Is wealth redistribution America’s future?

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As worldwide economic meltdown continues, and the cost of the U.S. bailout/”rescue” soars, the question looms: how will government pay even the short-term costs? Political candidates are not addressing this issue.

The make-somebody-else’s-children-pay-later strategy may soon reach the ultimate limit. Somebody has to load money into the Treasury now. Investors have been fleeing to the supposed safety of U.S. Treasuries, but how much debt can even a superpower accumulate before would-be creditors begin to worry about repayment?

The take from income taxes depends, of course, on the amount of income people have. If that isn’t enough, what next?

France and a number of other welfare states have a net wealth or “solidarity tax.” In 1999, Donald Trump once proposed a one-time net worth tax of 14.25% on individuals and trusts worth $10 million or more, claiming it would generate $5.7 trillion, which could be used to pay the national debt—before it got swollen by the bailout/”rescue.” This is not likely to be indexed to inflation.

No political candidates, of course, are publicly announcing a plan to confiscate assets. However, in a 2001 Chicago Public Radio interview, Barack Obama signaled his approval of wealth redistribution—and said it was a tragedy that the civil rights movement did not accomplish that. A tape including Obama’s discussion of using legislative or legal means to force redistribution is posted on the Drudge Report.

Of particular note was Obama’s answer to an audience member, probably a small businessman, who said, “Your plan’s gonna tax me more, isn’t it?”

“It’s not that I want to punish your success,” Obama said. “I just want to make sure that everybody who is behind you, that they’ve got a chance at success too. I think than when you spread the wealth around, it’s good for everybody.”

This doesn’t sound like the redistribution of wealth from the foolish to the prudent that occurs in a free market when a bubble bursts, but rather government redistribution, bailing somebody out of trouble by putting somebody into trouble, with a hefty “toll for the troll,” as Arthur Laffer describes recent government panic reactions (“The Age of Prosperity Is Over,” Wall St J 10/27/08).

Obama’s remarks are compatible with Marxist ideology—and he has yet to disavow the ideas of his Communist associates (Wes Vernon, RenewAmerica 5/28/08, Cliff Kincaid, Schwarz Report, October 2008).

“Whenever people make decisions when they are panicked, they are rarely pretty,” writes Laffer.

The election is occurring in a time when panic may be just beginning:

  • A front-page article in the overseas edition of the People’s Daily said Asian and European nations should banish the U.S. dollar. “The grim reality has led people, amidst the panic, to realize that the United States has used the U.S. dollar’s hegemony to plunder the world’s wealth,” said Shi Jianxun of Shanghai’s Tongji University (Reuters 10/24/08).
  • The dollar rally, in the face of deteriorating fundamentals, has been called a “death dance.” The gap between the paper gold market and physical gold market is widening. In Toronto, a multimillion-dollar off-market transaction in physical gold involved paying $1,075 per ounce—settled in euros. Foreigners may force changes causing the U.S. dollar to lose its global currency status. A freeze in short-term credit could interfere with distribution channels of railways and truckers in the U.S. (Jim Willie, Hat Trick Letter 10/23/08).
  • The Federal Reserve is inflating at 341% per annum. Banks are buying Treasury debt; the Treasury spends the money. Businesses must compete with the Treasury to get money. Without productivity, it is not possible to emerge from a recession (Gary North 10/24/08). See charts from Federal Reserve Bank of St. Louis and other sources.
  • A £516-trillion derivatives “time bomb” is ticking away. Warren Buffet called derivatives “financial weapons of mass destruction” (Independent 10/12/08).

Apparently, both parties hope that the day of reckoning can be postponed until after November 4.

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3 Comments

  1. Throughout history societies have gone from bondage, to faith & inspiration, to heroic growth & freedom, to complacency and back to bondage, usually within 200 years. America’s time is over. Like it or not, we ARE a redistributionist economy. People have learned how to manipulate government to get unearned money from others. Now that the government has spent a trillion dollars to nationalize the banking industry, the last piece is in place. Socialized medicine suddenly becomes the least of our worries. Will we be in servitude to the next super power, China? Freedom, independence and self-reliance are only quaint memories now. There is no popular support for such ideas, they’re not “practical”. Batten down the hatches, do the best that you can for yourself and your children, and watch the decline and fall of the American empire. I see no one on the horizon who can change the tide.

  2. “The Federal Reserve is inflating at 341% per annum. Banks are buying Treasury debt; the Treasury spends the money. Businesses must compete with the Treasury to get money. **Without productivity, it is not possible to emerge from a recession** (Gary North 10/24/08).” [Emphasis added]

    I had viewed charts from St. Louis FRS bank a few weeks ago, so was not surprised by North’s column. However this is the type information that I think the vast majority of people do not get from mainstream media or they do not understand what they hear/read (thanks to a lot of economic jargon by many economists and writers). Without productivity beyond the amount needed for current maintenance needs, which people (individually or as as association, eg. a business) then put into savings (typically, the bank, credit union, mutual funds, stocks, commercial bonds, etc.), there can be no real money (value) to be loaned out to those capable of repaying because they have in turn been productive of value. The fact that governments are putting out more currency (simply printing) of whatever the country, and putting it into the society via the central banks’ “loans” to commercial banks is *not* an increase in value (productivity). It is merely an inflation of the existing currency – a devaluation of it. But the first people getting those new dollars (euros, pounds, peso, yen, etc.) do not experience the lesser value; the rise in prices of everything else will not yet have occurred.

    Those individuals who have always saved a portion of their income (~>/=5-10%) over what was spent on consumables and asset acquisition, have been among the most productive in a society. It is an indicator of the short range thinking of large numbers in the US that so few in the population have been in this group – and one of the reasons for this very negative economic situation. The US government has contributed to this spend-spend society with its very low central bank (Federal Reserve System) loans for the past 6 years – and in previous initiations of bubbles. And then there has been legislation like the CRA (Community Reinvestment Act, 1977) with its encouragement/extortions of banks to make loans to individuals/companies of more risk they would not ordinarily have assessed as acceptable. (For more.)

    Yes, from what I have read the 2 major candidates for President have ignored in their speeches the crux of the major economic problems in the US, for which they as federal legislators are a part of the cause – but it’s been generations of legislators in the making, however only with the actions of government enforcers.

    The fairly long held idea (mostly in the last ~100 years) that government “makes money” to then be redistributed is an enormous ponzi scheme, fast approaching collapse – economically and socially under the arrangement that has been evolving in the US over the past 200 years. That social arrangement was unstable at inception but has become only apparent to many rather recently, even though at its creation it was far better than what existed elsewhere in the world – and even with its deterioration is still better then most of what exists now. Unfortunately, this last is not saying much. However, this arrangement is not all that there can be; but a really meaningful change will take a paradigm shift in thinking about how social order is attainable without the rule of some by others, which has been the scheme for all of history in virtually all of the world.

    The nature of human beings does not automatically lead to the conclusion that individuals must be ruled by others in order that there be orderly interactions between them. Society, just like any other natural system can be naturally self-regulating by means of interactions between its members, if only humans seek to discover and are allowed to implement the methods by which such self-regulation can be effective, rather than continuing to embrace social systems that need to be constantly held in an unnatural (and very non-optimal) state of balance by the operations of their rulers and other influencers. Individual self-order without rule by others is the social system whose members are humans, who have become fully adult. Just as people can become physical adults, so can they become social adults – if only they are allowed (and even required in the sense that they will not achieve their desires unless they do) to socially mature sufficiently.

    **Kitty Antonik Wakfer
    Casa Grande AZ

  3. No doubt about it Obama has predicted between the lines he plans on numerous entitlement programs–likely redistribution in numerous ways.
    Am a forensic profiler as well as psychiatrist and prev profiled Clinton on nat tv
    See my profile of Obama on website: americasstrugglewithsuccess.com
    (my other side: deeperintelligence.com explains basis for work)

    Have enclosed recent article below

    “I Don’t Want to Punish your Success”: It’s Obama’s Success Problem Stupid

    10/28/2008 6:17:38 AM

    The media is abuzz with Obama’s recent “share the wealth” comment to Joe the Plumber. But the first part of his comment in the end may be far more revealing, “I don’t want to punish your success, I just want to share the wealth.” “Punish your success” offers a far broader picture of what Barack Obama is really all about. (And rarely have we seen a better example of how denial reveals the truth of a matter—taking wealth from a person and giving it to someone else who hasn’t earned it indeed punishes the successful person.)

    In America, the land of opportunity, the one rule we run on is you earn your success. You make your own breaks, as the farmer teaches us “You say Amen (to God’s blessings) with your hoe.” Obama’s idea of punishing someone’s success provides a rich snapshot into his entire mindset: his entitlement plans to share the wealth will punish America, and we find hints of other ways he’ll punish America. Remember his mentor Jeremiah Wright thought America badly needed to have its success thwarted—“God damn America” he preached from the pulpit, we had 9/11 coming. Despite Obama’s reflexive cover-up rejection of Wright he knew full well what Wright was all about for years—making Wright in essence his proxy mouthpiece. (Reminds us of his friend Bill Ayers, one of the Weathermen radicals who blew up government buildings, but of course Obama denounces him, too, yet somehow he keeps picking these radical friends.)

    In the end Obama is all about denying himself success because his success will be tied up with America’s success. If he brings us down several notches or worse, he fails. Why we wonder could Obama be a secret self-sabotager who in the end really can’t allow himself to succeed? The answer is not difficult. When your father walks out on you when you’re two, it leaves you with a huge empty hole deep inside you as Obama himself has told us, leaves you feeling like anything but successful–like a big time loser if the truth be known. Leaves you, too, wanting to damn him with everything inside you, because he left you feeling damned.

    Then the picture of the adult Obama—ever still the wounded child—comes into focus. And we can understand why a Jeremiah Wright would resonate so with him. What a perfect substitute blasting away at the fatherland (America) instead of the father1—instead of blaming the black father what better scapegoat than the white fatherland. Remember Wright called America the “US-KKK-A,” continually making disparaging comments about white Americans and accusing the U. S. Government of manufacturing the AIDS virus to kill black people. Somewhere in the back of young Barry Obama’s mind, he easily could have concluded that if the U.S. hadn’t had racial problems in the 1960’s his black father might never have left him.

    If we think Obama won’t play a losing hand as president, we need to hear columnist Thomas Sowell who observed that Obama’s policies—both economic and foreign—are straight out of the past and both had disastrous results:

    “Protecting criminals, attacking business, increasing government spending, promoting a sense of envy and grievance, raising taxes on people who are productive and subsidizing those who are not—all this is a rerun of the 1960’s. We paid a terrible price…soaring crime rates, double digit inflation, and double-digit unemployment.” And speaking of Obama’s international plans—“including the media magic of meetings between heads of state…that approach, in the name of peace, is what led to the most catastrophic war in human history.” 2

    When all is said and done, Obama fits the classic fear of success/ sabotage success syndrome. In the next article we will explore another major clue to his success problems—his deep sense of entitlement.

    Yet we must remember American voters are the ones who will be putting him in power, revealing how many of us are trying to sabotage America’s success. One lesson from history where national self-sabotage has replicated from nation to nation like a plague—it’s virtually all unconscious. Success blind spots are the biggest blind spots of all. Success is the slipperiest slope of all.

    One last thing. As a forensic profiler and therapist, I know how valuable denial (such as “I don’t want to take away your success”) can be—all too often a verbal marker of exactly how a person unconsciously reveals the truth. Start paying attention to Obama’s denials and you’ll learn a lot about the man—and his limited dreams for America. You’ll learn the same thing from his images such as another seemingly casual comment in reference to our energy problems, “We can’t always have the thermometer at 73.” Translation: Obama is warning us he intends to cut down America’s power.

    1 Obama did exactly that in his autobiography greatly criticizing the Founding Fathers. See Profile, Part 8.

    2 “Obama offers change for worse,” Thomas Sowell, September 3, 2008.