I Am a Confederate Now

I am a Confederate now. I no longer believe in the union. I believe in the Tenth Amendment and the Articles of Confederation. My heroes now are not Abraham Lincoln and Ulysses S. Grant, but rather Andrew Jackson and John C. Calhoun.

You Are Living on 41% of an American Wage--the USSA* Steals 59%

There are several ways that Washington taxes and expropriates the majority of your earnings. Before 1970 the real hourly wage increased by approximately 2% per year. Some years it increased more and others less, but between 1800 and 1970 there were roughly 2% annual increases. The reasons for these increases were productivity growth and monetary stability. In turn, productivity growth depends on innovation while monetary stability depends on a stable money supply over the long term (in the 19th century there were fluctuations in prices due to fractional reserve banking among state banks, but in the long run prices were stable). Entrepreneurs will be loath to take risks if there is monetary instability that threatens potential returns.

There are additional sources of innovation, and government has assaulted all of them. For example, education in the sciences and technology might contribute to innovation. But the education system in the United States is poor and does not produce graduates who on the whole are capable of learning science and math. Moreover, education creates an entitlement mentality that deters risk taking and entrepreneurship.

Innovation depends on capital formation. But the income tax inhibits saving. This is reinforced by other forms of taxation such as Social Security, gasoline tax, sales tax, property tax and inheritance tax. Each of these taxes subtracts from income and therefore reduces the capacity of entrepreneurs to save. Banks are unlikely to lend to entrepreneurs who invent radically new technology. Private investors or "angels" may, but the solicitation of investment angels is difficult and not every inventor will be talented at doing so. Moreover, there has been a bias among private capital investors for computer and other electronic technology, and while there has been innovation in that very limited arena, there are wide areas in manufacturing, services and products outside of the "high tech" space where there has been an innovation drought. In these fields existing firms have been able to obtain financing to facilitate overseas plant investment to procure lower wage foreign labor but not radically new ideas. Pharmaceuticals seemed to have reached a dead end even before the health care act, and in the health care act the Democrats have taken a sledge hammer to pharmaceutical companies and to the economy at large, ensuring ever worsening stagnation in real hourly wage growth.

Most importantly, the freeing of the Federal Reserve Bank from constraints on monetary expansion and its freedom to subsidize Wall Street firms, real estate developers, hedge funds and commercial banks, has accelerated the transfer of wealth from wage earners to stock and other asset investors. The freeing occurred in 1971.

As a result of these government policies, the real hourly wage stopped increasing around 1971 and since then has not increased. The difference between the future value of one dollar that does not increase and the future value of one dollar that increases by 2% over 40 years is 220%. That means that without the Fed and without the dislocation to innovation and productivity increases due to it and to tax policies, your income would be approximately 220% higher than it currently is. For example, if you are earning $40,000 per year now, without the US government tax and Federal Reserve Bank system you would be earning $88,000. In other words, your income is 45% of what it would be without the Federal Reserve Bank.

That is on a before tax basis. If you pay 10% of your total income in federal income tax, 4% in state income tax, 5% in property tax, 7.65% in Medicare and Social Security tax (I'll exclude the 7.65% that the employer pays for you and then deducts from your wages) and say 2% in other taxes such as sales tax, premium tax, gasoline tax, inheritance tax and the like then the total is 23.65%. For many people that is an understatement. Rounding down to 23% gives you a reduction to your measly $40,000 of $9,200. Therefore, you aren't even earning what you would have earned in 1970, when taxes were lower. Instead of $40,000 you earn $30,800. Compared to what you would be earning in a free America where you might pay in state and federal tax what you would have paid in 1950, 15%, you are earning $30,800 / (.85 x $88,000) = 41.2%.

Aren't you grateful about all the government "services" that you receive, in exchange for which you pay 58.8% of your livelihood?

*United Socialist States of America

Obamacare a Citizen/Boomer Tax

Fox is reporting that Obamacare will pass in part due to the Blue Dog Democrats, all of whom need to be voted out of office, specifically including conservative Democrat Bart Stupak, who is willing to take President Obama's executive order as final proof that the law will not fund abortion. It seems likely that Congressman Stupak was strong armed because no one makes a deal where one side can rescind the deal at any time and the other makes a final commitment. Stupak is willing to trust Obama, and despite the naive arguments of ethics professsors, trust is inappropriate to deal making in politics and business. Certain elements of trust are necessary for a successful society. For instance, we trust that Congress will not violate the Constitution and that the Supreme Court will reverse it if it does. But our trust in that case is misguided, and American society is not successful. But that is a discussion for another day.

Former Lieutenant Governor Betsy McCaughey said at the recent Queens Village Republican Club Lincoln Day dinner that the bill would eliminate hip replacements, knee surgery and bypass surgery for senior citizens and that these operations have added significantly to the quality of life of the elderly. In other words, elective surgery is going to be curtailed. Boomers have been subsidizing the preceding generation through Medicare, Medicaid and insurance premiums, and now they will not receive the same level of care. On the other hand, it will inevitably be true that illegal aliens will receive benefits under Obamacare regardless of the provisions of the act as presently constituted. In other words, the Baby Boomer generation is a generation of suckers. It watched passively as the "greatest generation" sucked Social Security dry and enjoyed ever increasing Social Security and Medicare benefits. Then it watched Social Security curtailed in 1982 (for now the curtailment is merely an increase in the retirement age, but that will be increased further, mark my words). Now it sucks its collective thumb while Il Duce Pelosi subjects them to rationing of the operations to which their parents had open access. I have no doubt that planned suicide will be an important dimension of Obamacare, and progressives at the Washington Post have recently been singing the praises of planned suicide.

Boomers who want knee surgery will need to go to India or Arabia to have the operation done. The rates overseas are roughly five to 20 percent of the rates here in the US. However, they also will be forced to provide care to younger Americans and illegal immigrants with large families, whom Obama and Pelosi view as more worthy of care than middle class Americans. Nancy and Paul Pelosi, of course, are worth tens of millions of dollars and they will be able to pay for their knee surgery out of pocket, as will Barack Obama.

This is not a legitimate law. Congress as an elected body is traitorous, as is Obama. The American system of government has failed. It is time to begin considering a new approach to government, one that resurrects the Tenth Amendment and separates the nation into fifty quasi-independent states. I would like the freedom to move from New York to a free state.

Will Violence Escalate?

Glenda McGee forwarded a link on Lucianne.com to a Buffalo News story that someone threw a brick through Congresswoman Louise Slaughter's Niagara Falls office window. Slaughter is a leading advocate of Obamacare and heads the House committee that will structure the House health reform vote.

I wonder if there will be increasing violence directed at the government in response to the health reform fiasco.