Wednesday, June 05, 2013

Drowning In Government

The underground economy operates smoothly because government isn’t involved. How many of you have hired the kid next door to mow your lawn? You need a baby sitter? That works the same way and we don’t need government to regulate it, right? Most of us have friends and relatives who work “under the table” and, increasingly, small businesses that remain “on the books” struggle to compete with them.
Government would control and tax the smallest transactions if it could, and it’s trying to. It’s regulating yard sales and lemonade stands in several places. It will regulate every penny we earn and spend if it doesn’t collapse first - and its collapse is inevitable if we stay on the path we’re on. feds tried last year to prohibit children from using power equipment on private land for compensation, so it could conceivably prohibit the kid next door from using your lawn mower. Government licenses day care centers in many places and would control all baby sitters if we let it. Government has been too big for too long and growth is accelerating.

The more government tries to micromanage, the more legitimate business shrinks and the underground economy grows. It’s estimated to account for $2 trillion per year in the United States and $10 trillion worldwide. Democrats in power continue to grow government, but it’s not just them: it grew more under George W. Bush’s administration than it did under President Clinton’s. President Obama, however, has made them both look like pikers. He’s taken over 20% of the economy and bragged that he’ll bring down the level of the oceans even if it means regulating emissions from your lawn mower. His carbon-regulating “Cap And Trade” bill didn’t make it through the Congress, but he’s issuing executive fiats to implement provisions of it anyway. Will he stop the ocean from rising? Of course not, but he’s wreaking havoc on our economy with his ever-increasing regulations. That’s what socialists do.
Big-government efforts to control water levels historically have been hugely expensive and disastrously ineffective. Consider the Mississippi River: The federal government has been building levees and dikes to control flooding for more than a century, but observers point out that those efforts are making things worse. A 2011 article by Richard Maybury called “The River Is Socialist” states:

I’ll never forget the first time I drove along the river’s banks. I had to look up at the passing ships because in some places, the bed of the river is so high, it’s above the surrounding land. It can be kept confined to its channel only by dikes. If the dikes were not there, the river would flow out across the surrounding land and destroy everything. Year after year, decade after decade, the bed of the river rises, and the government responds by raising the dikes. What causes the bed to rise? The dikes. . . . when a river is confined to its channel, it has no place to dump its silt except in the channel. This raises the bottom of the river, until the river overtops the dikes. Did the politicians admit that building dikes was a bonehead idea? Absolutely not. They said, these worsening floods are a huge problem, but give us more money and power… and we will build the dikes even higher. And so it has gone for more than a century. The dikes are raised, which lifts the bed of the river, causing more flooding, plus more demands for higher dikes. All the while, the cities on the floodplains grow larger.

Some geologists believe the great Mississippi floods of 1927 and 1993 wouldn’t have been nearly so bad had government not been “fixing” things. More and more development goes on behind the dikes because the feds subsidize flood insurance. No private insurer would write those policies because they’d lose money and no one would build on floodplain if the feds didn’t provide insurance. Private banks wouldn’t give mortgages either, and who pays for the dikes and the insurance? All American taxpayers, including those of us who live on high ground.
Now consider all the big-government “fixing” of the subprime mortgage market by Fannie Mae and Freddie Mac over the past few decades. It has resulted in millions being underwater on their mortgages. Private banks would never lend to these sub-prime borrowers, but government insures their mortgages. It’s the root of our economic mess and President Obama is still at it - guaranteeing sub-prime mortgages - even those already under water, and printing money to do it. In the Mississippi floodplain, people have been underwater both literally and figuratively  because of “help” from government. As government continues to “fix” everything large and small, America drowns in debt.

We’d all be better off if government stopped helping us so much.

15 comments:

Henry said...

Ah, it is nice to see a column in which the blame is spread equally between the parties. This is something all my liberal and conservative friends can agree on....our government is bloated and over reaches its bounds.

Winston Smith said...

Hmm. It really is tough to post a response as you never seem to want to address the underlying issue that links ALL of your posts Tom. And that is that our government has been usurped by big banks and big business. Really, it couldn't be more obvious. Corporations ARE dictating policy. Congress is bought and paid for. And the on going charade---- that there are two opposing parties vying for control--- is increasingly more transparent and down right ridiculous. Obama is a liberal in name only. Much of his actions and policies are far right of bush. To prolong this myth that its the "liberals" fault, or the " conservatives" fault is to play along with the charade. And the more we do the more traction they gain. The more you ignore bernanke and the non federal entity he lords over, which, make no mistake, runs our lives, the more they win. In addition, we are not bringing democracy to any country in the Middle East by waging war. We are not helping our cause by drone bombing innocent people. The war on terror is an excuse for profiteering. Period. And we aint seeing the profits Tom. none.The CIA has had their hands in the Middle East for a very long time--- helping to create the very enemies we now claim to be "terrorists". There is way too much confusion and no true journalism in regards to the conflict in the Middle East. Not a lick.

So we need to aim our sights on the real enemies---wells Fargo, b of a, Goldman Sachs, Raytheon, GE, Monsanto, big oil, etc. these are our enemies. They own the press. This is no conspiracy theory. This is fact. Six corporations own all the media outlets...Do the math, ya know? Every single "news" source merely works to prolong the left vs right myth so that the masses are divided.

The last thing we need to be doing is name calling and arguing over trivial non sense created to distract.

I can't believe any American condones the way we treat the prisoners in gitmo. Or how about Bradley manning? This is shameful. I think we will regret letting the "media" ignore this issue. Remember Daniel ellsberg?

William F. Buckley said...

It seems that Teacher McLaughlin merely wanted an excuse to use the world "dikes" a couple of times, no doubt giggling as he typed.

Brian said...

I agree with everything Winston says, but I question his much repeated sound bite about "6 media corporations". Let me ask - when in history have we had more media outlets than we do today? How many were around during the time of Ben Franklin? How many during 1800's the 1900's, you name it. With the internet we have literally thousands of outlets to choose from. You don't think the almighty government could have put a severe hinderance to the www if they wanted? Can you name a time in history when the American people had more freedom than they do today?

Winston Smith said...

Brian,
I think you're missing my point? Maybe I'm not being clear? It's not that we lack a choice. Of course we have choices. But who shapes public opinion more than fox or msnbc NPR or CNN? No one. Unfortunately. So it may sound small--- six corporations--- but im not so sure you realize exactly what they own. Or the power they have. Not to mention, it helps your agenda when you own the press corps! That press secretary really gets the tough questions from those White House reporters! Not.

And make no mistake they have a firm handle on web related info as well.

And yes, of course we have alternative media. I love it. There are numerous journalists I admire working outside the mainstream. But that isn't the point Brian. The point is that a majority of Americans watch CNN and fox and take it as gospel and never give it a second thought.
Fox does their part playing the right and msnbc plays the left. perpetutaing the myth that we only have two choices! And we think we're free? Truly free? When you don't have a real choice how free are you?

So it's more the power the corporations have not the fact that there are only six corproations. Do you realize what these six corps. Actually own? Don't forget the vast subsidiary networks they own too!

There is true reporting, real journalism, taking place. It's just hard to find these days. Even with the web.
The press used to keep d.c. In check. Now they are accomplices. It's really sad.

Tom McLaughlin said...

There's plenty of good journalism out there. The electorate is the problem.

People need to be educated that our current path is unsustainable. Unless we cut government, we'll be bankrupt. We need to cut a few percent a year to let people adjust to reality and candidates who don't teach that won't get my support.

Maybe flat tax or fair tax proponents will be able to take advantage of the IRS scandal and make headway. Maybe corporations will get a real taste of free trade. Make it on your own or fold. Farmers too.

What we all need is a good dose of liberty - the liberty to succeed or fail and deal with the consequences of either on your own.

Winston Smith said...

Ok. You don't get it. Or, more likely, refuse to "get it".

Electorate? Is there such a thing? It seesms clear to me that big banks and corporations own each candidate. So, the idea of a true electorate is an illusion. It ain't real. And that couldn't be more obvious.

Yet again the most clear example is Barak Obama, labeled a liberal, African American roots, and campaigned on a platform that he has absolutely pissed on. He has prosecuted more Whistleblowers than every previous admin.! The worst part is he campaigned saying he would champion those brave enough to blow the whistle! Unreal! look at Bradley manning! Where is the mass outrage?! the corporate media flatly ignores him! A true shame. To continue, obama and gitmo? Lies. Blatant lies. Foreign policy? He is further to the neo con right than W ever could have imagined! And on and on. So no tom the electorate is a joke.

It is astonishing that you choose to ignore reality and contine this laughable charade of two party politics.

No corproate run govt here--- I see nothing, i hear nothing.

To think that you believe voting is going to make a difference. Wow.

Frostproof said...

Winnie, do you have any suggestions on how to climb out of the cesspool you describe? Or are you content to disparage others?

There is quite a bit of mass outrage. But your 'corporate media' won't mention it, except in a few cases of newly enlightened self-interest: AP, email mining, ... Most are happily snuggled in bed with the imperium.

To think that you believe ranting is going to make a difference. Wow. Laughable.

Winston Smith said...

Frostproof,

What on earth are you babbling about?

Relevance, please.

You're making assumptions. And you know what they say about that don't you?

Nice try...not

p.s. solutions? Uhm, don't vote, unless you want to continue to be a moron. I don't know? I've never claimed to have answers. I'm just pointing out reality to the brainwashed zombies. You call that ranting though. So.....maybe grow a set and start relying on civil disobedience? Maybe start a group that refuses to'pay taxes next year because of the IRS? God forbid you protest the wars, or wall st.or anything else in this country lest you be labeled a " hippie" by the sack-less tv sheep.

Steve said...

I agree with you on implementing a measured reduction in government that allows us to absorb small changes rather than abrupt austerity. It’s like losing weight. Most people can dramatically cut their caloric intake and see great results in a few weeks, but that’s impossible to sustain. But if we make small and continual changes in our diet producing small results, weight loss is easier to maintain, and over time, we reach a target weight. It took us decades to get into this mess; we have to think in terms of decades to get out of this mess. But with a political class that prioritizes their election first, their party second and this country third, I just don’t see enough of them with the political will to do that without the problem getting much worse. And even then, we’ll have to endure a sustained period of inaction while everybody blames everybody else, exacerbated, of course, by propaganda mills like Fox and msnbc.

I don’t agree with you on the banking crisis. Prime mortgages were sold, bundled together into bonds and then sold off to banks. Everyone involved made money, until the stream of prime borrowers began to dry up. When that happened, lenders targeted subprime borrowers. The rub is lenders lied about the credit worthiness of those loans. Subprime loans were packaged with prime loans to disguise their risk. Those bonds were touted as more stable than they were and sold off. Many banks bought the bonds, unbundled those loans, repackaged them and sold those off. It quickly got to the point where nobody knew what they were even buying anymore. It’s not a question of who’s insuring a given mortgage. It’s a question of who’s greedy enough to sell subprime mortgages, who’s deceptive enough to lie about their value and who’s dumb enough to buy them. The original lender never had to be concerned if a subprime loan was insured. They sold off the loans as soon as the deals were done jeopardizing the balance sheet of anyone who bought them.

A universal law of capitalism is profit demands more profit. Next years’ sales targets have to exceed this years’. When profit goals aren’t met enough years in a row, people begin to fear for the jobs. A person fearing for his livelihood does reckless things.

“Drowning in government” is appropriate, at least that’s the way it’s starting to feel. It’s beginning to look like our government has become a Frankenstein’s monster we created, that we can no longer control, yet, ironically, depends on us to survive.

Life is about thresholds. Little by little, bit by bit, government – with our blessing and without – has encroached on our lives more since the day we created it.

Consider the defeat of the expanded back-ground checks on gun purchases. Set aside all 2nd Amendment beliefs. Citizen support for expanded background checks exceeded 85%, yet our elected officials, who, theoretically should do our bidding, voted down the initiative. Some on Capitol Hill publically vowed to filibuster the initiative before it was even written.

The article below describes Obama’s hope to somehow jerry rig tax-deferred retirement accounts to not exceed an annual annuity of $205,000 in retirement, because that is someone’s arbitrary amount to finance what the government deems a “reasonable” retirement. There are current limits for retirement contributions, and that seems fair, but now it seems like they’re playing with the idea of trying to limit the amount of growth from those contributions, or perhaps penalize us if the accounts exceed that amount.

http://online.wsj.com/article/SB10001424127887324050304578412932073225110.html?mod=WSJ_Opinion_AboveLEFTTop

I’ve read a few articles about 401Ks, and they put the total invested value of the American 401K system at about 3.5 trillion dollars. I get a little nervous when they start nosing around that amount of money.

Anonymous said...

The funniest thing about reading this blog and the comments is that you all somehow think that a "democracy" that only promotes two choices is somehow a model of freedom and liberty!!!

I mean....Really?

" yes you're free....now choose one of these two groups."

It's beyond absurd.

Thanks!

Ol' Hickory said...

Bilderberg 2013 Tom?

Care to comment? I would appreciate your take on this " secret" meeting.

Thanks

Tom McLaughlin said...

Long as I don't have to pay to send anyone there, let them go. Let them have their meetings. If they use public funds, they have to tell us what's going on.

Whatever decisions they make have to be brought back to their countries to implement and we still have a democracy here. Our representatives can still vote it up or down. If we don't know what our representatives are up to and we vote them in for term after term, it's our own fault. Our electorate is getting pretty dumb, electing Obama to a second term and letting Congress spend us into bankruptcy.

Can a country be too dumb to survive? We'll see I guess. I'm more worried about what the federal government is doing here than I am about what people are discussing in Bilderberg.

Ol' hickory said...

Ok, but it's illegal. Why do we have lobbying laws then?

"It is illegal for “unauthorized citizens” to negotiate with foreign governments under the Logan Act, a law passed under the John Adams administration in 1799.."

The Logan act reads as follows:

Any citizen of the United States, wherever he may be, who, without authority of the United States, directly or indirectly commences or carries on any correspondence or intercourse with any foreign government or any officer or agent thereof, with intent to influence the measures or conduct of any foreign government or of any officer or agent thereof, in relation to any disputes or controversies with the United States, or to defeat the measures of the United States, shall be fined under this title or imprisoned not more than three years, or both.

-----

Seems to have senators, governors, bankers and high profile CEOs, etc, meeting in secret with international leaders of business and other countries deserves a bit more attention. No? I'm not sure the American public knows this even exisists and if they do who actaully attends this thing.

Robin Joustra-Dilks said...

As always you hit it right on the head. It is refreshing to see a journalist who is able to state the facts as they truly are. Our government is to big, and to involved in every aspect of our lives.
Sadly we allowed this to happen. In fact many have encouraged it wanting to excuse themselves from being responsible for their own decisions.
History has a way of repeating itself so it is only a matter of time before the mess we have created with all of its legislative rules and taxes falls apart. Not unlike so many governments that have come before.
Thank you.
R Dilks