Curried Wealth Building
Finding an Edge

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July 1, 2009
Issue 52  -  The Government Monster
 
Way back when in the founding days of this country, when it was a "every man takes care of himself" mindset, the notion that a law could be passed to limit choices or restrict behavior was unthinkable.  Today, it is the norm.  The laws being passed today resemble, in EVERY way, totalitarianism.  Let's look at the ways.
 
 
Workforce
 
Currently the federal government is the largest employer in the country and that doesn't count state and locals.  Look at this chart from contraryinvestor.com:
 
 
 
As you can see, since 1969 the government has grown almost at a constant rate, recently passing manufacturing and construction as the top employer.  Obviously, this can't continue forever because the other tax payers must pay the government workers so this trend will stop.  What happens then?  The end of growth, that's what.  The end of the game.  At that point it won't be possible to paper over the problem.  One interesting point on the chart is the last real downturn in government employment came during the brutal 1982-83 recession.  Look at what happened after 2000. A brief down drift and then right back up.  We are trying to "hire" ourselves out of the recession.  It won't (can't) work.  Someday soon, this trend will reverse and with states like California and Pennsylvania flirting with bankruptcy, the day is probably close.
 
 
Behavior
 
The government has invaded nearly every aspect of our behavior in the name of "protecting" the public.  We have speeding laws.  We have sin taxes.  We reward having children and getting married.  (Although these are laudable goals the government has no constitutional business being involved in our relationships)  We have laws to tell us how to build a deck on OUR house.  We have laws to tell us where we can do certain legal activities.  If it's legal, why does the government get to tell us where we can do it?  If you don't infringe on someone else's rights, you should be, and are constitutionally guaranteed, the ability to do the activity whereever you please.  Smoking is the perfect example.  There is the absurd situation of not allowing a man to smoke in his own HOUSE because a neighbor complained to the police she could smell it.  If an owner of a building wants to open a restaurant in it, why should the government get to tell him what legal activities are permitted inside?  Rewarding behaviors, while applauded by the favored, is ruinous to a society and sets up unnecessary walls and castes within the populace.  I've experienced the resentment from single friends who didn't qualify for the "free" money being sent out as "stimulus" checks.  Why do I get a benefit just for having kids?  Why do people get a benefit from owning a housing?  Now there is talk of taxing "junk" food, from the Washington Examiner:
 
The Senate Finance Committee is considering a so-called “Lifestyle Tax” raising the federal excise tax on our bottle of wine (and also our six-pak). In addition, the plan would increase tax on any beverage that contains natural sweeteners from sugar, corn syrup or fructose. Drinks that are sweetened with chemical or artificial sweeteners would be exempt.
 
 This won't stop here either.  Soon there will be "required" exercise and overweight people being taxed.  Think that's over the top?  Let me ask you this?  If Thomas Jefferson had been asked during the writing of the constitution about inserting a requirement to get approval to put an extra room on his house, what do you think his reaction would have been?  Rewarding and controlling behavior is the LAST thing a nonintrusive, rights oriented government would ever want to do.
 
 
Family
 
The government is now the co-parent of millions of kids and the numbers continue to grow.  Recall that a state run school system is a plank of the Communist manifesto and then look at the all encompassing nature of our school system. 
 
"TEN PLANKS OF THE COMMUNIST MANIFESTO
 

Tenth Plank: Free education for all children in public schools. Abolition of children's factory labor in its present form. Combination of education with industrial production. (Gradual shift from private education to publicly funded began in the Northern States, early 1800's. 1887: federal money (unconstitutionally) began funding specialized education. Smith-Lever Act of 1914, vocational education; Smith-Hughes Act of 1917 and other relief acts of the 1930's. Federal school lunch program of 1935; National School Lunch Act of 1946. National Defense Education Act of 1958, a reaction to Russia's Sputnik satellite demonstration, provided grants to education's specialties. Federal school aid law passed, 1965, greatly enlarged federal role in education, "head-start" programs, textbooks, library books.

(Research source: Encyclopedia Britannica.)"

 
Mirror images.  The state is basically in charge of the education your children receive, even with home schooling as home schoolers must have a state approved curriculum.  What part of the constitution permits that?  Why can a child protective service worker take you kid?  What does the government care if you have a kid or not?  Why should tax dollars go to a family because they are poor?  Is it you fault that a family is having a hard time?  Why does a government official get to decide if they are having a hard enough time to be given your money?  Why can offiicialdom just do these things?  Because we let them.  It's really that simple.  We veg out on our couch and ignore what is happening behind the curtain as they strip our rights away, one at a time.
 
 
Money
 
Governments at all levels are taking bigger and bigger bites of our incomes.  This is due to increases in regulation, levies, fees and direct taxes.  The current "tax freedom day" is in mid April.  That basically means that Americans work for government until mid April and then they get to keep the rest.  This is essentially serfdom.  Here is where are tax dollars come from courtesy of taxfoundation.org:

"Which Taxes Are the Biggest?

Five major categories of tax dominate the tax burden. Individual income taxes, both federal and state, require 38 days' work. Payroll taxes take another 27 days' work. Sales and excise taxes, mostly state and local, take 15 days to pay off. Corporate income taxes take 6 days, and property taxes take 12. Americans will log 4 more days to pay other miscellaneous taxes, most notably including motor vehicle license taxes and severance taxes, and about 1 day for estate taxes."
 
Some of these taxes border on insane.  Taxing a car?  Why?  The ultimate purpose of all these varied attachments to your income is to mask the true size of the thing.  This is the main reason for the withholding tax being enacted.  If you don't see it, you won't miss it.  So kill the man with a thousand cuts.  Until we start demanding that government only deal in issues that it has constitutional authority for, we will continue to be serfs.  As the depression sinks in deeper you will see them take more and more control of your tax deferred investments.  This is an inevitability.  Not a guess, not a hunch, an iron clad fact that will unfold.  We are in far deeper trouble than is being publicly admitted.  Currency controls and other "protective" measures will follow.  As I've said a hundred times, make sure you have real money:  gold and silver.
 
 
Healthcare
 
Currently, healthcare in the U.S. is privately run except for Medicare, which, by the way, is headed towards insolvency.  So it is surprising that Obama wants to take the system over.  Well not really, since that is what he wants.  The more control by the government the better.  They know best after all.  His friends have been calling for this for decades and he is no different in view point, contrary to what he might say.  Currently, the United States uses about 17% of our GDP on healthcare.  This contrasts with other developed countries using about 10% of GDP.  Now these countries like the UK, use a national system, so it's not a fair comparison.  We do, however, use an inordinately high amount on healthcare.  This is the result of many factors.  The biggest one is, and this is ironic, the government.  We impose so many regulations and paperwork requirements that our healthcare overhead is gigantic.  This greatly adds to costs.  I believe that we need to lower healthcare costs.  This would be done with less government, not more.  We need more incentives to be judicious in healthcare use.  Today most people don't think twice about going to the doctor for any ailment.  This adds to costs.  Also the litigious nature of our country has led to cautious doctors who over test and over medicate.  I truly hope this effort gets stopped, but fear it won't.  Would you really want government employees running healthcare like Congress or the DMV is run?  Would you want a government official telling you what procedures can and can't be done to you?
 
 
 
 
The more government intrudes into your life the worse it will be and the longer things will take.  This just isn't opinion, this is based on empirical data from literally hundreds of government programs.  The government is the LEAST efficient entity on the planet.  Let your congressman know that enough is enough.
 
Note:  I am still working on the last section of an "off the grid" plan.  It has taken longer than I imagined but I do hope to get it up this weekend.  (fingers crossed)  Hope you have a great 4th.