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Guest Post: Bypassing Government Roadblocks To Your Personal Prosperity

Tyler Durden's picture


Submitted by David Galland of Casey Research

Bypassing Government Roadblocks to Your Personal Prosperity

Recently I helped out with some delivery chores. As I drove about, I discovered that one of the roads I would normally use was closed by roadblocks. It was, I imagine, due to road repair work. I had to reverse course and take a substantial detour.

I wondered why the road crew hadn't put up a sign indicating the road was closed back at the main intersection, but I shrugged and muttered something like "Typical government operation."

Driving back home, this idea of roadblocks took root in my mind. The thing is, only governmental entities can set up roadblocks – at least, legally.

Obviously, there are times when such roadblocks are entirely appropriate... for example, when a bridge is found to be dangerous.

In that case, putting up a roadblock to let drivers know that the road is a no-go makes perfect sense.

For example, a temporary warning sign to let people know that there is a road crew fixing potholes ahead makes sense and that sort of thing.

Otherwise, unless a road is damaged to the point where driving is either impossible or ill advised, there should be no roadblocks set up. Makes sense, right?

The decision to set up a roadblock should be taken only by people who are close to the problem, who understand the issues, and can deal with the problem on the road, fix it, and open it up again as quickly as possible.

Imagine then a world where government officials, as often as not operating hundreds or even thousands of miles away, are in control of the roadblock rules.

Despite having no real knowledge of the problem at a local level, they dictate that those roadblocks be set up and made permanent based not upon the specific condition that a road is out, but rather based on political expediency, cronyism, imaginary threats, and donations by influential lobbyists.

In a world like that, where roadblocks are set up all over the place and without any real thought to the consequences to road users, imagine how difficult it could be to get from Point A to Point B.

In fact, it would not be out of the question that the single road leading to your house could be blocked, leaving you no way out.

While that seems rather extreme, I would contend that it is a valid metaphor for the world we now live in.

To make the point, a couple of weeks ago, I discussed my recent travels to Ireland and Portugal and the devastating consequences the actions of the European central planners have had on those economies.

Before the European Commission bulldozed their way of life, the Portuguese fishermen made a nice living. They made money and supported their families the same way they had for generations. Life was good.

But not long after Portugal's admission into the Eurozone, however, they woke up one morning to discover their own regulatory roadblock.

It was cooked up by bureaucrats thousands of miles away who have no idea of the local challenges or hazards it would bring to the local economy and the families that rely on it.

This roadblock required them under law to destroy their fishing boats, thereby preventing them from earning their livelihoods.

Another example of roadblock insanity can be seen in energy policy here in the US.

Hollow Soundbites and Pointless Platitudes

Politicians bray about the need for energy independence.

Behind the scenes, however, they kowtow to the environoids and special interests by littering the landscape with roadblocks that prevent energy companies from achieving and innovating our way to exactly the independence they tell us we must have at all costs!

Here's where it affects you:

Government has set up another sizable roadblock. This time it is in the path of savers.

By meddling in the market in order to allow the debt-bloated government to continue its out-of-control spending, the Fed has suppressed interest rates to the lowest levels in US history.

Almost overnight, retirees and others who counted on the yields earned on savings to cover living costs have come to a dead stop in front of a roadblock placed in the way of their most pressing needs.

Their finances now in tatters, even people in their 70s who have worked hard and saved all their lives are being reduced to serving up French fries at fast-food joints.

For another roadblock, look no further than Obamacare.

In a recent Reason magazine article, it also expressed the same sort of convoluted logic that has gone into creating a series of related roadblocks. As one wit put it:

"If you think health care is expensive today, wait until it's free."

One of those roadblocks has to do with the considerably higher taxes tucked away in reams of unreadable legalese that will shift yet more funding from the private sector to the public. Here's the text from an email sent to Doug Casey by a financial professional friend of his this week:

You may have had only a casual interest in the debate over the Obama Health Care bill, and even if you followed it closely, the headline discussion seemed to be more on the inclusion of millions of uninsured citizens, the penalties for not being insured, etc., vs. the fact that this is a noticeable income tax increase on investment income.

For those who have an adjusted gross income of $200k ($250k for joint returns) or more, the number on the bottom of the first page of your 1040, which comes before itemized deductions, charitable gifts, or personal exemptions, there is a +3.8% uncapped tax applied on all investment income (capital gains, interest, dividends, etc.), plus an obscure provision of the code known as the Pease, which reduces the value of itemized deductions, adding another +1.2% to the tax rate.

Be aware that if the current "Bush tax cuts" are not extended, the current long-term capital gains tax rate of 15% will go up by two-thirds to 25% beginning 1/1/2013. The top rate on dividends will nearly triple from 15% to 44.6%!! Ouch.

Unlike Social Security taxes, which are capped, the Health Care tax is uncapped. The mouthy Warren Buffett is finally getting his wish – paying more than a 15% tax rate. Instead of just writing a check for more, which he is certainly welcome to do, as an advisor to the administration, he probably had some influence on getting it applied to all higher-income Americans.

As you know, I am not a tax attorney nor an accountant, so am sending this as a heads-up, and if it is relevant to you, you should confirm the details with your tax advisors.

On the topic of throwing up more tax roadblocks, here's one from overseas… sent along in an email from our own Vedran Vuk. In Vedran's own words…

"Most of the time when we think about raising taxes, it's the threat of millionaires leaving. We don't usually think about them not coming to a country. Here's an interesting case of Zlatan Ibrahimovic signing a soccer contract for 14 million euros per year. If the new tax goes through in France, he will be taxed for 75% over the first million euros. If the tax does go through, good luck attracting multimillion-earning players to France. A lot of people in the 99% will be pretty unhappy when all of their sports teams become horrible as a result of the tax."

My favorite quote from the article is:

"Ibrahimovic will earn 14 million euros annually, sports daily L'Equipe reported. Sports Minister Valerie Fourneyron said that indicates that European football needs more regulation."

Yes, just what the world needs – more roadblocks.

Of course, this time it's to block decisions that the football team's management believes it needs to make in order to win (and therefore attract fans, sell tickets, and raise rates to sponsors).


I recently ran into a public-high-school English teacher and asked how the education business was going.

His response was, "Do you have four days for me to tell you all that's wrong?"

"It seems like every month some team or another shows up from the government in order to introduce a new teaching program. And the really frustrating thing, is that none of these people has ever taught school."

He went on to say that it becomes clear very quickly that they have no idea what they're talking about and that each new protocol was conceived by some bureaucrat with no teaching experience either.

It was eye-opening to hear such emotive language from a public-high-school teacher – in my experience, most of the people who choose that profession are largely on board with the whole big-government thing.

Yet, it seems that more and more people are beginning to catch on to the idea that central planning is not such a great idea.

It's how you end up with roadblocks where roadblocks don't belong.

It's how you end up on a road you never intended to travel along, forced there by roadblocks that don't make sense and clearly don't help.

Ultimately you risk getting hopelessly lost, or you turn around go back the way you came and start again.

So yet another school program gets introduced, another law, another rule. And it all starts again.

Happily, it is almost a certainty that, in time, the bureaucrats and their many roadblocks will be shoved aside.

I say that because there really is a limit to how long people will put up with being denied access to their fundamental rights of life, liberty, and the pursuit of happiness.

There is only so long that entrepreneurs will put up with having to navigate around more and more roadblocks in order to provide a product or service to consumers, when such roadblocks serve absolutely no useful purpose.

Unfortunately, while there are a number of things you can do to get started and plenty of sound advice along the way, it will take time.

That's because there is still a considerable swath of the voting public who actually buys into the idea that government is a force for good and that without it, equality and justice would go by the wayside.

And so it is that the US and virtually all of the large economies around the world are still firmly in the grip of the notion that central planning is the only way to get to the green pastures that surely must be just over the next hill.

Or, more specifically, the next round of legislation and policy machinations (read "roadblocks").

There has never been a starker example of the mindset of the current administration and its many followers than a comment made by President Obama this week. Here it is:

"If you've got a business, you didn't build that.
Somebody else made that happen."

His point is that essentially, all human progress is due to the good work of governments.

  • That without governments, there would be no roads to set up roadblocks on.
  • There would be no Internet.
  • There would be no body of case law nor a judicial system to enforce that law.
  • There would be no telephones.

I disagree, and so do many others – including many from past governments who see the direction Washington, DC is taking and don't like it.

I contend that this view of the world is essentially the opposite of the tenets of the capitalist/free-market model.

In the view of Mr. Obama and his ilk, We the Sheeple are all but helpless without the government to lead us forward.

That the US government's activities as a share of GDP have gone from well under 10% at the beginning of the last century to over 40% today – and will go over 50% by the time Obamacare is fully implemented – makes it clear that this country is now operating on principles that run completely contrary to those that promote success and economic well-being.

The consequence of continuing to operate on this model will be a steady decline in the quality of life for most Americans, while favoring a ruling elite that produces nothing… except more roadblocks.

Ayn Rand will someday be celebrated as a futurist.

But how does one fight back? Grab a gun? Don't even think about it: the Second Amendment may have been intended to protect against a tyrannical government, but the actual truth is that the weaponry of the US government is so incredibly advanced at this point that even the most well-armed militia wouldn't last a minute.

No, the best way to "fight back" is to get wise to the whole thing.

Understanding what's happening and knowing where the roadblocks are likely to be just makes sense.

And having clearly set out strategies that both sidestep the roadblocks and preserve your wealth is not just a good idea – it's critical.


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Sun, 07/29/2012 - 14:59 | 2660565 lotsoffun
lotsoffun's picture

real socialism, capitalism, communism if practiced with a sense of humanatarism and decency can all work to make people live a fruitful life. 

socialism in europe worked well for a few decades.  until goldman sachs moved in and taught the rulers how to leverage up, cds, fx swaps (into their own pockets).

we don't have capitalism or socialism here.  we have cronyism.  anybody seen jonnie corzine lately?  a perfect heist, the majority of his victims were farmers in the midwest and he got to play with all their money, lose it without consequences.

capitalism doesn't put a gunboat and bombers to the head of oil producing countrys.  capitalism says 'if they don't want to sell to me at a decent price, let them eat sand'.

want to stop terrorism?  simple.  all flights, boats, phone calls, internet, commerce, etc. to the middle east stopped until they get in line.

it would be 6 months, their rulers would have it all straightened out.  but, it won't happen, because the airlines and the this and the that run the government and they don't care about terrorists, because they will never be exposed.

they don't shit in their own beds.  they shit in ours.  and leave.


Sun, 07/29/2012 - 16:19 | 2660714 PrinceDraxx
PrinceDraxx's picture

Oh yeah, socialism worked great for a few decades.

And then they ran out of other people's money!


Mon, 07/30/2012 - 19:30 | 2663744 lotsoffun
lotsoffun's picture

i'm stupid?  i'm mature.  nice photo avatar.  not sure what that is?


but silly insults aside.  you didn't read what i said.  socialism can and did work, until as my theory, the US investment banks convinced the eu governments into making bets that they would win.

like swaps.  worried about having to refinance at a higher rate?  no problem.  i've got you covered.  you pay me fixed, and i pay you libor.  and if rates go up.  you're hedged.  except for one thing.  haha.  i control libor.

get it??



Tue, 07/31/2012 - 03:16 | 2664273 MeelionDollerBogus
MeelionDollerBogus's picture

"want to stop terrorism?  simple.  all flights, boats, phone calls, internet, commerce, etc. to the middle east stopped until they get in line."

Forgetting something?
#1 CIA is the cause of this terrorism, handing them the guns, the funding and the training

#2 CIA did this in South America and Mexico too

#3 CIA did this in Africa too

seeing the pattern here?

It's a little late to complain that the other guy's a rapist all the while you've already been caught raping every child and mother in every village from Vietnam to Faluja and stabbing the fathers while making them watch the rapes.


Thu, 08/02/2012 - 19:15 | 2674322 lotsoffun
lotsoffun's picture

actually mr. mdb. i agree with you, but i didn't express myself correctly.  we are in 100% agreement.  if they really wanted to stop terrorism - they would stop doing the things you mention - and they would also do the things i mention.  except both of those paths (and i mean this seriously), they are afraid would hurt their profits.  so, in the meantime, humanity pays for it.  i get to possibly fly on a flight with a 'terrorist' but jeffery imelt and big bad bama get private jets.  so what do they care about screening.  on and on.

Sun, 08/05/2012 - 23:51 | 2680878 MeelionDollerBogus
MeelionDollerBogus's picture

ah yes, in that case we do agree.

Sun, 07/29/2012 - 14:18 | 2660508 MeelionDollerBogus
MeelionDollerBogus's picture

Obamacare is not about free health care nor universal healthcare.

Sorry, this article completely misses the point that other nations like Canada have lower healthcare costs with higher numbers of people that can use the health-care, no deniability due to "pre-existing conditions" and lower unemployment because of less sick days and less need for disability from long-term untreated illnesses.

Obamacare is about handing corporate privilege to the Big Pharma drug cartel because as it happens, Obama actually shares puppet-strings with Big Pharma, not just Big Banks.

Quelle surprise.

Sun, 07/29/2012 - 14:57 | 2660562 Centurion9.41
Centurion9.41's picture

Right. And the Nazi's, Soviets, Mao, etc, had all sorts of promising propaganda telling everyone the pretty part of the story.

But like your propaganda, they ignored the whole truth.

Sun, 07/29/2012 - 15:49 | 2660654 Tirpitz
Tirpitz's picture

So what did your Nazi's, Soviet's and Mao's ignore?

Sun, 07/29/2012 - 16:13 | 2660703 PrinceDraxx
PrinceDraxx's picture

Using a word of French doesn't make you intelligent. Using the Canadian health system as an example doesn't tout your knowledge either. If Canadian health care is so great, why do Canadians flock to other countries to have their health care treated? The answer to that is because if they want to live when faced with something more onerous than a cold, they can't get treatment in Canada. They have to wait on the line of people in front of them and they might easily die from the delay.

The Canadians use health care similar to what you will find in Europe. A friend of mine in Ireland waited a year in line to get a MRI. If my doctor here in the States sets me up for an MRI, I can get it within the week. Then he got pissed because I didn't go.

Canadians "free" health care isn't free. Somebody pays. Nothing in this life is free, someone pays for it.


Wed, 08/01/2012 - 08:44 | 2664271 MeelionDollerBogus
MeelionDollerBogus's picture

I didn't say there was free lunch.

I said it was affordable and available to all.

I didn't wait a year to get an MRI, to get surgery, none of that.

If you can get it in a week it's because you're paying 1000x what I'm paying and that's fine with me. I'll get an MRI in 3 hours or less if I'm badly injured and if I'm not badly injured I can wait 4 weeks and that's probably what it would be.

It's a myth that we Canadians have long wait times for critical care. We do not. a friend of mine almost cut his finger off with a saw and was seen within 20 minutes of entering the hospital. By the 35 minute mark we were already leaving to go have a beer.

American health insurance is over-priced for a lower-quality product per dollar. That's a fact.

Single payer healthcare - what it looks like

Sun, 07/29/2012 - 14:18 | 2660510 Centurion9.41
Centurion9.41's picture

"Almost overnight, retirees and others who counted on the yields earned on savings to cover living costs have come to a dead stop in front of a roadblock placed in the way of their most pressing needs."

Reality is this.

Those people voted for benefits and then did not vote to pay for those benefits.

So now they are forced to pay via Fed action.

It's that or face economic collapse.

Of course, they could vote to undo the benefit programs they didn't sufficiently pay for and then the economic situation would return to "normal" and they would get the yields they hoped for....

They made their choices and now have to live with them.

Sun, 07/29/2012 - 14:38 | 2660534 spooz
spooz's picture

They also voted for lower taxes, which ended up funnelling most of our economy's resources up to the elites.  We need to start taxing wealth to get it back.  

Sun, 07/29/2012 - 14:56 | 2660559 Centurion9.41
Centurion9.41's picture

Yes, they voted for lower taxes, which is a relative assertion; cutting a tax rate of 50% is far far different than cutting a 15% tax rate. So your assertion has as much meaning as saying "the doctor reduced the patients caloric intake".

As for "funneling" to elites, what's an elite? The MSM? The 99%ers who were the kids of the wealthy that came out of their basement?

Sun, 07/29/2012 - 15:10 | 2660586 spooz
spooz's picture

You can start with the offshore accounts where they hide their wealth if you want to know more about the funnelling:


Tax evasion by wealthy and elites contributed to our not being able to build up a surplus during the good times, which would have helped us now.  So we need to tax the wealth to get it back.

Tue, 07/31/2012 - 03:09 | 2664270 MeelionDollerBogus
MeelionDollerBogus's picture

So you'd rather raise taxes so additional trillions will go into the hands of Haliburton, KBR, Goldman Sachs, JP Morgan and all on the backs of the working poor? Raising taxes hits everyone not just the rich elite.
Or maybe we'll tax the unworking poor too?

You realize you can't tax someone who isn't a citizen and someone who's very rich can afford to move. Many have. Many more will. Good riddance to thieves but for the rich and productive innovators they too will go for you intend to show them no mercy whatsoever despite the few jobs you may hope for come ONLY from them.

Sun, 07/29/2012 - 15:48 | 2660649 Tirpitz
Tirpitz's picture

"Those people voted for benefits and then did not vote to pay for those benefits."

The good thing is, they did not vote for mega-bailouts, and still have to pay for them. To let irresponsible but well-connected people, who have (stolen) more money than they can spend in ten life-times, see their bonus world intact. While the citizen's own lives get destroyed by them.

Sun, 07/29/2012 - 14:44 | 2660526 gwar5
gwar5's picture

Recommend Movie: "In Time"  Justin Timberlake, 2011


Not a Timberlake fan at all, but this well done Sci-Fi allegory surprised the shit out of me (HBO) last night. Also very cool cars, having 1960's retro-flare but sound turbine or electric drive.

Plot: The only currency of the future is digital time, controlled by the elites. Genetically engineered humans remain young and useful as long as they have digital time credits on their internally embedded computer countdown clocks. You immediately drop dead the second your clock ever counts down all the way to zero on your digital readout.

Everybody but the elites are habitually in a hurry because there is never much time on their clocks. Food and rent costs you time off your clock, and the masses must toil at menial jobs just to put a few digital hours, or another day, back on their clocks to survive.  

The elites control the currency (time) and are virtually immortal since they may have a thousand or a million years of time credits on their clocks. The elites have devised the time currency system which prevents overpopulation and maintains their status quo ensuring only the elites can live and be immortal. Through systematic wage deflation, and cost of living inflation, the masses literally drop dead a little faster through accelerating attrition, unable to keep time on their clocks. People running out of time are reduced to beg others to share a few more minutes of life.

Spoiler alert: Timberlake takes on the system and steals a million years worth of time. He disperses it to the masses, crashing the currency and the system. Interestingly, the determined time police (IRS) relentlessly on Timberlake's trail, are rigidly by-the-book to everyone, even the elites. They blindly support the currency time system because they fear a crash and/or rise of an unknown alternative system would be even worse, though they are also victims of the current system.


Rating:  80 round mag of a possible 100 round mag on the AR scale






Sun, 07/29/2012 - 14:45 | 2660542's picture

I read a story with the time credit premise in Playboy when I was fourteen. Silly me, reading Playboy. Youth really is wasted on the young. I'd like to get some of those time credits back.

Sun, 07/29/2012 - 16:15 | 2660704 francis_sawyer
francis_sawyer's picture



Wasn't a movie I was even vaguely interested in (but watched it by happenstance)... I was pleasantly surprised by the analogous content... Plus, as a bonus, Amanda Seyfreid is a hottie (even if she's an MK Ultra subject)...

Tue, 07/31/2012 - 03:06 | 2664267 MeelionDollerBogus
MeelionDollerBogus's picture

SUB-PLOT - sorry to be a spoiler - but anyone who's clock runs to zero can die from it, even the rich elite - and yet such a technology implies one can refill infinitely or even stop the clock, those who made the clocks. We never see who those people are or how new money is distributed into the system but for the newborns who carry 1 year of time on them that can't be taken until they come of age.

The real tricky question is to ask who are the clock-stoppers not the time-keepers or thieves or bankers.

Sun, 07/29/2012 - 14:30 | 2660528 spooz
spooz's picture

Cry me a river that the lucky ones making over $200,000 have to pay a little more on their investment income.  Do you know how many would LOVE to have to pay more taxes under those circumstances? Greed wins out, as ususal. ESPECIALLY since the only people making significant investment income are the elites, who try to stir up the upper middle class as if its their fight.  The same upper middle class that would significantly benefit from universal health care instead of the crony capitalistic Obamacare, where insurance skims 20-30% off the health care dollars as opposed to Medicare's 5% overhead.  We will be SO much better if we let the private interests run the show.  

And cry me another river about losing the sports stars.  I think the 99% are more concerned about their slide towards global worker unit status than the bread and circuses of professional sports.

"Life, liberty and the pursuit of happiness" don't amount to much if you can't earn a living wage, have no health care and have to go into debt to get an education, even if you work while going to school.  

The elites think they can keep pushing those same old libertarian buttons and get the same Pavlovian response.  The old appeal to entrepreneurs, when its the multinationals who benefit from the little guys outrage.  Paring down the government would be to just throw out the regulations and let the banksters and multinationals turn us into a third world country with worker units and elites, along with a shrinking but complicit upper middle class.

Gotta post to Jesse's excellent article about The Poor And Taxes to offset this propaganda.  He gets the relationship between public and private that is the source of our problems. History is full of examples of monopolies and banks becoming too powerful, which is where we are now:

Sun, 07/29/2012 - 14:41 | 2660538 Ol Man
Ol Man's picture

"Paring down the government would be to just throw out the regulations and let the banksters and multinationals turn us into a third world country with worker units and elites, along with a shrinking but complicit upper middle class."


The Banksters couldn't do what they are doing now without the power of government.


Sun, 07/29/2012 - 14:59 | 2660551 spooz
spooz's picture

If the unregulated shadow banking system is an example of what we could expect out of "free markets", NO THANKS.

Sun, 07/29/2012 - 15:43 | 2660640 Tirpitz
Tirpitz's picture

Could there be something wrong in selling toxic worthless 'assets' to widow-and-orphan funds? Sure not as long as there's some commission to be made.

Capitalism works, at least for the ruthless ones.

Tue, 07/31/2012 - 03:04 | 2664263 MeelionDollerBogus
MeelionDollerBogus's picture

These toxic assets are toxic because they are the product of fraud - massively unprosecuted fraud as Bill Black and Bill Murphy have each pointed out in their own ways.

Real capitalism requires real consent and ownership, not the power against consent to enforce a fraudulent currency, a fraudulent loan document, a fraudulent distribution of securities/shares based on fraudulent loans based on fraudulent currencies, all without consent, and an especially anti-capitalist activity is to do all this and to JAIL AND FINE anyone who EXPOSES it.

Tue, 07/31/2012 - 03:01 | 2664259 MeelionDollerBogus
MeelionDollerBogus's picture

There is no unregulated shadow-banking.

It's very clearly regulated, regulations sucking money in by demanding what currencies are allowed to be used and who is allowed to be a bidder, and further regulations about whose funds and transactions are protected, and further regulations and REGULATORS who keep the whole scam running because we'd all arrest these fuckers without those regulators and regulations.

What keeps banking in the shadows, the "shadow banking" off the books is that people are getting so complacent they desire ignorance as if it were a comfy pillow.

Regulations only make it more the case.

When all the REGULATORS and REGULATIONS are destroyed the shadow-banking system is VAPORIZED. What does it say that even DRUG CARTELS rely on it? They can SMUGGLE guns and people and drugs across borders easily and have their own armies yet they prefer the REGULATED shadow-banking sector?

Once those REGULATORS are gone there are no GOVERNMENT armies to enforce electronic cables, special trade agreements and shipping foreign currency the hard way - instead it will be all smugglers, all free-market all the time until that's no longer smuggling, it's SHIPPING, and the REGULATORS are recognized for what they are - PIRATES OF THE HIGH SEAS.

Sun, 07/29/2012 - 14:30 | 2660529 msjimmied
msjimmied's picture

Let me sum it up.

Drill Baby Drill

Deep, bone grinding Austerity needed

We don't need no Education

If you tax us, we will leave.


After decades of want, our dumb children would then finally reach the golden age of debt free prosperity (for reals?), when they can choke on the air and drown in the sludge. You would want to leave the planet then, but there will be nothing left to power your space ship. You can't burn tax free fiat to power an engine that big...needs more BTUs. It's a guarantee that nothing new would come up to change this scenario, not as long as we have big oil pumping out propaganda using mouthpieces such as this chump. We are wasting our time talking about ideology. There is no choice anymore. Doesn't matter who you put up there as the figurehead, the course is set. 

Ayn Rand? it's time my friend, that you give up childish things. 


Sun, 07/29/2012 - 15:32 | 2660611 AssFire
AssFire's picture

Spooz & Gully,

If you progressives can't understand this, there is no helping you:

Suppose that every day, ten men go out for a beer and the bill for all ten comes to $100.

If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.

The fifth would pay $1.00

The sixth would pay $3.00

The seventh would pay $7.00

The eighth would pay $12.00

The ninth would pay $18.00

The tenth man (the richest) would pay $59.00

So that’s what they decided to do. The men drank in the bar every day and seemed quite happy with arraignment, until one day, the owner threw them a curve.

“Since you are all such good customers, he said, I’m going to reduce the cost of your daily beer by $20.00.

“Drinks for the ten men now cost just $80.00

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men – the paying customers? How could they divide the $ 20 windfall so that everyone would get there “fair share?” They realized that $ 20.00 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay!

And so:

The fifth man like the first four, now paid nothing ( 100% savings).

The sixth now paid $2 instead of $3 (33% savings).

The seventh now pay $5 instead of $7 (28% savings).

The eighth now paid $9 instead of 12 (25% savings).

The ninth now paid 14 instead of 18 (22% savings).

The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before! And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

“I only got a dollar out of the $20“ declared the sixth man. He pointed to the tenth man, “but he got $10!”

“Yeah, that’s right, shouted the seventh man. “why should he get $10 back when I got only two? The wealthy get all the breaks!”

“Wait a minute,” yelled the first four men in union. “ We didn’t I get anything at all. The system exploits the poor!”

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalist and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

For those who understand, no explanation is needed.

For those who do not understand, no explanation is possible.

Sun, 07/29/2012 - 16:03 | 2660632 Tirpitz
Tirpitz's picture

"Tax them too much, attack them for being wealthy, and they just may not show up anymore."

Got to reduce their ill-gotten wealth rather by means of expropriation plus extermination. Where did it come from? The working class' toiling.

"In fact, they might start drinking overseas where the atmosphere is somewhat friendlier."

Let them go, the sooner the better. Just keep their stolen riches back in the country where they belong.

Sun, 07/29/2012 - 19:53 | 2661083 AssFire
AssFire's picture

You are getting your wish. Be careful what you wish for.

Communist dog does not understand earning is not stealing.

Wealth will be leaving.. You don't understand how many will be making $249,999.00 if you have your way?


Sun, 07/29/2012 - 23:33 | 2661476 spooz
spooz's picture

Riiiiiiiiiiiiiight.  And the CEOs will be willing to make only 18 times the average worker's pay instead of 480 times because they don't want to pay taxes.  Give me a break.

Sun, 07/29/2012 - 15:52 | 2660636 spooz
spooz's picture

 Allowing the elites to accumulate all the wealth leaves nothing left for the sheeple.  How does that work into your little story?

 People who make a good living should be willing to pay taxes.  Elites should be taxed on wealth that they managed to accumulate by buying tax breaks with the help of lobbyists.  In the interest of a sustainable economy, the wealth accumulation has to be reversed.

Sun, 07/29/2012 - 16:19 | 2660713 AnAnonymous
AnAnonymous's picture

HOw it works in this little story? Very easily as it depicts a progressive consumption tax. Which does not exist in most US citizen nations.

Of course, applying consumption tax in his little example would destroy his preset conclusion but hey, US citizenism is what US citizen does.

Sun, 07/29/2012 - 15:42 | 2660638 Vooter
Vooter's picture

That's it? The rich guy might take his ball and go home, so we'd better not make him mad? LOL... What if the satisfaction of beating the shit out of him or killing him is greater than the satisfaction created by his financial "beneficence"?

Sun, 07/29/2012 - 16:16 | 2660707 AnAnonymous
AnAnonymous's picture

Ummmm, well, usually, in US citizen economics, people who are exempted on consumption taxes are seldom the poor, quite often the middle and the upper class.

Another nonsentical example by a US citizen in order to make a point that is full fantasy...

Sun, 07/29/2012 - 15:50 | 2660657 Bloodstock
Bloodstock's picture


Sun, 07/29/2012 - 16:37 | 2660751 dolph9
dolph9's picture

You people don't get it.

In the modern world, you are not supposed to have personal "savings."  Savings are old fashioned, and now only for the super rich.

No, you are supposed to spend every last penny you earn to "stimulate" the economy, so that advertisers and corporations can make a buck, so that some peasants in China can have a job, so that some Africans can be fed, so that some Arabs can be bombed, so that the bankers and a few celebrities and pro athletes can rake in millions.

Savings are for patsies, suckers.  For the great unwashed American middle class that convinced themselves they were "doing the right thing" but will end up in the dustbin of history.

Is it starting to dawn on you?

Sun, 07/29/2012 - 17:06 | 2660821 HungrySeagull
HungrySeagull's picture

Where do you think the goddamn Silver and Gold IS?

A form of savings. Actually an asset.

Pitiful for sure but someday even that will rise. People are sick of debt now they embrace the opposite of Debt, Assets that are not controlled by anyone. (To a point...)

Verily even the super rich will find themselves picked clean.

While the debtors celebrate having thier debts written off and the taxes to be paid on the amounts.

To actually go into a bank and put your money into the teller's desk for savings? That old model is dead. Long live the new model... one driving by Sealy and Remington.


It is not just about money, It's also the things we use every day. We save some food, some water and so on so forth. So that when a storm comes, we can stay a while and not report to the shelter.

You do know that everyone reporting to a shelter only recieves 60 square feet of space.

Sun, 07/29/2012 - 18:37 | 2660970 francis_sawyer
francis_sawyer's picture

One of the most poignant scenes from 'Dr. Zhivago' is the moment Yuri returns home to a battered Moscow from the Russian front to see how the 'Party' has divvied up his former residence... 

Sun, 07/29/2012 - 23:28 | 2661449 HungrySeagull
HungrySeagull's picture

I had to watch that movie several times in my world to even begin to understand what an epic it was...

Sun, 07/29/2012 - 22:39 | 2661372 Ted Baker
Ted Baker's picture

Fact 3:- Govnts together with bank planners have been destroying the wealth of all over the last 4 years

Sun, 07/29/2012 - 23:29 | 2661451 Bitchin Bear
Bitchin Bear's picture

WTF Tylers - I've been away a few weeks and it looks like ZH has been taken over by HuffPo.  I've never heard so much liberal cant in my life.

Mon, 07/30/2012 - 02:49 | 2661642 Venerability
Venerability's picture


Few more commentaries like this one, Tyler, and you'll have to give in and make me a guest commentator.

Call me!

Mon, 07/30/2012 - 06:39 | 2661715 Freewheelin Franklin
Freewheelin Franklin's picture

So, the government doesn't build the roads, they just set up road blocks?

Mon, 07/30/2012 - 07:03 | 2661736 dizzyfingers
dizzyfingers's picture

"This roadblock required them under law to destroy their fishing boats, thereby preventing them from earning their livelihoods."

Happening here too. Days at sea restrictions deny owners of one-boat family businesses from fishing every day of the week, and there are many other interferences. Including but not limited to denying licenses to fish to children of families who've fished US waters for many generations. Often done using "environmental" excuses but part of the takeover or our formerly freer lives and denial of property rights. People can't fish along the shorelines they own and pay taxes on.

Tue, 07/31/2012 - 09:58 | 2664858 pyrat
pyrat's picture

things you can do to get started

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