Tuesday, March 27, 2007

The immaturity of big government and ‘transfers’ hither and yon

City States and richer regions will be bled dry by central governments to pay for others and to buy votes.

by StFerdIII

Government is basically the rule by the irrational and the emotional over the apathetic and helpless. Government corruption and inefficiency are directly correlated with its size and its distance from the voting mass. The equation is pretty simple. The further away from transparency and accountability government becomes the larger, more arrogant and dysfunctional the system is. Yet through educational and media propaganda the exact opposite is believed. This government sponsored lie only leads to fiscal problems and higher taxes.

The oft-told lie is that ruthless, exploitative, slave-owning, eco-destroying ‘globalisation’ is eradicating in a primal blood lust of immoral capitalism, our kind [sniff, sniff] values and society. What a piffle. Government revenues, spend, regulatory power, and bureaucratic hiring has increased in almost every state by 50% or more in the past 20 years. Measured by any means – taxes collected; regulatory fees imposed; off the balance sheet debt hidden from taxpayers and auditors; employees hired etc. – the state, any state, now controls more of the political-economy than at any time in post-feudal history.

Why do people flee California for Nevada and Utah? Punishing taxation; eco-cult fees and regulations; reduced land space [driving up housing prices] thanks to the eco-cult; user fees that skyrocket yearly; and social welfare program spend that drives up the cost of living. Only a masochist would want to live in such a place. The result? Mexicans and illegals moving in – urbanized whites and blacks moving out.

Why does Flanders fund Wallonia? The Dutch speaking and far richer trading region stretching from Antwerp through northern Belgium, has funded the French speaking southern part of the country for decades. French Wallonia receives massive subsidization of business; preferential tax treatment; preferred parliamentary treatment and an abundance of welfare transfers – all thanks to Flanders. The result? High debt, high taxation and government control of 47% of GDP. Net effect? Wallonia can’t stand Flanders and Flanders wants to secede from the unhappy union. So much for the happy socialist state.

In Canada why does Alberta fund Quebec? Alberta transfers $10.000 per family per annum, to the rest of the country so that smarmy populists can buy votes. Ontario does the same sending about $20 billion out of the province. Result? Quebecers are given ‘free’ money which they view as a birthright fueling squabbles with the rest of the country. Poorer regions which receive welfare transfers never grow up and debt and tax loads pile up as governments send ever more money hither and yon to buy votes.

Net effect? Canada has the 4th highest debt and tax burden in the world, and with $2.5 Trillion in total debt and liabilities the country is technically [if it was a business], bankrupt. Liabilities exceed net assets. Each person has a net asset level on average of $150.000 but debts of close to $200.000. Time to call the collection agency.

And on it goes in every state, in every part of the industrialized world. Richer regions, rich for various reasons including prowess in trade, technological development, good governance, limited taxation, strong capital markets and so on, must now pay for everyone else. This is not sensible.

Confederations work best when there is local accountability. Switzerland is the prime example of a society based on cantons or districts which are self managing and give only a small percentage of their tax revenue to a central government which is limited to 6 basic functions; defense, foreign affairs, infrastructure, health, economics and national legislation. This is a more sensible division of powers than exists in most Western states.

The Cantons have the right to opt out of national programs as they see fit. In the Swiss confederation the central government has no authority to ram through legislation that the Cantons reject. Net effect? In each Canton the participation rate in elections and referenda is above 80 % on average. The people are less apathetic, more aware and more civilly interested in their local affairs. A corollary is that Switzerland has one of the world’s highest GDP per capita at $40.000 per person. Wealth breeds independence and pride. Poverty and apathy does not.

There is no proof that big government, excessive welfare spending, dumb protocols like Kyoto, or government ‘projects’ or welfare scams are good for citizens. Modern society has a problem with a lack of responsibility and its attendant apathy. This is exacerbated by crushing taxation and regulation. Government is the problem not the solution. This is obvious if you study what works and what fails, in the development of wealthy and moral civilizations.