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Sunday, November 8, 2009

Pournelle: Mourn the Republic

From Jerry Pournelle, via Instapundit:

Health Care Bill Day

Unemployment is over 10%. It wasn't supposed to get that high. TARP was supposed to fix that.

Meanwhile today may be the most important vote in Congress since the days of the New Deal. If the health care bill passes, it will fundamentally convert these United States into a different kind of popular democracy, which generally means rule by a unionized bureaucracy organized to vote. Once that much of the economy is run by government, economic recovery as many hope for will simply be impossible.

Permanent unemployment at 7% or so; median income perhaps 10% higher than it is now, but not much higher; and a long period of stagflation. Reluctance to take on new employees, and great incentive to export jobs. Is this a picture of the future? We will have to see, as Congress debates the health care and carbon tax bills.

One of the big debating points is over abortion. That is certainly in important moral point, but the creation of an enormous entitlement overshadows it. At least under this bill, illegal immigrants can't be jailed for not buying government approved health insurance. The rest of us can be. I have no idea what happens to those my age. I gather that it pretty well eliminates the Medicare Advantage that pays most of my Kaiser dues. This all promises to be interesting.

With Detroit a ruin and manufacturing industries on the ropes, small business is the only possible engine of recovery from what they don't call a Depression; so the Congress is going to add an 8% tax on employing people. We already have the longest period of increasing unemployment since the Great Depression; I presume we are going for a really big record setting period of increasing unemployment.

What incentives people have to invest and create new jobs in this environment is pretty murky now; with the health bill there will be fewer incentives to invest in new jobs in the US. The incentives are now to the job black market -- hire illegal immigrants who don't have to have health insurance -- or to export the job if that can possibly be done.

Meanwhile the credit index is way down: people aren't borrowing or lending, meaning investment is down. Moving money around in circles keeps Wall Street going, but next year the Bush tax cuts expire, meaning a new round of higher taxes to go with the new taxes of the health care and carbon taxes, and the new regulations. And with a trillion dollar deficit the incentive to add surtaxes is overwhelming, thus again confiscating money from the successful -- money that otherwise would have been invested. Perhaps the government can invest for us with a new TARP?

Parts of the economy will thrive, but then some made good money during the Great Depression. The incentive will be to tax those who continue to do well, meaning they won't invest either, and will spend more on tax avoidance rather than making more money. We have seen that spiral before; the remedy was to cut taxes, but that is not a politically viable incentive.

Without investment there isn't a lot of job creation. Companies thrive by getting more work from fewer workers. That's good for the productive (who will have to work harder to pay their increased taxes) but doesn't do much for those without jobs. Unemployment compensation and welfare do not create jobs nor do they get people employed. Government employees don't increase production and wealth, but they have to be paid for what they do; and that takes more out of the economy. The spiral continues. When we do recover we may consider getting where we are now to be a great thing.

In other words: Have we seen the end of the good times? Tax rates go up, but government revenues keep going down. And down. Raising tax rates doesn't seem to make the government much more money. And unemployment goes up. And the beat goes on.

A new Great Depression is not inevitable, but each time there is another transfer of resources to the government, it becomes more likely. The trick to survival is to find niches where one can thrive or at least hang on in the midst of the downward spiral. Who is succeeding in today's Detroit? It would be worth studying those survivalists...

It's also worth considering vegetable gardens. I wish I were kidding.

The other survival tool is to learn a lot more about the tax laws. The return on investment from knowing more about tax laws is probably higher than the return on investment from increasing productivity.


I would have thought that the Obama administration is at least as responsible for the US response to the Swine Flu problem as the Bush administration ever was for the New Orleans response to Katrina, but the media are not reporting it that way. I wonder how those who stood in long lines for hours only to find that there is no vaccine feel about the government's coming takeover of the entire health care system? Will the new health care system work more smoothly than does, say, FEMA? Is there any reason to think so?

Still no vote as of 1650. The longer the vote is delayed, the more likely that it won't pass. But Nancy Pelosi is smiling, and claims to have 218 votes.

Mourn the Republic.



Anonymous Anonymous said...

It is a sad state of affairs when the federal government violates the social and political compact that they had (emphasis on the past tense) with its own citizens.

At what point does it become necessary to take up arms against one's own? When they line you up in front of a trench of other dead citizens? When they march you through the gates to the camp? Or when they first show up at your door? I would argue that they are in the process of marching us through the gate right now as economic ruin is as an effective tool to destroy freedom as are the guns of a federal agency gone rogue.

There is no path out of this now except violence. No matter how distasteful we find it, no matter how morally repugnant we find it, if we do not act now then the next step will find us kneeling in front of a trench and by then it will be too late.

November 8, 2009 at 4:27 PM  
Anonymous J. Croft said...

So create a tax free zone through the recall election process. scout out a small community with a "boss hogg" crime family and run a full ticket of reformers. Bring up their local corruption. Bring up BOTH BOOKS they use, the Consolidated Annual Financial Report. Sweep them out of office and then make that town a tax free community for residents. And gut all the b.s. laws.

When your town blooms, spread the peaceable arm of the Second American Revolution to nearby communities so you can elect a county sheriff that is responsible to you. Under a sheriff a Amsoc free zone would need the marshalling of NORTHCOM... dicey political move either way-crush the nonviolent political resistance and spark guerilla warfare or let the Second American Revolution spread like the ebola virus throughout the countryside.

You could make this happen. You got the will? You stopping to be keyboard commandos and DO is what it takes.

November 8, 2009 at 8:35 PM  
Anonymous Anonymous said...

We're ALREADY kneeling - we're just not smart enough to know it yet.

G*d-DAMNIT people!

I've looked at a few pictures for hours upon hours:

The one of the jewish guy sitting on the edge of the pit full of the bodies of his friends, looking at the camera, the rifle to the back of his head

The "pulitzer" winning one of the vietnamese guy being shot in the temple

and others like them.

Why? Trying to find - since the eyes are the window to the soul - what could possibly lead a man to passively wait when he knows what is coming.

Why did they not FIGHT?

How could they just ACCEPT it?

WHY ARE **WE** NOT IN THE STREETS like our forefathers would - no doubt - have been?


God damn those traitorous despots in DC - and may he have mercy on their souls because history will not.


November 8, 2009 at 9:34 PM  

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