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Letters by a modern St. Ferdinand III about cults

Gab@StFerdinandIII -

Plenty of cults exist - every cult has its 'religious dogma', its idols, its 'prophets', its 'science', its 'proof' and its intolerant liturgy of demands.  Cults everywhere:  Corona, 'The Science' or Scientism, Islam, the State, the cult of Gender Fascism, Marxism, Darwin and Evolution, Globaloneywarming, Changing Climate, Abortion...

Tempus Fugit Memento Mori - Time Flies Remember Death 

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Monday, September 6, 2010

Welfare state and Socialist collapse. Inevitable and based on lies and fallacies.

Avoiding reality is never a good idea.

by StFerdIII

The political-economy of the welfare state and socialist economics is based on many fallacies.
One is that all people are equal and of equal skill and need an equal "share" of income or of something that the political technocracy deems to be a good or service of value and of right, such as health-care. This has never been the case in the history of mankind.
The second is that state-management is moral and ethical. State power usually ends up benefiting some groups and punishing others. The level playing field becomes tilted very quickly – usually towards those who lack political power and voice.
A third fallacy is that the average person is an idiot and cannot or should not, make decisions such as deciding how much to save for retirement, manage their own health care in a competitive health market, or decide in a competitive school system which school suits their child best. Without the myriad of laws, regulations and concerned-o-crats which dominate and crush most markets, the average person would simply be reduced to a starving serf, shackled, cold, naked, and illiterate.
The fourth fallacy, is that the supposed immorality of markets, capital, business, and the human will crush the poor and reduce the old to starvation, if society does not have a legion of bureaucrats, social workers and armies of concerned unionized government employees. There is no evidence whatsoever to support the view that the state has erased poverty – jobs, technology and wealth accretion do that. In fact welfare dependency is legion in most Western nations with generations of families living on programs and working in jobs or regions that they should have long ago left.
The fifth fallacy is the bedrock of the first four, and that is something the Marxists and socialists call benign management. The power mongerers of statism embedded in its various forms of Fascism, socialism, welfare capitalism, pure Marxism, or Communism, truly feel that they are superior, more enlightened, and like Lenin or Mohammed, gifted with the true knowledge of what is good for you. The little people follow. In this view the great ones lead. Magnificent Gods like the Arab-Black Mohammed-Jesus (whose human name is Obama), need to manage our affairs to instill order from chaos. Like Vishnu, Baal, Zeus or Allah; the all-powerful deity will construct our world, our rituals, our lives, and the patterns of our daily existence so that we do not become confused, confident, humanist, independent, innovative, wealthy, or cognitive.

The problem with all of this is that statism in any of its many forms from the corporate Fascism of the Hitler cult, to the sappy, teary eyed mysticism of the cultural Marxist and socialist cult, leads to bankruptcy in all areas including the moral, the personal, the economic, and the social. In trying to "protect" us, these denizens of massive intelligence, always end up hurting us.

Thomas Sowell sums it up rather well when he says that too much government doing too much, leads to worse problems:

It is not just free market economists who think the government can make a mess bigger with its interventions. It was none other than Karl Marx who wrote to his colleague Engels that "crackbrained meddling by the authorities" can "aggravate an existing crisis."

The history of the United States is full of evidence on the negative effects of government intervention. For the first 150 years of this country's existence, the federal government did not think it was its business to intervene when the economy turned down.

All of those downturns ended faster than the first downturn where the federal government intervened big time – the Great Depression of the 1930s.

When governments interfere very little good happens. You can make an argument that poor relief, some monies for the retired, and helping those who lost their jobs, or need retraining to find a new job is money well spent. I would tend to agree – as long as there are limits. I would also argue that private charity is more important than the abstraction of government charity to help the poor. The culture would be radically different if there were tax incentives for people to help the impoverished through their own personal charity. If you make good money and have extra, you should be given 5 years of a tax free existence if you can take a welfare family, support them, help them get educated, and find a job. That would do more for the self-esteem of both the giver, and the receiver, than the litany of concerned and compassionate programs which contain boastful rhetoric, but do little in reality to truly help those obtain what they need – a basic education and a job.

No politician or social commentator would ever make the above, very simple, and very moral proposal of course. Most people would not consider it either. It is much easier to hide behind soft abstractions and cheap talk than actually doing something; "I am a moral person because I support socialized health care and big welfare payments...." There is nothing moral about these sentiments, just as there is nothing moral about socialism. No choice, waiting lists which pile up bodies, price caps, supply management, little capital and job creation, dependency, low self-esteem, and massive taxation are not moral imperatives but simply the derivatives of a poor system, lazy minds, and disinformation about markets and humans.

The ultimate destination of the 80 year madness of statism, or corporate socialism, in which the state at many levels, micro-manages your reality, is of course bankruptcy. There is no way around it. All nations owe 800% of their GDP – itself a poor indicator of the economy because it is simply a spending algorithm. Western states are thus bankrupt. The only thing that governments will do is print money, raise taxes (the carbon-Mother Earth taxes are simply to raise revenue and have nothing to do with science or our ravaged earth mother), regulate and create oligopolies which benefit the state, and at some point declare bankruptcy either through massive inflation, or a repudiation of all debts both foreign and domestic. Historically a state has never survived a level of debt of 800% of its economic size.

Braudel in his classic works on capitalism makes the historically valid claim that any state with 200% or more of its gross national product in debt, always expired. At some point as Braudel argued, the state with 2 times its economy in national debt, cannot borrow, cannot raise money, and always imposes drastic taxation and regulation to fund the so-called gap, between its profligacy and declining revenues. One reason why England rose to world domination was its ability to raise money. The English debt peaked at 140% during the Napoleonic wars. The French national debt was treble that level. If one goes back to the story of Venice, you will see that during the 16th century the French example applied – statism, lots of bureaucracy, the micro-regulation of business, the over-taxation of all products and services and ultimately the collapse of finances. In 1480 Venice as near the center of the economic world system. By 1560 its economy had shrunk by one-third.

It is highly unlikely that we will avoid the historical norm of going bankrupt. When 40-60% of your economic activity is taken by government spending, or is tied in some way to government contracts, largesse and contacts, the end is pretty clear. According to Von Mises the Hitlerian regime commanded about 58% of German GDP in the late 1930s. This is the Swedish level of government involvement today. The US once it enacts the socialization of its health market, will have some 48% under the direct control of governments. One reason why World War II was inevitable was that Germany was bankrupt and needed access to food, resources and land to both fund its military, and to keep its population docile as well as fed. A coming collapse is clear. The only issues will be what will it look like, when will it happen, and will there be a war?



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