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What Will the Trump “Tax Cuts” Do to Restore Our Freedom or Our Prosperity?

Most of the conservatives on talk radio are speaking in great praise of the Trump tax cuts. Frankly, I don’t know what planet they are on. Certainly not Planet Reality, that’s for sure.

So once again, the U.S. Congress and the U.S. President are kicking the can down the road, providing some tax-theft relief to some Americans, to individual workers only temporarily until such relief expires in 7 years, and to businesses permanently, supposedly. But is the system “simplified,” as Donald Trump promised? Nope. You still have to spend time figuring things out, such as what your new tax rate is, combined with knowing which deductions are taken away or kept or reduced, and so on.

But these so-called tax cuts are just another example of government bureaucrats’ continuing central-planning fantasizing, in which bureaucrats are trying to manipulate numbers, tax-theft rates, and a whole bunch of other factors, to fit their predictions for how much “growth” there might be in the next ten years or 20 years. (Most of them will be retired and living in luxury, or dead, by then. So they don’t care!)

The congresscriminals still refuse to cut spending in any meaningful way (or any way at all). Donald Trump is just another socialist who loves to spend other people’s money, won’t cut entitlements or even attempt to “reform” the welfare/Social Security System in any way. But, as long as he is anti-immigration and a warmongering nationalist, the cognitively dissonant conservatives on talk radio love him.

David Stockman, Ronald Reagan’s budget chief, explains how the central planners in Washington are still not getting it. In Part 1 of his analysis, he writes:

In the current situation, the absolute worse thing you could do is draw on Uncle Sam’s credit card to fund temporary cuts for the middle class and a permanent windfall to the top 10 percent of households which own 80% of the stock. And the reason, of course, is that America is marching straight into a 20-year fiscal and demographic trap that has the potential to spiral out of control and smoother any semblance of economic prosperity as we have known it.

Indeed, the signal event of 2017 is not the gimmick-ridden dog’s breakfast of K-street favors being enacted today, but the GOP’s utter failure to repeal and reform ObamaCare.

As we have long insisted, America’s health care system consists of the worst of both worlds. It amounts to socialism for the beneficiaries, which generates uncontainable demand via third-party paid, cost-averaged pricing; and crony capitalism for the providers, where delivery system cartels of doctors, hospitals, nursing homes, pharma suppliers, medical device makers etc. have implanted themselves deep on K-street and have thereby rigged reimbursement systems for maximum private revenue gain (and minimum system efficiency and competitive discipline).

That’s why the US spends 18% of GDP on health care compared to 10-12% in the rest of the (socialistic) developed world, on the one hand; and why the GOP couldn’t lay a glove on ObamaCare, which embodies in spades this “worst of both worlds” paradigm, on the other.

Indeed, there is no hope to slowdown the health care monster without restoration of consumer sovereignty and responsibility, risk-based pricing and free market supplier arrangements.

In Part 2, he writes:

As we showed in Part 1, the bill’s structure sets up a monumental fiscal and monetary policy collusion just 10 months from now that will literally shake the rafters of the Wall Street casino.

That’s because Uncle Sam will be borrowing the staggering sum of $1.257 trillion next year—even as the Fed is dumping $600 billion of existing debt into the bond market under QT. On the heels of sheer mayhem in the casino, the GOP’s report card will come in before the November 2018 elections bearing a big red letter “F”.

At the end of the day, there is no potential for stimulus or enhanced, sustainable economic growth in the overwhelming bulk of the GOP’s 500 pages of gifts to K-Street and Wall Street.

That’s because it is not a supply-side tax cut at all: It boils down to the huge “riverboat gamble” embodied in the 21% corporate rate, and the disposition of the $1.4 trillion that Uncle Sam will borrow to pay for it.

But here’s the thing. Uncle Sam could afford to borrow (not wisely) back in the early 1980s to fund the kind of supply-side oriented tax cuts  which dominated the 1981 act—since the public debt only amounted to 30% of GDP.

By contrast, today the Treasury balance sheet reflects 35 years of reckless fiscal policy and labors at 106% of GDP. And that’s before adding on the roughly $15 trillion of new deficits over the next decade built into current law and the Trump/GOP tax and spending programs.

And in Part 3:

In a word, the overwhelming share of the gain in after-tax corporate cash flow will be channeled into the Wall Street casino in the form of financial engineering rather than allocated to productive investment on the main street economy.

And he also notes in Part 3 that a big part of the problem is monetary central planning and the Federal Reserve System.

(There may be a Part 4 and further analysis from David Stockman.)

So the whole system itself of tax-thefts and central planning is inherently immoral. That is because theft and extortion are immoral (as well as criminal), and because when bureaucrats usurp the people’s economic matters, including health care, the bureaucrats are really stealing away the people’s freedom (as well as their prosperity).

On the tax-thefts, Murray Rothbard wrote in his Ethics of Liberty,

For there is one crucially important power inherent in the nature of the State apparatus. All other persons and groups in society (except for acknowledged and sporadic criminals such as thieves and bank robbers) obtain their income voluntarily: either by selling goods and services to the consuming public, or by voluntary gift (e.g., membership in a club or association, bequest, or inheritance). Only the State obtains its revenue by coercion, by threatening dire penalties should the income not be forthcoming. That coercion is known as “taxation,” although in less regularized epochs it was often known as “tribute.” Taxation is theft, purely and simply even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match. It is a compulsory seizure of the property of the State’s inhabitants, or subjects.

It would be an instructive exercise for the skeptical reader to try to frame a definition of taxation which does not also include theft. Like the robber, the State demands money at the equivalent of gunpoint; if the taxpayer refuses to pay his assets are seized by force, and if he should resist such depredation, he will be arrested or shot if he should continue to resist…

And on the State, Rothbard wrote in his Anatomy of the State (.pdf),

The State, in the words of Oppenheimer, is the “organization of the political means”; it is the systematization of the predatory process over a given territory. For crime, at best, is sporadic and uncertain; the parasitism is ephemeral, and the coercive, parasitic lifeline may be cut off at any time by the resistance of the victims. The State provides a legal, orderly, systematic channel for the predation of private property; it renders certain, secure, and relatively “peaceful” the lifeline of the parasitic caste in society. Since production must always precede predation, the free market is anterior to the State. The State has never been created by a “social contract”; it has always been born in conquest and exploitation. The classic paradigm was a conquering tribe pausing in its time-honored method of looting and murdering a conquered tribe, to realize that the time-span of plunder would be longer and more secure, and the situation more pleasant, if the conquered tribe were allowed to live and produce, with the conquerors settling among them as rulers exacting a steady annual tribute.

Sadly, I hear those conservatives on talk radio criticizing the “evil” from the Left, and the immorality of modern society. Yet, they continue to support the immoral criminality of the State and its thieving parasitism. In my view, they are also a part of the Left, being collectivists who love the centralized State. It’s the United States of Sodom and Gomorrah, but “conservatives” and the moralists still pray to the sick criminals of Washington. Pathetic.

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