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Wednesday, August 18, 2010

Stimulus and Austerity

This State control trick is very offensive. State comedians simultaneously claim "We need to do X!" and "We need to do not X!"

One example is the simultaneous demand for stimulus and austerity. "OMFG! Deflation! Recession! We have to stimulate the economy!" and "OMFG! Inflation! We have to balance the Federal budget!" are two logically incompatible ideas.

It makes no logical sense that, in less than a year, the economy went from "OMFG! Bailout! Stimulus!" to "OMFG! Inflation!"

"Stimulus" is a code word for "Steal via inflation and spend it on pork projects!" "Austerity" is a code word for "Higher taxes!" After the "emergency" passes, the "temporary" tax hike is permanent.

State parasites use an emergency as an excuse to grab more power. The incentive is to create as many emergencies as you can! Government is the one business whose executives can claim "We're failing to do our job! Give us a raise!"

The "Bush tax cuts" are set to expire at the end of this year. This might be the biggest tax hike in American history. Of course, the Democrats and Republicans are going to be unable to reach a deal. Not only will progressive taxation rates return to 2000 levels, but via inflation, you're in a higher tax bracket compared to 2000 for the same real income. By doing nothing, Congress ensures that everyone gets a tax hike.

With progressive taxation rates and inflation, everyone moves up to a higher tax bracket every year! The tax schedules are adjusted according to the CPI, which is far less than true inflation. Then, Congressmen "adjust" the tax schedules, claiming to give everyone a tax cut.

"Austerity" is another excuse to cut pensions. State employee unions can vote as a bloc to prevent serious benefit cuts. However, inflation severely erodes the value of a pension.

Suppose you have a pension of $50k/year and true inflation is 25%. Then, the present value of your pension is only $250k! Inflation severely erodes your pension. Some State employees get a CPI-adjusted pension, which is still far less than true inflation.

"Stimulus" is an excuse for theft via inflation and pork spending. "Austerity" is an excuse for tax hikes and defaults and inflation. Either way, you lose. State comedians go from one emergency to the opposite emergency, to keep the slaves confused. In less than a year, State propaganda went from "OMFG! Stimulus! Deflation!" to "OMFG! Inflation! Tax hikes! Balance the budget!" That makes no sense.

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