{"id":128534,"date":"2022-08-13T17:32:36","date_gmt":"2022-08-13T21:32:36","guid":{"rendered":"http:\/\/stateofthenation.co\/?p=128534"},"modified":"2022-08-13T17:33:39","modified_gmt":"2022-08-13T21:33:39","slug":"it-should-have-been-called-the-economic-reduction-and-inflation-expansion-act","status":"publish","type":"post","link":"https:\/\/stateofthenation.co\/?p=128534","title":{"rendered":"

It should have been called the “Economic Reduction and Inflation Expansion Act”.<\/b><\/h2>"},"content":{"rendered":"

Economic Reduction and Inflation Expansion \u2013 Everything\u2019s Out of Stock
\nand Nothing is Cheaper<\/strong><\/h1>\n

\"\"<\/p>\n

Author: Tom Luongo
\nGOLD GOATS ‘N GUNS<\/p>\n

\n
\n

\u201cI was into pain reduction and mind expansion, but what I\u2019ve ended up with is pain expansion and mind reduction. Everything hurts now, and nothing makes sense.<\/em>\u201c<\/p>\n

\u2014 CARRIE FISHER,\u00a0POSTCARDS FROM THE EDGE<\/em><\/cite><\/cite><\/p>\n

\n<\/blockquote>\n

So,\u00a0Davos<\/em>\u00a0finally got the mini-me version of\u00a0Build Back Better\u00a0<\/em>through a deeply divided Senate over the weekend. It\u2019s a terrible bill and will be a worse law, but at least it\u2019s only about 12% of the original cost.<\/p>\n

I guess it\u2019s true what they say, the US must be broke, even new layers of tyranny are cut-rate at this point.<\/p>\n

Whatever happened to dreaming big?<\/p>\n

It\u2019s all you can do now but to laugh, right? Nothing in D.C. is what it seems, like having lawmakers who work for Americans and the betterment of America. While this has been clear to me for what feels like my entire life, there is still real resistance to this concept.<\/p>\n

No, folks, Chuck Schumer doesn\u2019t work for you. He doesn\u2019t work for Wall St. (except when the pay him) and he doesn\u2019t work for the labor unions or anyone else. He works for globalists and foreign actors whose\u00a0raison d\u2019etre<\/em>\u00a0is the destruction of your life and your family\u2019s future.<\/p>\n

That\u2019s what this bill is intended and will do when finally enacted.<\/p>\n

I was asked by Sputnik News to comment on this last week and\u00a0the article is now out in the world.<\/a>\u00a0The main point of this is the one I\u2019ve been making for more than a year now about\u00a0Build Back Better<\/em>, as blackmail to the Fed:<\/p>\n

\u201cThis bill is another lame attempt by Democrats to force the Fed to stop raising interest rates by saddling them with new spending which it would have to monetize, similar to last year\u2019s Build Back Better,\u201d argued financial and political commentator Tom Luongo. \u201cWhat this is is pure pre-midterm electioneering. The Democrats need something to campaign on.\u201d<\/p><\/blockquote>\n

Thankfully it\u2019s so small that a few billion in spending next year isn\u2019t going to change much. But what will change is that the Democrats and their\u00a0Davos<\/em>\u00a0paymasters have finally gotten two things they were desperate to saddle the U.S. economy with:<\/p>\n

    \n
  1. 80,000 more IRS agents to increase tax compliance<\/li>\n
  2. 15% effective minimum corporate tax rate<\/li>\n<\/ol>\n

    Davos\u2019<\/em>\u00a0obsession is with tax normalization. They want everyone taxed like they tax the French and the Swedes.<\/p>\n

    \n
    \n

    \"\"<\/p>\n

    \n<\/figure>\n

    And then they want 100% compliance through Central Bank Digital Currencies (CBDCs) where there is no escape from their 24\/7\/365 surveillance. The US needs to be brought in line to pay its \u2018fair-share\u2019 of the Climate Change crisis.<\/p>\n

    The sad truth is that too many people in this world actually believe this utter bullshit.<\/p>\n

    Beyond the creeping and creepy Marxism in all of this is the inherent problem with this model for a society. Innovation comes from capital fluidity and flexibility. It is the ability of people to adapt quickly to changes in their environment that leads to prosperity and growth, not distributing resources on an arbitrary definition of equality.<\/p>\n

    That system\u2019s inherent tend towards entropy leads to where we are today, insane marginal tax rates subsidizing people who vote themselves largesse from the public treasury. To remind everyone, in Marxist-like reductionist terms, if there are only two classes of people, as Murray Rothbard pointed out, those two classes are\u00a0tax payers\u00a0<\/em>and\u00a0tax consumers.\u00a0<\/em>Once the system turns this predatory where it needs a majority of\u00a0tax consumers<\/em>\u00a0to survive off the\u00a0tax payers<\/em>\u00a0all productivity eventually stops, looting via corruption is maximized and the only ones making \u2018bank\u2019 are the enforcers and the \u2018corpse-feeders.\u2019<\/p>\n

    \u2026 until the whole engine of the economy stops cold. But, truly I\u2019m not invoking Ayn Rand here.<\/p>\n

    The belief that we can push this dead whale of an idea, communism, much farther up the beach isn\u2019t reaching critical breakout mass, it\u2019s reaching its mathematical limit.<\/p>\n

    What\u2019s clearly going on here is that the Democrats needed a win to go into the mid-terms with to shore up their base. At the same time GOP establishment was more than happy to \u2018oppose\u2019 it to fuel their election strategy and fundraising while vowing to try and repeal it (which they can\u2019t) when they gain control of the country post mid-terms.<\/p>\n

    This bill will do nothing to alleviate shortages and supply chain disruptions caused by COVID lockdowns, Biden\u2019s executive orders and ESG\/DEI arm-twisting of companies to \u2018get woke.\u2019 While they\u2019ve engineered a recession, you\u2019d swear their allergy to saying the word would lead to summoning an Elder God because this is some Lovecraftian nightmare world.<\/p>\n

    Oh. Wait.<\/p>\n

    They\u2019ll be happy to summon that image up after they can blame things on the GOP, at least that\u2019s what Schumer is thinking. The issue is that you can\u2019t solve\u00a0cost-push inflation<\/em>\u00a0with raising interest rates. But, at the same time, have zero cost-of-capital in the US doesn\u2019t fix anything that\u2019s broken either.<\/p>\n

    So, after this brief interruption, while we have a bustlet after a massive boom in commodity prices, expect things to get worse for the average\u00a0tax payer<\/em>\u00a0going forward as real-world inflation will continue while Pelosi, Schumer and the rest of the aliens on Capitol Hill assuring us they are still our friends, restrict our choices and make us feel guilty for still breathing.<\/p>\n

    The real solution is the one they will never contemplate \u2014 cutting taxes and regulation. No, the answer is never more freedom, it\u2019s that we still have too much of it. And there is no changing that dynamic as long as our lawmakers are beholden to the control freaks who have already engineered a world where 75% marginal tax rates are not enough.<\/p>\n

    Stepping back from this particular issue, it\u2019s incumbent to see it in the larger overall strategy of turning the US government even more into the enemy of the people in order to foment civil unrest, if not outright civil war, as a consequence for our unwillingness to\u00a0eet ze bugz.<\/em><\/p>\n

    You know this is all just unsustainable commie claptrap when you see subsidies for rich people to buy $80,000 electric cars. We really are dealing with people who have no idea how capital formation works or why any of their perceived \u2018successes\u2019 were just them piggy-backing on trends that were already emergent in the market before they got involved.<\/p>\n

    \n

    My full answers to Sputnik\u2019s questions are below the line:<\/p>\n

    \n

    Could this proposed plan help the US economy?<\/h2>\n

    No.\u00a0 This bill is another lame attempt by Democrats to force the Fed to stop raising interest rates by saddling them with new spending which it would have to monetize, similar to last year\u2019s Build Back Better.<\/p>\n

    What this is is pure pre-midterm electioneering.\u00a0 The Democrats need something to campaign on.\u00a0 The GOP will mostly allow it to progress to also have something to campaign against.<\/p>\n

    To what extent would the additional flow of money help tackle inflation?<\/h2>\n

    It won\u2019t.\u00a0 It will do the opposite, obviously.\u00a0 There is no need for this bill.\u00a0 What is needed is for Congress to stop spending money it doesn\u2019t have on programs the US doesn\u2019t need. \u00a0Moreover, Schumer is lying about who will pay for this.\u00a0 They want to tax the rich to play to their base, nothing more.<\/p>\n

    But raising taxes in a recession is a recipe for making the recession worse, not better. And no amount of jawboning will change that.<\/p>\n

    How could this proposed plan worsen the recession?<\/h2>\n

    You cannot tax your way to prosperity.\u00a0 Period.\u00a0 Closing the carried interest \u2018loophole,\u2019 for example makes for good rhetoric but it just means that that money will flee the US and find a home somewhere else.\u00a0 Capital flows to where it is treated best, so if you raise the tax rate on one class of people and they move the money out of the country then you are left with the spending mandated but without the revenue you thought you\u2019d generate.<\/p>\n

    More spending, less taxes equals the burdens being placed on those left to pay the bills. They always sell this idea with every one of these bills and it never works out.<\/p>\n

    The best way to raise tax revenue is to lower taxes, remove the roadblocks to growth and allow the market to find new efficiencies to drive costs down, not subsidize prices, be they prescription drugs or anything else.<\/p>\n

    The White House is continuously saying that the US economy is good and that there is no recession; what is your prognosis with regard to this? What do the facts and numbers tell us?<\/h2>\n

    If the economy is so good, why do we need this bill?\u00a0 The answer is we don\u2019t. So, the White House messaging is already confused.<\/p>\n

    The US needs a reorganization of how capital is handled domestically.\u00a0 Recessions are a reflection of the need for that reorganization through the liquidation of uneconomic spending.<\/p>\n

    Spending growth is attenuating because high food and energy prices are squeezing household budgets.\u00a0 As opposed to handing out free money printed out of thin air, creating a bigger debt burden for the future, they should be lifting the controls currently in place creating the shortages leading to higher prices.<\/p>\n

    What is the way out of this crisis for the US, and is the US government doing enough to tackle the problems?<\/h2>\n

    The way out of this situation for the US is to raise the cost of capital, which the Fed is doing through raising interest rates and force fiscal discipline on Congress by curbing their ability to run deficits while simultaneously lowering taxes at all levels especially on small businesses and wealth preservation.<\/p>\n

    This means an ideological shift away from the technocratic ideal that we can socially engineer a better society through the tax code.\u00a0 \u00a0We\u2019ve tried this all across the West.\u00a0 It has failed and led to where we are today.<\/p>\n

    The problem isn\u2019t that the government isn\u2019t doing enough it is that the government is doing orders of magnitude too much already.\u00a0 The Democrats (and their international backers) understand that the mid-terms are a referendum on this idea and are trying to hold onto what they can by giving people free money.\u00a0 Same as it ever was.<\/p>\n

    ___
    \n    https:\/\/tomluongo.me\/2022\/08\/08\/economic-redution-inflation-expansion-everything-out-stock-nothing-cheaper\/<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    Economic Reduction and Inflation Expansion \u2013 Everything\u2019s Out of Stock and Nothing is Cheaper<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-128534","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/stateofthenation.co\/index.php?rest_route=\/wp\/v2\/posts\/128534","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stateofthenation.co\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateofthenation.co\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateofthenation.co\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/stateofthenation.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=128534"}],"version-history":[{"count":0,"href":"https:\/\/stateofthenation.co\/index.php?rest_route=\/wp\/v2\/posts\/128534\/revisions"}],"wp:attachment":[{"href":"https:\/\/stateofthenation.co\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=128534"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateofthenation.co\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=128534"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateofthenation.co\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=128534"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}