Economic Illiteracy is a Dangerous Drug
A lot of the problems the US is suffering from today stem from the fact that we’ve been managed by a political class that is economically illiterate for decades.
“Debt is only money we owe ourselves.”
“We need to pass this $2 Trillion spending bill to drive down prices.”
“We need to phase out reliable energy generation in favor of unreliable renewables.”
“Nuclear energy is bad so we can’t build anymore reactors.”
“We need to bail out the banks that introduced systemic risks into our economy or the world will devolve into chaos.”
“We need to lock down the economy and print trillions of dollars to pay people for staying home from work while we flatten the curve.”
“A prolonged zero interest rate environment will stoke economic growth with no long-term effects.”
“We need to ship all of our manufacturing over seas so that we can flood the world with dollars, make the USD the reserve currency of the world, and lower prices at home. Good middle class jobs be damned.”
The list goes on and on.
The ramifications of these compounding economically illiterate policies has left the country, and the world at large, in an extremely vulnerable position. We are sitting on more than \(35 TRILLION of debt on the national balance sheet with another \)220 TRILLION in off balance sheet liabilities in the form of Social Security, Medicare, Medicade and other handouts the government has promised to make in the future. And, worse yet, many policies, particularly spending bills that pack in new regulations, have indirectly eroded individual freedoms.
The annual military budget increases the war machine and the military industrial complex, which then use the money they’ve been allocated to lobby for laws like the Patriot Act. Completely obliterating the fourth amendment in an effort to “protect the country from terrorism”. I sit here and shudder at the thought of how much money has been wasted on programs like the TSA and the additional lost economic productivity that comes with people idiotically taking off their shoes and standing in a radioactive tube with their hands up while some mouth breather who couldn’t guard a Pixie cup from a three year old yells at you. Let alone the potential economic activity and partnerships that are blown up with the bombs we drop using money we don’t have.
The mad dash to “nEt ZeRo EmIsSiOnS” also brings along with it inflationary pressures that result in increased economic stress for the Common Man while restricting his freedoms. Nothing makes this clearer than the Orwellian “Inflation Reduction Act” that forced net zero energy transitions policies through a bill. The policies limit the options individual Americans and corporations have when it comes to utilizing the energy sources they deem most economically viable at any given point in time. An over subsidization of wind and solar and a demonization of oil, natural gas, coal and nuclear has introduced economic imbalances that are leading to a capital misallocation of epic proportions. This has, in turn, led to less reliable energy systems and overall higher energy costs.
And now the incumbent administration, now headed by Kamala Harris, is pushing for an unrealized capital gains tax that is sure to scare tens of billions of dollars worth of capital outside of the borders of the US. We touched on it when it was originally being floated last week. However, at the time it seemed like the campaign was floating a litmus test to gauge how it would be received if it became an official policy. Today it became clear that this will be an official policy if Harris gets into office and garners the necessary votes to push it through.
What’s worse is the fact that one of her lead economic advisors, Bharat Rama, joined CNBC this morning to not only confirm that this is the official policy stance of the Harris campaign, but to say that people should be okay with this because they already pay an “unrealized gain tax” in the form of property taxes. Not only is it not true that property taxes are technically not unrealized gain taxes, but it’s also horrible framing. Property taxes are one of the most reviled taxes that people have to pay after income taxes. No one likes paying property taxes. Especially when they look at the laughable public schooling system that they fund.
Doubling down on failed policy seems to be the modus operandi of Kamala Harris and the Marxists on her team. An unrealized gains tax is nothing more than asset confiscation by a corrupt government that has completely lost control of its finances. It will destroy the wealth of the nation. “But it will only affect people who have more than $100M. Stop talking about this, it won’t affect you at all! You poor rich wannabe.”
People who have attained hundreds of millions of dollars have done so because they are smart. (Most of them at least.) And they worked extremely hard to build businesses to acquire their wealth. If you think they are stupid enough to stand by and let the government swoop in and confiscate that wealth, I have a bitcoin privacy fork to sell you. They will move their money out of the country on November 6th and the Harris administration will be forced to begin lowering the threshold of who has to pay unrealized gains taxes.
$50m
$25m
$10m
$1m
$100k
They will not stop doubling down on their incompetence. These people should be laughed out of polite society and marooned on an island for floating policy as potentially dangerous to the US economy as this unrealized tax is.
This is why we bitcoin. Bitcoin gives people the ability to store their wealth in an asset that is extremely hard to confiscate if secured properly. Bitcoin gives you leverage from which to fight back against this type of overt Marxism.
Final thought… It is abnormally humid on my village by the sea for a late August day.