Article by Ben Doolin on Aug. 2, 2016
If you look back through history, governments always grow until they collapse under their own weight. Spend some time on Roman history and you’ll see shocking parallels to the US today.
Part of the problem is that the incentives to ‘shrink’ The State almost don’t exist in comparison to the incentives to expand it. Consider a corporation that is receiving a billion dollar annual federal grant. Any politician that proposed cutting that would motivate that company to spend up to that billion dollars… to keep it in place. On the other hand any individual citizen would only save $3 per year by cutting that expenditure. In reality though… taxes are never cut (from the perspective that spending goes up every year, even if the tax burden is shifted around) so regardless how much energy an individual tax payer put into getting that grant cut, he’s not even going to save that $3.
Another problem is that The State, must bribe everyone (or at least a majority) to keep them compliant, so the checks keep coming. In order to do that, The State must bribe them with debt (i.e. stealing from the next generation)… since taxing $100, keeping $50 and giving $50 back isn’t going to motivate people to keep The State in place.
While this can work for a while, it’s mathematically impossible for it to continue indefinitely. Even Social Security was known to be unsustainable the year it was implemented.
One of the primary justifications for the existence of The State, is ‘taking care of the old and the poor’. While many may feel good that ‘others’ have done something… they should feel horror. Not only does The State create WAY more poor people, but the promise to take care of them is an empty promise that will leave millions dead when the money to pay for that promise, runs out.
Many like the idea of limited or minimal government, but neither of those is possible. The reality is that government is always as big as it can possibly be. That’s part of why new taxes always start out small and narrow, like the income tax that started out only applying to millionaires and only a tiny percentage. Any more than that and politicians ran the risk of being killed. A 1% increase in a year though, usually isn’t enough to get The People homicidal. So, it’s 1% per year, every year, until collapse.
Talk of cuts is always ‘just for show’. The closest thing to a ‘real cut’ in recent history, wasn’t even supposed to happen. The Sequester was a ‘mutual threat’, to ‘destroy the other party’ if they didn’t agree to what they wanted. Funny enough, neither party would do what the other wanted, even if it meant the cuts to their things would go through. So, a tiny cut to an increase in spending actually went through and you’d think the sky was falling. The horror stories from politicians that didn’t want to honor their agreement to cut, by reinstating funding after they reneged, went on for months.
With a small, ‘accidental cut’ being portrayed as catastrophic, there is no possibility that an intentional cut would ever really be considered. Add that to the motivation of the ‘cuttee’ to lobby with unlimited money and cuts truly are impossible.
As the collapse that has already begun, matures. The State will do everything it can to steal every last penny. It already took the step of taxing Americans, everywhere on earth. Even the Accidental Americans that have never set foot in America and have never worked here, have an obligation to pay US taxes. The government already raided the Social Security ‘trust fund’, leaving non-negotiable bonds which can’t be sold to recover the stolen money which means more tax increases to replace the money that was already stolen… with more stolen money. In Venezuela, the government raided all retirement accounts, replacing the money with government bonds that ended up worthless as The State collapsed. Governments are doing the same thing with banks. As they collapse, depositors are issued stock in the failing bank in place of their savings, until the bank collapses and the stock becomes worthless. Another characteristic of a failing state is reduction in services. As The State runs out of money, it’s the least powerful (i.e. the weak, poor, old, etc.) that are the ones that will get screwed first, since they can’t fight back. Services will be cut or ‘privatized’ which means you have to keep paying the same amount in taxes, THEN buy that service again in the private sector. In the US, the majority of Federal expenditures is for entitlements (Social Security, Medicare, Veteran’s Benefits). So, those will be an unavoidable target for cuts.
This collapse will also be different in that we’ll be ‘going in’ with The Fed incapable of doing anything about it. For thirty years, The Fed has been able to permanently lower interest rates with each recession. We’ve been stuck at the zero bound for eight years now. Other central banks have tried negative interest rates, but that failed. Going further negative would force people to pull their money out of banks all together resulting in bank collapses. QE has been a stunning failure. With tens of trillions of dollars pumped into the world’s economy, we’ve experienced the worst recovery in modern history. In fact, Obama will be the first president to never have a year of 3% growth (and he had 8 years to try). So, there are ‘no tricks left’ to use to kick the can down the road. We’ve hit the end of the road… it’s time to pay the piper and I expect millions to pay with their lives.
On the positive side, The State will collapse on it’s own… and the pain and suffering will be so intense that The People may for the first time in modern history, be willing to listen to why that happened… and may be willing to consider the idea that we shouldn’t do that again.