BS around the honey pot

Barnaby Drake

The result is called ‘taxation without representation’.

…The system is deeply flawed, but how did it get into this precarious state? Given that America has 500 million people, then at 17.5 trillion dollars, the current external and internal American debt is such that it owes $3.5 million for every single citizen in the USA, and climbing! How would you like to be told that your government had allowed business and banking and bad fiscal policy to get you and every member of your family into debt of this size?


BS around the honey pot

‘THESE problems are exacerbated by the total costs of government shifting to unsustainable levels. Total costs of government are excessive and increasing.

The total annual costs of government can be estimated as the total of:

• total taken in federal taxes (approx $300 bn)
• total taken as local and state taxes & charges (est $30 bn)
• additional costs created for compliance (>$86 bn in 2005)
• costs of errors and their correction (e.g. loss of MDB; total est >$20 bn)
• costs of total subsidies provided to selected groups (est $50 bn).
• This puts the total costs of government at $486 Billion, or over 50% of GDP, and as industry passes on its costs, it is the ordinary taxpayers who ultimately pick up this tab.

Example 1: Examples of taxpayers, communities being excluded from departmental consideration.

The Department of Resources, Energy & Tourism plays an important role to achieve improved competitiveness and sustainability of the resources, energy and tourism industries……

The Department of Innovation, Industry, Science and Research strives as a key priority to encourage the sustainable growth of Australian industries……

ABARE’s objective is to contribute to the competitiveness of Australia’s agricultural, fishing, forestry, energy and minerals industries……

DAFF’s goal is to assist our forestry industry to grow……

Example 2: A current example of democratic deficit that is creating voter hostility

An instructive example of the problems created by a business only focus is the Gunns pulp mill process. In that case the project sponsor, Gunns Ltd, was the only group authorised to determine community, social and regional business impacts. All public and business submissions were vetted by Gunns. Taxpayer monies were provided to Gunns for development of their proposal and public monies were also spent on marketing their proposal. The mill ‘approval’ decision was provided by a pulp mill supplier associated with the project (Sweco Pic). By contrast, taxpayers were refused any assistance and objectors were demonised by government as ‘anti development’ or ‘Green’.

The result is called ‘taxation without representation’.

In this case it appears those who receive tax revenues are treated much more favourably by government than those who pay the bulk of Australia’s taxes.’
(The above part-quotes culled from an article by Mike Bolan.)

It has probably always been the case, but never more so than in the last twenty years leading up to the monitory collapse of the Western world. It is a system driven by corporate greed, but it is only recently that it has been recognised as such. While the market was expanding, bankers and stock brokers were making fortunes, and there was a never ending credit threshold, the whole world seemingly approved. Those that raised their heads out of the mire and gave dire warnings of the probable consequences were either howled down as ‘doom-sayers’ or were ignored. Yet still they persist, even after the crash, of dealing out more money and credit and believing the solution lies in more of the same. A recipe for an even greater disaster sometime shortly in the future. The banks clamoured for, and got, more money thrown at them so that they could continue to trade in credit to each other and to ‘stimulate the economy’. Big manufacturers clamoured for, and got, more money in a succession of bail-outs to save the economy and jobs, but the recession continues to recess despite the fact that they have now emptied almost every available coffer. The future only leaves inflation, devaluation and printing of money for any further bail-outs and stimulus packages.

That is a recipe for total disaster.

The system is deeply flawed, but how did it get into this precarious state? Given that America has 500 million people, then at 17.5 trillion dollars, the current external and internal American debt is such that it owes $3.5 million for every single citizen in the USA, and climbing! How would you like to be told that your government had allowed business and banking and bad fiscal policy to get you and every member of your family into debt of this size?

It wouldn’t be too bad if it were just America, but in doing so, they have gobbled up the world’s resources and they have raided every available source of money in every financial institution and spread this fiscal disaster like a disease throughout the entire world’s economy. Now what will happen if their ‘road to recovery’ fails and they enter the second stage of devaluation and inflation? They start to print money to restart their own economy and in the process, devalue the rest of the world’s finances along with it. No country is immune from this.

More of the same is DEFINITELY not the answer, but industry, bankers and stock brokers believe that it is and continue to advocate and follow this destructive policy to the death. Even now, there are adverts on television telling you to invest and trade in the stock exchange with a hint of guaranteed profits even in these depressed times. ‘Protect your money’, they scream ‘by trading NOW’. More fodder for the big boys to feed off!

This is the very source of the problem, and it is driven by greed.

Large corporations are required to service the debt they incurred when they launch shares onto the stock exchange, although no further benefit is gained by the company from these shares once they have been issued, except for those directors who own a portion of them. However, there are many others who make their fortunes by trading in these shares and others who are investors, depend on the dividends. At the AGM’s of these companies there is pressure put on the directors to ‘perform’, which means increase profits. Money is almost always the only consideration, and ethics and morality and all the social values take a back seat. It is this pressure to ‘perform’ that has largely exacerbated the situation and put us into the position we now find ourselves in. The larger corporations need government compliance and assistance to continue to expand. Increased profits mean more GDP and more jobs, so the governments become willing accomplices. They set up departments to look after the interests of these businesses and chuck money into subsidies and support, and because it makes their balance sheets look good, everyone is happy. The unions are happy, the people are happy, and they can all talk about prosperity and jobs. This allows the government to maintain its power base. And with this new apparent wealth, people feel good and the credit market expands. People buy houses and cars and refrigerators and television sets and by-and-large run up huge individual and collective debts, which they believe they can easily take care of in this euphoric economy. The banks offer more and more credit, as do retailers and all commercial enterprises. ‘Fly now – pay later’. The imbalance of exports and imports creates a massive National debt as well. The result is that they are buying into the assets of the future and happily destroying the planet. We are, in fact, cutting off the branch we are sitting on, but who cares when fortunes are to be made on the stock exchange and the good life is available for all. Everything in the garden is rosy.

Meanwhile, the large corporations lobby the government and infiltrate the offices of their designer civil service departments which have been conveniently set up for them by a complicit government, and the members of the boards of all these large companies pay themselves exaggerated salaries for doing a good job. They are. Between them, they have created a potential utter and complete disaster! A disaster of such magnitude that it could bring the whole of the world’s civilization as we know it crashing down around their ears!

The climate, the environment, the credit crunch, the sub-prime fiasco followed by DEPRESSION! What a Hell we have made for ourselves on Earth. Faust has come home to roost! And even in the midst of the ruins the only proposed solution has been more of the same. ‘Continuous growth’ is the mantra. Even Obama in his inaugural speech mentioned it.

Is there a solution to this problem?

Yes, I believe so, but it is not along the normal accepted lines of economics. We have to sacrifice a life-style dependent on continuous credit and eating into our future. We have to stop and take stock. We have to match our growth not to paper, but to produce. We have to get ourselves back onto some ‘gold standard’ of values. We have to stop hankering after all the things that commercial enterprise says ‘we have to have’ and look to what we need. We have to stop trading in each other’s currencies and manipulating the money markets and we have to restrict the stock markets from trading in ‘futures’ and dictating the prices of goods which are not related to their cost or value. We have to prevent the raids by ‘entrepreneurs’ on all our money and assets and stop swapping them for useless pieces of paper. We have to forget that ‘jobs’ are the province of large corporations and start thinking of generating our own wealth and becoming self-sufficient. We need to stop empowering and subsidising business at the expense of the people and we need to concentrate on enterprise and imagination, and we need to get that message through to our leaders. We need to preserve what is left our assets and we need an enlightened energy policy using the copious natural forces available to us that will reduce our carbon emissions and possible save our planet.

Will this happen?

It just depends on the quality of our leadership.

Barnaby Drake