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(Government) Spending Is Theft
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Imagine being robbed every time you receive a paycheck, but once a year getting some of the stolen money back because the thieves took more than they intended. Would you be happy about it? If you are like most Americans the answer is yes, since most people are grateful when they get a partial “refund” of the taxes the government withheld from their paychecks. A tax refund means more taxes were taken out of your paycheck than you legally owed — in other words, thanks to withholding you gave the government a no-interest loan.

Withholding, which was supposed to be a “temporary measure” to help finance World War II, is an insidious way of minimizing the pain of, and thus opposition to, taxes. Because people never actually get possession of the money the government withholds, they don’t miss it. Imagine how great public demand for an end to the income tax would be if every month we had to write a check to the IRS.

This year, most Americans are owing less in taxes because of last year’s tax reform. Unfortunately, the benefits of the tax cut are going to be temporary because Congress and the President refuse to cut spending. In the two years that Republicans controlled both houses of Congress and the White House, federal spending increased by approximately 7.5 percent, or around $300 billion. Thanks to the GOP’s spending spree the federal deficit will reach $1 trillion this year, while the federal debt is now over $22 trillion dollars. This does not count the almost $100 trillion in unfunded liabilities which includes over $70 trillion in future Social Security and Medicare benefits.

Spending is going to increase for the foreseeable future. House Democrats have proposed increasing welfare spending by 5.7 percent to $630 billion and warfare spending by 2.1 percent to $664 billion. Many Republicans are complaining that the budget underfunds the military, while progressives say it underfunds domestic programs. Few in DC are willing to cut either welfare or warfare.

Government spending diverts resources from the private sector, thus damaging the economy and lowering our living standards. This is true whether the spending is financed by direct taxes or debt. Deficit spending, and the resulting pressure on the Federal Reserve to monetize the debt, increases the hidden and regressive inflation tax.

Government statistics are manipulated to understate the inflation rate. The Republican tax plan helps government hide the true inflation level by authorizing the use of the chained Consumer Price Index (CPI). Chained CPI makes it easier for the government to understate the effects of inflation by pretending that you are not negatively affected by price increase if, for example, you can still by hamburger instead of steak—even though the only reason you are buying hamburger is because Federal Reserve-caused inflation has made steak unaffordable.

Bill Rice, Jr., writing in The American Conservative, blames CPI manipulation for what he calls “shrinkflation.” Shrinkflation is when producers reduce product size to avoid, or minimize, price increases, so consumers pay more for less.

Tax cuts that are not paired with spending cuts are deferred tax increases. Unless the people and the politicians kick the welfare-warfare habit they will soon face increases in inflation and other taxes. The key to avoiding this is to restore a proper understanding of sound economics and the philosophy of liberty among the people. Politicians will only cut spending when the people stop demanding security and start demanding liberty.

(Republished from The Ron Paul Institute by permission of author or representative)
 
• Category: Ideology • Tags: Government Spending 
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  1. Ron Paul

    I would like to vote for you…I really would…but you are ultimately a Libertarian Kook…..I want a very fair tax system……NO MAN IS AN ISLAND….AND OR A NATION…

    • Troll: Biff
    • Replies: @Charlie Beall
  2. Rich says:

    Sometimes it seems like the US has gone way too far to the left for us to ever get spending under control. Republican candidates for office rarely come out in favor of cutting programs, usually they just want to cut the rate of increase, and if they do campaign on the major cuts we need, they are soundly defeated by an American populace that has become addicted to spending other people’s money. I haven’t given up hope that a Ron Paul type candidate might emerge in the future, I just don’t see any out there right now.

  3. anon[122] • Disclaimer says:

    The answer to Libertarian complaints is the same Libertarian employers offer their employees (while using it as evidence that employment is voluntary): Love it or leave it.

    Leaving America is voluntary. You’re not held here against your will. Go find something better. Just like anybody can do with a job.

    • Replies: @Charlie Beall
  4. Bill Rice says:

    Per Dr. Paul’s column, the government has increased its spending by 7.5 percent the last two years. Yet we are told by the government that inflation has only been about 1.8 percent. So the government has to increase its spending by 4.1 X the rate of “official inflation”. In my own family budget, I have been forced to increase our family’s spending on necessities by about the same rate.

    That is, the government’s spending contradicts its own inflation numbers.

  5. alexander says:

    Dr. Paul,

    The correct solution for the American people is to re-embrace and reapply our founding fathers dictum. “No taxation without representation”.

    Americans should not have to pay one penny toward the cost of wars we were deceived into starting , fighting …or dying for.

    The burden of that heinous war debt should fall directly on the shoulders of all the ruling elites who conspired to defraud us into them.

    They wanted these wars…let them pay for them ….and let them pay …..the whole damn way !

    A referendum , passed into law by overwhelming consensus, like The “War Fraud Accountability Act of 2020” would do just that.

    Retroactive to 2002, it would stipulate than any and all individuals who conspired to defraud us into illegal war be held account to the fullest extent of the law….Let every penny of “their” assets be forfeit , until the cost of “their “wars is paid down…or until they are all flat broke .

    How “Gung-Ho”towards war of aggression would Mr. Bolton be, Dr. Paul, were this the case ?

    How “Gung-Ho” ?

    Accountability for “War Fraud” should be “job one” of the American People …and it should be “Job one” of the next administration.

    Make the belligerent Oligarchs pay….and make em’ pay…the whole damn way !

    • Replies: @Oleaginous Outrager
  6. @alexander

    Yep, voting and referendums will stop them, just like with Brexit!

    • Replies: @alexander
  7. @War for Blair Mountain

    No Such thing as a “very fair tax system” has ever existed, nor will it ever exist. Arbitrary direct taxation of labor is theft and the lifeblood of abusive power. Period. Stealing bread from the mouth of labor is evil. There will always be an overwhelming majority of socio-economic idiots who believe in the legislation and enforcement of collective “fairness” by a philosophical ruling elite. Who decides the “very fair” level of theft? Truth is that America is not worthy of Ron Paul’s integrity, kindness, intelligence, and wisdom. Apologists for unrestricted government power to tax are the enemies of freedom and personal responsibility . Charity works when it is voluntary and flows from the hands and heart of the individual, not from the barrel of a government gun.

  8. alexander says:
    @Oleaginous Outrager

    Well,

    It all depends on the force of the will of the people….If you have a referendum passed into law…and 200 million Americans ringing up their congressman and the Attorney General demanding they enforce it….Yep, it will be enforced.

    Simply “voting” for the candidates who might “say the right things” on the campaign trail doesn’t seem to add up to much, these days,…especially in terms of “accountability”.

    Having the majority of taxpayers demanding it,…..every single day,……that just might.

    • Replies: @Oleaginous Outrager
  9. @anon

    Conquest and exploitation are the genesis and raison d’etre of every nation state. The United States is no exception. It is a predatory economic system operated by a ruthless, unaccountable, central power structure defended by legions of mercenary state enforcers. The referenced libertarian employers have it right, and should not be compelled to accommodate concepts of labor relations that are antithetical to the private company’s operating tenets, so long as those tenets do not violate the natural rights of its employees–natural rights concomitant with and enshrined in the Bill of Rights. Unlike voluntary employment with private companies that are subject to the rule of law, governments are sustained by violent force and direct taxation by which they control and exploit the brain-washed, productive ‘citizens’ fenced on their economic plantations. You suggest that when abused by his government the citizen can just leave, the same recourse being available in an unacceptable employer relationship. The problem with your thesis is that Americans are, in fact, ‘held against their will’. Try to expatriate and you will feel the government boot on your neck, and will experience the financial pain visited upon you by the U.S. state. You will not be allowed to ‘just leave’ the plantation. You will be summarily introduced to the ‘Exit Tax’, a compulsory levy imposed on the value of your accumulated assets and lifetime of retained after-tax earnings, before you’re allowed to ‘just leave’. Then decide whether to leave, or stay and fight for what is yours.

  10. @Charlie Beall

    It’s not that simple…..Most sane people understand the necessity of taxation…fair taxation…without it…goodbye Civilization…..

    For the record…I am for the abolishment of the regressive property tax…the alternative is taxing multimillionaires and billionaires at a higher rate than the NATIVE BORN WHITE AMERICAN WORKING CLASS…the property tax is an utterly savage evil regressive tax….

  11. @War for Blair Mountain

    The Tax Bill of a Nation is going to be paid one way or another…It must be paid in a fair nonregressive way….it can be very difficult at times to take Libertarians seriously…

  12. @War for Blair Mountain

    Last comment. ‘Fair Taxation’ is an oxymoron. Intelligent, informed, and ‘sane’ people don’t try to rationalize direct taxation of a person’s labor or property as anything other than what it is, theft. It is an arbitrary, violent concept of expropriation employed by every tyrannical government power structure. The American colonist survived and prospered absent direct taxation, and fought a war to prevent it from being imposed on them. Governments need limited revenue to perform the legitimate functions of the state, i.e., the protection of private property and human rights, and the administration of justice. However, ‘direct’ taxation is required to sustain the standing armies and largesse of the huge social welfare state. Contrary to your theory of taxation, there simply aren’t enough multimillionaires and billionaires to carry the monolithic American welfare state, with $25 trillion in short-term debt and $100 trillion in unfunded liabilities. The reason the ‘native born white working class’ is in debt up to its throat is because of the insatiable, tax funded welfare/warfare culture that has consumed America. Up until the mid-20th century, a significant majority of immigrants came to America for freedom and the opportunity to ‘earn’ a better life for themselves and their families. And they were strongly predisposed to assimilate–but, no longer. The driving force behind the recent flood of immigrants to America has been the easy access to government aid. From short order cooks and factory workers, to middle class white collar professionals, the American working population in the ‘private sector’ is carrying the burden of direct taxation to support the parasitic, tax consuming class of people (of all colors) who consistently take more than they give. Don’t let race cloud your thinking on the matter. ‘Indirect’ taxation on consumption, with exemptions for the necessities of life, and administered by competent, closely monitored public ‘servants’, is the only ‘fair’ taxation system. The honest message of Ron Paul notwithstanding, there just aren’t enough ‘sane’ Americans left who understand that inescapable truth.

  13. Big Government for Whom?
    by Howard Zinn
    The Progressive magazine, April 1999

    I have seen some of my most stalwart friends flinch before the accusation that they-in asking, let us say, for a single payer health care system-were calling for “big government.” So insistent has been the press and the political leadership of the country-in both parties-that “big government” is a plague to he avoided, that otherwise courageous people on the left have retreated before the attack.
    It’s an issue, therefore. that deserves some examination.

    When Bill Clinton, in his 1996 campaign, announced happily that “the era of big government is over,” he was suggesting that the United States had gone through an unfortunate phase that was now ended.
    He was repeating the myth that there once was a golden past where the “free market” reigned and the nation followed Jefferson’s dictum: ‘that government is best which governs least.”

    Big government has been with the world for at least 5()() years, and became very big in this country (Jefferson never followed his own pronouncement, as he doubled the territory of the government with the Louisiana Purchase).

    It was the rise of the modern nation state in the sixteenth century that introduced big government to centralize the tax system and thus raise enough money to subsidize the new worldwide trading organizations, like the Dutch East India Company and the British East India Company. Both of these companies were granted government charters in about 1600, giving them monopoly rights to maraud around the world, trading goods and human beings, bringing wealth back to the home country.

    The new nation states now had to raise armies and navies to protect the shipping trade (especially the slave trade) of these powerful companies, to invade other parts of the world, to forcibly take land, for trading and settling, from indigenous people. The state would use its power to drive out foreign competitors, to put down rebellions at home and abroad. “Big government” was needed for the benefit of the mercantile and land-owning classes.

    Adam Smith, considered the apostle of the “free market,” understood very well how capitalism could not survive a truly free market, if government was not big enough to protect it. He wrote. in the middle of the eighteenth century: “Laws and governments may be considered in this and indeed in every case, a combination of the rich to oppress the poor, and preserve to themselves the inequality of the goods, which would otherwise be soon destroyed by the attacks of the poor, who if not hindered by the government would soon reduce the others to an equality with themselves by open violence.”

    The American colonists, having fought and won the war for independence from England, faced the question of what kind of government to establish. In 1786, three years after the treaty of peace was signed, there was a rebellion of farmers in western Massachusetts, led by Captain Daniel Shays, a veteran of the war. The uprising was crushed, but it put a scare into those leaders who were to become our Founding Fathers. After Shays’s Rebellion, General Henry Knox warned his former commander, George Washington, about the rebels: “They see the weakness of government; they feel at once their own poverty, compared to the opulent, and their own force, and they are determined to make use of the latter in order to remedy the former. Their creed is that the property of the U.S. has been protected from the confiscations of Britain by the joint exertions of all, and therefore should be the common property of all.”

    The Constitutional Convention in Philadelphia for 1787 was called to deal with this problem, to set up “big government,” to protect the interests of merchants, slave-holders, land speculators, establish law and order, and avert future rebellions like that of Shays.

    When the debate took place in the various states over ratification of the Constitution, the Federalist Papers appeared in the New York press to support ratification. Federalist Paper 10, written by James Madison, made clear why a strong central government was needed: to curb the potential demand of a “majority faction” for “an equal division of property, or for any other improper or wicked object.”

    And so the Constitution set up big government, big enough to protect slave-holders against slave rebellion, to catch runaway slaves if they went from one state to another, to pay off bondholders, to pass tariffs on behalf of manufacturers, to tax poor farmers to pay for armies that would then attack the farmers if they resisted payment, as was done in the Whiskey Rebellion in Pennsylvania in 1794. Much of this was embodied in the legislation of the first Congress, responding to the request of the Secretary of the Treasury, Alexander Hamilton.

    For all of the nation’s history, this legislative pattern was to continue. Government would defend the interests of the wealthy classes. It would raise tariffs higher and higher to help manufacturers, give subsidies to shipping interests, and 10() million acres of land free to the railroads. It would use the armed forces to clear Indians off their land, to put down labor uprisings, to invade countries in the Caribbean for the benefit of American growers, bankers, investors. This was very big government.

    When the Great Depression produced social turmoil, with strikes and protests all over the nation, the government responded with laws for Social Security (which one angry Senator said would “take all the romance out of life”), unemployment insurance, subsidized housing, work programs, money for the arts. And in the atmosphere created by the movements of the sixties, Medicare and Medicaid were enacted. Only then did the cry arise, among politicians and the press, continuing to this day, warning of the evils of “big government.”

    Of course, the alarms about “big government” did not extend to the enormous subsidies to business. After World War 11, the aircraft industries, which had made enormous profits during the war (92 percent of their expansion paid for by the government), were in decline. Stuart Symington, Assistant Secretary of the War for Air, wrote to the president of Aircraft lndustries: “It looks as if our airplane industry is in trouble, and it would seem to be the obligation of our little shop to do the best we can to help.” The help came and has never stopped coming. Billions in subsidies poured in each year to produce fighters and bombers.

    When Chrysler ran out of cash in 19~3(), the government stepped in to help. (Try this the next time you run out of cash.) Tax benefits, like the oil-depletion allowance, added up over the years to hundreds of billions of dollars. The New York Times reported in 1984 that the twelve top military contractors paid an average tax rate of 1.5 percent while middle-class Americans were paying 15 percent and more.

    So it’s time to gently point out the hypocrisy as both Democrats and Republicans decry “big government.” When President Clinton signed the crime bill to build more federal prisons, when recently he
    called for billions more for the military budget, he did not refer to his declaration that “the era of big government is over.”

    Surely, with only a bit of reflection, it becomes clear that the issue is not big or little government, but government for whom’? Is it the ideal expressed by Lincoln-government “for the people”-or is it the reality described by the Populist orator Mary Elizabeth Lease in 189(): “a government of Wall Street, by Wall Street, and for Wall Street”‘?

    There is good evidence that the American people, whose common sense often resists the most energetic propaganda campaigns, understand this. Political leaders and the press have pounded away at their sensibilities with the fearful talk of “big government,” and so long as it remains an abstraction, it is easy for people to go along, each listener defining it in his or her own way. But when specific questions are asked, the results are illuminating.

    Again and again, public opinion surveys over the last decade have shown that people want the government to act to remedy economic injustice. Last year, the Pew Research Center asked if it is “the responsibility of the government to take care of people who can’t take care of themselves?” and 61 percent said they either completely agreed or mostly agreed. When, after the Republican Congressional victory in 1994 The New York Times asked people their opinions on “welfare,” the responses were evenly for and against. The Times headline read: PUBLIC SHOWS TRUST IN GOP CONGRESS, but this misled its readers, because when the question was posed more specifically: “Should the government help people in need?” more than 65 percent answered in the affirmative.

    This should not surprise us. The achievements of the New Deal programs still glow warmly in the public memory: Social Security, unemployment insurance, the public works programs, the minimum wage, the subsidies for the arts. There is an initial worried reaction when people are confronted with the scare words “big government.” But that falls away as soon as someone points to the G.l. Bill of Rights, Medicare, Medicaid, food stamps, and loans to small business.

    So let’s not hesitate to say: We want the government, responding to the Lincolnian definition of democracy, to organize a system that gives free medical care to everyone and pays for it out of a reformed tax system that is truly progressive. In short, we want everyone to be in the position of U.S. Senators and members of the armed forces-beneficiaries of big, benevolent government.

    Because “big government” in itself is hardly the issue. That is here to stay. The only question is: Whom will it serve?.

  14. anon[642] • Disclaimer says:

    if Ron Paul had won we might be auditing the Fed right now

    and various hooknoses might be fleeing to israel

  15. buckwheat says:

    Paul sure talks a good game but as far as meaningful action talk is cheap………..

  16. @alexander

    200 million Americans ringing up their congressman

    That some vivid fantasyland you’re living in. That’s twice the highest voter turnout in a century, and you certainly are never going to motivate even a tiny percentage of Americans to demand anything “every single day”.

    • Replies: @alexander
  17. alexander says:

    Fantasy land, ….Hmmm…Perhaps.

    If anything it is a tad low on the estimate.

    Don’t think so ?

    Maybe we should work it backwards…

    Of the 328 million Americans in the United States today,…exactly How many enjoy being defrauded out of their money ?

  18. alexander says:
    @Oleaginous Outrager

    I replied to you on comment #17.

    Maybe we should take a nationwide poll….

    ” If you were LIED into war…who should pay for it….YOU….or the LIARS ?”

    Or .

    “Because the America taxpayers were DEFRAUDED into committing “illegal war of aggression” we are now 22 trillion dollars in heinous debt…….WHO SHOULD PAY FOR IT ……the “defrauders”….. or their victims ?”

    • Replies: @alexander
  19. alexander says:
    @alexander

    For the record, I think that the title of this article is not correctly worded.

    Government spending is “not” theft,..when the government is doing its job.

    What IS the governments job, you may ask ?

    Easy.

    “Provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity.”

    The role of government is NOT to defraud us into war…. and bankrupt the nation.

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