OT: Tyranny of Control, Guns, Cancer, BMI, etc.
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kt
Since 16 Mar 2005
764 Posts
Portland, Or
Opinionated
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 Thu Jan 24, 13 11:25 am |
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Confiscated, are you serious? You really think that the government is confiscating your money? Just taking your money for no good reason at all. Healthcare, safety net for others not as fortunate as you, roads, bridges, military, schools, parks etc...
Should we just have no government at all and all live the pioneer life? Every man for himself and all the guns we can carry. Boy, that sounds like a great world. Didn't hear you complaining about taxes while Bush was in office.
| Hein wrote: |
With every dollar confiscated through taxation and
by every law and regulation imposed by the government,
the level of freedom is reduced.
I'll bet we run out of freedom before we run out of atmosphere. |
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BigR
Since 05 Jul 2005
372 Posts
White Salmon
Obsessed
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| Thu Jan 24, 13 12:13 pm |
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| Quote: | | Confiscated, are you serious? You really think that the government is confiscating your money? |
Yes.
It is called Financial Repression.
The Mechanics Of Financial Repression
The specifics of financial repression took somewhat different forms in each of the advanced economies, but they shared four characteristics: 1) inflation; 2) governmental control of interest rates to guarantee negative real rates of return; 3) compulsory funding of government debt by financial institutions; and 4) capital controls.
1) Inflation. First and foremost, a government that owes too much money destroys the value of those debts through destroying the value of the national currency itself. It doesn't get any more traditional than that from a long-term, historical perspective. Without inflation, Financial Repression just doesn't work. Historically, the rate does not have to be high so long as the government is patient, but the higher the rate of inflation, the more effective financial repression is at quickly reducing a nation's debt problem.
http://www.imf.org/external/np/seminars/eng/2011/res2/pdf/crbs.pdf
For example, per the Reinhart and Sbrancia paper, the US and UK used the combination of inflation and Financial Repression to reduce their debts by an average of 3-4% of GDP per year, while Australia and Italy used higher inflation rates in combination with Financial Repression to more swiftly drop their outstanding debt by about 5% per year in GDP terms. As the crisis is much worse this time around, a substantially higher rate of inflation than that experienced in the 1945 to 1980 period is going to be necessary.
2) Negative Real Interest Rates. In a theoretical world, some would say that governments can't inflate away debts because the free market would demand interest rates that compensate them for the higher rate of inflation. Sadly, this theoretical world has little to do with the past or present real world.
In the past (and all too likely in the future), there were formal government regulations that determined the maximum interest rates that could be paid.
So long as the Federal Reserve keeps control, there is no need for explicit interest rate controls. However, should the Fed begin to lose control, there is a strong possibility that interest rate controls will return to the US financial landscape, with similar regulatory controls being re-imposed in other nations.
3) Involuntary Funding. With this popular component of Financial Repression, the government establishes reserve or "quality" requirements for financial institutions that make holding substantial amounts of government debt mandatory - or at least establish overwhelming incentives for financial institutions such as banks, savings and loans, credit unions and insurance companies to do so. Of course, this is publicly phrased as "mandating financial safety", instead of the more accurate description of mandating the making of investments at below market interest rates to help overextended governments recover from financial difficulties.
This involuntary funding is sometimes described as a hidden tax on financial institutions, but let me suggest that this perspective misses the important part for you and me. Because all financial institutions operating within a country are required to effectively subsidize this liquidation of government debt by accepting less than the rate of inflation on interest rates, the gross revenues of all financial institutions are depressed, and therefore less money can be offered to depositors and policyholders. Because financial institutions make their money not on gross revenues, but on the spread between what they pay out and take in, then arguably, financial institution profits are not necessarily reduced, rather the guaranteed annual loss in purchasing power is passed straight through to depositors and policyholders, i.e. you and me.
As an example, if a fair inflation-adjusted return were 8%, and the spread kept by the financial institution was 2%, then we as investors would get 6%. If financial institutions, through involuntary funding, are uniformly forced to accept a 3% return on the government debt that must constitute a big portion of their portfolios, then they still keep 2%, but only pass through 1%. So the financial institution keeps 2% either way, and we as savers are the ones who ultimately pay this "hidden tax" in full, by getting a repressed 1% instead of a fair market 6% return.
4) Capital Controls. In addition to ongoing inflation that destroys the value of everyone's savings and thereby the value of the government's debts, while simultaneously making sure that interest rate levels lock in inflation-adjusted investor losses on a reliable basis, there is another necessary ingredient to Financial Repression: participation must be mandatory. Or as Reinhart and Sbrancia phrase it in their description / recipe for Financial Repression, it requires the "creation and maintenance of a captive domestic audience".
The government has to make sure that it has controls in place that will keep the savers in place while the purchasing power of their savings is systematically and deliberately destroyed. This can take the form of explicit capital and exchange controls, but there are numerous other, more subtle methods that can be used to essentially achieve the same results, particularly when used in combination. This can be achieved through a combined structure of tax and regulatory incentives for institutions and individuals to keep their investments "domestic" and in the proper categories for manipulation, as well as punitive tax and regulatory treatment of those attempting to escape the repression. A carrot and stick approach in other words, to make sure behavior is controlled. |
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Hein
Since 08 Mar 2005
1314 Posts
Possessed
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pjc
Since 06 Mar 2005
649 Posts
Addicted
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quenyaistar
Since 21 Oct 2011
416 Posts
Cougar, WA
Obsessed
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| Thu Jan 24, 13 4:06 pm |
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People like to say, I want to be Free. Sorry, that is not viable people are just too stupid, selfish, greedy, ignorant, bullyish etc... not to mention to damn many
We gotta be checked for our own good, and thats where govt comes in. I used to think if you earned it you should keep it, as I have gotten older it is plain to see that just will not work.
Studies have shown folks do not get any happier if their income exceeds 80 grand a year, that says to me we need more folks making 80 grand a year, and we should be taxing folks, for thier own good, so they do not exceed that 80 grand a year.
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pjc
Since 06 Mar 2005
649 Posts
Addicted
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| Thu Jan 24, 13 4:18 pm |
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don't tax you.
don't tax me.
tax that fellow.
behind the tree. |
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pkh
Since 27 Feb 2005
6549 Posts
Couve / Hood
Honored Founder
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Hein
Since 08 Mar 2005
1314 Posts
Possessed
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| Thu Jan 24, 13 6:11 pm |
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It looks like I was suckered. But who knows?
An entertaining thread, none-the-less.
And I'm glad it didn't get locked due to personal insults.
That's a step in the right direction. |
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pjc
Since 06 Mar 2005
649 Posts
Addicted
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| Thu Jan 24, 13 9:37 pm |
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you were only suckered if you sent him $400K out of pocket to save the life of a loved one, as others have done.
if you changed your mind based on compelling arguments of others than you're the opposite of a sucker |
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Weaz
Since 23 May 2012
360 Posts
Beaverton
Obsessed
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| Thu Jan 24, 13 11:01 pm |
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A little late for the veggie comments but I have to
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Occupied Columbia
Since 12 Nov 2011
376 Posts
Columbia City
Obsessed
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| Thu Jan 24, 13 11:55 pm |
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| Thanks for the b12 weaz. |
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sundayfunday
Since 08 Aug 2012
11 Posts
United States, FL
New Member
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| Fri Jan 25, 13 4:44 am |
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Big R-
Very well said...can you comment on the fiat system and how it relates to Financial Repression? |
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Lurk
Since 04 Apr 2009
355 Posts
Obsessed
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| Fri Jan 25, 13 9:13 am |
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PJC totally agree, but if your thinking vegan is a cure for cancer, that is not been established by science.
Again, for the average person eating meat on occasion presents no problem for the healthy person. If you want to deny yourself meat cheese dairy, go for it, you may live a little longer, but you will have missed out on one of the few pleasures we have daily, eating. The french know this and consume less portions but rich in cream, cheese meat etc. Yet they are FAR healthier than americans overall. Its portion size and quality of the food they eat. We were meant to eat a very wide variety of foods.
Its ok to take big risks in outdoor sports in the gorge, but damnit don't eat the snickers afterward??? |
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Occupied Columbia
Since 12 Nov 2011
376 Posts
Columbia City
Obsessed
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| Fri Jan 25, 13 9:29 am |
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| Lurk wrote: | PJC totally agree, but if your thinking vegan is a cure for cancer, that is not been established by science.
Its ok to take big risks in outdoor sports in the gorge, but damnit don't eat the snickers afterward??? |
I'm not a Doctor and I don't play one on Kiteboarding forums. I never said cure. But it is possibly and likely a valid treatment. If you truly have or have had cancer read the china study. look at the rat + cheese casein study. The science is out there. But because Vegetable growers don't spend millions on advertising doesn't make it not true.
I eat Cliff Bars. |
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Lurk
Since 04 Apr 2009
355 Posts
Obsessed
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| Fri Jan 25, 13 1:22 pm |
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PJC: I have and better yet people a lot smarter than me have also, they called the study interesting but flawed in its methods..
What is so hard to understand on forums:
1. Life is not black and white, causation is far more more complex.
2. Forums always point to simple answers to complex questions.
3. The internet loves conspiracy
Yes our government is controlled by special interests. If Hein could understand how our system works, he would give up the rants and see moderate solutions, not just conspiracy.
Whole foods makes a killer bar.
If you want almost no government move to Somalia or Yemen. Everyone has a gun and you will have a job as a pirate. |
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kitebot
Since 20 Feb 2007
251 Posts
Obsessed
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| Fri Jan 25, 13 3:37 pm |
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| Well said Lurk. |
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pjc
Since 06 Mar 2005
649 Posts
Addicted
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| Fri Jan 25, 13 3:40 pm |
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all im saying is that weird texas cancer doc is charging people vast sums out of pocket for a non-scientific method. he sucks, imho.
also, veggies are good for you. conventional veggies, organic veggies, fresh, frozen, from a can, whatever, you're probably not eating enough veggies. if you think "i'd eat more veggies, but the fresh local organic are so expensive and the normal stuff from the grocery store is going to give me cancer" you're also a sucker.
i've known organic farmers that basically tell people that. those dudes are lame too.
i've eaten salads in paris france that cost 40 buck. i've eaten frozen veggies from the grocery store that cost 30 cents a serviing. frankly, i think the latter taste better, but i'm a kick butt cook, and nobody is smoking in my house so it smells better than a paris cafe.
all im saying. |
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