Fatal Embrace & Taxing
by James Cook, President of Investment Rarities. April 16, 2009Print
People talk about socialism today as if it were something new for America. Actually, we’ve been going socialistic for 70 years. We’ve had an ongoing transition from capitalism to socialism. Today we are more socialistic than capitalistic. As a consequence, we are suffering from the economic failure that is part and parcel of socialism. The current economic crisis that’s frequently blamed on capitalism is in truth, a failure of socialism. Our country faces total ruin because of our fatal embrace with this collectivist creed.
A primary tenet of socialism is a government monopoly on money. They decide what the money will be. Socialists have no use for gold as money. By removing the connection to gold and creating a purely fiat money, they set the wheels in motion to destroy America’s greatness. A fiat money can be created at will by politicians and central bankers. A nation that debases its currency with fiat money signs its own death warrant. America’s failure to maintain sound money signifies the onset of national bankruptcy and loss of economic power and prestige.
Without fiat money our politicians could not spend recklessly and fund their myriad social programs. They could not run huge deficits and cover them with a printing press. Inflating and socialism are joined at the hip. Our leaders never seem to be concerned about the runaway costs of social programs, wars, bailouts and stimulus. They plow ahead seemingly oblivious to the inevitable debasement of the dollar. They are going to shove socialism down our throats, no matter what the cost.
The cost will be great. Every evil that can afflict a civilization is set in force by currency debasement. Today our leaders tell us to spend instead of save. Have you ever heard more convoluted advice? This is the philosophy of capital destruction, social turmoil and impoverishment. This is the strategy of economic know-nothings who inevitably flourish under socialism. This plan to eat the seed corn is the road to economic perdition. Be afraid!
The new administration emphasizes fairness. If you’ve worked hard all your life and have finally started to make some money, you are going to pay more taxes. Some of this money will be passed out to people sitting on a porch. You can be sure they will think it’s fair. You, however, may not agree.
Ayn Rand would have asked the porch sitters: What is your moral right to the earnings of others? Of course, there is no moral right, and there’s nothing fair about it either. What’s more, there’s a lot of damage that goes with high taxes. The great economist Ludwig von Mises made these fitting comments:
“Progressive taxation on income and profits means that precisely those parts of the income which people would have saved and invested are taxed away.”
“If the present tax rates had been in effect from the beginning of our century, many who are millionaires today would live under more modest circumstances. But all those new branches of industry which supply the masses with articles unheard of before would operate, if at all, on a much smaller scale, and their products would be beyond the reach of the common man.”
People who want to improve the country through high taxes are taking a page out of the Marxist playbook. It’s not so much they want to save the country as to rule the country. Their views are rooted in envy coupled with an abysmal lack of understanding about how capitalism works to benefit the masses. Their minds have been poisoned against capitalism by the impractical nonsense of leftist professors and intellectuals who never had the guts to venture out. High taxes are just another milepost on the road to ruin. We are doing all the wrong things to foster prosperity. It’s more than tragic.
(James Cook is President of Investment Rarities.)
Copyright © 2009 James Cook