Friday, August 12, 2011

The organised thieves

Whilst most UK media attention has been paid to the underclass and not so underclass of amoral parasites who turned on their fellow citizens, the most organised thieves of all - governments, have been trying to evade reality in Europe some more.

The sovereign debt crisis of Ireland was purely due to the foolish 100% guarantee of Irish banks given by the previous Irish government (trying to outdo the £85,000 limit in the UK) - it eliminated risk for banks, transferring it onto taxpayers.  It had a property bubble fueled by easy low interest credit in Euros, driven by the buoyant German economy, which bust.  Now Irish taxpayers are paying for bank guarantees made by politicians on their behalf.  Irish politicians promised to steal from taxpayers to support the profligacy of banks.

The sovereign debt crisis of Greece is pure state socialist profligacy.  A generation and a half of continuous budget deficits, fiddled accounts and lies about the national budgets, mass tax evasion, a welfare state that rewarded people for non-jobs and to retire in their 50s.  It was only extended when Greece joined the Euro, as budget deficits were "cheap" with low interest credit.  In addition, Greece was propped up by years of subsidies from the EU to its poorest members, of which Greece no longer largely qualifies since the accession of the former Soviet satellite states. Now Greek residents are learning to pay tax and learning that the socialist state has run out of cash.  Greek politicians promised to steal from future taxpayers to pay for the "jobs" and benefits of many of the current ones.

The sovereign debt crisis of Portugal is similar to Greece, without the fiddled accounts, with a bit less debt, but a smaller GDP to bear it.   Again a long period of cheap credit and Portugal enjoyed much EU largesse before the EU turned to funding infrastructure in the former communist bloc countries.  Portuguese politicians promised to steal from future taxpayers to pay for the lthe "jobs" and benefits of many of the current ones.

Spain's sovereign debt crisis has some parallels with Portugal, but was also exacerbated by a property bubble ala Ireland, where the economy was propped up by massive private borrowing for property, which went into construction.  Now Spain has a crisis of lower tax revenue and an overly generous state sector and welfare state.  Spanish politicians were hoping to keep stealing from future taxpayers and current property speculators and construction companies to pay for the the "jobs" and benefits of many of the current ones.

Italy's sovereign debt crisis is government led, as Italians have tended to be wary of credit, but Italian governments been profligate about buying votes with government jobs and social services.  Decades of short coalition governments that have favoured special interests now see Italy with sovereign debt of over 118% of GDP.  Italian governments have long promised to steal from future taxpayers to pay for the the "jobs" and benefits of many of the current ones.

Cyprus's sovereign debt crisis is less about government spending and more about fear of bailing out banks that loaned to the Greek government, and the slow in GDP due to losing half of its electricity generation capacity due to an explosion.  Cyprus's government has promised to steal from current and future taxpayers to pay for the profligacy of banks who loaned to another profligate government.

Belgium is small, but it too has sovereign debt of around 100% of GDP.   It too has had a generous welfare state, but has run more sedate budget deficits, although it saved itself from a crisis a decade ago by running surpluses for eight years, getting public debt below 100% of GDP.  It is now facing a similar crisis, but its overspending has been trimmed.  Still it too promised to steal from future taxpayers to pay for the job and benefits of current ones.

Now there is France.  It has public debt of over 80% of GDP, but has run budget deficits consistently for decades.  The trick has been to run deficits smaller than growth of GDP in some years, which has simply meant that the debt burden has been pushed out again and again.  Now it faces risks around its banks, which the French government is fully expected to bail out (large businesses in France often never really go bankrupt) banks that loaned to the profligate countries named above.

So the ban on short selling, is France's way of trying to stop the reality of the risk of French debt being devalued.  France can continue to borrow from the children and grandchildren of future taxpayers only if France's economy grows faster than the rate of borrowing.

You see governments throughout the Western world have been engaging in theft, on a grand scale, from future taxpayers.

Now as a libertarian I see all taxation as theft, because if private individuals or governments acted as government did, they would be treated as criminals.

However, even if you accept the absurd democratic-socialist model of government, that people vote for governments that institute taxes, and so somehow consent to it (essentially the majority impose their will on all), then this fails to apply to governments running budget deficits for current spending.

For when governments borrow, they are borrowing from future taxpayers.  Whilst many are current taxpayers, in 10-15-20 years time, some of those will be dead, and most current children will be taxpayers, and some as yet unborn ones will be.   None of them voted to pay the taxes to pay the debts of people who wanted unfunded pensions, who wanted subsidised businesses, who wanted unfunded healthcare.

It is intergenerational theft, and it can most easily be seen in the PAYGO pensions and health care systems in place in the USA, UK and yes, New Zealand.  Ponzi schemes that pay people on current pensions and health users (most of whom are elderly) out of the taxes of currently trading businesses and individuals.  By no stretch of the imagine are the benefits these people are getting paid for by them, for their taxes paid for the last lot, and there aren't enough new taxpayers to pay for this insecure intergenerational mandatory deal that statist politicians bribed people with.

So whilst there is righteous anger and disgust at the actions of looters, vandals and others who have demonstrated they are little more than parasites and destructive to humanity and life, there also should be anger at the political classes, who have continued to peddle their borrow and hope mentality, with their regular advance auction of stolen goods, so they get power.

It is true whether the party concerned is called Republican, Democrat, Labour, Conservative, Liberal Democrat, National, Greens or Maori Party.   All are guilty, all gain power and seek to borrow from people who don't have a vote, who have no choice but to pay for what current politicians want to spend money on.

The Tea Party in the US has, in part, represented resistance to this profligacy, and whilst it has attracted a colourful range of characters, it has also attracted approbium and abuse for wanting to end this mortgaging of childrens' futures.  In the UK, only think tanks and lobby groups represent that attitude, and in New Zealand perhaps only now ACT, and of course Libertarianz.
Don't believe me?  Simply ask your next politician why your children and grandchildren should be forced to pay back debts so that people who currently live off the state, get benefits from the state or get their businesses supported by the state, don't have to pay for it themselves?

1 comment:

Richard McGrath said...

Well put, Scott! I know you won't mind me stealing some of this article to use during the coming election campaign.