Tuesday, August 17, 2010

Heeeeeeeeere's the Collapse

"If there is no wind, row." – Chinese Proverb

(This article has been amended since first posted)

Each day, day in and day out, the "collapse" arrives for thousands of Americans. If you work for the government you might hardly have noticed. If you own and run a small business, you have had it beat you into submission. The media and the Left have done the most amazing job of convincing many Americans that the problem is the elusive "rich". Wall Street "Fat Cats". Scum bag executives that are exporting jobs for the sake of greed.

The truth, and the facts, are somewhat different. The truth is, the rich do not cost the middle class a single dime... the truth is, the haves are the government workers, particularly the members of the public employee unions.

It will be interesting to see how this plays out over the next decade or 2.

-------------------------

I had a visitor from my home town just north of New York City to the farm earlier this summer. Her younger sister was in my high school class. We got to talking about property taxes.

Now this person lives in a neighborhood where folks working at the local G.M. plant lived during the 50's, 60's, and '70's. By the mid 1980's, the prices of these homes became out of reach for factory-line-workers. Not because the properties had been improved but because of their proximity to the train station and a half hour ride into Manhattan.

She had bought the home from her mother some years back, and over the years her property taxes had risen to today's $16,000+! Mind you, this a former working class neighborhood. Actually, many of the old residents are still there... only the turnovers went to the yuppies as the older folks could not afford to move.

How does an individual making $100k per year, or less, pay New York's outrageous income tax levy, the outrageous sales taxes and fees for everything from car registration to park passes, and $16,000 per year in property taxes while providing for a family? How, exactly are these people supposed to save and provide for their "retirement"? Just how FOS have we become?
The $480k this person will pay (in constant dollars) in property taxes over the term of their 30 year mortgage would have done wonders, given interest compounded on those dollars, to provide these people with savings and security... instead it has been confiscated by their state and local governments leaving most of these folks literally destitute. Did I mention that New York State, in spite of these outrageous extractions, is destitute as well? Unable to assist the people they have reduced to penury?

In the background (foreground) of this cluster f*** is the ugliness that is our politics. How many times does the media have to run the story about "greedy executives" off-shoring jobs? As if its a f***ing conspiracy. Labor is being arbitraged until we reach equilibrium. The same people that can grasp this when it comes to entropy (heat will flow from a hot cup of coffee into the surrounding environment until both come to equilibrium) go deaf, dumb, and BLIND when it comes to grasping this simple economics equation. These are the very self same folks pining about poor folks in the third world... where, pray tell, do these economically challenged nit-wits of the American Left think those "off shored" jobs are going to?

Unfortunately for America, the same forces for equilibrium that are beating our income's into the mud are also doing the same job on the distribution of the world's Oil exports. This has the unpleasant effect of compounding the labor arbitrage in the extreme.

The question is: What, if anything, should be done about it?

Of course, the answer is to try to take advantage of this miasmic circumstance in each subsequent political election... and actually that makes perfect sense because there is nothing that the political structure can do about this anymore than American politics can restrain China's CO2 output, so they might as well see to their own careers. That's the problem with democratic republics... they are the "worst form of government except for everything else".

So here is the good news, sort of...

I read with interest that the many bloggers like me commenting on this seem to have gone from macro complaining to recommending micro action. John Michael Greer, Dmitri Orlov, Charles Hugh Smith... (I really need to start using my middle name... it sounds sooooo cool with Greer and Smith... hmmm... Gregory Thomas Jeffers... ugh... too busy. Oh, well) among many others seem to have gone from venting to action.

I must criticize some of what I read... "prepare" is such a sh*tty word. It connotes some kind of deluge that if one can just survive they will pop out the other side.... that's like "dieting". What is needed, in my humble opinion, is a change in "lifestyle" (another word that I absolutely, positively freaking despise...).... because in the end we need to enjoy the life we have, and me thinks, that can best be accomplished by acclimating to our new found modest lifestyles before they are forced upon us... and if they have already been forced upon you... LIE TO YOURSELF, and tell yourself that this was your plan from the beginning... and then get back to the business of living.

Because "The American Dream" is NOT dead. We just f**ked it up. But you can have it if you really want it - that is, for what it really was. When I was a kid, we had an army for a family, and that was normal back then for Catholic, working class folks. My parents lived in a 800 square foot, 3 bedroom home with 1 bathroom with 7 kids (when I was 3 or 4, my parents took in a 13 or 14 year old girl. She was not legally adopted but we referred to her as our sister, she just came to live with us when her mom died and her father abandoned her and shared a closet sized sleeping alcove with my toddler sister... I remember her arrival because we all had to move down one space at the table. We did not have dining room chairs (for the kids that is, my parents and oldest brother sat in chairs on the open side), as it was a very small kitchen/dining area (and with all of those kids) my father constructed an "L" shaped bench around the kitchen table... all of us kids had our place and had to slide in at either end of the "L" making it impossible to get up from the table without vacating everyone... anyway, can you imagine an unregistered adoption of an "early teens" girl today? No doubt my parents would have spent their lives in prison... times have changed).

THAT WAS the American dream. A roof over your head. Not a f***ing status symbol. A small business or job with which you could feed and clothe your family. Not a consumer lifestyle. TIME!... to play baseball with your kids, go camping, fishing, swimming... and all of the other outrageously fun stuff we did as kids that did not cost SQUAT.... TIME, because we were not working 70 hours per week in order to make the payments on 3 cars, 4 cell phones, 5 gym memberships... as well as the property taxes and mortgage on 5000 square foot house that nobody uses 4000 square fee of, the 16% for social security and medicare we will never see, the 33% income tax to fund an outrageous military budget and bloated bureaucracy (oh, and by the way... I am guilty of ALL of the above... but then I came to my senses).

The AMERICAN DREAM IS NOT DEAD. It just got way-layed. Most folks can get it back if they want it. There is a farm down the street from us. 5 miles from the seat of a county of 100,000. County has Little League, Boy & Girl Scouts, community center with indoor/outdoor pool, nice 3/2 house, small barn, 6 acres of pasture and gardens. Could be had for $170,000. Property taxes $1000.

If you want the AMERICAN DREAM, all you gotta do is vote with your feet. The American Dream is alive and well in small towns and cities of the despised Red States. What states are in dire straights? California, New York, Illinois, Florida, New Jersey, Michigan, Massachusetts... anybody see a pattern here besides me? The high tax/social services/socialist states are f****ing broke. They have taxed their productive citizens right into poverty (or into moving away), and they ain't getting themselves out this mess... everyone of them or their pension systems will require a bail out. The low-life, scum sucking, smug little commie bast*rds (perhaps a tad too much?) that brought the system down have done a very, very good job of convincing people that this was ALL caused by Wall Street. Good Grief!! You mean to tell me that everybody refinanced their houses to buy jet-skis, granite counter tops, and Paris vacations? Bull S**T!!! You mean to tell me that those that did, and let's face it, they were far and away the residents of those enlightened "Blue States", did not know what they were doing? That they were somehow victimized?? Christmas, I gotta stop writing... I'm about to have a canary... Many of these people are nothing more than common thieves... but when you got this many of them, well, the politicians can't exactly call a spade a spade, now can they?

So here's to you rat-bast*ard Keynesian elitist jag-offs. Way to f****ing go.




26 comments:

James m Dakin said...

I admire those that try to convert to the sustainable, low energy lifestyle. But for those less optimistic, or screaming paranoid survivalist nut-jobs, prepping is just stocking the ark for the coming storm. Love your work. Peace.

Greg T. Jeffers said...

Mr Dakin:

Funny you should comment here today...
I just found your blog while researching food storage for wheat... can you send me an email at mentatt@yahoo.com? I would like to pick your brain a little if you don't mind.

Greg T. Jeffers said...

Mr Dankin:

I did not intend to disparage "prepping"... I think you and I are likely doing much the same thing with only semantics being different... I did want to emphasize that life does go on... well, for the living that is... and it is our DUTY , our moral obligation, to enjoy the gift of life...

Shalom Be Bayit

Anonymous said...

We are the victims of our immigrant ancestors. They came from Europe with nothing, worked hard and did better. They told us we could do better too. They moved up from shanty to a house and beans to beef. We inherited the aspirations well after all expectations of our parents and grandparents were met. We kinda overshot.

Regards,

Coal Guy

bureaucrat said...

Because nobody bothered to save for the inevitable Baby Boomer retirement wave, we are stuck with a debt-choked, under-saved and invested United States, and that will force the 20 year malaise we are headed for. Forget this collapse nonsense. The only game in town will be health care and retirement services .. and where the money comes from for these, who knows.

As far as where all the money is .. we know exactly where the money is. The very rich and the very, very rich have been pulling away from all of the rest of us for 30 years. The gulf between rich and poor hasn't bveen this wide since the 1920s. There is PLENTY of income to tax out there. The political process is shielding the rich from paying their proper share of taxes, and have been shielding them for 30 years. Moving jobs to China (also something that benefits the wealthy and their 72% of all financial wealth) doesn't help either.

If anyone can give me the name of a sizeable government spending program they find a waste of money, let me know. Read up on where your taxes go. I dare you. :)

Going after the government employees and their "unions" now, huh. Just like Mish? There is no doubt I am well overpaid and overbenefitted as a Federal employee. But Federal unions are by law very weak (can't negotiate salary, benefits or anything else that matters). State and local, I can't comment on.

I would just ask to not accept this idea that everyone has to live like selfs in this New World. There is lots of tax money out there. Can't wait till someone decides to go and get it. :)

Anonymous said...

Bur,

Two big lies have been repeated over and over again for the last 40 years. 1. Real estate will rise forever. 2. Don't worry, Uncle Sam will take care of you. Those two myths combined with high taxes coerced the savings rate down over the years. Income is not wealth. The way to take wealth back from the rich is not to tax them, it is to save faster than they do. The policies you promote will not improve the distribution of wealth one bit. They are counter productive.

Marx ranted about the wealthy only get wealthier because they rent capital to the masses. The solution is to buy (save) not rent. The socialists know this. That is why their policies discourage saving.

Regards

Coal Guy

Greg T. Jeffers said...

Bur:

You really should spend some time with Coal Guy, he has the patience, maturity, and intelligence to help... whereas I am just mad as hell and in no mood to take it any more....

just kidding.

tweell said...

I am a bureaucrat, so am part of the bloat. Mind you, my last pay raise was in 2003. Since then the pay raises haven't equalled the increased retirement contribution requirements, let alone inflation. My state is in trouble since it increased services and added staffing, now they're trying to keep all of that while cutting spending (yeah, it doesn't make sense to me either).
I'm still on track to quit and move to the family farm at the end of the year, so I'll pass on being your neighbor. The only bad part is that it's in Taxifornia, so 15 acres of farm = $12k property taxes. That's still better than just a house in NY for $16k+ per year!

PioneerPreppy said...

The American middle class is worse off than a traditional serf or a penniless immigrant. Instead of just paying for an over indulgent ruling class we also must pay for foreign and domestic under classes.

The middle class has been voting with their feet for years which is what is forcing these bail outs and socialist legislation we are seeing now.

There maybe some places left to move to but how long will they last? Like my little farm they are all mostly on the edge with some stalled sub division a stones throw away.

We have now reached that part of empire when the urban costs of Rome begin really screwing with the latifundian countryside only with a modern twist.

It will be interesting to see how it develops.

Anonymous said...

Most people I talk to are looking at ways to decrease their economic exposure. That is, spend less, pay off debt, lower their tax exposure. This is not good news to the government. Where will the tax revenue come from?

Regards,

Coal Guy.

Anonymous said...

Bur, what do you mean that no one saved for the baby boomers. I remember entering the workforce back in the 1980's and my ss deduction was increased to they could put it in the "locked box" for the baby boomers retirement. I was making all of $3.85/hr and the extra $$ deducted hurt.

I'll second Greg's suggestion that the American Dream can still be had.

I saw what was coming back in 1990. In 1992, as a young 20-something couple, we bought land, learned to build a house and homestead. The most we ever made was $29,000/yr. Even today, as a family with 3 young children, we don't clear over $24,000. But we have a better lifestyle than most people because we don't have any debt.

We produce most of our own food, heat with wood, collect rain for water and are satisfied with what we have. Is it hard work? Yes! But it sure beats every other alternative.

Idaho Homesteader

bureaucrat said...

All the Social Security surplus was borrowed against and spent already, because everyone wanted lower taxes. Since the Baby Boomers chose who would represent them, I can only assume you went along with this crappola, and had your SS savings made part of general spending. Reagan and Bushes (and Clinton) did exactly what you wanted them to do. And now they are gone, and we're stuck with nothing saved.

I always enjoy listening to the thoughts of my fellow Americans. :) I also like shouting them down, but only when necessary. Haha! I try to use the facts as has been reported to me.

Anonymous said...

Actually, bur, you have most of your facts incorrect. I'm not a baby boomer (born 1968). I definately did not vote for reagan/bush/clinton/bush/obama (I'm a 3rd party supporter except in a local election where I know the people), and I do have a lot saved for retirement because I don't depend on the gov't. Plus, I am one of those crazy people who doesn't want lower taxes.

I love my children and want them to have a future. I totally believe in a "pay as you go" system of taxation.

I was quite mad at Bush #43 when he bribed the American people with the stimulus checks he sent out to everyone. That check represents my children's future.

No I didn't send it back. But instead of using it at WallyWorld and supporting China like everyone else. I used it to pay my property taxes. ;) A "render unto Ceasar" type of thing.

So does this mean I want higher taxes? Not necessarily. But I don't want deficit spending either. So let's cut spending to meet tax collection.

Now I'm smart enough to know that this means that basically everything the gov't does stops. No SS checks, no defense spending, etc. At this point, let's have a discussion about what services the American public want and are WILLING TO PAY FOR.

So is this ever going to happen? Of course not! That is why I live on a rural homestead and produce most of my own necessities and teach my 3 young children how to live like pioneers. I fully expect this gov't to implode and I want to be out of the way when it does.

Have a great day!

Idaho Homesteader

Greg T. Jeffers said...

Idaho:

The American dream is NOT dead, and me thinks you are my living proof.

Regarding the hard work of homesteading...

Over the past 30 years we found that having every convenience turned out to not be all that good for us... our waste lines expanded and we went soft - in the head as well as the body. No matter how much I go to the gym, my conditioning during my time in Florida pales in comparison to my time on the farm. I hope to be able to make it my full time home next year.

50 years ago, many Americans simply did not have enough to eat... now, no matter HOW YOU ANALYZE IT, we have way too much to eat... and it is destroying the "real" part of our lives... but it is conducive to couch potatoing/t.v. surfing... so we got that going for us.

Bur, I don't even think you believe half the sh*t you write. I think you just like to get a rise out of folks.

Greg T. Jeffers said...

People have to find their own way. There is more than one way to live a life.

bureaucrat said...

Problem is 80% of Federal spending is spending everyone wants, and will NOT want cut (SS, Medicare, Medicaid, Interest and Defense). So this idea that we will balance the budget by cutting (Federal) spending is nonsense. The people will not stand for it. They haven't for 30 years. Nor will they stand for much cutting at the state and local level either.

Does everyone think California state government is a bunch of idiots? Their budget doesn't balance cause the people want their services .. period.

So the next question is, who pays more taxes? The rich, obviously, who have been getting away with tax murder for 30 years.

I'm a year older than you, Idaho. Listen to your elders. :)

Anonymous said...

Yes, sir.

;)

Idaho Homesteader

Dextred1 said...

Bur,

You really do have a terrible grasp of history. There can be no lock box. When FDR proposed SS he did it as a tax. You cannot set money aside according the constitution. So he went after social security under the "general taxing power" of the us government that is why social security receives special privilege bonds for the money paid into the system.

The case was decided in Helvering v. Davis. George Davis sued the US government saying social security was unconstitutional. He lost in district court and then the tax was ruled unconstitutional in the circuit court. On appeal by the government it landed in front of the Supreme Court as many of the new deal policies did, but this time there was pressure because the egomaniac FDR had tried to pack the court and in doing so forced votes on clearly unconstitutional issues. But this came with a small caveat. That being that the federal government cannot direct money to a certain group because well of that whole thing called the rule of law. So as part of the case the money could not be earmarked for special purposes because it would show bias by the federal government and would not be ruled constitutional because of Article 1 Section 8. In this case the court ruled that the government cannot create a compulsory tax on the people. This is really funny because this the same way that Obama is going after the new health care mandate. It will have to be under the general taxing power of the U.S. government.

As related to this, the federal deficit went up every yr under Clinton because we took SS money and played other bills. Go back and look. We had a balanced budget but never paid down the national debt, not once. This is because about 30-40% of the national debt is money the government owes itself. But the government cannot save money, where would it do so. Somehow I doubt that the Framers, who after all meant the Constitution as a fetter on expansive government and not a blank check for it, intended the Constitution to authorize a tax-devouring engine of dependence on the State like Social Security. The purported constitutionality of Social Security rests on sloppy argument, willful evasions of reality, and, ultimately, frightened submission to one of the worst acts of tyrannical bullying in the federal government’s history.

1.The Myth of the Clinton surplus
http://www.craigsteiner.us/articles/16

Greg T. Jeffers said...

Dex:

I'd ask you to run for the Senate, but I'd hate to ruin you as a human being... besides, you are probably too young...

Dextred1 said...

Jeffers,

Thank you.

bureaucrat said...

Nevertheless, Social Security exists and everyone loves it. I myself am going to try to NOT file for benefits as I think I'll get enough as a federal employee from pension, 401k, etc. But the average person wants it, needs it, and will oust any politician who tampers with it.

The problem became "what to do with the SS surplus." It was invested in Treasury bonds as the government normally cannot find banks worldwide to store this quantity of money. So it became usable by Congress for other spending priorities (Medicare mostly). It should have been invested in something like the Vanguard Total Stock Market Fund or something hugely worldly diversified. Instead, we have no SS surplus, in reality.

Just cause you don't agree with me doesn't mean my use of the facts is wrong. :)

Anonymous said...

Bur,

If each of us were saving that 15.3% of income instead of letting the government confiscate it, there would not be any distribution of wealth problem.

Dex,

Your depth of knowledge is amazing.

Regards,

Coal Guy

Anonymous said...

Bur,

A bad idea is still a bad idea, no matter how many people love it. If you don't want your SS money, please, still apply and send it to me.

Regards,

Coal Guy

Dextred1 said...

BUr,

I can say you honestly don't understand my argument. The government can not save money. There is no such vehicle for this and it is also unconstitutional. The government is a funnel and just because it is paided as SS does not mean anything, it is taxed under the general taxing powers described in article 1 section 8. The courts have ruled (fleminng v. Nester) saying their is no right to any said amount and for any reason the congress could change benefits.

Anonymous said...

"Labor is being arbitraged until we reach equilibrium."
Does this still apply when there is no more oil or the cost is so high that transporting goods made half way around the world would make them phenomonaly expensive?

bureaucrat said...

Norway is somehow saving a lot of money (96% of oil profits). The "Government Pension Fund -- Global" now has a balance of the equivalent of $500 billion. Smart people, them Norwegians. :) They figured out how to save somehow. But, like you said, they don't have an "American Constitution." If the Constitution required us to slide into the ocean, I'll some people would actually demand it happen. :)