Notes Book

Schizophrenic Accounting

One way to illustrate how statism is like schizophrenia is to examine the state's accounting practices. The pundits and politicians talk as if a percent or two on the income tax make a difference to the state's income. But there is no talk of monitoring or measuring the Federal Reserve inflation tax. There is no talk of disclosing the various black budgets of intelligence agencies. For years the Defense Department has been unable to explain where a whole lot of cash went. Politicians talk about cutting welfare programs, but not auditing the Defense Department. Drug law property seizures and other Drug War costs are not listed in this accounting, though they have the same negative effect on the economy as taxes. Discussions of the official budget assume that the official budget has some resemblance to the actual cash flows in the government but that is manifestly and openly admitted to be untrue. The Federal Reserve, for example, provides a very healthy income stream. It is taxation without information. We don't know how much the tax will be. We don't know who spends it, and for what. It seems somewhat likely that the public discussions are about the official budget and the private discussions are about the real budget. Could it be that there is some private discussion about who will receive the income stream that the Federal Reserve generates. What about the income generated from the poppy crop in Afghanistan?

I don't know of any attempts to estimate how much Federal Reserve Tax the US government has collected, but it must be at least in the tens of trillions and we have no idea where it went or what we got for it. How crazy is that?

The state is a loosely affiliated collection of coercive syndicates. The so called leaders of this apparatus have little real control over the amount of plunder their minions extract from the populace at large. The only real way to reduce the states income is to reduce the number of government minions.

We can have a world with less coercion. Reducing the number of people engaged in socially sanctioned coercive activities would be a good first step. Coercion is counterproductive. Societies with increasing levels of coercion face decreasing standards of living. By definition, societies with increasing number of government employees have increasing coercion.

Freedom works. Free societies have historically been prosperous societies, and there is no reason to believe that will not continue.