Taxing, Printing Money and the Construction of the Bogeyman Firewall.

Here is a little mental game and a slick trap for the mentally disnimble to lightly struggle with until they hop and clap and announce that they have made the right decision:

Question Part 1: Would you like to spend some money now and avert a disaster or would you wish to wait until the disaster happens and you have no money?

Question Part 1a: On the environment, would you spend money to save the oceans from boiling?

Question Part 1b: On the stimulus program, would you spend money to keep the economy collapsing and keep your job?

Reply to 1a or 1b [to either of these prompts and for many others that are fear drive]:

The frantic reply to 1a, 1b: Oh, save me! I don’t want to lose anything or be at risk. I trust the government to fix this problem.  The government will get me a job. We need to change.

When it comes around to the mental marginality[1] of many of our voters then the question itself becomes moot especially when only  a few of us pay taxes [less than 70 million since those who make less than about $48,000 don’t pay much in tax] in a country awash with low incomes, phony government jobs, illegal aliens and entitlements.[2]  For those, the reply can be slight modified to read:

Reply 1b: Oh! Save me [from the Bogeyman]. Go ahead and spend the money of others if there is a risk as there is no financial risk to me. Let the ‘rich’ and the fat cats fix this mess with their money as they stole it from us in the first place.  We need to change.

Note, that hackneyed answers of the third sort can be applied to simple concepts like the phony Carbon Cap Tax, [3] Global Warming[4] or the Bailout Follies [5]of the Economy. What drives this simple process of voting other people’s money into the financial latrines stems from the sociological status of the lower classes. Our system is clearly structured as a pyramid with those few percent at the top organizing the economies and government of the world. Leftist governments begin at the bottom of the pyramid and seize control of the apex only to ruin the structure and cause the pyramid to collapse in depression, war or famine.

Theory on Leftist Governments and the Pyramid of Capitalism.

We can note that leftist governments can only attain power and wealth from capitalists and when their government’s fails capitalism thus reforms and creates new pyramids. This cycle has continued for several thousand years. A forced redistribution of wealth only leads to a rise in power and influence in the hands of the criminals or the inept.  Look at Zimbabwe, the USSR, PRC, and North Korea.  Once the wealth is wasted, socialism or Neo-Marxism happens.  Europe, a socialist swamp that has taxed business about as far as it can do so is crashing in massive debt. We struggle to find other places on this planet where taxes could have been higher and now they are bankrupt. So much for the theory that the government can effectively manage society.  The left has constructed an effective firewall that prevents reason or protests to stop this juggernaut from crushing our society.

Question 2: Could we just print money and tax and spend and increase government so we can protect you from the oceans boiling, save the polar bears and fix you up with a good job with low taxes and generous benefits?

Reply 2a: Go ahead and spend the money of others [a firewall] if there is a risk as there is no financial risk to me. We need to change. Print all the money you need.

The problem here, in both cases, is that the basis for spending could be wasteful and misdirected in both these cases and the excuses for failure or a ‘proof’ of success is built into the question. A firewall is thus constructed where the wealth of our citizens is subject to confiscation by government and inflation. This firewall protects the usurpers.

Global Warming is a joke.[6][7] The temperature is actually falling world wide as it does in cycles lasting hundreds of years. If we tax carbon and the average surface temperature keeps falling then those extremists who waste our tax monies can tell us that high taxes saved the planet.  If we have a severe recession and the inflation rate is only 20% per year then we can be told that ‘it could have been worse’ and that that high taxes saved the planet.  The answer to all questions is that we need higher and higher taxes and somehow that translates as ‘change’.

In protest of this tax and spend action we hear:

“"Everybody on the street in America understands that," said Sen. Richard Shelby, the ranking Republican on the Senate Banking Committee.”This is not the right road to go. We'll pay dearly."

Shelby, of Alabama, told CNN's "State of the Union" that the package and efforts to shore up the struggling banking system will put the United States on "a road to financial disaster."[8]-- Stimulus will lead to 'disaster,' Republican warns [Emphasis is mine in all quotes.]

The retort from Harvard:

"Those who presided over the last eight years -- the eight years that brought us to the point where we inherit trillions of dollars of deficit, an economy that's collapsing more rapidly than at any time in the last 50 years -- don't seem to me in a strong position to lecture about the lessons of history," Summers told ABC's "This Week."[9]--by Lawrence Summers, the head of the administration's National Economic Council.

 Clearly, from listening to Summers “We need to change.”  We need to change ‘from trillions of dollars of deficit’, to many more trillions of dollars of deficit, produced by printing money. That is a change of sorts. Notice that the far left-liberal  Neo-Marxist  states of CA, NY, NJ, MD and MA are going broke and face bankruptcy and none of these states spend money at unreasonable levels at the insistence of the Republicans. NY has trashed its society with astronomical taxes and the liberal yo yo Bloomberg can do little but, you guessed it, raise taxes. Look at the murder rates in cities controlled by liberals.[10] California has 10% of the population, has a 40% deficit, a lousy credit rating and cannot pay for the extravagances they offer to bribe the voters. [11]But, the shoveling of money into the hands of the greedy teacher’s unions, illegal aliens who pay no taxes and get free benefits and others was a political success.  California is overwhelmingly liberal and wants federal funds. We lost some 5 trillion dollars in phony mortgages to people with poor credit using the excuse that this was for ‘affordable housing’ and the Republicans have left no positive comments on this CRA [Community Reinvestment Act].[12][13] Bundles of this crap are now know as ‘toxic assets” and have swamped our banking system. These are a product of the left-liberal-Neo-Marxian Fannie Mae and Freddie Mac.

Our money supply, known as M2 is now 8.2 trillion dollars is threatened by wild spending and printing of paper money will balloon up in the usual bank money multiplier[14] that ranges from 5-20 depending on the velocity at which money traverses the banks. With a multiplier of only 5, [a very conservative estimate as the actual reserve ratios are zero, 3% and 10% depending on how much money is involved] one trillion in new printed money would balloon to 5 trillion so our money supply would increase from 8 to 13 trillion, a 63% inflation. With the probably 3 trillion in spending by Obama in the next two years and a multiplier of only 5 we get a 300% inflation. If the multiplier is about 10, then we get the extra 4 trillion multiplied by 10 or 40,trillion a mere 500% inflation.

Given this information, a precise prediction of what happens in the financial system, we can ask the question again with some modifications:

Question 3: Do you realize that printing money might cause high inflation and ruin numerous businesses and cause mass unemployment?

Reply 3:  I don’t know about that, but we need to do something fast. We need to change. We need to save the polar bears and get jobs and free medical care and a national retirement system for all. I don’t have to pay for any of that.

And, that is the end of the story--or, the end of our economic story. The next episode is cutting costs in businesses, firing workers and finding ways to preserve capital and avoid massive taxes and finding ways to make a profit in this future society.  Every corporate business plan will have to include radical changes in operational plans to cope with inflation. They should study Jimmy Carter and his Era of Malaise, it is returning.

A depression looms. The construction of the Bogeyman Firewall ony  protects government.

Down we go……….. rycK

Comments: ryckki@gmail.com