Government Candy & The Economy of Liars

Today:  The Greek Drama is ramping up yet again on continuing news that official government data is false.  Big surprise.  The lines outside their “candy store” are long and the warehouse is empty.

In our own “mirror, mirror on the wall”, we must wonder how long it will be before the same fate befalls us.  

In a country where 47% of so-called tax payers don’t pay any income taxes at all, and 85% of them (40% overall) actually have a “negative tax liability” (i.e. are paid unearned “refunds”), we never stop to ponder whether such a thing can be good for us.  It is merely become a “necessary” counterbalance to “the rich keep getting richer” and, therefore, must pay an increasingly progressive “fair share”. 

Welcome to the candy store….where the lines are long and…well, you know, the warehouse is getting emptier by the day.

Of course, our “warehouse” is not being emptied merely by all those begging masses at the front counter.  No, no, no.  There is wholesale thievery at every point of transit and delivery, from the TARP recipients to the government employee reaping 55% higher wages and benefits as compared to the private sector or, even, the rising number of “disabled” bi-polar alcoholics receiving SSI benefits.

The candy store is in full-on free-for-all, excepting the shrinking middle class who can’t help but to wonder how it is that their per capita share of US liabilities is now more than $350,000 (an amount 50% greater than the average value of their assets). 

I shouldn’t rant, lest you believe that I’m feeling a mite touchy over my own personal share of the burden, a mere week since tax day 2010.   Bad as that might be, I write today, rather, to call your attention to two excellent articles, the first by Gerald P. O’Driscoll Jr. of the CATO Institute, as published in the WSJ, and the second, as an afterthought, by Jack Curtis at The American Thinker.

First, Mr. O’Driscoll paints a dreadfully clear picture of just how far we’ve strayed from “free market” capitalism, into what may only be understood to be “crony capitalism”.  This is the “candy store” writ large, adequately demonstrating, I think, the amateur hour dimensions of the current Greek Drama.  

O’Driscoll notes only in passing the likely impact of the recent charges against Goldman Sachs and pending financial regulations, without pausing to reflect on their $995,000 contribution to the Obama campaign.  Is this a principled attack on corporate malfeasance or yet another new layer of subterfuge?  By all accounts, the octopus that is GS will thrive under the proposed regs, notwithstanding token sacrificial offerings thrown under the bus of the SEC’s kangaroo court or of public opinion. 

Still, O’Driscoll get’s it pretty well right.  This is a “market” in name only, lacking utterly honest price discovery or, really, any data that makes sense.  The Greeks could learn a thing or two.  Of course, without access to their own printing presses, they’ve merely been “found out”.

Against this backdrop, Mr. Curtis reminds us of the underlying reasons for these games.  We might boil it down to the fundamentals, really, of a free society.  When beggary and thievery become rampant, there are simply too few left to carry the burden, to pay the bills, to knit the whole of society together.

Have we arrived at that point?  Well, by now it should be clear that a majority of “tax payers” are effectively “on the dole”, either paying no income tax and/or receiving some form of payment from the “G”.  What chance of that majority electing to pay their “fair share”?  How about none at all.

So, with the highest 20% of income earners now paying 86% of the tax burden, do you think they’re not getting their money’s worth?  Think again.  They are merely paying the entry fee for access to the “largesse” of the treasury from the other, much wider, end of pipe, where $1 million can get you billions.

On balance, it’s easy to think that, perhaps, the precious votes of those 47%, have been bought rather cheaply.  Not that it will matter in the long run.

Harry Tuttle

A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.

– The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.

– Alexis de Tocqueville

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