulated" capitalism is the winner.  Socialism will eventually lead to revolution.  Please don't stop reading now because you "think" you are a socialist or you think your party supports socialism; be your own person.  Study for yourself.  They will argue that there is no proof that socialism will fail, and they will tell you that capitalism is failing, but if you study up on these very important subjects, you will see there there is plenty of proof in every day activities and common sense that one leads to success and one leads to complete and utter failure and eventually chaos and revolution.

Think of these two "life forms" as two separate trains.  Once implemented, they are hard to stop by the individual, but capitalism is easier stopped because it's run by individualists and socialism by collectivists.  To understand what I mean, you have to understand the two terms, individualism and collectivism.  Please research.  Care enough to study the subjects.  Wilde's theory on individualism is outdated in today's modern day socialism.  Giving you a  piece of land and you not having to work for a living, as nice as it seems, does not strengthen your spirit.

Capitalism does have a few flaws that can be regulated and corrected.

Flaws of capitalism:

1.  Monopolies (eating up small business and eliminating the competition, leaving behind the fat excess of later erosion/deterioration of the monopoly)
2.  Environment (capitalism is fueled by growth, but again this can be regulated)
3.  Greed and manipulation (the top 1% can have serious influence over politicians and legislation, in which laws can be put in place to widen the separation of social classes, the haves and the have nots - stronger ethics laws, regulations, laws and enforcement of these laws and regulations can correct this)

However capitalism has a lifeblood of pros:

1.  Healthy competition which pushes us towards greatness
2.  Better education
3.  Individualism as long as monopolies are contained and small allowing small businesses thrive

4.  Productive employment through small competitive businesses creating more sustainable jobs and a broader                      world market for products.

5.  More stable families, financially and emotionally.  The loss of industries and jobs here are not due to a weakness of capitalism, but because of the new world economy and NAFTA.  NAFTA is often given more credit for the demise of jobs but the truth is that "free trade" and outsourcing our many of our jobs to poor countries, plus a devalued currency has lead to the demise of jobs, and a decrease in our living standards requiring us to work more hours to get by.

Flaws of Socialism:

The entire dogma is flawed.  It is not a question as to "will it fail?", it is a question of "when will it fail?".  It absolutely can't sustain itself.  As I stated previously, it will be a slow and painful death.  It will start out fine once ushered in, but will steadily erode at the economy and psychology of the people.

1.  Loss of competition and reward leads to more complacency, laziness (even slothfulness), loss of production and also loss of motivation.

2.  Lack of competition and reward leads to a loss of production at work, which leads to struggling businesses which lead to us getting further behind in the world economy and even more outsourcing our jobs overseas, which leads to less smaller localized businesses and the strengthening of monopolies (monopolies are a weakness of both socialism and capitalism) which will outsource many of the jobs to other countries.

3.  Lack of competition and discipline in our schools leads to rebellion, less educated children who later grow up to be our leaders who fall behind in the world economy, making bad decisions for our country in all sectors.

4.  Loss of our countries sovereignty as we become a less productive and lazier society.

5.  Loss if our liberty.  Socialism requires an increasing larger government and more laws and taxes to burden the citizens.  It is inevitable that crime will rise, health issues and more unemployment. You would think that creating more government jobs would help the economy, but government jobs do not produce a product as industries do, and government salaries are not sustainable except through taxes, fines, traffic tickets, and an in excess tapping and increasing national deficit to pay unsustainable government salaries.

4.  Complacency (the complacency that's occurring now is not because of capitalism - more information below).  Complacency is a by product of many things.  It's here now but will increase ten fold with socialism.

5.  Bigger government, bigger government programs, bigger government hand outs, bigger national debt and eventual failure and collapse of the system. 

Keep in mind that both Capitalism and Socialism are part of a mindset.  It's simple psychology.  True capitalism creates reward for hard work.  If monopolies could be regulated and free trade competition implemented we would have better products on the market at better prices if it were not for cheaper overseas goods being imported into the states.  Socialism creates no reward for hard work, but in its place the promise that you will be taken care of for not working or succeeding.  Capitalism creates jobs, and helps businesses succeed therefore creating more jobs and tax revenue, however socialism will kill the spirit of the american people, break the back of the small businessman and create an atmosphere that it's easier to just give up and sit down which will bankrupt or nation.  Socialism does create more "government" jobs, but those jobs are paid for by heavy tax burdens.  In other words, it's a very inefficient system.  It just doesn't make good business sense.  Debt is debt.  It will have to be paid back one day. It doesn't matter if it's personal debt or government debt.  You can defend it all day long saying that socialism is to "protect" the people so that they don't go hungry, but time will prove that when the system is bankrupt, we will all be hungry and it will be complete chaos to proportions we have never seen.

There are some things that are not relevant to either socialism or capitalism that are happening to our country.  Everyone's heard of the "stone age", the "industrial age", and  the current "information age", but my main concern is "can the information age replace the industrial age?".  Also the question I ask is can government jobs replace industrial jobs?  Statistics show very clearly that the number of government jobs are a much higher percentage compared to industrial and other domestic jobs than thirty or more years ago.  What happens if this increase of government jobs and decrease of domestic jobs continues?

This scenario can be easier described in the following comparison scenario:

10% government jobs paid for by taxes from the people who work in civilian jobs and 90% civilian jobs who's taxes pay for infrastructure, protection, public education, and salaries of government jobs and maintenance of their vehicles and buildings that they occupy.

As you can see the above scenario doesn't seem too bad, but what if the following happens?:

60% government jobs paid for by taxes from the people who work in civilian jobs and 40% civilian jobs who's taxes pay from the infrastructure, protection, public education, and salaries of government jobs and maintenance of their vehicles and buildings that they occupy.

In a worst case scenario which in reality can never happen you would have 100% government jobs who's salaries would be taxed at a much lesser rate (say 28%).  Out of that 28%, you'd have to pay their salaries (how do you pay a $100,000 salary out of a tax base of only $28,000?), plus their benefits for 40 years after they retire, plus their vehicles, insurance, buildings they work in and maintenance of those buildings and also provide public safety, build and maintain roads and interstates, provide public education, buy weapons, fight wars, provide aid relief to impoverished countries, and so many other things that go through the system at the tax payers expense.

These things haven't just occurred during President Obama's administration.  They have been happening for years; Republican and Democratic presidents alike have contributed to both positive things and also negative things, but we, as a nation, all see to be riding this unstoppable train we call a republic together and we're drifting along having a good time, but who is scouting ahead and repairing the bridge that is out?

Many will argue that the invention of radios, television and the internet are invaluable and a great asset to our society and I am not disagreeing with that concept as long is it is partnered with discipline .  I'll say that the  information age definitely has it's advantages, but definitely has some of the disadvantages due to lack of discipline such as complacency leading to loss of time to participate with family and in community activities, local politics, loss of local tax base (purchasing items online instead of locally), and the growth of monopolies such as google, microsoft, and amazon.   This loss of time to participate in our communities, churches and family discussions has led to a downturn in our culture as a whole.

Something else I have noticed is a greater divide growing between the democratic party and the republican party in this county.  There are an increasing number of democrats that think if you're a republican, you are automatically anti-environment, and pro-upper class and anti welfare.  There are an increasing number of republicans in this country that think if you are a democratic, you are pro-socialist, pro entitlements and bigger government.  This divide is going to heighten as our economy gets worse and the pros and cons of both capitalism and socialism are exploited.  The divide will grow stronger and more vocal as the economy gets worse and each party will seek to fight for what they believe in.

It's almost as if there needs to be a third party that subscribes to a modified form of capitalism.  This party, when in power, needs to dismantle monopolies, and promote competition within our country and control free trade overseas, create laws that require corporations to have a much higher percentage of domestic jobs in comparison to outsourcing jobs overseas, stricter trade regulation during and after the reconstruction of our industrial sector, and tighter control and regulation of insider trading and enforcement of laws for unethical conduct dealing with wall street, corporate waste, and the banking industry.  Also focusing on new technologies for economical replacement of oil such as more productive solar panels, wind turbines, dams, nuclear energy and clearly transportation etc.  We must be proactive about being a competitive country again instead of being partners with such countries as China who only want us to buy their products, but could care less if we are unemployed or hungry or have individual liberty.

If there isn't a third party that can do this, then either the republicans or the democrats need to become more educated, pro-active, and concerned about our country's situation and move it forward.  We are entering into very precarious times;  a dire straits, for you doomsday experts.  Education and non-complacency is essential, and we don't have another day to spare.