Taxes Don’t Fund Government: So What’s Next?

Taxes Don’t Fund Government: So What’s Next?

With the U.S national debt currently sitting a little above 23 trillion, there is still a lot of debate about how we got here and whether or not this accumulation is sustainable. Most people in Congress responsible for the matter see it as a problem, stating that “we don’t have the money to pay back our debts.” Though their instincts are admirable, their rational is based off the false idea that taxes fund government spending in our current economic-political enterprise.

When governments issue a sovereign currency, backed by nothing, they will always be able to pay their bills, even if their tax revenues fall short of their expenses. This has been the fiscal reality for most of the world’s governments since Nixon closed the gold standard in 1971.

Federal governments (there is more nuance with state & local) are able to do so because taxes are simply used as the mechanism that gives sovereign currencies value. In this system, sovereign nation’s money is limitless and no more than a key stroke on a computer; it is merely an accounting manuever. Citizens need to accumulate their specific currency to pay their taxes (or else) which creates the demand for it. To acquire the currency, citizens labor to receive a wage or receive a payment directly from the government. Once received they pay back their tax to the currency issuer and that issuer shreds the money. A sovereign currency issuer does not need it’s own money back to spend once more.

The idea that debasing a currency would cause hyperinflation is a presumable counter. There is not a fixed amount of dollars however, so even though the value of a dollar may be decreasing, fiscal, monetary and legislative manuevers can be taken to stabalize prices and increase the purchasing power of citizens.

This video created by one of the thought leaders of this concept, Warren Mosler, describes how the British used this concept to fully employ their coffee plantations in Africa. To get the local population to work for them, they assessed a tax on their huts. If the local population did not pay their tax they would burn their huts. This incentivized the locals to work for the British because they needed to acquire the British currency to pay their tax and prevent them from burning their homes..

Mosler claims that this was great for the local population. The money that was not taxed back was used to develop an economy and everyone was employed. Perfect right?

Well this is the nuance and ultimate question — is this a moral system? The local African population was conquered and then controlled by a more powerful people’s wrath and fiscal policy. Did the local African population have a say in how the government spent, who the government gave the money to, and how the local population would be taxed? The video did not get into that, though it certainly raised these questions.

This misunderstanding of our current fiscal system stalls human progression because it leaves legislatures and the people they represent misinformed and therefore misguided in their policy desires. If they understood that currently taxation is not used to fund government, maybe they would question the ethics behind it. If they understood that governments can and will spend on whatever they want, with as little interference in social and fiscal policy as possible, maybe they would desire a whole different type of political, fiscal and monetary system.

Now Hobbesians will say that humanity cannot break this reality. That there must be an all-powerful ruler deciding how the rest of the majority of human beings will live, but the Hobbsian view is fallacious. Humanity almost committed omnicide during the Cold War with this ideology. It is not sustainable.

Like all systems, the more de-centralized and liberated it is, the more equality, peace and prosperity it will enjoy. If we adopted such a character in our political and monetary livelihoods we could escape this tyrannical conundrum.

Competition among currencies can solve this by creating a marketplace for the most honest and advanced currency. Fixed commodity based currencies could compete with ones who have a subscription, or “tax” and that can be endlessly created. To this author it seems that encouraging our lawmakers to allow this competition with their monopoly currencies is the quickest and most non-violent way to restore honesty and morality back into our socio-economic-political systems across the world.

Maxwell is a freelance writer who works in Finance and is currently pursuing his CFA. 

How to Automate a Legislature

How to Automate a Legislature

Donnie Gebert is a former US Army Intelligence Sergeant, Ammunition Supply Specialist, Infantryman and US Navy Electronics Technician. He was medically discharged after 17 years of active service and lives with his three children in Texas. He is the author of “A Direct Republic: The Null Hypothesis of Politics: (How to automate a legislature)” and has appeared on The Bob Murphy Show, The Pete Raymond Podcast & The Future Tech Podcast; these podcasts elaborate more on the ideas of this interview.

How are you? What has the reception been like to the book? Do you feel like it has sparked a greater interest in personal liberty?

OK. Been 4yrs of looking for a job.

That kinda pushed me into this. The book is just getting some air time. 85% positive, 10% confused, 5% irrational belligerence. Overall, a good start.

“If you’re participating in a macro-movement that’s sinister you might not necessarily know it, so pay attention.”

To reach the goal of full decentralization do you think an emphasis on decentralizing local politics would be necessary first before any kid of disruptive technology or business could enter and fully takeover the monopoly legal system?

The decentralization process may never replace that system, should that other system not die from natural causes. Local is the easiest place to start, in an educated and informed population. That’s the barrier, at any scale. Local issues are harder on property issues, see Walter Block. Federal issues are almost purely fiscal and revolve around dollar hegemony. The federal issues that need coordination, and there are a few, are best serviced by siloing the issues and letting the participants pile in by their own preference.

Facebook’s Libra should give you a picture on how crypto actually damages governments and the shit’s on live tv. It’s not theoretical.

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Speaking about the American system, most people who acknowledge the problems of our legal system but still have visions for ‘good government’ argue that either a more informed electorate is necessary and/or more proportionate representation (more representatives) is required in Congress to achieve it. Do you believe that with one or both of these we could have a ‘good government’ that is more beneficial than a direct republic?

Good is subjective, government needs definition. Government is organization by force. Is that good? By this definition, organization is the goal, not government. Most of the people looking for ‘good government’ will agree that force is bad. This allows these people to have their ideas of “good government.” It just places all the cost and ramifications of their own ideas in their own lap. Then, you and I may point, laugh, and discuss what’s good. 😂

“you’ve got to learn to say no to other human beings.”

Do you think there are any aspects of human nature that would get in the way of us adopting a direct republic? If so, do you think they can be overcome?

All of human nature prevents the idea of “good government”. I shifted human nature on the individual and made the process a de facto educational event. No one tells you how, let’s see how you do for yourself….

This forces peer-review to be the first step…..you may call it research. People have to pay for the laws/protections they have and know there’s nothing past what they pay for and/or are involved in.

If this idea is antithetical to the species, I may have inadvertently killed us all. Unlikely. 😁

What do you think is the easiest way to convince people to take whole responsibility on themselves? Do you think it can be done or do you think some kind of natural destruction would need to come first for the average person to really begin to see the immense value in it?

So, education is the cheapest bang-for-buck solution. You pay for the curriculum, copy and paste. That up front cost is where I sit. After that, It’s a free course. 3 stages, legal hygiene, legal self defense, legal judo. Hours, 2-4, 2-20, 20-200.

However, lets assume that in every zip code there’s a number of people, like you. They get it. They’d do it with support. They need to be aware but communities like this can be built very quickly.

It’s not me, it’s the idea. If someone gets this on Joe Rogan, it could fuck up the 2020 cycle. A viral “I want to be my own rep” campaign led by the “Make me the Last President of the US” candidate. Anyone with a microphone can ruin politics by educating people. That’s how fragile that paradigm is right now.

Reprinted with permission from Amped Magazine

The Immense Potential of Liberty

The Immense Potential of Liberty

In this essay I will piece together reflections on law, economics and meaning — specifically on how they connect in principle to structure healthy human organizations. While doing so I will interweave theoretical descriptions of how certain institutions and philosophies would change to accomplish that worthwhile goal. For introductory context, the ideas encouraging this essay are from the aggregated works of Ludwig Von Mises, Dr. Jordan Peterson and Donnie Gebert.

“We cannot enter into alliances until we are acquainted with the designs of our neighbors.”

When Sun Tzu wrote this in The Art of War he was reflecting on a fundamental truth, that no one, no matter who it be — individual, corporation or government — can be fully trusted until their true intentions are revealed. Through this understanding it is easy to recognize gaps in our modern legal and political culture where such transparency is lacking. Politicians keep their worst promises and abandon all their good ones. They enact laws that are unconstitutional and resort to propaganda to justify their actions. The overarching system also engages in ambiguous deception. It utilizes (and is negatively incentivized by) a monetary policy that permits infinite and unconstrained spending whilst the public is left with the bill. Additionally, intelligence agencies established by the system, hide and collect private information without discloser to the public. Unsuitably this all occurs while citizenry are seemingly given the opportunity to change it through their use of an occasional vote.

To solve this problem, I propose we truly adopt methods of being attuned to what our early ancestors prescribed — a solidified spiritual and cultural pact, endowed by nature, God or some transcendent source, that everyone is created equal and is able to formulate their existence as they please, i.e natural law.

To safely and sincerely accomplish this would take decades, but yes, this would result in the abolition of the U.S Constitution, the White House, and the Congress. What would replace it is as described in A Direct Republic: The Null Hypothesis of Politics: (How to automate a legislature) by Donnie Gilbert. In it Gilbert structures his policy proposal by arguing that political organizations whom force people, by law, into funding projects they do not approve of are behaving antithetically to the principles of liberty and natural law. Additionally he criticizes the folly and moral inconsistencies of communities pre-approving individual decision making and also addresses the tyranny a majority creates through democracy. To address the transparency problem and remain consistent with natural law Gilbert submits that we must all become our own legislator and only adopt laws that directly affect our lives.

This methodology would be consistent because of contract law. People would form mutual agreements with each other that if broken, would only effect the established parties, not the entire population. Broader community association would then develop when individuals and other societies or organizations with similar contract law wanted to unite and collaborate to create even more efficient and flexible contracts. The freedom to create any conceivable contract is what is important. When people are given that ability their cumulative efforts would produce ideas and formulations that would benefit the most amount of people because of specialization and abundance. It appears that if we limit this process we limit the capabilities of our intellect and economy.

To keep this short I will not go further in describing what the detailed operations of such a society would look like. If you would like to learn more about this topic, please read Gilbert’s book I mentioned above. That being said, I would like to describe the monetary system of such an organization. This characterization is to further emphasize the favorable outcomes of respecting natural law in all areas of life. I want to address the importance of economic freedom because money is one of the most essential tools of our existence. When people fundamentally trust and understand the value of their monetary design they are able to make optimally informed financial decisions. This clearly is the most desired outcome because it enables the most equitable and beneficial outcomes. When that design is manipulated however, people become ignorant and apathetic toward their future. This is because of new and ambiguous monetary and political policies that remove the ability of regular people to establish reliable value on the prices and goods and services. This ever increasing economic ignorance is not good for the future, especially as it metastasizes. This is why Austrian economist Ludwig Von Mises says in Human Action:

“There is no means by which anyone can evade his personal responsibility. Whoever neglects to examine to the best of his abilities all the problems involved voluntarily surrenders his birthright to a self-appointed elite of supermen. In such vital matters blind reliance upon “experts” and uncritical acceptance of popular catchwords and prejudices is tantamount to the abandonment of self-determination and to yielding to other people’s domination. As conditions are today, nothing can be more important to every intelligent man than economics. His own fate and that of his progeny is at stake.”

So it seems like to prevent waste, negligence and tragedy it is our duty to operate in a sound monetary system. This type of system would not have a mandated form of currency, instead it would encompass a market of competing currencies, each vying to be the most beneficial form of payment and saving. Despite the numerous amount of currencies being used, price discovery would be more honest than the current systems because of the increased attention and knowledge people would have of their finances and the market in general. So just as in a free market of laws, a free market of currencies would benefit society immensely and would be intellectually consistent with natural law. As the Austrian economists describe, economic freedom and free markets end class struggle, builds a large middle class and continually raises the standard living for everyone.

In passing, it must be noted that people must be able to opt out of a system to be free. Recognizing this is essential to understanding liberty.

So how does Dr. Jordan Peterson involve himself in this discussion? It is his remarks on meaning and potential that connect because he describes them empirically. This is of necessary comprehension because that is exactly what Ludwig Von Mises and Donnie Gebert have done in their analyses (here Gilbert’s more theoretical operational perspectives might fall outside the empirical description, but his emphasis on natural law as a sound principle does not). Peterson thusly places the regeneration and strength of society on the individual. He rightly acknowledges that we are society of individuals and that each of us has tremendous influence on the direction of that society. To demonstrate this point he calculates that each person is three people removed from a billion people. (If that doesn’t put your potential into perspective I don’t know what does) This being the reality of existence, why wouldn’t we adopt social policies that conditions the most potential out of everyone, i.e natural law? Moreover, if taking on responsibility, especially voluntarily, in whatever form gives people’s lives meaning and purpose, why wouldn’t we give them full ability to determine what that responsibility would be for them and their communities? Again, why would we want to limit this?

It seems to me that making excuses for the suppression of liberty is our way of gnawing at the temple of existence. As Peterson describes, doing so is a catastrophic way of existing because of the self-injury that it causes personally and how that then ripples outward into society. I believe that we are currently capable enough, technologically and cognitively, to recognize the senselessness of this perspective. I also believe we are currently experienced enough to honestly and consistently admire the incalculable potential that liberty provides our world. I hope you can meditate on these ideas and I hope you find them as inspiring and gratifying as I do. BIO

*Originally posted at The Sovereign Citizen Magazine*

Maxwell B. Stetson is received his undergrad at Drexel University in International Business & Law, writes on economics, politics and foreign policy and conducts interviews on similar topics for his personal site.

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