Fiscal Responsibility In The Real World

It is both ironic and pathetic that as our corrupt, Western governments drown in their own self-created insolvency, these weasel-politicians spend more time talking about “fiscal responsibility” than at any other time in modern history. However, as with most of what our politicians talk about; they have little-to-no understanding of this subject themselves.

A simple hypothetical example will bear this out. Suppose we have a Corporation in serious financial difficulty. It’s spending is roughly flat (in real dollars), but its revenues (also in real dollars) have collapsed. Despite this “revenue crisis”; the Corporation completely ignores revenue-generation, and obsesses entirely about slashing spending.

It performs this cost-cutting primarily through laying-off its own employees (and/or slashing their wages and benefits), which reduces its own revenues even further. What is the one thing which we know for certain about this Corporation? It will go bankrupt in the near future.

This hypothetical corporation is, of course, an identical representation of our own, corrupt/incompetent governments. While we suffer through the greatest revenue-crisis in the history of our nations; all the politicians ever talk about (and occasionally do something about) is cutting spending.

Who continues to advise our idiot-politicians to continue slashing spending (in order to ensure that their minimal brainwave activity is never directed toward increasing revenues)? The deceitful bankers and the even more-incompetent economists. Of course it is this same cast of liars and fools who are 100% responsible for creating both our revenue-crisis and our solvency-crisis (which has resulted).

It was the bankers who assured our governments that they had “discovered” a magical financial formula which would permanently allow all our governments to borrow money at much lower interest rates, and thus (“safely”) carry much more debt. It was the pseudo-expert economists whose “forecasts” proved to be absurdly optimistic, and thus woefully inaccurate.

Why did the bankers (always) lie? Why were the economists (always) wrong?

The bankers lied to our governments about financing their debts for two, equally important reasons:

1. They wanted to bury our governments in debt, and thus enslave us in debt to these very same bankers (or, more specifically the bankers’ Masters).
2. They wanted to ensure our governments never engaged in fiscally-responsible economic policies, specifically that they failed to produce adequate revenue-streams to accompany their (rising) debt-loads.

The economists were wrong for a plethora of reasons, broadly broken down into two categories: their biases/blind-spots, and their utterly inept attempts at analysis and prognostication. Some of these biases can be summarized as simple, class-based elitism; it is beyond the scope of this piece to cover the remainder of those (numerous) biases.

The ineptitude of these economic charlatans also has numerous facets. Perhaps their greatest failing can be roughly summarized as their inability to perform dynamic analysis, and thus their insistence on engaging in static analysis. These terms are likely unfamiliar to readers.

Simplified; static analysis is analysis where one’s modeling is based upon a world which never changes. Conversely, dynamic analysis (as the name suggests) is analysis which does incorporate change into its modeling – and future forecasting.

Because we live in a world of change; static analysis is always grossly inferior to dynamic analysis. Because we live in a world of exponentially increasing change; this inferiority of analysis has also increased exponentially. The economists have not simply been “wrong”, they have been spectacularly wrong.

It is the inability of these charlatans to engage in dynamic analysis which makes it impossible for them to accurately look ahead to the future. This is why these pseudo-experts are continually being “surprised” by asset-bubbles and/or crashes, and virtually any other major economic event outside the limited parameters of their vision.

If the past six years has taught us nothing else; it has taught us that we cannot trust either the lying bankers or the charlatan economists. However, our governments continue to listen to these Liars and Fools. The Liars and Fools continue to advise our governments to maintain the same economic policies (and same mistakes), and our governments continue to repeat those mistakes – even as their own (and our own) economic annihilation looms directly ahead.

Thus do our own governments clearly pass the boundary between mere (gross) incompetence and overt betrayal.  We do not have “bad government”; we have Traitor Governments, led by casts of treasonous politicians. It is not that our politicians are incapable of doing what is in our best interests (despite appearances); it is that they refuse to do what is in our best interests.

Nowhere is this clearer than with respect to “fiscal responsibility” – in the real world. In the real world; there is a very specific formula which applies to financial management: the larger the debt-load any person (or entity) carries over a long-term basis, the larger the revenue-stream they must generate to service that debt-load. The failure to maintain an adequate revenue-stream (i.e. tax base) does not merely suggest future insolvency; it guarantees it, as a simple fact of arithmetic.

Yet as our Traitor Governments followed the Liars and Fools in massively ratcheting up their debts (in real dollars); they not only refused to maintain revenues at a constant level, they have allowed them to collapse. The charts below (based on U.S. data) paint an unequivocal picture once one looks past the numbers based on “official statistics”, and focuses on the real-dollar calculation based upon actual inflation numbers (the green lines).

[charts courtesy of nowandfutures.com]

As was indicated earlier in this piece; we see spending not simply flat, but actually now falling (in real dollars). This reduction in real spending comes despite massive increases in military spending, corporate subsidies, and (or course) interest payments to the One Bank. In other words, actual spending on the American people (and other peoples across the West) has completely collapsed. In this era of neo-fascism; all wealth flows into the pockets of those on top, while the masses receive nothing but rhetoric and lies.

Then we have revenues, where the green line displays two “cliff” formations, coinciding precisely with the beginning of this millennium (and the emergence of neo-fascism). Fascism is an ideology of (criminal) insolvency. Economies (and societies) are plundered by their own governments (on behalf of the oligarchs they serve). Then, once those societies have been squeezed dry; the Fascists will typically start wars against their neighbours.

This late-stage fascism has two goals: warding off internal revolution, and plundering their neighbours’ wealth. This is why fascist regimes will inevitably build-up massive war-machines to defeat/intimidate both their external and internal “enemies” (i.e. its own people).

Fascist hierarchies do not deliberately destroy their own tax base (and thus their own economic viability). Rather, this is an inevitable consequence of their rape-and-pillage mentality – and policies – which such regimes propagate.

The wealthy go virtually un-taxed. The upper middle-class are taxed perniciously, and everyone below that level is squeezed completely dry. With its bottom-up tax base completely destroyed; all fascist regimes produce revenue-cliffs such as we saw in the preceding chart.

With all major Western nations nearly insolvent and many teetering on bankruptcy; how do we reverse these revenue-cliffs? Wealth taxation. Where does (nearly) all the wealth amassed by “wealthy” Western societies – over a span of centuries – now reside? In the hoards of the billionaires; specifically the hoards of the mega-billionaire oligarchs who direct our Traitor Governments. Those hoards now represent the only viable “tax base” for Western societies.

As our Traitor Governments have (ruthlessly) slashed their own labour force, slashed their wages (and in many cases stolen some/most of their pensions), and slashed social programs across-the-board (in real dollars); their mantra has always been the same tired line. “Sorry, it’s nothing personal, but we need the money – and this is best for everyone.”

So now we say to the billionaires (and primarily the mega-billionaires): sorry, it’s nothing personal; but we need your money – most of it – and this is objectively/unequivocally “best for everyone”. Wealth taxation is not simply the “best” taxation policy (and always has); it is the only viable path toward solvency.

Both are own, failed system of taxation and this current revenue crisis have been previously discussed in much greater detail, in previous series’. The logic (and arithmetic) behind the arguments presented here is mathematically irrefutable. At some point; wealth taxation (and a “wealth surtax” for the very wealthy) will have to be accompanied by some systemic Debt Jubilee – unless the billionaires/mega-billionaires want to “donate” all of their hoards to this worthy cause?

Here we see perfect symmetry, as it is the Mega-Billionaires (in the form of “the One Bank”) who are also holding most of the massive IOU’s of our governments; gleeful in the debt choke-holds they possess with these governments. If they tear up these fraudulent IOU’s ($10’s of trillions in Western bond-debt); then perhaps it won’t be necessary to confiscate (via taxation) all of those $trillions which they have illegitimately looted from our societies, and the pockets of each-and-every one of us.

 Jeff Nielson

www.bullionbullscanada.com