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How Much Has Been Lost: A Case Study, My Father

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March 02, 2009 – Comments (28)

In order to understand the scope of our current situation, I think it can be helpful to look at the impact of events on a single, hard working, honest individual over the course of 30 years. I propose to do that in the following blog, using my father as an example. My father is currently a private contractor, offering consulting based on his tremendous expertise in the field of food service distribution. He was forced into this line of work after the Fortune 500 company he worked for imploded in a pyramid of debt and mismanagement. His services continue to be in demand, thankfully, and he just completed a contract with another Fortune 500 company to revamp distribution processes at several of their largest plants. I also care for him very much, and am saddened by the massive losses he has suffered.

My father returned from Vietnam in 1970 with an amputated leg above the knee. After a year in a VA hospital where he learned to walk all over again, he enrolled in college and completed his Bachelor's. The government paid for his school and pays for his disability benefits and medical care. It's not really a fair trade, but it's the best he's going to get. When I asked my father why he volunteered to join the Marines, he responded, "I was going to be drafted into the Army and I didn't want to die." After learning about Chesty Puller's Marines at the Frozen Chosin Reservoir in North Korea, I understood the simple wisdom in that statement.

Following graduation from college, and the birth of a son he never would have dreamed would become an anarcho-capitalist, he went to work for GE, and enrolled in a Master's program. He earned his MBA at night, while my mother waited for him in our only car with me and my brother. He was promoted regularly: to foreman, to warehouse manager, to regional distribution manager, to national distribution manager.

He bought his first house, a two-unit property in the late 1970s. We rented out one flat and lived in the other. His next home in suburbia was purchased on a shrewd discount with a large down payment (large by today's standards - roughly 30%). In the late 90's he moved into the dream condo, again with a large down payment of nearly 35%.

Over the years, it's difficult to consider, but one must look at the amount of opportunities that this man has lost and couple that with the tremendous losses he has taken in the past 2 years. Only then can we get a complete picture of how badly government intervention in the economy, inflationary central banking, and the Welfare State have cost not only him, but also the hundreds or perhaps thousands of people that would have benefited from his confiscated income.

In our recent conversations, we reasonably estimated that my father has payed over $500,000 in direct federal income taxes during his lifetime. We estimated that he had paid an additional $75,000 or so in State taxes and roughly $150,000 in property taxes.  We estimated that he paid $60,000 in sales taxes. Take a moment to think back over your lifetime. How much money do you think has been taken for you in taxes? We can't even reasonably estimate other taxes he has paid on dividends and investments or hidden taxes on items like gasoline, and we haven't even considered the possibility that he may not receive full Social Security benefits.

It is possible that my hard working father has paid over $1,000,000 in taxes during his lifetime. All that from a disabled man that many Welfare State proponents would tell you is incapable of competing on an inherently unfair playing field. Hogwash. How many Welfare Babies has my father's success paid for? How many bullets has it bought for the government to enforce economic war in Iraq, Afghanistan, and Central and South America? We could go further with this. We could talk about the Americans with Disabilities Act, and how unemployment among the disabled has risen since its inception. How it unfairly labels all disabled as needing special treatment and how it pits one group of society against another (individualists).

But let's also consider his current losses. Despite living his life in an honest and noble fashion, my bourgeois father has now lost 60% of his retirement fund. His high rise condo has lost 40% of its value (thankfully, he was smart enough to make a large down payment and is not upside down). He has lost an enormous portion of his wealth. He won't tell me the actual number but I know it's several hundreds of thousands of dollars, and possibly more.

Why has it happened? For starters, despite his sound judgment, and shrewd negotiating, the condo he bought at a discount was still purchased during an asset bubble created by the Federal Reserve's inflationary monetary policy. The retirement fund was invested in an economy built on fiat currency and paper money paradise that makes the Socialist Welfare State possible.  Unbeknownst to him, and to most Americans, American Capitalism was not Capitalism. It retained some of the features of the Classical Liberal tradition - hard work, consumer driven entrepreneurship - but mixed in was a set of anticapitalist laws and central planning underwritten by a philosophy of a debtor society.  The fact that my father never fell for the easy money of the fiat world didn't make him immune from its collapse. If he can be found guilty of anything, it would be a lack of comprehension of the significance of sound money. Had he understood that, I'm sure he would have been heavily invested in precious metals rather than paper. It certainly fits with his disposition.

There are other losses that can't be considered by the "Do Something" crowd. These short-sighted armchair economists and charlatans (some of whom go on to win Nobel Prizes) can only see, as Henry Hazlitt once remarked, the bridge that is built. They can't see the jobs and bridges lost in the transfer of wealth from productive sectors of the economy to unproductive ones. There is no clearer example of this for me than my father. What could he have accomplished with the million dollars or more that has been confiscated from him through taxes, inflation, and the debtor economy? How many productive uses could a man of his caliber put those resources toward? How many jobs could have created? How many people could have benefited from his capital accumulation? In essense, that's what Capitalism is! You can't have Capitalism without Capital. Men like my father, who work hard and save, invest their own money, indicating a longer time preference of return, and build great enterprises.

Instead, look at the men that run our nation and our businesses? What capital do they employ? If any, it's the wealth confiscated from hard working men like my father. Otherwise, their enterprises are built upon a pyramid of debt and phony obligations. They thrive on political influence, and when their schemes fall apart, they use that influence to further wreck our system. And they call that Capitalism? Nonsense!

There is something we can all do about. First, we need to take account of what we have actually lost, not only in paper wealth, but also in opportunities destroyed through wealth confiscation. Second, we need to question every half-truth and lie that the political, business, and intellectual class feeds us daily through the major newspapers and TV networks. Third, we need to start replacing politicians, through peaceful means if possible. Find candidates that support libery and economic freedom. Support them. If there are none, read up on liberty, and run for office. Join meetup groups and social networks.  Engage the status quo every day.  How many more men like my father are you going to allow to be hampered by the power brokers, central bankers, and economically illiterate socialists?  How can you continue to listen to them drone on about helping the unfortunate and needy, when my father is a shining example of how a disabled man can succeed by filling his head with knowledge?

Liberty is choice. Totalitarianism can only come through apathy.

"Everyone carries a part of society on his shoulders, no one is relieved of his share of responsibility by others. And no one can find a safe way for himself if society is sweeping towards destruction. Therefore everyone, in his own interest, must thrust himself vigorously into the intellectual battle." - Ludwig Von Mises

David in Qatar

 

 

28 Comments – Post Your Own

#1) On March 02, 2009 at 4:19 PM, carcassgrinder (40.76) wrote:

David.....

Excellent story.  Very similiar to my fathers story as well.  I truly feel bitter that these men who lived their life with integrity and nobility have been fleeced for playing by the rules.  

But I know that these same men came from nothing....and can go back to nothing without losing a beat.  What is even more amazing is that these men will maintain their integrity and nobility even on the way down.  My best to you, your father, family and all the others in a similiar predicament. 

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#2) On March 02, 2009 at 4:39 PM, starbucks4ever (98.67) wrote:

whereaminow,

Have you considered that the first thing that would happen in that free-market paradise of your imagination is that a) your father's high-rise condo would instantly lose 80% of its value and b) everybody working for the Pentagon would get a pink slip? I am not saying you wouldn't find a silver lining in this because you actually might. But I am just curious if you are truly ready to handle that free market with all its repercussions. I still remember 1991 back in the USSR, when every scientist working for a government-owned research lab was praying for the free market without realizing that they stood first in line to lose their shirt. 

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#3) On March 02, 2009 at 5:02 PM, whereaminow (24.34) wrote:

carcassgrinder,

Thank you, and I wish the best to your family as well. If this world has taught me anything useful, it's that rugged individualists like our fathers will be happy and successful (as they measure it) as long as they have freedom from tyranny.

zloj,

On the post economic situation of the Soviet Union I can offer no counter argument as I am no expert. I can take an educated guess that a collapse in the USA would look similar and lead to chaos.

I don't wish for a free market paradise. Paradise is a place of eternal happiness, and happiness can not be found through outside forces.  Neither can it be bought through materialism nor bestowed through the outside efforts of well wishers.  True happiness can only be found in a reconciliation of one's place in the world with the knowledge that they have properly fulfilled the their own expectations and the expectations of those they cherish.

The free market world of an anarcho-capitalist wouldn't promise you a rose garden (to borrow a phrase from the Marines.) However, it would allow you to either fail or succeed on your terms, in liberty and freedom from coercion.

A transition to such a society would be dreadfully painful, and for that I offer no counter argument either. The world today is far too reliant on the power of collectivist rulers to return to individualism and the rule of law.  That is why we recommend a gradual, peaceful return. It can not happen overnight.

There are only a couple of ways to have a peaceful return to individualism that I can think of. The first is through education. Teaching people about The Federal Reserve banking system is one of my favorite personal endeavours. The more people learn about it, the less they support it. Few people even know that the Federal Reserve is not part of the government.

The second way is withdrawal. The historical precedent for such an action would be the Taoists in China, the first "men of the mind" that were the driving force behind the inventions which created the world's first superpower. Their withdrawal from society lead to the gradual decline of Chinese civilization, but at least it was a peaceful way out.

David in Qatar

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#4) On March 02, 2009 at 5:04 PM, outoffocus (23.25) wrote:

How many Welfare Babies has my father's success paid for?

I have a slightly different take on this situation. Welfare, like many other programs is a pure example of good intentions gone wrong. Welfare was supposed to be a failsafe for poor families so that children dont starve. What it turned into an entitlement system that is abused by people who only think about themselves regardless of the poor children involved.  I am of the belief that the communities themselves should look out for the poor. The smaller community would be better able to assess a situation and properly react to it rather than some big government bureaucracy giving out mass benefits.

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#5) On March 02, 2009 at 5:50 PM, starbucks4ever (98.67) wrote:

whereaminow,

I see where you're coming from. What you're saying does form a complete set of beliefs, some of which I disagree with, but that's not the point. My point was, are you personally ready to accept the kind of free market you stand for? At this moment, the benefits you enjoy under the current system do not seem that important because they've been taken for granted for so long, and the problems you're likely to encounter in the future seem remote and abstract. But when that future finally arrives, it tends to feel veery different. Suddenly your father's veteran benefits and social security go up in smoke, together with all the savings in real estate or equities. Treasuries are worthless because you just voted to outlaw the government's two major sources of revenue: taxes and printing presses. The only savings that remain is cash, bullion, cans of sardines, and maybe some corporate debt provided the corporation is still around and solvent. God help the bondholders if your corporation did a lot of business with the goverment. To compensate for these minor inconveniences, your father no longer has to pay an income tax, so his current income rises 50% or more. Considering the general deflation that's likely to follow, his income doubles or triples in real terms. The only catch is, that's assuming he still has a source of income. When too many individuals have lost too much in the process of reform, some businesses also start to have some trouble. And then you wake up one morning and suddenly realize that you are no longer dreaming about freedom of enterprise. Instead, you're recalling the good ol' days of guaranteed entitlements, FDIC-insured deposits, protected property values, cheap credit, and protective moats around your companies' business. Then you recall that limo bought on a 4% HELOC against a high-rise condo, and your eyes steam with nostalgic tears...The title of your next Caps post is "Why regulation is good and unbridled capitalism is bad"... Are you really sure that you won't have a change of heart when you finally get what you wished for?

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#6) On March 02, 2009 at 6:08 PM, Aerius (83.96) wrote:

David,

Always excellent reading. I also find it also incredibly frustrating that those who come to be dependant on the state (bureaucracy, welfare, etc.) are unlikely to vote for someone that will reduce the benefit they recieve from the state - creation of state entities is much easier than their destruction. Thus the move towards socialism is much easier than the move away.

The bureaucracy needs to expand to meet the expanding needs of the bureaucracy.

-Aerius 

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#7) On March 02, 2009 at 6:10 PM, Mary953 (76.45) wrote:

David,

I add my good wishes to your family.  I know you are as proud of your father as I am of my husband - They are strong men who deserve that pride.  And you have captured the picture of our generation in a way that commercials do not.  Thank you.

More people have read Atlas Shrugged than the Black Swan.  More people will read and understand this posting about your father than will read your enlightened and educated libertarian arguments.  I am one.  I am not, hopefully, intellectually lazy, just very set in my ways, and I agree with you but I doubt that it will change things much.

My family members could all fit the profile you have described.  Actually, the men fit better because they were subject to the draft and then in the late 70's, if you were a WASP male, any forward promotion in any job in large companies or government roles stopped because of quotas. Owners of small businesses, on the other hand, were were bound by government red tape that was amazing in its ability to strangle any business that it chose to. At least one employee was needed to file claims or handle red tape as a norm. 

Now, our government has violated the rule that Friedman called the "fool in the shower" rule.  His idea is that any stimulus to the economy should be done slowly, rather than all at once because it takes time to determine the effects of the changes. If a change in federal funds rate takes about six months to fully integrate into the economy, then wait to see how it will effect things - slowly.

He compared it to taking a shower. A fool gets into a cold shower before the water has had time to warm up. Rather than waiting for the temperature to adjust, the fool turns the hot water all the way up and scalds himself. 

I fear that the Washingtonians (and I refuse to blame one person or one party) have decided to cool the shower back down by turning on more shower heads and turning them all the way up.  Then, they are handing us the water bills, and pricing the water as though we were in a desert.  Which you may be - I thought you were now in Spain.  Perhaps I am getting confused enough that I might be able to run for Congress.  I can spend money.  I do not yet know how to lie with a straight face, and we do have a good fiscally conservative Congressman, though.  I suppose not. ;-)

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#8) On March 02, 2009 at 6:35 PM, whereaminow (24.34) wrote:

zloj,

Your questions are excellent. No sane person can espouse a philosophy without an understanding of the inordinate difficulties in the transition from here to there. 

I prefer to start these conversations in the area of money production for two reasons. First, it is the current system of monetary control that is most immoral aspect of global society, the main cause of war, and the most significant factor in the inability of non-industrialized nations to achieve a higher standard of living. Second, I have studied it extensively and I am fascinated by it - both by the brazenness of those who manipulate the system and by the ease at which they conceal their efforts from society. I have given some thought to blogging extensively about monetary policy, but I'm not sure that the audience here would find it interesting. I am reconsidering that. I owe a great deal of thanks to a former Marine that took me under his wing many years ago and taught me how central banking works.

Yet, even abolishing the Federal Reserve, a policy I support, is no longer the most optimal path. That too would be chaotic, though I am convinced that the fiat currency system will collapse and lead to chaos anyway. A peaceful solution would be to allow competition in the creation of supply of money.  Nowhere in the world is this allowed. Any person that is not a central banker will quickly have his world turned upside down by armed agents of the State if he or she tried to develop their own currency.

However, private currency production is not counterfeiting per se. Counterfeiting is the fraudulent creation of money that has no value yet is passed off as equal in value to a standard currency. Private money producers have no such desire. In fact, we contend that is the government which is engaged in counterfeiting, as each new fiat that is created destroys the wealth of previously created money - thus rendering the contract under which that money was held, void.

So we can certainly start by auditing The Federal Reserve (and I recommend similar movements in other countries and the IMF), and allowing private enterprise to compete in the production of money. Allow the consumers to determine the integrity of currency.

There is obviously a very good reason that the government would not allow such an idea. First, it would decentralize power. Second, consumers would quickly realize that privately issued currency is more stable and reliable than anything the government issues. Middle class consumers would be the first to make use of such currency.

Government is Sued Over Seizure of Liberty Dollars

The next topic I would be happy to discuss is the issue of fractional reserve banking. Historical context is lost in so many issues, but more so even here. The roots of fractional reserve banking are from the money changers. Unfortunately, so much anti-Semitism clouds the history that most accounts are only written by hate speakers.  The truth is that the money changers did contribute to the rise of anti-Semitism even if they had no understanding that they were perpetrating a fraud.  Today, their system has developed into an elaborate web of usury that can only continue as long as everyone feels confident in a system they don't even understand.

Many attempts have been made to require 100% reserves in the past. There is no moral or ethical argument a person can make against 100% reserve requirements. There are utilitarian arguments, which amuse me as Libertarians are often accused of being the utilitarians!

These are steps that can be taken now and in the near future as the current system crumbles, which it inevitably will. 

Another step that must be taken is the end of the 3 wars: Iraq, Afghanistan, and Drugs - before they bankrupt us all.

Ending various forms of regulation, government mandatated monopolization, and welfare programs are the least of my concern.  These we hope to phase out in time. Certain regulatory agencies can be made private for-profit (such as the SEC) with competition allowed, should the consumers find them necessary.  I believe there is even a market for private environmental watchdogs, but decentralization of control is the key.

The point is that our system doesn't have to be violently overthrow or dismantled. It needs to be looked at reasonably, and the best path towards a less absurd society needs to considered. These ideas are being worked out by many professors and scholars. Our philosophies are growing in popularity at a rapid pace, and many thoughtful people are entering the discussion. It has to be a peaceful revolution.

David in Qatar

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#9) On March 02, 2009 at 6:44 PM, whereaminow (24.34) wrote:

Mary953,

Your thanks is returned. If your family is anything like my father than I consider your praise as the highest form of respect.

The Friedman analogy is fantastic. Thanks for sharing that.

I was in Spain with my fiance for a short vacation. One thing I love about Europe is the spectacular job their governments did with city landscaping. Madrid has got to have the most beautiful parks and gardens I've ever seen. It was a perfect romantic setting. (See, I can say something nice about government once in a while =D)

David in Qatar 

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#10) On March 02, 2009 at 7:58 PM, starbucks4ever (98.67) wrote:

A very reasonable observation. Social systems have lots of inertia, so any change has to be gradual. But doing it gradually is not the ultimate test. The test is how you prioritize your goals, that is, what you want to do first what could wait. The trouble with Libertarianism is that it has always aimed as its first priority to cut taxes for the top 0.1%, then as a second prority to cut taxes for the top 1%, then as a third prority to cut taxes for the top 5%, and then ... and then the fourth, fifth and sixth priorities could wait indefinitely. And then it becomes really hard to answer that inevitable question "what's in it for me?". So far, we have been routinely aked by the Libertarians to de-regulate billionnaires here and now and then wait and see if they will keep their word when it comes to the rest of us. And until we see evidence that Libertarians' PRACTICAL agenda is starting to change, any discussion of the merits of Libertarianism as a theory will remain a futile excercise in utopian thinking. 

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#11) On March 02, 2009 at 10:37 PM, abitare (88.86) wrote:

Very good story and post. I think it is going to get interesting some people have lost a lot and may not have any/much pension left.

 

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#12) On March 02, 2009 at 10:38 PM, whereaminow (24.34) wrote:

Unfortunately that is all too true. I hope you understand that is not my position, nor those who hold similar positions to me. The libertarian ideology is pretty dispersed, though all tend to more or less desire the same ends.

My understanding of the tax system, how it was implemented, and how it affects Americans is that I would like to see taxes repealed from the bottom up, rather than the top down. Lower-to-middle income families need that money more than top earners do. That doesn't mean I support any form of income taxation, but it means if you are going to enact a reasonable, humane solution to fix a horrible policy, it should be done to have the greatest positive impact.

The Libertarian Party has failed, in my opinion, to address the issues that would provide the most immediate benefit to the largest number of people, and instead has focused on issues that only a handful of powerful party members endorse (sound familiar?) For this reason my financial support for the LP has declined every year. 

I think auditing The Fed is a policy that most Americans would support, and nearly all would support if they understood how The Fed worked. Those that think we are crying wolf should be delighted to see us completely discredited when an audit turns up no funny business.  I don't think anyone believes we are crying wolf anymore.

While the LP has focused on the freedom to take drugs (I do not support drug use - but believe that incarcerating users is a failed and inhumane policy), many Americans would be willing to see a more reasonable policy that includes an end to the Drug War. As the war continues to spill over our borders, Americans have to face the fact that prohibition has had the same effect as alcohol prohibition did last century, only this time the cartels have .50cal machine guns, RPG's, and frag grenades. And it gets worse every year.

Many Americans support immediate troop withdrawals from Iraq, and quite a few are incensed that Barack Obama intends on leaving 50,000 troops and 14 permanent bases in Iraq as part of his so-called withdrawal plan.

Many Americans would to see a humbler foreign policy, that doesn't include 700+ military bases in 130 countries - many of which have served to prop up totalitarian governments.

Many Americans would like to see small businesses thrive, rather than being choked by regulations intended to rein in the excess of big business, but rather are used against for their benefit, and usually enacted at their behest.

These are just a few of the Libertarian policies that would be very popular with many Americans, certainly enough to win a minority in a system that had a fair competition among political parties. Unfortunately, our system is rigged by the two parties in control. Funny how they keep telling you the two party system is best. Wonder who made it nearly impossible for other parties to get on the ballot?

David in Qatar

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#13) On March 02, 2009 at 10:55 PM, SharpSEO (68.82) wrote:

Very nice piece. Hope everything works out OK. My parents are also in a tough spot. It's a huge problem.

When I think about all the taxes I pay, between state & federal income, gas, sales, property, capital gains, dividend, etc, it's absolutely ridiculous.

The time for serious change is near, I hope. I think we're finally reaching the breaking point.

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#14) On March 02, 2009 at 11:02 PM, russiangambit (29.37) wrote:

I have a dream ... to be able to allocate my tax dollars on the programs of my choosing. I imagine some sort of a Web site where you register and let's say you paid 20K in taxes, and there you can say I want 5k to go towards healthcare, 5K towards education, and so on. Then the government tallies the allocations and budgets accordingly. So, if there are people wanting to spend on welfare, let them. Wouldn't that be an ultimate democracy?

You say that $1,000,000 of your father's taxes was spent on welfare. I have a suspicion that most likely that a good portion of that money was spend on military. Planes and bombs are very expensive.What would you say to that?

I was vehmently opposed to the war in Iraq just because I have closer familiarity with the wars than an average american.  I wish I could make sure that not a cent of my tax dollars is spent on military actions abroad. It really eats at me that my money was being wasted in Iraq and there is nothing I could do about it.

On the discussion with zloj, I think we have similar background, both of us being from the USSR,  and I can tell you naked capitalism  that we experienced after the USSR collapse ain't pretty. It does ensure survival of the fittest. But watching the untimely demise of those less fit is still too much for once consience. Especially, when in nature's terms the fittest is not the one who is noble and doing the right thing (like your dad). Actually, it is the most cunning, backstabbing , machiavellian type that does the best. The type of person for who the end justifies the means.

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#15) On March 02, 2009 at 11:26 PM, starbucks4ever (98.67) wrote:

Turns out we actually agree on many things. There is always a rift between the espoused ideology and the real agenda. It's not a sure fact that the Libertarian Party cares about Libertarianism any more than the Republican Party cares about the Republic or the Democratic Party cares about democracy. My test is very simple: what a politician has done in real life is what he actually stands for, no matter what's written in the party program. And by that test, looking at the actual political record, I don't see much to support. When I see them campaighning heavily to break up HMOs and make health care really competitive, in the spirit of their program, then I promise you to support them on the issue of tax cuts for billionnaires as well. But certainly not before that.

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#16) On March 02, 2009 at 11:53 PM, whereaminow (24.34) wrote:

SharpSeo,

My best wishes to your family as well. It would be horrible if we had to watch our parents' generation crumble before our eyes.

russiangambit,

Please consider that I mentioned both the welfare and warfare state in my lament for my father's lost income. I detest the warfare state as much as you.

As for where our tax money goes, last year $400B was spent to pay the interest on the national debt. $1T total was collected. When you subtract the operating budget of the IRS, not much was left over you would think. All of current warfare and welfare is financed through borrowing and money creation. It is a disaster waiting to happen, or more precisely perhaps the disaster is currently happening.

zloj,

If I had approached our conversations in this manner from the start we would found common ground much faster. I apologize and will learn from that.

David in Qatar

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#17) On March 03, 2009 at 7:32 AM, LawfordCap (99.84) wrote:

Your post stimulated me to think about the future of fiat currencies and the entities that manage and depend on them….

- In the UK a bank account can be in Euros or in Pounds and in Argentina you can take dollars or pesos from an ATM.

-Technology that allows people to switch between alternative assets (gold, dollars, euros, oil) is becoming ever more widely available.

-and asset transfer technologies like PayPal are developing fast.

- As easy of asset transfer increases along with the ability to trade one asset for another, people will increasingly view the tradable fiat currency they hold as more of an asset then as a solid store of value.

- The more fiat currencies are viewed as such their management, their creation and those that depend on them will change.

-I feel they are unlikely to disappear, rather the role they play in a global economic system will just evolve.

These are just my thoughts….and I would love to hear your comments.

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#18) On March 03, 2009 at 9:35 AM, whereaminow (24.34) wrote:

LawfordCap,

I'm glad that I can introduce you to some new ideas, even if they don't necessarily jive with you. Interesting that you mention PayPal. Their original vision was to give non-Americans a chance to protect their money from hyperinflation by offering the ability to hold dollars instead. At the time, and even in today's world, dollars hold a more stable value than money world currencies.

Several companies that I know of tried to offer a bullion based online currency: E-Gold and E-Bullion being two off the top of my head. I believe the government shut down E-Gold, not because they were fraudelent, but because they were operating a competing currency to US dollar. It's similar to what happened with Liberty Dollars.

I think the future privately competing currencies is here, whether central bankers like it or not. The fight will start in the courts, but events like hyperinflation of the dollar and euro will force consumers to take action. The fight will eventually be won thanks to government ineptitude.

No army can stop an idea whose time has come.

David in Qatar  

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#19) On March 03, 2009 at 11:20 AM, jgseattle (31.85) wrote:

I will take a little different approach to this.  I hope over my life I can pay over $1m in income tax!  I have no problem paying a fair tax!  The size of government needs to be figured out, yes.  But government needs to be supported.

If I pay $1m in taxes it means, most likely, I am in the top % of all earners.

It should also mean that I have investment that can lose money and i will still be ok, unless I foolishly spend my earnings.

I am not sorry for your father, I am proud of your father that he has the assests, earnings, education, and skills to create value and to earn a comfortable living.

I am sorry for you that you whine about paying taxes!  I do not like the way my tax money is spent, and if the government could operate without any money fine I would rather not pay taxes, but that is fantasy.

If you are in Qatar you can always renounce your US citizenship and pay the local taxes or find some other low tax country to live but until then i think I would be proud of the contribution I make and if I was not then find an alternative!

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#20) On March 03, 2009 at 11:25 AM, LawfordCap (99.84) wrote:

whereaminow

Thank you for taking the time to comment on my post.

Surely a lot of a currencies value is related to its liquidity, ease of exchange and risk properties…. so if another asset has these properties could it not be a type of "privately competing" currency… putting a possible “E-Oil”, “E-Copper” or some tradable “E-index” in a similar class to the E-gold and E-bullion you mention?

If a major shift in the perceived value of a fiat currency occurs… say for example, Argentineans abandon the peso in favor of some other store of value (under continued advances in the tradability and transferability of liquid assets) like those mentioned above, what implications do you think this will have on the functioning of the state?

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#21) On March 03, 2009 at 11:27 AM, OleDrippy (36.95) wrote:

I love this discussion. I hope more people find and learn that libertarianism is NOT anarchy, nor does it support solely the elite in this country. A Libertarian would have allowed the elite on Wall Street to fall; those who made the right financial decisions would be allowed to rise to the surface. Now we are going to have huge zombie banks, with the same worthless bankers moving money and positions among themselves. Nothing has changed and the taxpayer and investor/saver continues to get the shaft.. Things were NOT meant to be this way!

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#22) On March 03, 2009 at 12:02 PM, whereaminow (24.34) wrote:

jgseattle,

I don't understand what purpose your comment serves. If you are happy to pay millions in taxes you are free to do so. Some libertarian ideologies support panarchy, i.e. the freedom to choose to be governed or not to be governed. You would be free to pay taxes for the services government renders while others would be free to live without government.

I don't whine about pay taxes. I don't pay taxes. I've provided more than my fair share of value to the government and to the people of The United States. I served a rewarding and somewhat lucky 10 years in the Marines. Enough said.

Besides that, if I were to renounce my citizenship, I would enjoy greater economic and social liberty in Qatar than I do in America. You don't have to believe that if you don't want to. But I live here and I know it's true. The corporate tax rate is 10%. The individual income tax is 0%. Sales tax is 0%. Etc. There is no taxation. You could speculate that your tax dollars subsidize the Qatari lifestyle. That may have some validity, in which you may want to reconsider your stance to not whine about where your tax dollars are going.

LawfordCap,

The rejection of central banking issued currency in a nation could have positive implications. If the government was resistant to the idea of oppressing the population it would be forced to choose an alternate route to stay in business. In other words, the government and its bankers would have to provide a more stable currency, forego frivilous spending, and find more efficient ways to raise money. If this could be done without a totalitarian downside it would be a tremendous benefit to all, and would serve to make anarchy less desirable, in a sense. Since we don't see that happening without severe political pressure, we will continue to apply that pressure. Governments can raise money through means other than forceable taxation. We suggest they focus on those competitive, market driven alternatives if they wish to stay "in business" in the long run.

OleDrippy,

Thanks for the kudos. Which anarchy are you referring to? The classical definition is Nietzsche's version of a world that refrains from coercion and violence. The modern definition is punk leftists that burns Seattle for no apparent reason during a WTO meeting without understanding or caring to know the actual reason the WTO is wicked, or the ACORN thug that "appropriates" private property lost in foreclosure.

David in Qatar

 

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#23) On March 03, 2009 at 1:22 PM, whereaminow (24.34) wrote:

We've gotten off track however. The point of this blog was to get Fool members to ask themselves:

"What have I lost not only in this crisis, and through taxation and inflation, but also in lost opportunities due to destroyed and confiscated wealth?"

"What benefits I am missing out that hard working, motivated people could have created for us had they not been cheated in a system of confiscation and debt?"

"What could I have done with this capital accumulation? How many jobs and innovations may have sprung from my ideas?"

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#24) On March 03, 2009 at 1:25 PM, Nainara (< 20) wrote:

Hello David

I always find your posts to be very interesting and thought-provoking. With regard to anarcho-capitalism, however, I am not aware that an example of such a political system has ever existed for any significant duration of time. From the emprical perspective, it seems to be a pie-in-the-sky ideal, just as one might label marxism at the opposite end of the spectrum until such a time as a true anarcho-capitalist society emerges to bring the concept to reality.

I tend to find the mainstream Friedmanesque brand of libertarianism to be a more practical and achievable ideal- A system where the government exists with the express purpose of preserving and protecting the liberty of responsible individuals (a definition that excludes traditional wards of the state such as children and the insane) and is forbidden to engage in any activities unrelated to that purpose. In this brand of libertarianism, the term liberty is expressly defined as providing the individual ultimate control and responsibility for his Life, Freedom, and Property.

I suspect that the commonality that both anarcho-capitalism and "mainstream" libertarianism share (that is opposed to the general public) is the assumption that liberty is the higest achievable good. It is incidental to the libertarian that liberty also is conducive to a healthy, competitive society. It should be noted that this is in explicit contrast with other competing philosophies such as confucianism which places societal harmony and prosperity as the highest achievable good.

If one is to convert the masses to libertarianism, more than just a recognition of the opportunity cost of the current order (as stablished through the example of your father's loss) is needed, one must first convince others that liberty is the ideal. Unfortunately, use of the term has become cheapened and twisted to the extent that the public no longer associates liberty with its meaning. I recently saw a CBS television AD for a special documentary on the Department of Homeland Security  that had a wonderful juxtoposition of narriation along the lines of "...heroes protecting liberty" while showing a team of SWAT breaking in the door to somebody's house with a battering ram.

I could go on, but I've digressed.

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#25) On March 03, 2009 at 2:26 PM, whereaminow (24.34) wrote:

Nainara,

Thanks for contributing your thoughtful comments. I definitely support your point of view as well. I suspect that many Americans agree with us, but feel its useless to vote for anything other than the two parties.

David in Qatar

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#26) On March 03, 2009 at 2:41 PM, jgseattle (31.85) wrote:

you cannot have it both ways where some pay and some do not, that is called a free rider by economists.

All I am trying to say is that a fair tax is required and that the wealthy should be happy to pay some % of income to support the infrastructure that supports their weath accumulation.

I am in the top 5% of earners and pay taxes with some pride.  As i stated i may not like where the money goes but I am not going to whine about it I will vote and let my one voice accumulated with others of a same ilk.

If you feel you are so much better off in Qatar I suggest you do renounce the US citizenship.  I have thought about doing the same as I really love Central America and some countries have advantagious taxing.

In this blog I have not seen a reasonable option put forward to make taxes better that is politically reasonable. 

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#27) On March 03, 2009 at 3:19 PM, whereaminow (24.34) wrote:

jgseattle,

I don't feel as though I am better off. I AM better off. But that doesn't mean I want to stay here forever, or that I am going to sit idly by while America is taken over by illiterate collectivists and central bankers. I served to defend The Constitution and Liberty - not to defend any particular politicians or their agendas, particularly if those agendas are immoral and sure to cause harm.

It's great that you are a top earner. I don't begrudge you that, nor do I wish to take anything you have. You do, however, have a moral obligation to consider how your tax money is spent, how effective your vote is (it means nothing and has no effect).

There are so many free riders in our system, aren't there? I am tax exempt, by the government. It's Foreign Earned Income Exclusion. On the flip side I donated my max $2300 contribution to several liberty minded politicians, none of whom had any chance of winning their elections. A waste? Maybe from a utilitarian perspective, but not from a moral one. So let it go. I'm not renouncing my citizenship. I've earned it.

Americans who live overseas, particularly in areas where American foreign and monetary policy has had a significant impact often feel exactly as I do.  I've been doing it since 1996, and have seen a great deal of the world.  Each time people like me return home we see further decay in American society.  We see huge transfers of wealth from the middle class in America to the wealthy, and to undesirable people overseas. We see waste, fraud, and deceit overseas among American bureaucrats and the modern global conquerors. We see a complicit media and an increasingly confused electorate.

Just because we have the courage to no longer accept the status quo, to question what we were led to believe, and that we aggresively engage people in discussions to introduce them to our reality doesn't make us whiners. It makes us human.

David in Qatar

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#28) On March 11, 2009 at 2:21 PM, nzsvz9 (< 20) wrote:

What have I lost? My stock portfolio(s) private, 401(k), 529b(s) and home are down from 30-50% all.

Yes, my 401(k) is more like a 201(k) now ...

My tax rate is about 50% of my WEALTH, not income, and the inflation taxation is coming.

Spend your money now, get real things for it, and enjoy them, or hold something of value that can be traded for food (i.e. gold) before any collapse, otherwise it'll be taken away in the downward spiral of fiat currency boom-bust and then inflation.

Known by my broker as that troublesome nzsvz9

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