Trickle Up Economics

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I hear a lot about income disparity, the widening gap between rich and poor, the loss of the middle class, and the notion that wealth redistribution is a right and proper function of government.  There are grandiose notions about eliminating poverty and world hunger, spouted by the super-rich and leaders of organizations like the International Monetary Fund.


But my extensive research into American history, economics, and current events tells me that everything in our system works to shift wealth upward, with those of lesser fortunes or opportunities supporting the overhead.


“You’re wrong!” scream the media-educated, who remind me that one percent of the population pays 99% or the taxes, or similar statistics.  Well, let’s look at that.  Where do federal revenues come from?  According to a Google search, 47% of federal revenues come from individual income taxes; 34% come from payroll taxes; 9% from corporate income taxes; 6% from “other”; 3% from excise taxes; and 1% from estate and gift taxes.  This does not count individual state revenues, which come generally from income tax (in those states which have them), property, and sales taxes.  Then there are local revenues, which usually come from property and sales taxes.


So which taxes do the wealthy pay 99% of?  I would have to assume--if the statistic is accurate--the media-informed are citing only income taxes. 


Before the income tax was instituted in 1913, most federal revenues came from tariffs and excise taxes.  Protective tariffs were a source of constant friction between Southern and Northern, Democrat and Republican interests, until the income tax was instituted.  The Northern industrialists liked tariffs, but the Southern agricultural interests, who had to pay higher prices for imported goods, didn’t.  Part of Abraham Lincoln’s Republican platform in the election of 1860 was advocacy for higher tariffs, and some people claim that was the primary reason for Southern secession.  He also supported railroad expansion, and his administration--and subsequent ones--gave huge land grants and subsidies to the railroad companies.  After all, Honest Abe had been a corporate railroad attorney before running for office.


So how does taxation shift wealth upward?  It reduces disposable income, which isn’t a problem if you’re swimming in money, but if you can barely pay the rent, taxation represents a significant investment, even if you don’t pay income tax.  If you work at all, you’re paying payroll taxes.  If you rent or own a home, you are paying property taxes, either directly or indirectly.  You pay sales tax on food, utilities, gas—if you have a car—and everything else you buy.  You pay excise taxes on any luxury items (such as alcohol, cigarettes, hotels, air fare, as well as utilities).  You are paying for licenses, fees, and car tags.  And, you are paying for mandated insurance on your car. 


This becomes a significant tax bite, especially if your income is low.  When individuals are supporting up to four levels of government (city, county, state, and federal), the amount from so many taxpayers necessarily dwarfs the super-rich contributions to the nation’s cumulative tax burden.


How is that money spent?  War is always expensive, if you’re a government, but it’s a boon if you’re a banker or government contractor.  Even in the rare times of peace, federal contractors and federal employees and retirees may be the richest groups of people in the US. 


Among federal employees, this includes not only elected officials and their staffs, but the top people in the 134—more or less--federal agencies that have been created since the Constitution was ratified.  While state and local governments may differ in the details and the scale, they are essentially set up like the federal government, complete with bureaucracies, government contracts and contractors, and decisions based on favoring the few at the expense of the many.


Other methods for shifting wealth upward include the stock market, the Federal Reserve, and debt, and they are all interrelated.  The significance of the debt-backed dollar cannot be under-estimated, as it effectively saps the wealth of individuals through promotion of national and individual debt, with interest on national debt now at about six percent of national revenues. 


What is the debt-backed dollar?  In short, the Federal Reserve Act of 1913 empowered a banking cartel to create money out of nothing to fund Congressional appropriations.  Government spending is financed through the sale of treasury bonds to individuals, corporations, the Fed, foreign, state, and local governments. It is, in effect, a Ponzi scheme, with the upshot that Congress must spend future money to create money, with the help of the Fed’s magic wand.  The Federal Reserve Act, then, put Congress in the debt creation business, so Congress is compelled to spend money to stay afloat.  As of February, 2018, national debt was $20,493,027,951,424 and growing.


However, the money paid to the Fed in interest on this national debt increases the tax burden and reduces the disposable income of people who support it.  Personal debt adds to the wealth of the bankers through interest payments and an economic hold over their assets, as evidenced by mortgages or car loans.


So, who besides the bankers benefit from this largesse?  Government contractors and the stock market are major beneficiaries.  The stock market has provided for government back-ups since the London Stock Exchange was blessed by Queen Elizabeth I in 1571.  The British government became increasingly dependent on the stock market to finance its wars, notably the Seven Years’ War, between 1756 and 1763, and later the Napoleonic Wars, but taxation played a major role, too.  In fact, a careful reading of Adam Smith’s famous tome, Wealth of Nations, published in 1776, shows it to be a study into the various methods of taxation that governments had used or could use to pay debt from “the late war,” that ended in 1763. 


Some of the largest corporations depend heavily on government contracts to ensure their profitability.  That the banks, stock market, and federal government have been closely aligned since the nation was founded shows in the creation of the first central bank in 1791, brainstorm of Alexander Hamilton as Treasury Secretary.  The New York Stock Exchange was conceived in 1792 under a buttonwood tree and formalized by the so-called “Buttonwood Agreement,”  by 24 stock brokers who agreed to trade only among themselves, thereby eliminating auctioneers and other individuals from their clique. 


The first securities traded on the NYSE were Revolutionary War bonds, shares of the First Bank of the United States (the first central bank), the Bank of North America, and the Bank of New York.  The Bank of New York, founded by Alexander Hamilton, provided the first loan to the newly created United States in 1789, to pay the salaries of George Washington and the US Congress.  The banks, stock market, and federal government have enjoyed a co-dependent relationship ever since.


That the United States was created as an economic engine shows in its history and its Constitution.  Not only is the Constitution an economic document that gives the federal government control over all “economic narrows” in and between states, such as navigable rivers and postal roads, but it gives the government the implied right to perform any act not specifically prohibited, such as the first central bank.


Script for the First Bank of the United States—the first central bank—set the precedent for wild stock speculation when it was first offered July 4, 1791.  Many congressmen were purchasers of this script (rights to bid on subsequent stock).  The price soared, then crashed, and Treasury Secretary Hamilton propped up the price with public money to buy government securities.


They say war “stimulates the economy,” but it also bankrupts governments, while profiteers get rich.  The so-called “robber barons” of the 19th century, like John D. Rockefeller and J. P. Morgan, paid substitutes to fight the Civil War for them, while they exploited the war to generate millions in sales and profits, financed the government, manufacturers, railroads, banks, the stock market, and other investors.  Rockefeller learned early it was easier to make money by lending it than working for it.  As a result, his family has been a dominant force in the banking industry, as well as the oil industry, for generations.


The best example of the trickle-up effect of modern economics shows in the burgeoning debt of third world countries, such as Ecuador.  I just finished reading a book entitled Savages, by Joe Kane, published in 1995.  The author describes his work with the indigenous Amazonian cultures endangered by the oil boom and exploration, the Huaorani, known as a fierce group of nomadic hunter-gatherers who had never been conquered, until the country’s government sold mineral rights out from under them.  Kane notes that in 1970, before the oil boom started, Ecuador’s national debt stood at $300 million.  Twenty years later--after the oil companies had removed 1.5 billion barrels of crude, about half the estimated reserves--national debt had climbed to over $12 billion.  As of 2016, the national debt of Ecuador was $35.5 billion


How did this happen?  The method for impoverishing a people is well described in Confessions of an Economic Hit Man, by John Perkins, in which foreign investors promise governments economic booms in exchange for certain favors, like oil concessions.  The only caveat is that the foreigner (in this case, Americans) provide, at the country’s government’s expense, the engineering, equipment, major personnel, and other ancillary services.  Meanwhile, the International Monetary Fund devalues the country's currency on a regular basis, raising the price of food and other necessities for the local populations.  .


Foreign investors are deadly for “emerging economies,” because they have no investment other than money, often other people’s money, that they manage for maximum profits.  The stock market supports this worldwide exploitation by providing a layer of shells between the dirty work and the innocent-appearing reports and dividend statements.  Americans and other first-world inhabitants thus become distanced from their retirement portfolios, and how their money is being used to support the predators.  As author Kane suggests in his book, who, really, are the “savages”?





Robert Burk Added Feb 18, 2018 - 4:35am
The problem is we have been divided and we have been taught to mistrust each other. Even unions have been dismantled in many areas which allowed for the gutting of wages and worker power. Yet, power can be devolved down to the lower levels with proper organization. It is the peoples own selfishness and fears that permit them to be enslaved and impoverished. Positive Democracy can reverse this but we need at some point to come out from our caves and reintroduce ourselves to our neighbors.
Cliff M. Added Feb 18, 2018 - 10:01am
"Trickle On Economics". We will take everything and piss on everyone else. The corrupt politics of economic fiscal policy which tilts the playing field heavily in favor of capital is the main culprit. Governing for sale has brought us this dilemma.Exploit the masses and prosper should be the motto. The American working poor peasant class is a sorry development.
Katharine Otto Added Feb 18, 2018 - 10:49am
Neighbors seem to come together in a shared crisis, like a hurricane or flood, but they lose sight of that when the crisis is over.  The unions have had the same problems with abuse of power as the employers they protested.  People seem to grant too much authority to so-called "leaders" then resent them when they "lead" them into traps.  
I believe it's a mistake to trust delegated power too much, yet top-down "organization" is the standard mode in so-called "civilized" societies.  The paternalistic structures harness the resources of everyone to benefit the few, while bullying or conning them into believing it's for their own good.  When you finally realize you've been had, it's too late.  It's not a matter of selfishness but one of intentionally created dependency, the cripple-to-control tactic that has taken hold of the American mind.
Katharine Otto Added Feb 18, 2018 - 10:58am
Cliff M.,
Thanks for your comment.  Money does rule, doesn't it?  If you go back in history, especially Anglo-American history (the one I know best), everything has a price, even intangibles.  Not a matter of "do unto others as you would have them do unto you," but one of "do unto others before they do unto you."  
There's a good analogy in The Robber Barons, by Matthew Josephson.  As the US moved westward during the 19th century, the attitude shifted from one of earning a "livelihood," to making (but not necessarily earning) "money."  Now we talk about "jobs" instead of "employment," because the "jobs" generate tax revenue and "consumer sales" to benefit "the economy."  Never mind if the "jobs" are soul-deadening, make-work jobs that produce nothing of value, or if the "consumer goods" are junk that quickly ends up in landfill.  I wonder how many people would covet government "jobs" if they didn't get such good benefits and pension plans. 
Katharine Otto Added Feb 18, 2018 - 11:05am
Thank you for your comment, too.  Victims allow themselves to be divided, and blaming the perpetrator merely protects the status quo.  The book Savages was an eye opener, because the strategies used to undermine the indigenous peoples' and nation's autonomy and natural resources were well developed over time.  When your own government sells mineral rights from under you and allows the invaders to pollute air, water, and land, for short-term profits, where do you turn?  It's too late to throw the bums out and elect new "leaders."
Dave Volek Added Feb 18, 2018 - 11:10am
Nice article with a good history lesson.
I liked your point that while the 1% do pay a bigger proportion of their earnings as taxes, the bulk of the total tax revenue still comes from the middle class and upper middle class.
You bring up the "payroll taxes." My understanding is that at least 85% of American workers pay these taxes. But because they are not called "income tax", this gives the libertarians to right to say that 47% of Americans do not pay income taxes. And this leads to the implication that the working poor and lower middle class are somehow the greatest parasites of the system. 
I will be re-reading this article again in the next few days.
Positive Democracy can reverse this but we need at some point to come out from our caves and reintroduce ourselves to our neighbors.
Well said. Tiered Democratic Governance is a forum where we can make this happen.
Katharine Otto Added Feb 18, 2018 - 11:42am
Thanks, Dave,
I threw in a lot of information that could be used for separate articles.  It was getting too long, so I'm glad it sort of hangs together to make the larger point.  Your additional information helps.
George N Romey Added Feb 18, 2018 - 12:15pm
Katharine an excellent article! You write better than a New York Times reporter.
Our entire economy since the 1980s is based upon debt peonage. Increases in business activity since 2008 have been debt driven. Take away the ultra low interest rates and endless debt backed money printing and 1932 would look like a picnic.
We are headed for and need a total jubilee. As painful and destructive as that would be the debt based economy must die if we are to survive as a nation. We are already monetizing our national debt through the Fed. How long can the US simply print up money to pay interest on the debt it already owes? How much longer can we base consumerism on credit cards?
We used to fear debt in this country and for good reason. A trillion was not to long ago an unimaginable number. Now a trillion has become chump change. 
CRM 114 Added Feb 18, 2018 - 12:35pm
All major religions forbid the charging of interest to their own kind.
There's probably a good reason for that.
Jeff Jackson Added Feb 18, 2018 - 3:14pm
Excellent article Katherine. I always bring up Milton Friedman, who pointed out (and I'm always making this point) that, as a percentage of income, the poor always pay more. Things like sales taxes, gasoline taxes, and others take up a much bigger percentage of those making under 20k than those making 200k. The $.25 per gallon tax on gasoline is easy to pay when you're putting gas into the new Mercedes, but it is a heavy price to pay when you're putting it into the fifteen-year-old Chevy. Nice work, keep it up.
opher goodwin Added Feb 18, 2018 - 3:40pm
Katharine - somehow unions and socialism have been successfully demonised in the USA. This has enabled the rich to screw down salaries and working standards. The result is the huge disparity. America is the most divided unequal country on the planet and, for reasons that amaze me, the people at the bottom still support their own slavery.
The system is run by the rich for the rich.
George N Romey Added Feb 18, 2018 - 3:55pm
Opher because the poor are fed the line and want to still believe they too can be rich with the right amount of hard work, preparation and dedication. Yes the rags to rich story was possible at one time. You know what I see now. The opposite. People in their 50s that with great parents became successful. Then they were laid off in the Great Recession. The only jobs available despite their fancy degrees and loads of experience are crap $13 an hour job. Their lifestyle has plummeted to where they started off. And this is a successful system?
If I had ignored my parents (and every other adult at the same time) I would have skipped college and became a firefighter or truck driver. I wouldn’t be blogging on WB today instead I’d be enjoying my retirement.
A. Jones Added Feb 18, 2018 - 6:07pm
You write better than a New York Times reporter.
LOL! That's a very low bar.
A. Jones Added Feb 18, 2018 - 7:11pm
The method for impoverishing a people is well described in Confessions of an Economic Hit Man, by John Perkins,
Here's a little bit about John Perkins:
Confessions of a professional liar
"In a Web site for Dream Change, an organization [Perkins] founded, Perkins is now selling social consciousness. 'Dream Change (DC) is a world wide grass roots movement of people from diverse cultures and backgrounds dedicated to shifting consciousness and promoting sustainable lifestyles for the individual and global community. The objective of inspiring earth-honoring changes in consciousness is accomplished through programs that educate and foster environmental and social balance. DC was originated to encourage new ways of living.'
The site goes on to say, 'John Perkins defied a code of silence and broke through personal fears when he wrote Confessions of an Economic Hit Man.'
[NB: Nice little bit of personal promotion and self-aggrandizement there, wouldn't you agree? This is a clear textbook example of Virtue Signaling.]
'To many it seemed heroic' he says. 'But for me it was a matter of journeying out of the physical plane, seeing my life from a time-less perspective, and realizing the freedom of going deeply into the divine self that lies at the core of each of us. Once we allow the process, we experience cellular changes.'
Perkins continues: 'We vibrate at higher frequencies and realize our limitless potential.'
Since he stopped pitching nuclear power under oath (although he didn’t believe his own testimony), Perkins has written several other books, including: Shapeshifting: Shamanic Techniques for Global and Personal Transformation; Spirit of the Shuar: Wisdom from the Last Unconquered People of the Amazon; The Stress Free Habit: Powerful Techniques for Health and Longevity from the Andes, Yucatan, and Far East; and Psychonavigation: Techniques for Travel Beyond Time, in which 'John Perkins relates his encounters with the Bugis of Indonesia, the Shuar of the Amazon, the Quechua of the Andes, and other psychonavigators around the world. He explains how the people of these tribal cultures navigate to a physical destination or to a source of inner wisdom by means of visions and dream wanderings. Learn to attract the inner guidance you seek.'
But a cynic might suggest that Perkins has just found a new group of victims to exploit, the progressives and new age do-gooders who want to understand the indigenous peoples Perkins uses to reinforce his argument that he really is a good person down deep, regardless of all the lies he has been telling.
In Confessions of an Economic Hit Man, Perkins connects the dots of U.S. policy and corporate greed, but it reads like the work of a writer who consulted a focus group to find out what progressives would buy, and it works. The epilogue even deals with media ownership, a sure hit with progressives but an unlikely and surprising concern for Perkins."
- - - - -
In other words, Otto, Perkins is a wing-nut and professional liar who searches out audiences that are psychologically and morally lost, and then tells them what they want to hear — for a price. Here's an example of one such price from a 2005 event:
"LIMITED SPACE! On magical Deer Isle, Maine*
MAY 11-15, 2005; $895 if paid by April 1, 2005, ($1050 thereafter)
Includes materials & meals.
(*For the first time in its long annual history, the Advanced Master Shapeshifting Workshop with John Perkins will be held on magical Deer Isle, Maine. We are ecstatic to gather this intensive group at such a beautiful, natural location. Deer Isle is known for its majestic landscape and diverse wildlife which has inspired spiritualists, environmentalists, artists, holistic practitioners and others for decades.
Shapeshifters is the sole group at Goose Cove during our stay, offering an exceptionally intimate environment for in-depth work. Massage, energy work and other body therapies are available by appointment at additional cost. 413-665-0101"
- - - - - - -
I hope you were able to attend that event from 13 years ago, where you could have enjoyed a massage, indulged in some non-strenuous shape-shifting, connected some conspiratorial dots about the globalist corporatocry conspiracy, and discu
A. Jones Added Feb 18, 2018 - 7:11pm
I hope you were able to attend that event from 13 years ago, where you could have enjoyed a massage, indulged in some non-strenuous shape-shifting, connected some conspiratorial dots about the globalist corporatocry conspiracy, and discussed how Adam Smith's "Inquiries into the Nature and Causes of the Wealth of Nations" is not a book on the importance of division of labor and productivity, but actually a book on various methods governments could use for taxation — an unusual opinion based on what you call a "a careful reading."
And to think that many people regard psychoanalysts as being just plain nuts.
Katharine Otto Added Feb 18, 2018 - 7:23pm
Thanks for your continued support and understanding.  I wish more people thought like us.  After finishing Savages, I picked up The Land Grabbers, by Fred Pearce, a Brit (Opher) who has traveled the world interviewing the grabbers and the grabbed on all continents.  
While Ecuadorean peasants and indigenous populations are losing their land to oil concessions and accompanying deforestation and pollution, the first chapter of The Land Grabbers describes how Ethiopia's natives are losing their formerly communal land to foreign billionaires and millionaires and their mechanized agriculture for export.  Of course, the government is complicit.
Debt is a killer, yet the world is running on it, and the World Bank and International Monetary Fund are the international equivalents of the Fed.  Naive foreign governments are falling into the trap, and it's killing their people.  Confessions of an Economic Hit Man is one of the most informative books I've ever read on how this strategy works, and it reads like a spy thriller.
I'd like to think the jubilee is already happening, but slowly, giving people time to adapt.  Getting and staying out of debt is key, and if you can grow food, that's a plus, too.  Even herbs on a window sill absorb CO2 and contribute to global cooling.
Finally, because of the way the monetary system works, lack of debt can be a political statement, because it reduces the fiat money supply and makes currency more valuable.  The dollar lost 95% of its buying power between 1913 and 2010.
Dino Manalis Added Feb 18, 2018 - 7:27pm
During good economic times, money trickles easily, but when people and businesses face difficult times, trickling stops.  That's why consumer and business psychology must be positive with pro-growth policies.
Katharine Otto Added Feb 18, 2018 - 7:30pm
CRM 114,
That's one good thing about religion, I guess.  However, when you're a corporation, it probably relieves you of obligation to religious tenets.
The Fed is an interesting animal.  I've done some research, to find its board of governors is an independent agency, with directors appointed by the president.  However, the 12 regional banks are privately held, with their member commercial banks required to own stock.  Their board members are appointed by the board of governors or elected from the commercial banks.  However, the controlling shares are held by mysterious interests that some people link to the Morgan, Rockefeller, Rothschild, Kuhn-Loeb, Warburg, and other family dynasties.
Katharine Otto Added Feb 18, 2018 - 7:45pm
I contend the US is more socialist than capitalist, what with the government's involvement in every aspect of personal and commercial life.  The link between government and the stock market cannot be denied, and "corporate welfare" guarantees the biggest companies will be richly rewarded with government contracts, favorable legislation and outright subsidies.  then there are all the government pension plans that are invested.  If anyone wants to get a bead on Congress, they should look at their stock and bond market portfolios.  That is socialism, fascism, or communism.  Take your pick.  
I agree with you about the disparity, but the US is far from the worst, in terms of income disparity.  Reading about these "emerging economies" and how their governments sell out their people makes me realize how lucky we are in the US.  Our malnutrition, so far, is probably the result of fast and processed food, not from lack of basic sustenance or potable water.
Reading books such as Upton Sinclair's Oil!, shows how the unions, socialists and communists lose sight of their purpose through in-fighting, insider power grabs, and internal politics, too, which may be a reason workers have lost confidence in them.
I do appreciate your reading and commenting.  Like me, you care a great deal about the planet and its overall health.  We humans simply have to learn how to make healthy stewardship pay.
Katharine Otto Added Feb 18, 2018 - 7:48pm
A, Jones,
The NYT does have some good articles, sometimes.  I don't like its whiny, supercilious, hostile slant, but I think George intended his statement as a compliment.
A. Jones Added Feb 18, 2018 - 8:09pm
The NYT does have some good articles, sometimes. 
A "good article" does not mean a "well written article." Romey tried to compliment your writing style, and not necessarily your article's content (with which he no doubt agreed). I find the writing in the Times appalling.
I think George intended his statement as a compliment.
I'm positive he did. That's why I found it so funny.
A. Jones Added Feb 18, 2018 - 8:11pm
Script for the First Bank of the United States—the first central bank—set the precedent for wild stock speculation when it was first offered July 4, 1791. 
"Scrip", not "script."
Flying Junior Added Feb 19, 2018 - 2:00am
47% of federal revenues come from individual income taxes; 34% come from payroll taxes; 9% from corporate income taxes; 6% from “other”; 3% from excise taxes; and 1% from estate and gift taxes.
The number of 34% is surprising, given that the typical burden of a working American is much more weighted in favor of federal income taxes than FICA and Medicare payroll taxes.  A smarter and better informed person than myself might use this information to prove that something is seriously wrong with our system.  Not something fixed by the recent republican tax heist.  More likely an imbalance that was exacerbated.
On a more fundamental level, I do not advocate considering payroll taxes as federal revenue.  These taxes are paid into a federally sponsored insurance program.  They are not up for grabs as most national republican politicians seem to think.  They fund entitlements.  These are payments that Americans are entitled to by virtue of their paying into the insurance program.  These are not another source of wealth to be plundered by immoral republican politicians.  Reform all you wish, as long as you do no injustice.
Finally, most of us are aware that only 1% of federal revenue, (or a slightly greater percentage if you agree with me that payroll taxes do not count as federal revenue,) are made up of estate and gift taxes.  One percent is not insignificant in an economy of our size.  The abolition of estate taxes by the republican administration is nothing less than a crime.
A. Jones Added Feb 19, 2018 - 4:24am
On a more fundamental level, I do not advocate considering payroll taxes as federal revenue
Most tax specialists refer to payroll taxes as "federal revenue":
"Payroll taxes, which help to finance Social Security, Medicare, and unemployment benefits, are the second largest source of federal revenue, and make up about one-third of total receipts annually."
These taxes are paid into a federally sponsored insurance program.
It's a federally managed social safety net, not an "insurance program." Real insurance policies comprise voluntary contributions to risk pools, with risk allocated according to actuarial information. If EVERYONE gets paid, irrespective of risk, AND the payments were not voluntary to begin with, it's not an "insurance program" but a form of social safety net. Yes, there's a difference, so call it by what it actually is, and not what the federal government wants you to call it. If the left wishes to fool itself into believing it's an insurance program — similar to buying life insurance or homeowners insurance, fine. 
Finally, most of us are aware that only 1% of federal revenue, (or a slightly greater percentage if you agree with me that payroll taxes do not count as federal revenue,) are made up of estate and gift taxes.  One percent is not insignificant in an economy of our size.
It is, compared to the remaining 99%. It's also a violation of property rights: either you own the property and the wealth you created or you don't. If you do, then you can bequeath it to your children and heirs as you see fit; not as bureaucrats think it ought to be distributed.
Lefties seem incapable of understanding the concept of "incentive." They believe that all one needs to do is enforce legislation to strong-arm people into a behaving the way they believe is right, and people will simply continue behaving and working toward the same goals as they did before the legislation was enforced. Wrong. It's well accepted in economics that the higher the estate tax — i.e., the more the state interferes with the basic property right of an earner to dispose of his property and wealth as he wishes at the end of life — the more the original high-income-earners engage in present consumption, rather than saving and investing for the future — since the future is taxed and has already been decided by government.
Additionally, the estate tax actually mainly falls on small business owners and family-owned farms, not on the super-wealthy: the super wealthy can afford the costs of hiring expert tax attorneys and estate planning experts while middle class business owners generally cannot. Since the estate tax rate is determined by asset-value but payment to Treasury must be made in cash, many family-owned businesses and family-owned farms that are not among the super-wealthy end up selling their assets just to pay the tax.
To sell a small business or farm that might have been working well just to pay a tax represents an overall loss of value to the economy as a whole: it's a market inefficiency created by government legislation itself, and the societal loss of value has a special name in economics: Dead Weight Loss.
The abolition of estate taxes by the republican administration is nothing less than a crime.
So was the implementation of estate taxes by the ultra progressive Wilson administration in 1916.  It sometimes takes a crime to undo an earlier crime.
George N Romey Added Feb 19, 2018 - 10:58am
Katharine the goal of the big banks and Fed has always been to enslave Americans into debt peonage for life. It’s modern serfdom. For the banks it’s a gift that just keeps giving.
Notice over the past 50 years consumption changed from income backed to debt backed. This has benefited the biggest banks enormously. And if one or more of them happen to fall into crisis based upon lending decisions they will now demand and quickly get a no strings bail out to whatever amount necessary. The bankers also understand the value of a non stop printing press.
But like all greed there is eventually a total crash and burn. This event is coming although it appears as though the Fed and the Treasury, not to mention the IMF, have ways of postponing it for years. Maybe not in lifetime.
Dave Volek Added Feb 19, 2018 - 11:37am
As promised, I re-read the article again. Yes, there is a lot of different topics that each could be turned into  separate articles.
I found this quote especially powerful:
It reduces disposable income, which isn’t a problem if you’re swimming in money, but if you can barely pay the rent, taxation represents a significant investment, even if you don’t pay income tax.
Eventually, the clock is going to strike midnight for the national debts around the world. The thing is that the super-rich won't suffer that much, financially speaking. Yes, their assets will decrease in value, but they won't be in a state of destitution. So they don't have that incentive to reduce the debt.
But, as you say, deficit spending helps them to increase their wealth (at least until ponzi scheme stops working), they are all gung ho for more deficit spending.
A couple of years ago, I ran into another thinker by the name of Ben Paine, who has some interesting ideas on American affairs. I got him over to WB, but he didn't seem to like the tone of the discussion here.
Ben had an interesting angle to national debt. If we can assume that everyone's share of the national is the same, then an increase in government spending or a decrease in taxes actually shifts the burden of the debt from the rich to the poor--as the rich get the bigger benefit of such social engineering changes.
Between your article and Ben's assertion, I think there might be a psychological force driving the wealthy, who control a good chunk of the political process, into deficit spending. In other words, deficits are not part of liberal thinking.
Anyways, that is an interesting position. Maybe someone will take up on it.
Even A Broken Clock Added Feb 19, 2018 - 2:42pm
F.J., I think your perception on payroll taxes not being considered as Federal revenue is faulty. Ever since the co-mingling of the SSI tax with other Federal revenues back in the 1960's happened, there has been no true separation. SSI and Medicare represent substantial Federal expenditures, so much so that all of the other functions of the government will be dwarfed by these two categories in the next decade. Money is fungible.
Katharine, I also think that you have co-mingled many potential posts into one post. I'd like to see more substantial discussion on several of your topics. As an example, you touch upon the multiplicity of governmental entities that can garner revenue. I think that there could be a significant consolidation of governmental services at the local level. I live in West Virginia, and we have a total of 55 counties, with 55 school boards. Counties were originally set up so that most folks could get to the county seat within a day by horse drawn wagon. Does that make sense now? It does to those whose livelihood is drawn by having so many local governmental divisions.
But I think this is a very good post;
Katharine Otto Added Feb 19, 2018 - 4:11pm
A. Jones,
Thanks for the update on John Perkins.  I knew he was sleazy by the fact that he did what he did and was able to pull if off and do it for so long.  He didn't admit that the strategy is used here in the US, too, but I've seen how it works in my local community and at the state level.  All these promises of economic boon are based on lies calculated to get governments in un-repayable debt, while contractor friends reap the benefits.  Look at the nationwide wave of downtown "revitalization" projects that run the established businesses off by raising the bar and charging new rents that no one can afford.  It's more like "devitalization," but by then, it's too late.
I figured Perkins' "handlers" were fine with his exposing the tactics, because it probably wouldn't hurt them and might even help.  They are probably proud of having been so clever, and are laughing behind their hands at having conned the world so easily.  In the book, Perkins claimed his company has folded, but I suspect it was Bechtel, a private company that has a huge presence at Oak Ridge Labs, in Knoxville, TN.  I've been there and have seen that for myself.
So, I recommended Perkins' book, but not his character.  I agree this new "shaman" persona is probably bunk, and he may well be exploiting the spiritually gullible.  The "shape-shifting" stuff reminds me of David Icke's Tails from the Time Loop, another interesting read, in which Icke goes into how all world leaders are shape-shifting alien reptiles who feed off human energy, especially anger, and transport it to parallel dimensions.
Katharine Otto Added Feb 19, 2018 - 4:13pm
I'm not sure I believe in growth, anymore.  "Growth" has become like a cancer, and a little down-sizing may be the healthiest path to take.
Katharine Otto Added Feb 19, 2018 - 4:19pm
A. Jones,
We don't get many choices of print newspapers around here, and I prefer print media to on-line or TV information feeds.  The NYT beats the Savannah Morning News for writing style and content.  The Wall Street Journal is about 95% predictions and full of subtle and not so subtle advice on investments.  And USA Today can have some good stuff, but doesn't give the coverage the NYT does.  The best information comes from a varied selection of magazines, and, of course, books.
I stand corrected on "scrip."  If that's the only mistake you found in my article, I did good.
Katharine Otto Added Feb 19, 2018 - 4:33pm
FJ and A. Jones,
Thanks for informing me in more detail about estate taxes.  I don't expect it to be a problem for me.  I've advised my wealthier friends to help their kids and grand kids now, like paying for their college educations, or helping with down payments on their houses.  It's not so much about estate taxes, although these were a consideration, but about having no say in the matter after you die, even if you have a good will.  Also, who wants to think their relatives are just waiting for them to kick the bucket so they can benefit from the death?
I agree with A. Jones about Social Security and Medicare.  No matter what it's called, the federal government is spending the money as fast as it comes in and depends on new money to cover payments.  And, Medicare is indeed insurance, contracted through Blue Cross, primarily.  
I believe payroll taxes should be optional, giving employees and employers the chance to find other means of support after retirement.  I would have opted out, if I'd had that chance.  As it is, I collect Social Security but rejected Medicare.
Katharine Otto Added Feb 19, 2018 - 4:45pm
This debt-enslavement may be backfiring on them.  More people seem to be walking away from debt, not caring about credit ratings.  What can they do to you, after all, if you default on a student loan or on credit cards?  So many other people are doing it that they can't police every one.
People are seeing that the banks can get away with it, and the stock market can get away with it, so why not them, too?  We've created a top-down culture of dishonesty and credit-unworthiness.
I wish with your background, you'd write something to explain all these "financial instruments" that have been developed to shift money (ie obligations) around.  I've been reading about "margin calls" and "derivatives" and, lately, a "commodity index" invented by Goldman Sachs.  Apparently commodity speculation contributed to drastic increases in food prices in 1978, if Fred Pearce of The Land Grabbers is to be believed.  Then there the REITs, and the list goes on.
George N Romey Added Feb 19, 2018 - 4:53pm
Katharine as I’ve said it’s all hocus pocus with nothing backing it other than banker and politician supported bullshit. I’d like to write about the biggest con game ever hoisted on mankind but there are too few listeners. Too many still think the right “R” or “D” will solve it all. Just look at some of the posts on WB.
Katharine Otto Added Feb 19, 2018 - 4:59pm
Thanks for your thoughtful consideration and your ideas.  It occurs to me that no matter how rich you are, you still starve if food is not available, or if it's contaminated.  The spending worries me, but not so much as what the money is used to do, like fight wars.  And, while there's a lot of controversy over social programs, my concern is that they create or perpetuate a child-like state of dependency on the government to provide and to make decisions for people instead of trusting them to make their own.  
A major consequence of the nanny state is a population of people who never grow up.  Why are Americans so sickly or so obsessed with trivialities, like the personal lives of movie stars?  Maybe I'm being judgmental, but I believe that if the government backed off, more people would assume more responsibility for themselves and the world we live in.
The national debt sets an example of profligate spending and waste that no one respects, especially since we're not buying anything but trouble with it.
George N Romey Added Feb 19, 2018 - 5:17pm
We are in uncharted waters. Our entire society is addicted to debt. It’s the only thing separating us from 1932 but far worse. Funny thing about debt it only works if it gets paid back. Increasingly that’s not the case. Since banks sell off the loans they make for now it’s not problematic for them. Like 2006-08 when the losses start to rise the securitization machine grinds to a halt and the banks are stuck with lots of feces in their hands. Last time it was a $14 trillion affair. Next time will be far worse and will the Fed again have Treasury print up a solution?
Dave Volek Added Feb 19, 2018 - 5:21pm
Thirty years ago in Canada, social assistance used to be hot political topic that came up in the news a lot. To many people, it was setting up that nanny state you are talking about. And yes there were obvious abusers.
These days, you hardly hear about it. Even the right-wing parties really don't bring up this topic to get favor with their base.
I think a couple of things have happened. First, the Canadian social programs have become refined and are delivering the assistance in a more meaningful and efficient way. Second, I think most of the public has come to realize that some people really can't find and hold on to a 35-week job; giving them social assistance is preferable to putting these people out in the streets or engaging in petty crime.
I have known quite a few social assistance people in the last decade. Most of them are unemployable, but some could handle a 20-hour week job. And life on social assistance in Canada is not easy. Most Canadians would prefer a full-time job at minimum wage before going on social assistance. In other words, there are fewer abusers than a generation ago.
From comments on WB, it seems the American social assistance system is really screwed up. Another reason to change the system (in my opinion).
Katharine Otto Added Feb 19, 2018 - 5:23pm
I'm glad these topics are stimulating so much interest, because they touch all our lives.  Despite the criticisms, I think WB is a happening forum, with a healthy variety of backgrounds, knowledge, and opinions on so many subjects.  Also, feedback helps me know what's clear or not clear, to consider different angles, and to expand or deepen thought.
You make an interesting point about all the counties, and the resultant plethora of bureaucracies.  There is a move afoot locally to merge the city of Savannah and the county of Chatham.  I live in the county and object to the merger.  The Chatham County government is corrupt, but the city government is worse.  They just tried a police merger but abandoned it because they couldn't agree on how much money each entity should pay.  
Now, the problem with getting to the county seat is parking.  Government buildings are all located in the densest and most expensive part of town, along with their revenue-producing parking garages.  
I do believe the national government is too centralized, out of touch with all but urban and business interests.  Ideally, government should be accessible to the voter/taxpayers, who may then take more responsibility for managing the public servants.  
Thanks for your compliments and contribution.  It's nice to communicate with people who tend to think outside the box.
John Minehan Added Feb 19, 2018 - 5:27pm
A couple of things I have seen with the Estate Tax:
---although the Federal Estate Tax has been substantially reduced in this century, some states still have fairly large estate taxes; and
---estate taxes, in the case of small businesses, are levied at inflection points by definition; the death of the (or a) business owner; and
---are likely (but not inevitably) accompanied by thing like: borrowing against the business to pay for the expenses of the owner's last illness; loss of the owner's attention to the business; and a transition under pressure and a concomitant lose of business.
All of these things together might make the estate tax (even one that "seems fair") the proverbial straw that breaks the camel's back.  
A. Jones Added Feb 19, 2018 - 9:13pm
If that's the only mistake you found in my article, I did good.
You mean, "I did well", not "good."
C'mon, Otto. You know the difference between "well" (an adverb) and "good" (an adjective). That's the kind of solecism I'd expect from an illiterate like Romey, and not from someone with an M.D. degree.
Carry on.
A. Jones Added Feb 19, 2018 - 9:22pm
I recommended Perkins' book, but not his character. 
But his book was highly influenced by his character; they're not "siloed" from each other. If his character is that of a liar, then so is his book.
George N Romey Added Feb 19, 2018 - 10:45pm
Katharine ignore this ignorant person. Unlike you he has never penned one article on WB. He will never have your wisdom and insight.
A. Jones Added Feb 20, 2018 - 1:08am
he has never penned one article on WB.
I devote my energies toward commenting on the articles of others. You know that, Romey.
Katharine Otto Added Feb 20, 2018 - 5:22pm
It's hard to comment on something I know nothing about, like the Canadian system.  And social assistance is such a huge topic, it would be hard to say much of relevance in a short response.  I do believe the government (local, state, or federal) creates dependency, like the over-indulgent parent, but it also creates obstacles to success, such as requirements for licensing in so many areas, or rules.  Or it forces "help" on people who don't want or need it.  Charities are now "non-profits."  
I'm not a fan of government, obviously, but we have nothing else to compare it to.  I believe we have all been socially engineered to accept the overlords, the bullies and cons who have convinced us we need them.  I'm not so sure.
Katharine Otto Added Feb 20, 2018 - 5:26pm
We are indeed in uncharted waters.  I was thinking today that it's dangerous to promise other people's money, as our government has been doing with its debt.  What right does Congress have to promise the future incomes of the unborn?  Talk about taxation without representation . . .
I therefore believe the government should not be allowed to go into debt beyond the terms of the sitting congress-people.  I've also thought taxpayer/voters should vote directly on the budget, and it should be binding.  
Katharine Otto Added Feb 20, 2018 - 5:30pm
Thanks for the info.  Once again, you are out of my depth.  At the moment I have nothing to gain from anybody's death and don't care what happens to my 'estate" (if I have one) when I die.  My goal is to die with a zero balance.  (Why die when you still have money?)
Katharine Otto Added Feb 20, 2018 - 5:36pm
A. Jones,
If I allowed the author's character to determine everything I read, I would not have read the Constitution, among other things.  I compensate for misinformation by reading widely, and Perkins' book substantiates many things I have read elsewhere, as well as things I have seen myself.
Thanks for the grammar correction.  I almost wrote "I done good," in an apparently futile attempt at levity.  
You do appear to have a breadth of knowledge.  I would read a post by you, should you ever choose to write one.  I would even comment.
Flying Junior Added Feb 20, 2018 - 10:22pm
Everything you say is true, Clock.
Except that we need to repair SS and Medicare by adjusting the amount of income that can be taxed.  That's all that it takes.  It's not on the chopping block so that republicans can underfund it.  We can control fraud and abuse.  We can do more to prevent disability.  But we are not looking to reduce benefits for the elderly, retired and disabled Americans.  That's what the fiend Ryan wants to do.  Sometimes I think that the entire republican party agrees with him, but I have more faith.
Of course, money is fluid.  The Federal Government is basically free to dip into our prosperity like it was a bottomless well.  Everyone laughed at the idea of a lockbox.
But the money paid into SS is the money that pays for the benefits.
The idea of making payroll taxes optional is radical and dangerous to me.  We're in enough trouble without that kind of talk.  I guess that really is the fundamental difference in a little tiny nutshell, isn't it?  My parents have a pension which includes health insurance, but they appreciate the difference that Medicare makes.  I'm looking forward to some financial relief when I come of age.  It is an appropriate and just way to help our seniors.  We don't let them just fall by the wayside.
Katharine Otto Added Feb 21, 2018 - 4:24pm
Thanks for your comment, but I would say a 25-year-old needs the money in the present, and if payroll taxes were optional, would have the knowledge that she could pay now or later for retirement.  Also, employers, who have to match payroll tax deductions, might be more willing to hire, at higher wages, if they didn't have that payroll tax burden for some employees.  
It's just an idea that I don't expect to fly.  The government is too addicted to taxes to consider that people might learn to take care of their own retirements if Nanny State weren't doing it for them.
Flying Junior Added Feb 22, 2018 - 2:56am
Thank you for your perspective.  There will always be discord.
A. Jones Added Feb 22, 2018 - 4:19am
A. Jones,
If I allowed the author's character to determine everything I read, I would not have read the Constitution
I didn't claim that an author's character determines — or ought to determine — anything you read. I claimed that an author's character influences anything he or she writes.
I don't understand what the framers of the Constitution have to do with this. Are you claiming they were liars, as I am claiming Perkins was?
You do appear to have a breadth of knowledge.  I would read a post by you, should you ever choose to write one.  I would even comment.
You're very kind, Dr. Otto. I might, indeed, contribute an article at some point, and would, of course, look forward to your comments.
Katharine Otto Added Feb 22, 2018 - 1:27pm
A. Jones,
I'm suggesting that we all have our own perspectives, and everyone is capable of selecting the information most conducive to his own point of view.  I'm sure the framers of the Constitution thought they were doing the right thing, but they made sure their meetings were secret, and they by-passed state legislatures to get it ratified.  They did it when Thomas Jefferson and John Adams were out of the country, and we're not sure who actually wrote it, although current thinking blames James Madison.  
I read the Constitution as a huge power grab by the Federalists, to insure the wealthy elite, primarily New York mercantilists, reigned supreme.  Why do you think they call it "The Empire State"?  I will write more about this another time.
George N Romey Added Feb 22, 2018 - 4:33pm
Katharine my sense is that the day we allowed any entity to have a material impact our economy and society is the day we sealed our fate with a corresponding big government. Big corrupts whether it’s business or government. When you can manipulate something you control it. The Federal Reserve was nothing more than a get out of jail free card for the biggest of banks.
Its why Citicorp has been given multiple bailouts over the years while the 5 branch Bank of Fruitland would easily be allowed to die.
I remember in the 80s Americans were led to believe big business would make us all successful. We didn’t want to see a future of mass firings and outsourcing/insourcing. It was the greatest myth put over people.
Cliff M. Added Feb 22, 2018 - 8:52pm
George, I remember my father telling me that after the government lied to us about the Vietnam War don't believe anything they say  anymore.
Katharine Otto Added Feb 23, 2018 - 11:09am
George and Cliff,
My thoughts, as well, but it's hard to get a handle on the extent and pervasiveness of the problem.  It does have something to do with absentee and hidden bosses, I think.  Adam Smith's "invisible hand" can be interpreted many ways.  He didn't explain it, yet the reference has been used, apparently with many interpretations, through the centuries.  
Cliff,  Funny you should mention lying.  I'm formulating a blog on that topic now.
Bill Kamps Added Feb 23, 2018 - 1:15pm
Katherine, nice article.
As you say, our Founding Fathers were not poor, and they did not design the country to be altruistic towards the poor.  Like most humans, they designed it to benefit themselves.  They did do some things that benefit us a lot today, one is they made it very difficult for an individual to take over the country. 
Since the times of the Pyramids wealth has been concentrated in the hands of the few.  I would suggest that wealth now, and potential economic mobility is greater now for most people in the world, than at other times in history.   For most of history, there was no middle class in ANY country.  In many countries today's poor live much better than the poor did of 100-200 years ago.  Its not a prefect world but it is progress.
That does not mean we should be satisfied with the situation.  It simply means the situation is actually getting better not worse, if one uses a long enough time horizon. 
This is why Citicorp has been given multiple bailouts over the years while the 5 branch Bank of Fruitland would easily be allowed to die.
They are not kept in business ONLY because of corruption George.  When the Bank of Fruitland fails, it wont set off a world wide panic, that would threaten the economy.  Citibank failing, would set off this panic.  So we have little choice but to bailout Citibank.
This does not mean we have to let the individuals go without punishment, but we do that also.  Throwing a Citibank VP into jail would not damage the world economy at all.  No reason we cant do that. 
Bill Kamps Added Feb 23, 2018 - 1:21pm
Katherine, most people when they look at taxation do NOT look at all levels of taxation, many of which are very regressive.
The FICA tax, sales tax, property tax all affect the lower classes much more than the rich because the tax is a larger percentage of their earnings. 
The set up of Social Security also is a detriment to the lower classes.  They pay into the system as a retirement plan, but if they die before receiving benefits, their survivors do not get the savings put into the plan, that money is just gone.  This hinders many people from building any kind of wealth.  The tax hinders them from saving, and the lack of ownership of the funds, reduces any wealth creation. 
While the money put into SS for the wealthy is a pittance, the money put in for the poor would have some significance, especially if it were earning some interest over the decades. 
In lots of little ways, the lower classes are disadvantaged because of how various taxes, and benefits are setup. 
Cliff M. Added Feb 23, 2018 - 1:22pm
Katherine, It is pretty sad that lying has become acceptable if it accomplishes the motives behind it. Our fearless leader is a prime example of what morals have become.
Cliff M. Added Feb 23, 2018 - 1:29pm
Bill, The sad part of economics getting better worldwide is who is being forced to take the pain. No middle class for a long time is becoming more of a possibility by the day.After the lifeblood is sucked out of the ordinary American corporate America will have to cater to a different customer base world wide.
Bill Kamps Added Feb 23, 2018 - 1:30pm
Katherine, It is pretty sad that lying has become acceptable if it accomplishes the motives behind it. Our fearless leader is a prime example of what morals have become.
Cliff, in politics when was this not the case?  You think the Kings told the truth to the serfs?  You think the leaders that created WWI and WWII were telling the truth before they destroyed large parts of the  world?
Who were these leaders that told us the truth?
Bill Kamps Added Feb 23, 2018 - 1:40pm
After the lifeblood is sucked out of the ordinary American corporate America will have to cater to a different customer base world wide.
Cliff we are paying for lots of mistakes over the past decades. 
In the 1960s we put in place regulations and incentives to help corporations go world wide.  This made sense then because so  much of the world was not industrialized and if THEY didnt get a middle class we wouldnt have customers.  Unfortunately many of these incentives still exist.
It is like the repatriation tax that Congress just changed.  Are we to blame Apply for keeping $350 billion overseas because bringing  it home would be too expensive.  Is it really their fault or our Congress fault because they didnt change the rules?  
Now we can say we gave a favor to the bad corporation Apple, and gave them a tax break.  However, the  result is they will bring $350 billion back to the US and invest it here. 
If we think the US middle class will prosper and US corporations will not, we are delusional.  Better to incent US corporations to do right by the US people, than to destroy them. 
George N Romey Added Feb 23, 2018 - 3:28pm
Ultimately corporations will suffer if we keep killing off the upper middle and middle classes. Most of the C level see that coming. However, when the C officers are expected to make quarter after quarter of growing profits then they make decisions that have an aggregate negative long term effect.
Low interest rates and more more available credit has softened the blow for awhile. But that won’t last forever. Every civilization died from excess, hegemony, imperialism and over leveraged. The US continues down this trek.
Katharine Otto Added Feb 27, 2018 - 1:30pm
I haven't looked at this thread for a few days and am only now seeing your thought-provoking responses.  There does seem to be a decline in even the "appearance" of honesty.  Lies abound, and build on themselves, so it's hard to determine where truth ends and lying begins.  Then, there are the partial truths and the perspectives that are honest but based on erroneous information.  Mix that with all the generalizations and predictions, and you have a society built on a mass hallucination.  Nothing perpetuates this more than television and TV news.  Even the internet offers the chance for feedback and checking out your assumptions and facts.  TV is a one-way street that selects out for agendas backed by advertisers and other heavy-hitters.
That being said (written), I think you are all acknowledging that the poor and middle class provide the foundation the rich stand on.  As I see it, the rich are desperately insecure of their positions, although pretending otherwise, because the masses are rebelling in passive-aggressive and passive-resistant ways.  "Consumers" aren't consuming enough to keep "the economy" churning the way the Fed wants.  The politicians are stymied, because they can't figure out how to spend enough future money to maintain their own relevance.  Alas, the American would-be worker is too lazy or sick to support the overhead, and the revenues aren't keeping up with interest on the federal debt.  The Fed's board of governors may have to start working for a living, but they can't do anything worth paying them for, so they're in a real pickle.
Alas.  It's hard to tax zero income.
George N Romey Added Feb 27, 2018 - 9:12pm
Katharine that’s just it. Incomes fall and where does the $$ come to support the big banks and the war machine. Right now it’s a Ponzi scheme. Make up money to fund the shortfall and repeat as necessary.
Katharine Otto Added Feb 28, 2018 - 10:12am
We're both saying essentially the same thing, but no one wants to hear.  Who wants to admit they are being played for fools?  
It's interesting to me, because money and banking are essentially new concepts in history.  Banking and the stock markets essentially were born with the industrial age, the need for large amounts of capital and pools of capital to fund large industry.  
Now we are seeing the consequences of that, such as over-manufacture of products for glutted markets, debt-backed financing, world-wide pollution, and money backing money backing money, with tangible assets diminishing and way down the line.  Anyone who has any money in the stock market, including pension or mutual funds, is helping to fund the international eco-rapists, human rights abusers, and the perpetual wars.
While other people believe we need to see "the economy" grow, I believe we need to shrink the "globalized economy" and focus on smaller and more regional concerns, where people have more direct and hands-on involvement in local happenings.  I believe the dollar needs to deflate, such that buying power increases.
I can get long winded (long-worded) on these subjects, but I appreciate that your background helps you understand things that other people can't or won't see.
MEFOBILLS Added Mar 7, 2018 - 11:13pm
Katharyn to add to your comment:
Part of Abraham Lincoln’s Republican platform in the election of 1860 was advocacy for higher tariffs, and some people claim that was the primary reason for Southern secession. 
Yes, it was the main reason.  States rights arguments are a canard.
Southern Land Owners were buying African slaves from Jewish Capital.
Jewish Capital in London and Wall Street was funding the outfitting of slave ships, to then bring Africans to the Americas.
On the outbound leg, slave ships would be filled with hemp, timber and rum.  Our ((friends)) also owned the distilleries, and some of this rum was to help procure more slaves from West Africa.
England's trading system was the movement of goods from one place to another, and then take a cut on the transshipment, and as well earn manufacturing profits.
The U.S. was to export Cotton, which would be made into finished goods in England, and then transported about the English Colonial System.  Aristocrats in the South would buy British goods in trade, not NORTHERN industrial goods.
The South was becoming an Aristocracy of Land Owners using labor to grow cotton, which was then sold into the British Colonial System.  These land owners could control their slaves, hence the 3/5 rule for voting.  Plutocrats with 3/5 vote in South were less able to manipulate the country through the vote..
(Yet another reason, democracy is flawed.)
The South was also falling back into the Colonial System, and by this time the "international banker" was promising the Kings and Queens of Europe that they could deliver the South. 
Lincoln didn't understand economy, but even so his northern interests were not happy that South was falling away, and soon south would become majority negro.  The north was industrializing and didn't want or need negro labor.  The north wanted markets for its products, and did not want negros and plutocrats in the south setting agenda for the country.
All Lincoln had to do was blockade British shipping, and buy the produce of the South.  Our ((Friends)) no doubt were operating out of Wall Street to protect their slave interests. 
Advocacy of higher tariffs was to block British Industrial Goods, so Northern industry could get on its feet. 
Katharine Otto Added Mar 8, 2018 - 10:20am
Oh, I wish we could talk in person.  There's much more to this story, because I believe the South was suckered into a financially devastating deal with slaves and debt.  People don't realize what a Machiavelli Alexander Hamilton was, but he grew up working as a bookkeeper for British slave traders.  It's not clear who financed his move to the continent and paid for his education at King's College, but I suspect it was his slave-trader employers, to whom he remained loyal for the rest of his life.
The first three stocks traded on the NYSE were bank stocks, with Hamilton involved in all three banks, the First Bank of North America, the First Bank of the United States, and the Bank of New York.  
The South didn't realize what a valuable resource it had in agriculture, and slavery wouldn't have been necessary but for exports.  As you say, the Brits made enormous profits from trading goods and slaves, not just from the mercantilists, but from taxes.  In the War Between the States, many of the British were supporting the South, because of the tariff issue and because they could trade directly, but for--as you say--blockade of Southern ports.
Also, at that time, the South was the major source of food for the industrialized north, and this sent Lincoln into a panic.  That's why he was so quick to give away so much land to the railroads, to develop agriculture in the Midwest.  Had the South recognized its power over the food supply, it would have fared much better.
George N Romey Added Mar 8, 2018 - 10:51am
And to that modern slavery continues. Wal Mart buys product from factories paying slave labor overseas  and pays American workers slave wages on this side of the world. In the 1800s slave owners were responsible for housing and food. Today Wal Mart (and the many like them) has passed that off to the Federal Government.
Katharine Otto Added Mar 9, 2018 - 10:17pm
Oh George, you are speaking my language.  We have just shifted slavery to where we can't see it.  Of course, we are all economic slaves to the federal government, but they claim it's the price of freedom.  Go figure.
John King Added Mar 14, 2018 - 1:07pm
As Virgil said: "audentis Fortuna iuvat ". Today's politicians have found the way to riches - give the people what they want and they will keep you in power. In the past, power was gained at the point of a gun or the tip of a spear. If we look the list of US politicians in the past 100 years, few went from poverty and returned to it at the end of their career. Harry Truman was from the middle class & he returned there after his terms were up but few others who did the same can be found. We now have a Congress that passes laws to regulate nearly every facet of American life but exempts themselves from those laws. We get Obamacare & they keep premium system they created for themselves. So only the method is new, not the goal nor the results. For all the boldness and audacity of this, we the people keep electing them and are shocked to find that only the pols and their pals benefit while the rest of us provide the financing for their schemes. Ms Otto describes the history fairly accurately and for sure, the most pernicious tax is the payroll tax but that fact does nothing to ameliorate the fate of the victims as long as they will persist in their belief that the government, any government, is here to help.
George N Romey Added Mar 14, 2018 - 1:12pm
It’s the same story that people believe if we just get the right “D” or “R.” The tragic part are those that think Trump is actually in control.

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