Authoritarian Audacity – Consider This…

Bobblehead DollEliadis, Hill, and Howlett (2005) edited a book, “Designing Government,” used in many different academic institutions to teach courses on government in the United States.  The book and the authors are well known in academic circles, so when I discuss the findings in the book, I am not pulling information from an unknown, hardly read, obscure source.  I wanted this made clear from the beginning, for recently, several media sources have tried to declare that the cost of government is inconsequential and does not hinder a country’s economic forecasts significantly.  As I continuously state, draw your own conclusions.

From pages 60 and 61 for “Designing Government,” we find the following statistics; the authors put them in chart and graph form, I have placed them in bullet form; this is the only change to the statistics made.  Reported for Canada’s government in Canadian Dollars (1995).

      • 1973/74 – Economy-Wide cost of compliance costs $58 Billion
      • 1987 – Economy-Wide cost of compliance costs $78.7 Billion
      • 1993/94 – Economy-Wide cost of compliance costs $85.7 Billion
      • 1995/96 – Economy-Wide cost of compliance costs $83.4 Billion
      • From 1988 40% to a forecast of 47.2% in 1998, Regulatory costs of compliance increased.

According to the Canadian Federal Budget for Fiscal Year 1973-1974 as presented by Minister of Finance John Turner in the House of Commons on 19 February, 1973 Total Revenue was $22.997 Billion, Total Expenditures $25.208 Billion. With a deficit of $2.211 Billion.  If the cost of compliance for federal regulation was $58 Billion, the entire Canadian Budget could have been funded twice without deficit spending, with funds left over.  Tell me, what exactly is the number of “significant” for the cost of government??u=http2.bp.blogspot.com-BKwWSo412lIUngTRkmSYwIAAAAAAAARd8GqxDhvovmRgs1600salestaxcartoon.jpg&f=1&nofb=1

Now, wait a minute, you say, this is just a single year.  I could be gerrymandering and cherry-picking my data to make a point.  I haven’t listed a point yet.  But you’re correct.  Let’s run another year just to see what else is out there.

According to the Canadian Federal Budget for Fiscal Year 1987-1988 as presented by Minister of Finance Michael Wilson in the House of Commons on 18 February, 1987 Total Revenue was $97.215 Billion, Total Expenditures $126.232 Billion. With a deficit of $29.017 Billion, the cost of regulation in that year alone was $78.7 Billion.  Firstly, that is a lot of deficit spending in a little over a decade.  Secondly, that is a lot of growth in government regulation costs in the same period.  Thirdly, one is left to ask using historical records why both the cost of government and the deficit spending went up so significantly during the same period.Working Dollar

According to the academics, the answer is a little dry, “extreme forms of rhetorical hyperbole.”  A simpler version of the answer is this, the politicians in power are staying in control by scaring the hell out of the electorate using extreme cases, fear-mongering, and the media to hype fear!  But, don’t believe me, do not take my word for this at all.  Watch the news, go backward using YouTube, watch the news, and look for the latest “Boogeyman.”  In the 1980s, the boogeyman was the USSR.  In the 1990s, the boogeyman changed, morphed, and all but disappeared, becoming local crime issues.  2000 began, and we had corporations become the boogeyman.  Then 9/11 hit, and terrorism became the watchword.  Then we had the southern border and wars, and then we had big tech, big pharma; fast forward to 2020, and we have COVID, the unvaccinated, and the list goes on.  Rhetorical hyperbole in the extreme, drumming fear as the only constant 24/7/365 as the only reporting done by the “media.”

All the while, what is happening in government?  What is the current cost of government regulation?  Canada conveniently, like many other governments post-2000, hides their costs of regulation in hundred of pages of marketing materials and calls this  a “plan,” a “budget,” and a “roadmap.”  Finding simple facts like how much federal regulation costs my family and me into an arduous task.  However, if you can decipher all the lines and arrive at an answer, feel free to leave it in the comments below.Apathy

The point is, the information is not accessible, transparent, or quickly locatable, even though you pay for the government to report this information to you.  A perfect example of authoritarian audacity, and it is rampant in every single government across the globe.  Hey United Kingdom, they say the Internal Revenue Service in the United States is bad at reporting financial data to taxpayers; you have the US beat!  However, France and Italy have you beat!  But China and Cuba have you guys beat except for Venezuela and Brazil.  Canada and Australia are dark horses somewhere in this race; Japan, Vietnam, Thailand, and many more are on the list somewhere.  The only easy place to find data is Switzerland and Iceland, and even there you still have to swim upstream against marketing and government bureaucratese!

Knowledge Check!Taxpayers, the point is simple, you are paying to be hoodwinked.  You are paying to be lied to, manipulated, robbed, cheated, and left holding a bag full of blank checks and IOUs by the government officers elected, born into office, and who stole their way into power in your countries.  The bills do not go away when governments fall; ask Russia how they are doing with the USSR’s bills and problems.  Ask Venezuela how they are coping with the loss of their country and the accounts from their failed government.

Deficit spending countries, Canada, US, UK, Ireland, Spain, Greece, etc., you might want to pay a little attention here, cause when your economy finally fails, the bills come due, and who pays then?  Not the politicians who wrote the blank checks.  Not the special interests who benefited from the governments they sucked the money from.  Certainly not the Hollywood stars and media elites who consider themselves above everyone else.  The citizens pay, and they pay in blood, they pay in sweat equity, and they pay in treasury long after the principal and interest have compounded, and the debt creators have turned into worm fodder.Lemmings 1

Regulatory costs are always significant and exorbitant in time and treasure long after the wage earner is paid for being the putz that hinders and represents the government your taxpaying dollars support.  Regulatory costs are never free!  Regulatory costs are always triple, if not more, in dollars and cents than what a legislator thinks they will be.  For example, when Obamacare was priced as costing $10 Trillion, the smart taxpayer tripled the cost before considering anything else about the legislation.  The same is true for every other piece of legislation from the school board and the mayor’s office through the governor’s office to the federal level.  Every price tag should be tripled before consideration simply because the various accounting offices always downplay the numbers as a human failing.

But you have got to be joking.  Government cannot possibly cost that much money.  Let’s test that theory, using the United States, 1996 dollars, and Social Regulation for FY 1997 as reported by the OMB under Executive Order 12291 and 12866 from the following link.

?u=http3.bp.blogspot.com-CIl2VSm-mmgTZ0wMvH5UGIAAAAAAAAB20QA9_IiyVhYss1600showme_board3.jpg&f=1&nofb=1Total social regulation costs for 1997 were $198 billion.  Please note that this total does not include costs of regulations that totaled less than $100 million or regulations from independent agencies. There is a possibility that some agencies might have underestimated the costs of their rules.  Thus, the $198 Billion is a guess, and the end total is probably much higher.  Moreover, the estimate of $198 Billion is based upon educated guesswork performed and accepted by academics, legislation, and other banking regulations.  Not included in the costs of regulation are the simple transfer costs of money inside the banking system itself, as these are not considered as costs of regulation.

Did you catch that; certain costs are not considered because Congress allows them to be not considered.  Thus, Congress can lie about regulation costs, fees, taxes, and other monetary adjustments.  The only person who ever is accountable is the taxpayer left holding the statement for deficit spending.  Then the agencies have the audacity to need specially trained personnel to fill out paperwork to meet obscure fraud and deception laws and charge these costs back to the taxpayer as costs other than costs for regulation.  Best of all, tax paperwork is not considered a cost to regulation; paying taxes is not a regulatory cost.  Why not; taxes cost businesses to operate and cannot be changed into different categories?

Tax BurdenThe point is elementary; those who think they have power, bureaucrats in government employ, consider themselves authoritarians.  These authoritarians have presumed to possess the audacity to control how they spend your money because their bosses have allowed them leniency through laziness and disinterest.  Through a lack of scrutiny, the bureaucrat has become fat on power and must be placed upon a diet if a government “of the people, by the people, and for the people” is to survive.  Are you more aware of the problem?  What will you do today and tomorrow to help fix the problem?

© 2021 M. Dave Salisbury
All Rights Reserved
The images used herein were obtained in the public domain; this author holds no copyright to the images displayed.

$1.8 Trillion Annual Deficit – The Problems with Biden’s Budget

Angry Grizzly BearWith gratitude to the National Conference of State Legislatures (NCSL), their analysis of the proposed budget was broken down, and some sense was made.  Not that the news is logical, acceptable, or palatable, just that the budget documents were broken down, which was helpful.  We start with the most bass-ackwards aspect of the budget by asking one question, “Where is the money supposed to come from?”

The 2022 Budget Proposal left President Biden’s desk requesting Congress to spend $6 Trillion and add $1.8 Trillion in new deficit spending to the bloated debt the government already owes.  “Who is going to buy the bonds and make money on this debt?”  When a person employs a search engine, asking this exact question, many answers come forward, and some do not make any sense.

Peter Schiff stated:

The government doesn’t have money that it doesn’t take. Any dollar that the government spends is a dollar that the private sector can’t spend or can’t invest. The government has to take money out of the economy before it can put it back in. Nobody seems to understand this basic point because they see the Fed creating money, and they think, well, we just print money. They don’t realize that when they print money, they destroy the value of the money that’s already there. So, they’re not adding new purchasing power. They’re just redistributing it” [emphasis mine].

Thus the first problem with America’s debt and proposed budget transparent; there is no money that government can spend unless it first forcefully removes it from the owner.  That is theft, or as we recently discussed, legalized theft.  The Supreme Court of the United States (SCOTUS) has ruled that legalized plunder, legal theft, or forced taxation are the price we pay for civilization, thus making legal the government’s actions to steal money.Government Largess

Let me be clear; I am not an economist.  I select several very bright and experienced people to help explain things to me.  However, I can help others with less interest in economics understand what is happening in America right now to answer the question put forward, “Who is buying America’s debt instruments?”  The simple answer is that the Federal Treasury is buying the debt instruments, as the whole world sells their bonds and other American debt instruments.  What the Federal Reserve is doing is called “monetizing debt.”

Monetizing Debt

Gravy Train 3The definition of monetized debt is as follows. “Debt monetization or monetary financing is the practice of a government borrowing money from the central bank to finance public spending instead of selling bonds to the private sector or raising taxes. It is often informally and pejoratively called printing money or money creation.”  Money can only be created in two ways: selling products and services and lending money where the borrower pays interest.  While there are many different debt instruments, i.e., credit card, home loan, student loan, bonds, Treasury Notes, etc., the principle remains the same: you either sell goods and services to make money or lend money and make money on the interest.

Why does monetizing debt matter?

Two simple reasons the government allows debt to be monetized.  To hide debt, it doesn’t want the public to know about, and to absorb cash on the market as a tool to fight inflation.  Here’s the problem, there is too much debt on the government’s books to hide it from the public any longer.  Add to that the sheer volumes of cash in the marketplace after handing out money during COVID, and the Federal Reserve will monetize debt.  Even if the chair of the Federal Reserve denies monetizing debt, debt is being monetized.Burning money - THE JOSIAH BARTLETT CENTER FOR PUBLIC POLICY

In short terms, your pocketbook is going to take another hit on the chin, and possibly two.  First, your interest rate on privately held debt, credit cards, student loans, homes, etc., is going to go up, all while making lenders nervous and refuse to lend money.  Second, inflation is already making the dollars held less valuable.

Inflation first; inflation is the devaluation of dollars.  The government floods the marketplace with cash, and the currency you hold will drop in value.  For example, recently the inflation was reported to have been 4.6% higher year-over-year.  This announcement was made in April 2021, so all the money you earned last year suddenly became 4.6% less valuable this year, all before the interest rate increases affected those dollars.Inflation - 8 Things Everyone Ought To Know.

Case in point, the US Government sent me $1000 in January; I held onto those funds due to a move that was coming and spent the money in June.  However, between January and June, inflation moved up at a steady pace, and when I went to spend that $1000, it was only worth $850.  That is the power of inflation in your pocket.

Have you asked for a credit increase recently and been denied?  What about your credit limits on your credit cards, have they shrunk?  Both are indicators that the lenders refuse to lend due to the tremendous risks caused by fiscal insanity in the Federal Government.  What about home loans, have you had to produce more documentation, prove more income, and work harder to qualify for a loan?  What about student debt?  The government controls the lending of student debt.  Even here, the Federal Government cannot demand a lender loan money to student’s and many students have found their college expenses grow, and their ability to borrow shrunk.Inflation pickpocket | Cayman Compass

In a simple fact of life, every household in America understands perfectly. When your credit scores go down, your ability to borrow reduces, and it becomes harder to meet all your bills every month.  Every city, county, state, and even the Federal Government should know this lesson, but they refuse to believe problems arise when credit scores go down.  All because those elected believe they can tax some more, and the money magically appears.

Does money magically appear in your pocket; of course not!  It must be earned through working, selling goods and services, or trading your time for employment with an employer for a paycheck.  Does the law allow you to write blank checks, kite checks, backdate checks, or simply float a check waiting for a future payday; of course not!  Yet, this is what the government is doing right now with your money.  The government is spending money, promising the lenders that a future payday will be theirs, but the government has to spend money to get money.  Does that excuse work for you when the electric company, gas company, cellphone, and other bills arrive?A Helpful Chart : How Inflation Changes Mortgage Rates

The most heartbreaking statement I have heard in a long time was recently made by a physician’s assistant, who claimed, “Aren’t we all just one paycheck from disaster?”  The simple truth, mostly, yes!  Studies exist that talk about financial resiliency in America.  Financial resiliency is all about being able to weather a patch of trouble without losing your possessions in bankruptcy.  The conclusions were all but unanimous. Along with most industrial nations, America has no financial resiliency due to government fiscal policies that hinder saving money and the need to live on credit cards to keep the basics of life paid for each month.

When inflation is stealing the value of your money, no wage can compete with government theft, all before taxes.  Add in tax laws that are counter-productive, job-killing, and increase the cost of doing business, and the job you have becomes tenuous at best.  Add in the hidden debts the government is trying to hide, and nobody in America is making money.

QuestionWhat about those who consider themselves “Rich?”

The same problems you are having with inflation are the same problems everyone is having with inflation.  Let’s go back to my $1000 that became $850 through six months of inflation.  We all spend the same money, and inflation is killing everyone’s dollar equally!  Hence, I beg you, do not allow the media hype about rich versus poor to derail the point.  Inflation and monetized debt are killing the US Dollar, which is why so many foreign investors have dumped their US Debt instruments for safer financial shores.

While some people have more financial resiliency than others, everyone’s dollar is dropping in value.  Inflation and low financial resiliency mean making budget cuts to charities, hiring someone to maintain a lawn, and a host of other ways and means American’s share our money.  It can mean turning off services, weighing how much fuel can be used, and a host of other belt-tightening decisions.  All things the government should first be doing, and they refuse.24+ Inspirational Quotes For Unemployed - Audi Quote

Yours and my liberty and freedoms depend upon stable economic policy, firm fiscal policies, and elected officials scrutinizing the government for waste, fraud, and abuse.  Yet, what do we regularly find; fraud, waste, and abuse!  The Department of Defense has lost multiple trillions of dollars; not a single politician is asking for an audit and an explanation or is willing to withhold additional appropriations until the lost money is accounted for.  The Department of Veterans Affairs continues to mismanage funds, misappropriate funds, and waste money like overripe fruit; yet, still, we have zero interest from the politicians elected to scrutinize government.

I repeat Peter Schiff, only for emphasis:

The government doesn’t have money that it doesn’t take. Any dollar that the government spends is a dollar that the private sector can’t spend or can’t invest. The government has to take money out of the economy before it can put it back in. Nobody seems to understand this basic point because they see the Fed creating money, and they think, well, we just print money. They don’t realize that when they print money, they destroy the value of the money that’s already there. So, they’re not adding new purchasing power. They’re just redistributing it” [emphasis mine].

Inflation Quotes | Inflation Sayings | Inflation Picture Quotes - Page 2In redistributing your money, the government has proven they are the problem, and the solution begins locally!  Change your mayor, city council, county board, school boards, and every other elected official.  Getting the local governments in fiscal shape allows state governments to begin practicing fiscal health and sanity.  Then, we put people into the Federal Office more interested in scrutinizing the government than in writing endless laws and abdicating their legislative role to the executive bureaucrats and the judicial branch.

Knowledge Check!The budget put forth by President Biden is the height of insane, and I have only covered less than 1/10th of the budget problems in this article.  Granted, I covered the most egregious problem, but the fact that the legislative branch is even negotiating a compromise is beyond insanity and borders on criminal negligence!  We, each citizen of a representative government, must stand and tell our representatives NO MORE!  No more fiscal insanity, borrowing to buy votes, entering into debt obligations that make captives of unborn millions of other people.  No more will we allow them to buy votes to maintain power.  End the financial abuse of the taxpayer; your wallet will thank you!

© 2021 M. Dave Salisbury
All Rights Reserved
The images used herein were obtained in the public domain; this author holds no copyright to the images displayed.