FT187: “It’s odd how we can never afford a tax cut but we can always afford new spending.” —Old Pithy

Posted by PITHOCRATES - September 13th, 2013

Fundamental Truth

The Democrats’ idea of Bipartisanship is Republican Capitulation

It’s that time of the year again.  Summer is winding down.  The weather is starting to cool.  The harvest is coming in.  The stores are already stocking their shelves with Halloween decorations.  Yes, it’s the end of the government’s fiscal year.  The time the government will run out of money unless Congress passes a new budget.  Or what passes for budgets these days.  Continuing resolutions.

This that magical time of year when Republicans and Democrats come together to negotiate the government’s budget for the upcoming fiscal year.  The give and take process where they sit down and work with each other.  Civilly.  Saying things like, “Yes, that is too costly.  We need to spend less there.”  And, “You’re right, that is important to the people and we should spend more there.”  And the occasional, “I agree.  That program is no longer needed and we can remove it from the budget entirely.”

I am, of course, lying.  These are things that are rarely, if ever, said to each other.  For when it comes to these budget battles it is always the same.  The Republicans try to be responsible and cut spending.  The Democrats then call them greedy corporate toady Nazis.  The Republicans will then suffer a general emasculation and give the Democrats their spending hikes.  And perhaps a tax hike or two.  While asking them to please like them and invite them to the cool parties.  And the Democrats will then commend the Republicans’ bipartisanship.  What others would call capitulation.  Happy that things are once again right in the world.  With the Republicans once again the Democrats’ bitch.

Entitlement Spending creates a Permanent Underclass that keeps the Privileged Class in Power

John Emerich Edward Dalberg-Acton, known more simply as Lord Acton, said, “Power tends to corrupt, and absolute power corrupts absolutely.  Great men are almost always bad men.”  And boy was he on to something there.  For something happens when some good conservatives go to Washington.  They enter a world like no other.  Nothing they could ever have dreamed of.  A world that once belonged only to the nobility and the aristocracy.  Those things Americans fought for their independence from.  And here they are.  After winning an election to rein in the kind of government spending that makes this living possible.  And they say, “What, end all of this?  Are you mad?”

So many cross over to the dark side.  Sell their souls.  Forsake their constituents.   Do great dishonor to our Founding Fathers.  All because they like the money and the power.  Especially the power.  Some resist.  Those from the Tea Party seem more immune than most when it comes to the corrupting influences of Washington.  But these people who stand on principle?  Those who serve their constituents honorably?  The left will fling every invective upon them.  A figuratively flinging of excrement.  To try to beat them down and break them.  To get them, too, to forsake their constituents.  And to join them as they drop trou and defecate on the Constitution.  Figuratively, too, of course.  At least I hope so.

So this is what makes the budget process so adversarial.  You have those who are trying to do the right thing for the people.  And those on the other side who want to corrupt these people.  To get them to quit fighting against them and to join them.  So they can maintain their privileged class.  This is what all that entitlement spending is all about.  It’s nothing but alms.  To keep the people content enough so they don’t rise up.  But not too content that they don’t fear that those greedy corporate toady Nazis may take away their meager alms.  And once they get someone to think like that they have a voter for life.

There comes a Point when Raises in Tax Rates actually Reduce Tax Revenue

The key, then, is keeping people poor.  For the whole privileged class thing those in Washington have doesn’t work unless they have poor people who need them.  Which is why they spend so much time reminding the poor how much they need them.  The Democrats in Congress.  Who are always there fighting for them.  Keeping their alms flowing.  But also keeping them poor.  Which a welfare state does well.  Because if you have enough to subsist lethargy will do the rest and destroy the spirit.  Getting the poor to accept their place as a permanent underclass.  That needs a permanent privileged class taking care of them.

There is only one problem.  This destroys lives.  People in this permanent underclass may have gone on and done great things.  They may have been doctors.  They may have been engineers.  They may have been entrepreneurs.  But they will never be those things because the left sacrificed them to maintain their privileged class.  Forever consigning them to the underclass.  So the privileged class has someone to take care of.  No matter how costly it gets to maintain this entitlement culture.  No matter how great the deficits get.  Or how great the national debt grows.

So there is another problem. As you convert taxpayers into tax-consumers you have to keep raising taxes on those remaining in the tax base.  But as you raise tax rates you put the brakes on economic expansion.  And with reduced economic activity there is reduced tax revenue.  There comes a point when raises in tax rates actually reduce tax revenue.  And we’ve passed that point.  Which is why we have record deficits.  A record national debt.  And the worst economic recovery since that following the Great Depression.  Because we are spending, taxing and regulating too much.  Which is why uncorrupted conservatives want to cut taxes, defund Obamacare, roll back other costly regulations and reduce spending.  Things the left bitterly opposes.  For doing so means we don’t need them as much as they need us to need them.

So as the budget battle commences you will hear the usual refrain from the left.  We can’t afford tax cuts.  As they equate tax cuts with government spending.  But we can always afford new government spending.  So the left will call for bipartisanship.  That is, capitulation.  And eventually make the Republicans their bitch.  Again.  And increase the national debt.  Again.  Putting the nation on the path to bankruptcy.  What the left considers a small price to pay to maintain their privileged class.  As long as that bankruptcy comes after they’re dead and buried.  After they enjoyed their time in the privileged class.  Which is why the left is also less likely to believe in God and life after death.  For it is easier to be bad when there is nothing to fear after a bad life.

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The UK is Burning because they have too much Socialism and Class Warfare

Posted by PITHOCRATES - August 10th, 2011

You Simply can’t Keep Increasing the Burden on the Productive Class Forever 

The UK is burning.  Thanks to socialism.  And class warfare.  For people are rioting because they’re not getting enough stuff.  So they’re correcting that inequity by stealing stuff from others (see As rioting spreads UK’s Cameron vows crackdown by Stefano Ambrogi and Angus MacSwan posted 8/10/2011 on Reuters).

Youths fought running battles with police in the northern cities of Manchester and Liverpool as well as in the Midlands.

They smashed shop windows, carted off televisions and designer clothes, and torched buildings as police armed with shields and batons struggled to maintain control…

Gangs of youths in hooded tops battled police in Manchester, smashing windows and looting shops, and setting fire to a clothes shop.

In nearby Salford, rioters threw bricks at police and set fire to buildings. TV pictures showed flames leaping from shops and cars, and plumes of black smoke billowing across roads…

In Liverpool’s Toxteth district, rioters attacked two fire engines and a fire officer’s car, police said. Earlier, some 200 youths throwing missiles wrecked and looted shops…

Cars were burned and stores looted in West Bromwich and Wolverhampton in central England; and in Nottingham a gang of young men set fire to a police station. There were also disturbances in Birmingham and Leicester in central England, and Milton Keynes north of London…

In Birmingham, police launched a murder inquiry after three Muslim men died after being run over by a car in the mayhem there. A friend of the men told BBC radio they had been part of a group of British Asians protecting their area from looters after attending Ramadan prayers at a mosque.

“The car swerved toward them. It was cold-blooded murder,” the friend said. The father of one of the men tried to save his dying son with CPR.

They’re not doing this in the US.  Yet.  Because the US is not quite the social welfare state the UK is.  Yet. 

These UK riots illustrate the problem with socialism.  ‘From those according to ability to those according to need’.  The youths rioting have no ability.  And have shown no effort to learn any ability.  Content to remain on the dole.  And it’s a very generous dole in the UK.  Well, it used to be.  Hence the rioting. 

The rioters have needs.  Great needs.  Widescreen televisions.  Designer clothes.  Seeing buildings and cars burn.  So they attended to their own needs.  Took from those having ability.  And burned the mother up.  Destroyed the property of the very people who pay taxes and fund the welfare state.  And provide jobs.  So it looks like the rioters haven’t helped their employment prospects in the community.

Getting a permanent underclass dependent on government benefits provides loyal voters at election time.  But it comes with a price.  The spending required to maintain this underclass eventually becomes unsustainable.  Because you simply can’t keep increasing the burden on the productive class forever.  They may just say screw this and go on the dole, too.  And let someone else put up with the high taxes.  And the looters.

“This disturbing phenomenon has to be understood as a conflagration of aggression from a socially and economically excluded underclass,” the liberal Independent newspaper said.

“These youths live in the heart of British cities but they do not feel part of them. Far too little has been done by successive generations of politicians and public servants to integrate these individuals into normal society. The fuse for this explosion has been burning down for many years.”

Oh, society’s to blame.  Not the people smashing windows and stealing stuff.  Or the people setting fires.  It’s the people who have been living by the rules, the law-abiding people, who are to blame.

Critics say government policies of chopping public spending and raising taxes to cut a huge budget deficit have aggravated the plight of urban youth as the economy struggles to grow and unemployment rises.

The awarding of huge bonuses to bankers has become emblematic of a culture of flashy consumption for the elite.

Corruption scandals within London’s police force and a 2009 scandal over parliamentarians’ expenses have also fueled the notion that greed is a motivating factor across the spectrum of British society.

“Everyone’s heard about the police taking bribes, the members of parliament stealing thousands with their expenses. They set the example. It’s time to loot,” a youth in the riot-torn London district of Hackney told Reuters.

“It’s time to loot.”  That says it all.  They don’t want to sit down and discuss socioeconomic issues.  They just want to get stuff while the getting is good.  I mean, there are protests.  And there is theft.  Labor standing in a picket line is a protest.  Smashing windows and stealing stuff is theft.

Is State Welfare so Generous that People don’t want to get off of State Benefits? 

Of course, some are politicizing this violence.  To make the case for more social spending.  Because if you don’t pay these thugs off they’ll come and smash your windows and take your stuff (see Do Budget Cuts Cause More Riots? by Bouree Lam posted 8/10/2011 on Freakonomics).

A couple weeks ago, Jacopo Ponticelli and Hans-Joachim Voth put out their working paper “Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2009.” It uses cross-country data in the 90-year period to examine whether riots and civil unrest increase as governments cut spending. They found a positive correlation between social instability and budget cuts.

I think the real question is this.  Is state welfare too generous?  Is it so generous that people don’t want to get off of state benefits?  And when said benefits are cut they riot?  Are they so lazy and have such a state-induced entitlement mentality that the thought of having to provide for themselves is so disagreeable that they prefer burning their own neighborhoods? 

And so they riot.  They torch their oppressors.  Probably drive these stores out of their neighborhoods.  And discourage anyone from opening a new store in such a violent and riot-prone neighborhood.  Now what?  Where are they going to shop with no stores?  Who will they riot against then?

The Balance of Power has always Determined whether there will be Peace or War 

As bad as all of this is, some are saying the US should follow the UK’s example.  Stop being a world superpower.  And enjoy harmonious bliss at home.  Like they have in the UK.  When they’re not rioting and burning the place down (see Three Cheers for Decline by Charles Kenny posted 8/9/2011 on Foreign Policy).

Of course, the United States still possesses greater military strength than any other country in the world. But what good has being the world’s policeman done for Americans? Wielding that might meant the United States saw more combat deaths overseas last year than any other country, according to data from Uppsala University. Beyond the blood is the treasure: U.S. military spending increased 81 percent between 2001 and 2010 and now accounts for 43 percent of the global total — six times its nearest rival, China. The U.S. military burden is equivalent to 4.8 percent of GDP, the largest economic burden of any OECD country.

Everyone attacks U.S. defense spending.  Something, by the way, called for in the Constitution.  Unlike entitlements.  Now 4.8% of GDP is too high and should be cut.  Whereas entitlement spending is twice that amount and yet no one calls for any spending cuts there.  So it’s not a money thing.  It’s a ‘let’s weaken the U.S. thing’.

Freed from the distractions of colonial oversight and global leadership, it could retire its planet-spanning chain of military bases, shrink the Royal Navy, and devalue the pound without fears that the world would come to an end. And the country learned to collaborate without feeling equal status was a slight to its dignity — joining the European Union, for example, and signing the Kyoto Protocol.

Could the United States go down the same track toward contented (well, most of the time), pretty-good-power status?

But let’s not forget something.  When the sun never set on the British Empire the world was a more peaceful place.  We call it Pax Britannica.  Latin for British peace.  The British Empire was a benign one as far as empires go.  There was prosperity and peace.  And little war.  Something only a powerful military can give you.  When in British or American hands, at least.

The world is a dangerous place.  Always has been.  And the balance of power has always determined whether there will be peace.  Or war.  When the Nazis had it there was war.  When the British had it during the Pax Britannica there was peace.  Yes, the US and UK have made some mistakes.  But ask yourself this.  Who would you feel more comfortable having the kind of military might the US has?  China?  Iran?  Russia?  I think not.

So the US should give up its national security interests.  And take that money and spend it on more state benefits.  Like the UK did following the end of her empire.  So the permanent underclass can grow larger.  And more restive.  Demanding ever more benefits.  And rioting when they don’t get what they want.  Not a very good tradeoff for living in a less safe world if you ask me.

People Dependent on Government Benefits tend to vote for Candidates who Promise more of the Same

The rise of the welfare state has created a permanent underclass dependent on government.  Because overly generous benefits made it attractive to remain in the underclass.  Happy not to be productive.  Living off the labors of those who are.  It’s good politics.  People dependent on government benefits tend to vote for candidates who promise more of the same.

But there is a limit to how much wealth you can transfer from the productive class to the nonproductive.  If you take too much away the productive class may just join the ranks of the nonproductive.  Because that’s where the incentive is.  So the government can only tax up to a certain point.  Then they have to start borrowing.  Until the borrowing creates deficits too great to borrow anymore.  So then the spending cuts begin.  And, of course, the rioting.

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Hmmm, Help the Economy or Class War?

Posted by PITHOCRATES - September 17th, 2010

Do you know why some Democrats are now urging their leaders to extend the George W. Bush tax cuts?  That’s right, because Bush and the Republicans were right. 

The Democrats want to tax and spend.  But you can’t tax and spend if you don’t win reelection.  And there lies the problem.  They’ve crashed the economy.  Created a permanent underclass.  And shook down the average working stiff to pay for it.  The problem the Democrats have is that there are still too many people who want to have a job.  And until they can take the vote away from these people, they can’t just take their money.  They have to…represent them.  Yeech.  (That would be how these Democrats feel.  Personally, I feel that representing your constituent is a beautiful thing.  So rare these days.)

You see, Democrats are elitists.  They’re part of the Washington aristocracy (which includes RINOs, too).  Life was simpler in the 15th century.  Or so they would think.  And this is what they would say.  If they were honest. 

People knew their places in the 15th century.  The noble classes owned the land.  And the land was everything.  The lord of the manor enjoyed the good life while the peasants worked the land.  Feudalism.  The way it was supposed to be.  Not these days.  This uppity middle class works wherever they want and does whatever they wish.   With no deference to us.  We who are better than they.  No, they act, well, as if they are our equals.  Imagine that!  These impertinent, despicable guttersnipes.

But they’re not honest.  So they don’t say this.  But when they act against the will of the people, they don’t have to.  Their actions speak louder than words.

So now they must deign to listen to these voters.  And these voters want something that’s alien to them.  Jobs.  So they must turn to the alchemy of the Republican Party.  That mysterious witch’s brew.  They have no idea what it is.  But it stimulates the economy.  For real.  It’s one part tax cuts.  Something else.  They don’t know.  It’s all Greek to them.  They don’t know anything about the economy.  But when the Republicans get their way, a crap-load of money comes into Washington.  And they can take it from there.  For they know how to spend that money.  Their money.  So they’ll act like Republicans.  For a little while.  Just long enough to make it through another election cycle.  Then they can stop that nonsense and return to tax and spend.  With a great, big pile of new money.  Their money.  Yeah, that’s right.  To them, it’s all their money.  If only us dunderheads would get it through our thick skulls.

So the Washington aristocracy will call a temporary truce in the class war.  And they will try to stimulate the economy.  And this time it won’t be another spending bill to fund some underfunded union pension plan.  It’ll be something that actually stimulates.  Because it’s for real this time.  It’s election time.

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