Cyprus Wealth Tax A Dangerous Punishment For Saving

March 18, 2013 2 Comments

News out of Cyprus over the weekend should concern everyone. Cyprus is in need of an EU bank bailout. Not surprisingly the Germans are tired of bailing out fiscally unstable European nations. With Germany refusing to bail Cyprus out the EU came up with another plan: Tax savings. Just three weeks ago the President of Cyprus laughed off such a proposal as ridiculous. Early Saturday morning in a massive document dump the President’s plan to tax savings (10% for savings over $50k, just under 7% for those with less savings) was revealed. Only the press didn’t pay attention. It took individual citizens complaining on Twitter about not being able to use ATM’s for people to figure out what was going on.

American leftists such as Robert Riech are hailing the taxation of wealth as a great thing. In reality what Cyprus is doing is incredibly dangerous. They’re basically setting up bank runs all across the EU. The people in Cyprus learned too late that their savings were going to be taken from them. Don’t for a second think the folks in Greece, Italy, Spain and Portugal aren’t taking notice. If people believe their country might tax their savings, they’ll pull their savings out of the bank. Because of fractional reserve banking, most banks won’t have enough cash on hand to give back to depositors. Thus we could see bank runs that collapse banks in Italy, Spain and several other countries.

This is both good news and bad news for the United States. It’s bad because the Euro zone is one of our biggest trading partners. Bank runs such as what is likely to happen due to the situation in Cyprus will slow economic growth throughout the EU. Bank runs creat chaos and chaos is never good for economic growth. The only bright side to this is that some large depositors might move their money to the United States. Though having said that banks in Germany and Britain are as stable as ours.

This entire situation sets up a dangerous precedent. While we aren’t likely to see our savings taken from us via a bank enforced wealth tax in the US, there is legitimate concern that it could happen here. We’re a nation that has over $16 trillion in debt. It would hardly be surprising if one day the government decided to tax us in this manner to pay off debts to avoid financial collapse. It’s not likely now but it could be in the future. There have been talks from the left about nationalizing our 401k’s, which would serve a similar end. If people become fearful of banking, the entire financial system could be in major trouble.

In the short run the message being sent by Cyprus is that there is no gain in savings. Savings are one of the most important functions of the family and of an economy. It’s bad enough that governments discourage savings by creating artificially low interest rates and taxing middle class capital gains. With governments in the Euro Zone either taxing bank accounts or considering them, the incentive to save decreases. Without savings, families don’t have a hedge against unexpected unemployment or expenses. Thus they look to government, which of course doesn’t have the money to be our hedge anymore. Especially in socialist countries like Cyprus, Greece, Italy etc.

Make no mistake, the US government is engaging in the same mistakes concerning savings. The Fed keeps interest rates artificially low, thus there is incentive to consume today rather than save for tomorrow. Our national debt is such that at some point we will no longer be able to afford the massive government we’ve created. Our states and local governments are in debt as well. Taxpayers are being taxed to death, wealth is the only avenue the left haven’t explored via taxation. With people not saving and expecting personal bailouts from government, we’ll have a problem on our hands when we can no longer afford our national debt. It’s a matter of time. We can’t add $1 trillion a year to the national debt and expect that to be sustainable forever. We’re not Cyprus yet but we aren’t far off.

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Why Are One In Three Children Living Without Their Father?

December 27, 2012 Leave a comment

The Washington Post had a piece the other day about the decline of fathers in the home. It’s an across the board problem, though it’s  more pronounced in lower class and black families. It isn’t just a problem here in the US, in Britain the #10 Christmas present request from children was a dad this year. We’re seeing two things at play. The decline of Christian morality on one had has made fathers irresponsible and dispensable. At the same time, secular government has encouraged the elimination of the father from the home via various laws.

Nearly 1 in 3 American children live only with their mother. For blacks, 54% of black children live without their father. That number rises to 88% for black families below the poverty line. It’s not much better for white families below the poverty line, of which 68% of the children live without their father. We can see the decline in Christian morality in these numbers. Not surprisingly most of these people don’t attend church, a huge change from two generations ago. As morality has declined the illegitimacy rate has increased to nearly 40% of births. It isn’t just a minority problem, over 25% of white babies are illegitimate. The more illegitimate children, the fewer fathers in the home.

No doubt each father is responsible to take care of his own children. He has no excuse for not caring for his children, just like mom has no excuse for having four different fathers for her four kids. There is however interplay between government law and policy and illegitimacy rates and the decline of fathers in the home. Fathers have been relegated by the state to little more than child support payments. When the father doesn’t pay or is unknown, then the government steps in and plays the role of father providing welfare checks, food stamps, telephones, housing etc. Seeing that someone else will care for their children, some men are more than happy to step aside.

There’s a reason why the majority of single parent households are poor. They know how to play the government system, they have ready access to the welfare bureaucracy and apparently have no shame in taking full advantage of it. Men are viewed as nothing more than a means to an end. Most of the men realize that and unfortunately they take full advantage of it for their own temporary gain. It’s a sick system, an unintended consequence (or perhaps intended) of the welfare state. Is it any wonder that illegitimacy rates, particularly in the black community, skyrocketed after the Great Society of LBJ?

The black family used to be the cornerstone of the black community. It just 50 years ago that the overwhelming majority of black children grew up with a mother and a father despite the fact that most blacks were poor. The problem we face as a nation isn’t ethnic and it isn’t directly related to poverty. The problem we face is a progressive destruction of the moral fiber of the nation coupled with government action that encourages the destruction. It isn’t just in the black community, it’s in the white community as well. We see similar problems among poor whites.

Fathers are relevant in a child’s life. That got lost for decades as single mothers became more popular in the media and as men became portrayed more like morons than as head of household. Some men have fed into the media depiction of them, aided by a government who will do their job for them. While we may debate whether or not government is at least partially responsible for the lack of fathers in the home, a generation of children long for a father. If kids in Britain want a father more than a bicycle or doll odds are there are just as many children here in the US who feel the same way.

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Big Government Is What Keeps Blacks Poor, Dependent

December 10, 2012 Leave a comment

Law Professor Michelle Alexander of Ohio State’s Law School spoke at an event sponsored by Detroit’s Central United Methodist Church. This church resembles a Saul Alinsky styled community organizing group as opposed to the bride of Christ. Alexander criticized the American prison system, alleging it is a race based caste system and the moral equivalent of Jim Crow. She detailed the negative consequences of having a felony on your record all while pretending the prison system is aimed squarely at blacks. There is much to criticize in American criminal law. But the blame for black poverty doesn’t belong on criminal laws, it flows from the destruction of the black family by the welfare state.

We could spend quite a bit of time attacking American criminal justice. Our drug laws have built countless prisons to house otherwise non-violent felons. Our drug laws have created the gang underworld which thrives on violence over drug distribution. If Alexander wants to attack those laws on non-race grounds, that would be one thing. But to pretend as though those laws are focused squarely on blacks ignores the fact that thousands of white people have been convicted of these crimes and suffer the same post-sentence consequences as blacks and other minorities.

No doubt post-sentence consequences play a role in keeping convicted felons in relative poverty. The problem isn’t those consequences, it’s the law in the first place. But even these laws aren’t to blame for modern black poverty in America. It would be easy to point out that under Obama the black middle class has been destroyed. But the problem for blacks, and to a lesser extent poor whites, goes well beyond drug laws. It’s easy not to get convicted of a drug law, all it takes is staying off drugs and not selling them.

What keeps blacks and poor whites down is the welfare state which has replaced fathers and men with the government. The illegitimacy rate in the black community is 80%, it would be even higher if over half the abortions in this country weren’t black babies. Men aren’t needed to provide for a poor family anymore, it’s easier to have government provide. It’s more cost effective, no one has to work. Since the 60′s Great Society welfare programs black illegitimacy has skyrocketed and male delinquency has not surprisingly mirrored these rates. Men aren’t needed in the black community anymore. For men rather than serving the higher purpose of a family, they serve the higher purpose of gangs and when they don’t do that they make life go away with drugs and alcohol.

It isn’t any better in the poor white community, where the illegitimacy rates are lower but shockingly high at over 40%. Government has replaced men with welfare. Both the black community and the poor white community can justifiably complain about terrible government schools which don’t exactly kick start any career other than drug dealer, juvenile delinquent or knocked up teenager. Poor whites and blacks have more in common than liberal black social justice advocates care to admit.

The theme in all of these problems is government. Government created the war on drugs and has built hundreds of prisons to lock up non-violent drug users, to say nothing of the violent gang drug sellers. Government has created the welfare state, which has dispatched with husbands and fathers in exchange for a monthly welfare check. It is government that has sent up all the negative consequences for families and society from not having fathers in the home. It is government that is responsible for the disgraceful education available at the inner city government schools. Don’t fool yourself, your suburban school isn’t all that great either.

Rather than demand bigger government, Alexander and Detroit’s Central United Methodist Church would be better served advocating for smaller government. Big government has done little more than create big poverty for blacks. We can begin with Jim Crow, which outrageously used the power of government to keep blacks down. Now we can focus on the welfare state and other big government programs that have radically altered the black family (to say nothing of poor white families). The black community has never embraced what will truly make them equal: less government involvement in their lives and a strong nuclear family. Alexander will cry racism over the prison system but that’s not what keeps blacks poor. Government and the unintended (intended if you see a racial motive) consequences of big government are what keeps blacks poor and in an endless cycle of poverty.

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Half of Americans On The Government Dole

May 26, 2012 3 Comments

Earlier this week we discussed the reality of American poverty. What we call poor in American is actually quite rich when compared to the rest of the world. Poor is considered to be a family of four living on less than $22,350. Two billion people in the world live on less than $2 a day. Our poor have more living space and more consumer electronic goods than the average European family. Poverty in America is relative only to the wealth of other Americans. When we look at the rest of the world, American poverty becomes a laughable joke.

With that in mind, it is shocking to discover that 49.1% of Americans are on the government dole. Some of these people are legitimate, around 15% are on medicare and thus are also on social security. But 15% are receiving food stamps and 26% are on medicaid. We have legions of people getting other programs such as WIC, section 8 housing, free school lunches, free cell phones, condoms, drug syringes and a host of other welfare programs. We’re spending a fortune on all of these programs. The Federal government is massively in debt and state governments are increasingly in debt.

In short, we have many millions more on welfare than need to be. We don’t have a problem with poverty in America. What we have a problem with is people living on the dole who don’t belong there. When people can live on the dole but can still afford multiple cars, cable television, HD television sets, microwaves and air conditioning they’re simply getting to much from the government. I don’t begrudge people these consumer goods and creature comforts. But when you’re on the dole and can still afford all these luxuries you have to wonder why anyone would have the incentive to work.

This is perhaps the biggest problem with the welfare state, it saps people of their incentive to work. It turns people into lazy, dependent slaves of the state. Welfare saps people of their humanity. Life shouldn’t be easy on welfare, it should be extremely difficult thus creating incentive to find work. The problem is that we’ve made it far to easy to live on the dole, to be dependent on the state. It’s simply to easy to get food stamps. We’re handing these things out to people who can afford to buy their own food. If you can afford to buy video games, you can afford to buy your own food.

Taxpayers don’t realize the cost or the ease with which people can obtain welfare. Only half of American families pay income taxes. Those taxpayers are middle, upper middle and upper class Americans. Most have no idea what the criteria is for obtaining welfare, be it food stamps, WIC, unemployment or another form of welfare. So they have no idea how easy it is, they have no idea that people who don’t need food stamps are able to obtain them. But it is easy and nearly half of the country is on some form of government assistance.

At some point taxpayers must revolt against this nonsense. We don’t have legions of starving people, we don’t have legions of poor people who cannot afford food and shelter. We have a lower class that can afford all sorts of consumer goods yet expects the government to pick up the tab for basics. This is patently absurd. We’re not talking about people who suddenly finds themselves unemployed, we’re talking about people who are on the dole long term generation to generation. We have a major problem and the Democrats want to make it worse and the Republicans are afraid to do anything about it. Our welfare state is unsustainable and at some point it will collapse.

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The Truth About American Poverty

May 24, 2012 9 Comments

In order to be considered below the poverty line, a family of 4 must have income of less than $22,350. There are apparently over 46 million such Americans these days, with substantial increases since Obama took office. These people are portrayed as desperate, starving people in dire need of assistance and help. The image we’re supposed to have of these people are of starving kids in Ethiopia or of children dressed like ragamuffins in tattered clothing during the Depression. But the truth is poverty in America is relative only to what the middle and upper classes have. The poor in American bare no resemblance to the truly poor and starving in other parts of the world.

According to the US Census, 87% of the American poor always have enough to eat. In fact, less than 3% of poor children suffer from stunted growth in America which isn’t surprising when 96% of poor parents report their children always have enough to eat. Less than 1% of the poor are homeless a single night during a year. In fact, 42% own their own homes. The average poor family household has 1,400 square feet of living space. That’s lower than the average American family which has over 2,100 square feet of living space but it’s higher than the average of any other nation in the world including all the nations of Europe.

The US Census reports that 80% of poor households have air conditioning (Only 36% of all US households had air conditioning in 1970). Around 92% of poor households have a microwave, just under 75% have a car or truck, 31% have two or more cars, nearly 2 out of 3 poor people has cable or satellite television service and a DVD player, over half of poor American children have a video game system, one third of the poor has a wide screen plasma or LCD television and half have a computer.

This is a starkly different picture presented of the poor than the one we’re fed by the media. The truth is the poor in America are rich in comparison to the poor of the rest of the world. They live a life of luxury when compared to the poor and starving in parts of Africa and Asia. In short, we’re not talking about the truly poor for the most part when we’re discussing the poor in America. We don’t have hoards of starving children, we don’t have legions of homeless. We have people who don’t have as much as the middle class but still have a microwave, television, cable, video game systems and a host of other consumer amenities.

The sob stories the media feeds us about the poor in America are really not about poor people. They’re about middle class Americans shocked by losing their jobs and being forced down into the lower class. It’s largely about their inability or their refusal to cope with their new reality. A reality that for most Americans is temporary. But this reality isn’t one of true poverty, it’s one of relative comfort just not at the level one is accustomed to. It’s a level of comfort that most of the world would love to have. Half of the world lives on less than $2 a day, do you think they wouldn’t enjoy the comforts the poor in America have?

Poverty is relative, even within the Federal government. Poverty levels are different at different agencies. Poverty is whatever suits the state at a particular time. When we look at poverty in the United States, we really need to recognize that poverty here is only relative to what the middle and upper classes have. When we compare American poverty to the rest of the world, it’s pathetic and laughable. We don’t have truly poor people in this country, the people we call poor are living large on consumer electronics. They’re hardly starving and homeless.  It should give us pause to wonder about our welfare state and whether we really should be paying for cable tv and video games for the lower class.

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Godless Welfare State Burns London

August 10, 2011 16 Comments

London is burning as the welfare class rises against cuts in to their lazy lifestyle. What started as a race riot has turned into a leftist riot against cuts to the welfare state. Unlike past leftist rallies and revolutions, this seems to be less about obtaining power and more about preserving welfare. Two snot nosed welfare recipients crowed that they were showing the ‘rich’ and the police that they can ‘do what we want.” Apparently this means that the riots are about stealing wine, flat screen televisions and burning down the neighborhood. In other words, they’re about selfish gain rather than any imaginary notion of political justice.

These riots started out as race riots. They however appear to have been taken over by people who remind me a great deal of the anarchists who protest and loot at just about every G8 Conference. These people are funded by various leftists, including George Soros. Keep in mind, the left views the chaos caused by riots as a power grab opportunity. The left encourages street violence and riots in order to grab power for themselves. This is what is taking place in England today, the far left is encouraging mob violence in order to take power back. One wonders how long it will take the Cameron government to collapse.

These riots show us everything that is wrong with the welfare state. The cradle to grave welfare state teaches people that they are entitled to money, housing, health insurance and so on without ever putting even the smallest amount of effort into their own existence. The welfare state teaches people to be dependant on a faceless bureaucrat. So instead of looking to family and friends for help, people look to bureaucrats. The end result is that there is a disconnect between individuals and their families and communities.

When there is a disconnect between individuals and their community, burning down local businesses isn’t viewed in a bad light by these people. Especially so when they believe that the owners of those businesses are taking away welfare benefits. It doesn’t matter if it isn’t true, when you have no connection to your community it matters not to you whether your neighbors house burns so long as yours stands.

The reaction to the threat of welfare being cut back or cut off isn’t particularly surprising. These people don’t know how to fend for themselves because they’ve been taught from birth that faceless bureaucrats will take care of them. Now that there isn’t any money to do so, these welfare slaves are freaking out over the prospect of having to fend for themselves. Make no mistake, these people are slaves to the welfare state. They literally have no idea how to truly take care of themselves. Their reaction is about what one can expect, they’re going to go grab what they can before they have to fend for themselves. We see in what they’re grabbing the depths of their welfare slavery. They’re going after bottles of wine, tennis shoes and televisions rather than food and clothing.

One thing that needs to be mentioned is that England has become a post-Christian society. We’re talking about a nation where less than 5% attend Church on Sunday. They have turned their back on God and in doing so they’ve brought these riots upon themselves. Socialism is the antithesis of the Christian faith. It teaches dependence on government rather than dependence on God. Under socialism, God is replaced by the welfare bureaucrat. God requires self reliance, socialism requires reliance on the government. God requires hard work, socialism allows for sloth. The acts of evil we are seeing in England is what one should expect from people who have turned their back on Jesus Christ. A once great Christian nation doesn’t think anything of stealing wine, shoes and televisions while burning down the local furniture store.

England and the world watch on in horror as the riots spread from London to the rest of the country. Night after night, the riots continue. The problems are clear. The socialist welfare state has destroyed two generations of British citizens. The only hope for England, in fact the only hope for the world, is a return to Christ. We have seen what is happening in England happen in every post-Christian European nation over the past 200 years. It has finally come to England. We must pray for revival and a rejection of the welfare state. We Americans must look at what’s happening in England and take it as the warning that it is.

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