The Stimulus Bill Created 450,000 Government Jobs but Cost One Million Private Sector Jobs

Oh will you look at this, another example of government “help” causing more damage than benefit [PDF]. The study titled The American Recovery and Reinvestment Act: Public Sector Jobs Saved, Private Sector Jobs Forestalled demonstrated once again that government “public works” programs don’t actually benefit anybody:

We estimate the Act created/saved 450 thousand government-sector jobs and destroyed/forestalled one million private sector jobs. State and local government jobs were saved because ARRA funds were largely used to offset state revenue shortfalls and Medicaid increases (Fig. A) rather than boost private sector employment (e.g. Fig. B). The majority of destroyed/forestalled jobs were in growth industries including health, education, professional and business services. Searching across alternative model specifications, the best-case scenario for an effectual ARRA has the Act creating/saving a net 659 thousand jobs, mainly in government.

So all of that money that was supposed to get our economy rolling and save or create jobs only managed to do so for government jobs. Yet less government jobs were saved or created than private sector jobs were lost. This is the usual result whenever government attempts to involve itself with economics. Had the government not first interfered with the market to create the current recession we’re in (thanks for the housing bubble by the way Mr. Federal Reserve) but then they take actions that have been demonstrated in the past to cause more harm.

The Reason for a Commodity Based Monetary Standard

One of the reasons I know Ron Paul is a pretty stand up guys is because he’s up front and honest:

I’ve described the rationale behind the idea of taxation being theft but taxation isn’t the only type of theft the government partakes in. Another type of theft they perform is inflation. As the Federal Reserve prints money each monetary unit (dollar) becomes worth less.

If you have $10,000 in a bank account at the government prints off $100,000 inflation ensures the value of each dollar goes down meaning that the purchasing power in your bank account becomes less. Inflation takes some time to kick in and thus those who first receive the money are unaffected while those of us at the bottom of the receiving pole get the feel the full force of it.

During this whole bailout fiasco the government has been printing trillions of dollars and handing those bills out to companies that are “too big to fail” and foreign banks. This is a nice little double dip of theft as the government first stole money from the citizens in the form of taxes and then they stole purchasing power from us in the form of inflation.

This is where the advocacy of hard money comes into play. People often hear libertarians speak about a “gold standard” and scoff. When you understand the reasoning behind the gold standard is makes a bit more sense though. First saying gold standard is a bit of a misnomer as any commodity can be used in place of gold (gold has traditionally been used because it was the commodity chosen by the market).

What a commodity standard does is prevent government theft in the form of inflation. One of the benefits of gold is that mining it is a fairly intensive process and much of the mined gold is used for industrial uses. This means the amount of monetary gold remains mostly fixed and thus the purchasing power of each ounce o gold remains mostly constant. As gold can’t just be printed up the amount can’t be increased on a whim so the government is restricted from “printing money.”

The reason libertarians say we need to return to the gold standard is because there is no better way to protect each person’s purchasing power from government initiated inflation.

The Road to Serfdom Comic

If you’ve ever been curious how central economic planning could lead to tyranny then you need look no further than The Road to Serfdom by Friedrich A. Hayek (the book is available for free at the link). Of course most people seem to be unwilling to actually read a book these days so you can get the gist of what the book talks about in convenient comic book form.

What’s interesting is how well the United States is following the steps put forth in Hayek’s book. The United States implemented national economic planning during World War II and left much of it in place after the Japanese surrendered. Likewise the politicians utilize a lot of propaganda to gain acceptance for their plans (such as claiming government is needed to protect people from the free market even though the people are the free market). It’s actually rather sad to see but I doubt we’re going to derail the tyranny train anytime soon. Either way the comic is a great little piece that you can show your statist friends in the hopes some idea from it may sink into their heads.

How’s That Pricing Fixing Working For You

Cuba being a communist nation has a fixed economic system. Part of a fixed economic system involved fixing prices at certain levels which are usually absurdly skewed from what the free-market value is. What happens when the price of a good is fixed so low that money is lost on that item? Simple, the price must either be raised of the quality must be lowered. Cuba has decided to go with the latter and have reinstated the mixing of peas in coffee:

Cuba is resuming mixing coffee with roasted peas in a bid to cope with rising international coffee prices, the authorities say.

The blend for domestic consumption will help cut costs, given that coffee prices had risen some 69% over the last year, the announcement said.

Coffee mixed with peas isn’t exactly something that tastes all that great:

The measures mean that the authorities will be able to continue distributing coffee with the subsidised price fixed at at 4 pesos (17 US cents) for a 115g (4oz) bag, the statement said.
Workers handles sacks of coffee imported from Brazil Imports of coffee help to meet local demand

Cubans, who tend to drink small cups of highly sweetened coffee, are used to pea-blended coffee.

“It’s much, much more bitter than pure coffee, which is smoother,” Havana resident Froilan Valido told AP news agency.

This is the inevitable end to a planned economy. It’s impossible to actually plan an economy due to the extremely large number of factors that determine the value of a consumer good. Since coffee harvests have been poor in Cuba the commodity is rarer which raises the price. Harvest amounts aren’t fixed and can be affected by everything from weather to disease. This combined with countless other factors means any economic plan is likely to fail as such events can’t be predicted with any amount of regularity.

Of course this action will lead to higher pea consumption which will make the product rarer and thus increase it’s market value. Thus this action won’t bring the price of coffee down for any meaningful amount of time because the price of peas will have to go up with increased demand. This is akin to corn subsidies in the United States which involves much of produced corn being consumed in producing ethanol fuel which drives the price of corn up. Thus a food product becomes more expensive.

If Grocery Stores Were Run Like Public Schools

Many people claim that private education can’t work and the only way to ensure everybody receives a good quality education is for the government to provide it. Of course these people don’t stop to realize that the government isn’t providing the education we are through our tax dollars. What if other markets were run like public education? What if grocery stores were run like public education:

Residents of each county would pay taxes on their properties. A huge chunk of these tax receipts would then be spent by government officials on building and operating supermarkets. County residents, depending upon their specific residential addresses, would be assigned to a particular supermarket. Each family could then get its weekly allotment of groceries for “free.” (Department of Supermarket officials would no doubt be charged with the responsibility for determining the amounts and kinds of groceries that families of different types and sizes are entitled to receive.)

Except in rare circumstances, no family would be allowed to patronize a “public” supermarket outside of its district.

Sounds pretty goofy doesn’t it. Likewise if grocery stores were run like public education people would be allowed to patronize private stores but alas would still be paying for public ones:

Of course, thanks to a long-ago U.S. Supreme Court decision, families would be free to shop at private supermarkets that charge directly for the groceries they offer; such private-supermarket families, though, would get no discount on their property-tax bills.

This is one of the things that really gets me about how public education is run in this country, like most government programs there is no means of opting out. Even if you don’t utilize the public education you’re required to pay for it at the point of a gun. There is no option to avoid paying for it even if you chose to seek a better education for your child elsewhere.

Most people in the United States wouldn’t be OK with other markets being run in this manner so it confuses me why they’re OK with the education market being run this way.

Mileage Based Tax and Other Fun Uses for GPS

Those of you who have purchased hybrid or electric cars recently probably remember a pretty nice tax incentive. Not only has the government been granting tax breaks to those purchasing fuel efficient vehicles but those who have these cars pay the government less gasoline tax as well. Unfortunately for you guys the government doesn’t like missing out on what it considers revenue and the State of Minnesota is looking into mileage based taxation:

The state’s Department of Transportation is recruiting 500 drivers in Hennepin and Wright counties to travel with GPS-enabled smart phones for a “Minnesota Road Fee Test.” The data will be used as state officials consider replacing gas taxes with mileage-based user fees.

It seems the state has a hard on for putting GPS devices in automobiles. If that state decides to go this route I wouldn’t be surprised if inclusion of these devices becomes mandatory (maybe that’s when I’ll move to join the Free Staters in New Hampshire) through legislation. These types of devices would grant the state three major benefits as I see it; the ability to tax people based on miles driven, the ability to track the whereabouts of vehicles for law enforcement uses, and the ability to automatically write traffic violations.

The first item is the justification being used by the states to get the pilot program going. It’s doesn’t take a stretch of the imagination to see the police using these devices to track where somebody has been. Police have a bigger hard on for violating rights than the politicians.

The second item is the most interesting because it would create an additional source of revenue. A GPS system can be used for many things including determining the speed of a vehicle. With the correct data the device in your vehicle could know the speed limit on each street in Minnesota. The GPS could be used to determine the speed of your vehicle and the speed limit of the street your traversing; if the first value is higher than the second the device can automatically issue you a speeding ticket. And there you have it, instant additional revenue.

Man I miss the days when I was naive of government desires and thought these ideas were just cooky conspiracy theories.

My Investments Are Doing Well

It seems my investments are doing well:

In Hong Kong trade, gold hit a record $1,500.70 an ounce, which traders said was mainly due to Standard & Poor’s downgrade of its outlook on US debt.

Silver also touched a 31-year high of $44.34 an ounce.

When a country’s economy starts circling the toilet it’s common for those living in that country to seek an investment they can use to preserve their purchasing power. Sometimes this causes people to convert more of their wealth to another country’s money (for instance people in Zimbabwe moved to relying heavily on dollars and euros now that their country’s money is worthless). Another place to put money is in commodities.

Traditionally precious metals have done well in times of economic uncertainty. As uncertainty in fiat money increases the desire to place wealth into traditionally safe commodities increases. I’ve been investing in precious metals (mostly silver) for a while and have made pretty good bang on it. Well it would be more accurate to say it appears as though I’ve made pretty good bang on it but in truth I’ve mostly offset the effects of inflation and thus preserved my previous purchasing power.

With all that said it is likely that there will be a correction soon where the price of these metals will dip down. This is usually the smart time to buy because the prices will then continue to climb again. This is the trend that’s been going on for years at this point and will likely continue while the devaluation of the dollar continues.

Oh, and I was investing in precious metals way before Glenn Beck came on the air so don’t both accusing me of following him. I never even watched his shitty show.

Why Taxation is Theft

OK, libertarians often talk about how taxation is theft while statists call the libertarians crazy. The statists don’t understand why libertarians would call taxation a form of theft and honestly many libertarians who make the statement that taxation is theft don’t fully understand why. Thus we have a lot of people with a misunderstanding walking around and I feel it necessary to explain the concept of taxation being theft. Really this post is me being selfish, instead of having to retype this argument every time I make it I’m just going to link back to this.

The foundation of libertarian philosophy is founded on something we like to call the non-aggression principal. The non-aggression principal states all aggression is illegitimate. Aggression is defined as any initiation of force, be it physical or simply a threat, against another person or their property (which I’ve explained is actually an extension of a person). This means any time somebody initiates force or coerces somebody to perform an action it is seen as illegitimate by libertarian philosophy.

Taxation is the collection of money by the state. This collection isn’t voluntary though as not paying money to the state will lead to them either confiscating your property or placing you in prison. The threat of property confiscation and prison time are forms of aggression and thus the action of taxation is seen as illegitimate by libertarian philosophy. When one party uses aggression to obtain property of another party the act is called theft and we say the first party stole from the second party. For example if I threatened to kidnap you and hold you in my basement for 10 years if you don’t pay me 10% of your earning every year most people would consider my act theft. Thus comes the phrase taxation is theft.

Libertarians aren’t claiming taxation as theft because we’re greedy. The claim is made because the entire concept goes against the very foundation of libertarian philosophy, the non-aggression principal.

Now you statists can stop calling us crazy when we claim taxation is theft. You are more than free to make an attempt of arguing for social benefits of taxation but please stop screaming, “YOU’RE FUCKING CRAZY!” We’re getting sick of hearing it and it makes you look like a moron who lacks a real argument against our statement. Those identifying as libertarians please understand the reason behind the phrase, “Taxation is theft.” You’re not helping libertarianism by making statements you can’t explain, it just makes us look crazy to the statists.

A Contradiction of Thought

This is really a post that has nothing to do with anything but is a thought I had. How can somebody complain about the police but then turn around and demand more laws be enacted? It seems to be a popular opinion of many people I know; they complain about how terrible the police are but later talk about wanting more laws and regulations put into place which would require more enforcement agents be hired.

Trying to make sense of it only causes my head to hurt.