Cheap Money Didn’t Fix the Economy (Shocker!)

Some big, round-numbered interest rate thresholds have been passed in recent days including 4.0% on the 10-year UST, 5.0% on the 2-year UST and 7.0% on the 30-year mortgage. These all come at the end of extended round trips, of course, so the question at hand is how long did these trips take and what has been accomplished by all of the Fed’s interest rate pegging and repression during the interim.

As to the duration of the round trips, the elapsed time between this week and when rates originally broke lower from current levels are as follows:

Elapsed Time Of Round Trip:

  • 10-Year UST: 5,600 days;
  • 2-Year UST: 5,700 days;
  • 30-Year Fixed Mortgage: 8,090 days.

Let’s start with mortgages, where rates on the 30-year first dipped below 7.0% in February 2001 and then fell steadily for nearly two decades to a low of 2.67% in December 2020. After plateauing for more than a year, the mortgage rate has rocketed back to 7.0% during the last 15 months.

The theory, of course, is that the wise men and woman on the FOMC know far better than the free market the appropriate mortgage rate. And also that, especially, the rate path needed to push higher societal investment in housing should not be left to the happenstance of supply and demand.

Alas, we don’t see much evidence that all the massive interest rate repression summarized above did much for real fixed residential housing investment. As of Q4 2022, the figure was still 36% below its 2005 peak and 15% below the level that pertained before Greenspan really poured gasoline on the housing market after the dotcom crash.

As it happened, the housing investment cycle bottomed in Q3 2010 at about 35% below current levels. Given the rate at which new building activity is now sliding, it would not be surprising at all to see real housing investment approach the post-crisis bottom during the year ahead. After all, the seasonally adjusted Mortgage Purchase Application Index is now at its lowest reading of the 21st century. On a year-over-year basis, total purchase applications are down a staggering 43.7%.

So the question recurs: What is the point of the Fed’s massive manipulation of debt prices when its policies in the case of the housing market are simply leading to a repetition of huge cyclical swings in activity levels?

Real Private Fixed Residential Investment, 2002 to 2022

When looked at on a longer term basis, the verdict is even more damning. As it happens, the level of private housing unit completions in January 2023 was 1.406 million at an annualized rate. As shown in the yellow line below, that was actually a tad under the level first posted 53 years ago in October 1970!

It would be no understatement, therefore, to say that was truly some kind of round trip to nowhere.

Back then, of course, the US economy was only 25% of its current size in real GDP terms and the number of household units needing homes was 63 million versus 131 million today.

That’s right. We are now at real housing investment levels equivalent to those of a far, far smaller economy.

So the burden of proof sits squarely on the back of Keynesian defenders of monetary policy activism at the Fed. Do they really think that left to its own devices the free market would have generated even fewer housing units and even lower investment than has actually occurred?

We think not. After all, as we show below rampant central bank money pumping does not produce more tangible output or wealth; it simply causes the price of what’s there to steadily inflate.

New Private Housing Units Completed, 1970 to 2023

Needless to say, there has been nothing round-trippy and earthbound when it comes to housing prices. In fact, the all-transactions house price index today stands at 1,050X its 1975 level (blue line).

And that’s not just general inflation at work, either. During the same 47-year period the CPI has risen by barely half that amount. So what we have, therefore, is direct evidence that sub-economic interest rates cause supra-economic asset price appreciation in a sector of the economy that is heavily debt financed.

43-Years Of Inflation: House Price Index Versus CPI, 1975 to 2022

Indeed, in more recent years when the Fed went into money-printing hyper-drive, the rate of inflation in the residential housing sector has actually accelerated. For instance, the median listing price of the US inventory of housing units for sale has increased from $127 per square foot in July 2016 to $217 at present.

That’s a gain of 71% in just over six years. And its especially significant because it standardizes to the square foot level to control for the fact that people have been buying slightly “more house” in recent years.

Listing Price Per Square Foot For US Housing Inventory, 2016-2023

Needless to say, Wall Street pays no never mind when it comes to the ways and means of rising prices. Apparently, if it’s higher, it’s better when it comes to asset prices. Full stop.

At least that would appear to be the case with respect to pricing the local condo market. Since 1995 the CPI has doubled, but New York City condo prices stand at 4.05X their early 1995 price level. So money-pumping is well and truly the universal elixir…until it isn’t.

New York City Condo Price Index, 1995-2022

As we have frequently pointed out, ultra-cheap interest rates have not caused real activity to accelerate in the overall main street economy, either. In that respect, the two very best measures of long-term growth are real personal income less transfer payments and the total industrial production index.

Both measures eliminate the inflationary noise in the numbers, of course, but they also remove the distorting effect of today’s massive level of transfer payments. The latter currently totals nearly $4 trillion, meaning that one-seventh of GDP is not new production, but simply wealth transferred from producers to consumers and from future workers to current beneficiaries.

In any event, the sharp growth slow-down since the financial crisis of 2007-2008 is unmistakable. Compared to the longer term trend established during the 41 years between 1959 and 2000, the per annum growth rates since Q4 2007 came in drastically smaller:

  • Real Personal Income Less Transfer Payments: 3.51% fell to just 1.80%;
  • Total industrial production: 3.40% fell to just 0.04%.

Real Personal Income Less Transfer Payments And Total Industrial Production, 1959-2022

One possible excuse for systematically falsifying asset prices, of course, is that at least it pulls economic activity forward in time, making society wealthier earlier than would be the case on the free market.

But self-evidently, even that canard doesn’t wash. Both residential housing and the main street economy have drastically under-performed their historic growth trends, especially since the pre-crisis peak in Q4 2007.

What we got, instead, was just plain inflation—first in asset prices, now in the prices of goods and services.

So what we get next is a correction—mostly likely a great big, bad one!

This article was originally featured at David Stockman’s Contra Corner and is republished with permission.

A Second Trump Presidency Promise No Improvements on Trade

Over the past few weeks, former President Donald Trump has been releasing some of his proposals if he were to return to the White House in 2024. While many of his positions pose great danger to personal liberty, such as his plan to “end crime and keep Americans safe,” his proposals on tariffs are near the top in terms of ignorance.

In a video posted on February 27, Donald Trump released his plan to “end our reliance on China.” In the short video, Trump claims that his plan would increase American jobs by the millions and remove our dependence on China. The Trump War Room Twitter account proclaimed he would “revive Mercantilism for the 21st Century.”

Trump’s promoting of tariffs would be disastrous for the economy. The increase in the costs of production manipulates competition as it leads to people spending more money on a product than they otherwise would have. People would be better off buying products in their self-interest at the cheapest cost.

Let us say America were to propose a tariff on a sweater company from Britain to incentivize American made sweaters. Since the tariff can be altered so high that it forces Americans to buy domestically, the prices of the American sweaters would be expensive since the demand for American-made sweaters would skyrocket. The extra money a consumer lost due to the tariff could have gone somewhere else in the economy.

If the tariff were to be exponentially higher and the hypothetical industry were to be started, it would need workers. If this new company needed 30,000 workers, it would need to come out of another sector of the economy. Therefore, no net gain is achieved.

Sadly, Trump did not understand this economic concept when he came into office in 2017 and he still does not. Trump wasted no time before to increase tariffs to boost domestic growth, but failed to accompish his goal.

In a report conducted economist Erica York of the Tax Foundation, the Trump tariffs imposed nearly $80 billion worth of new taxes on Americans, equivalent to one of the largest increases in decades. They also reported that his tariffs reduced long-rung GDP growth by 22 percent, wages by 14 percent, and full-time equivalent jobs by 173,000.

The tariffs implemented in 2018 and 2019 have led to direct burden and deadweight loss, according to numerous economists. In fact, the amount of burden costed was roughly $800 per household.

Industries also took big hits as well. Aaron Flaaen and Justin Pierce found that the tariffs were associated with “relative increases in producer prices via raising input costs.” Between February 2018 through January 2020, the tariffs were estimated to cost American companies $46 billion, and exports of goods hit have fallen sharply.

The claim that Trump would bring mercantilism to the twenty-first century clearly shows the former president’s ignorance of economic history. Mercantilism, as defined by economist Murray N. Rothbard, is “a system of statism which employed economic fallacy to build up a structure of imperial state power, as well as special subsidy and monopolistic privilege to individuals or groups favored by the state.”

Thanks to this policy, monopolies such as the East India Company and the French East India Company were formed. Countries such as Great Britain adopted these policies, and it cost them economic growth and freedom of colonial business.

Further consequences were seen in the tax revenue used to build the power of the English government, along with the” multiplying of the royal bureaucracy needed to administer and enforce the regulations and tax decreed,” according to economist Thomas J. DiLorenzo. The consumers lost out on the government restrictions on production on top of hampering the division of labor imposed by the bureaucrats.

It was only after Britain extended the trading market that economic growth could be achieved. According to Professor Robert Allen, the expansion of international trade led to Britain’s “high wage, cheap energy economy, and it was the springboard for the Industrial Revolution.”

Eventually, free trade began to flourish as countries saw high economic growth and reductions in poverty. Countries such China embraced free trade after decades of failed communism, including with America. Both sides benefited from free trade, benefits that gives Americans an extra $260 of extra spending a year, according to economists Xavier Jaravel and Erick Sager.

America has seen great benefits from free trade over the last several decades. According to a report published by the Peterson Institute for International Economics, the payoff for American trade between 1950 and 2016 was at $2.1 trillion. This increased the GDP per capita by around $7,000 and GDP per household to $18,000.

Companies also see great benefits as well. Almost 11 million jobs are depended upon the export of American goods and services, as well as foreign direct investments.

Despite all the great benefits from free trade, people like Donald Trump continue to ignore basic economics and instead implement disastrous economic plans.

TGIF: Which Way — Capitalism, Socialism, or Something Else?

Big questions are being thrashed out these days. One of the biggest is this: do we want capitalism or socialism? Unfortunately, the online discussions I’ve witnessed have been, to put it as politely as I can, terrible. (For an example, see this one between Reason senior editor Robby Soave and political commentator Briahna Joy Gray, cohosts of The Hill‘s online show “Rising.”)

Let’s start with the words themselves. We’re in a linguistic mess. It’s only a slight exaggeration to say that nearly everyone has his own definition of capitalism and socialism. So when people get together to hash things out, they ought to begin by saying what they — the discussants, not the words — mean. That doesn’t seem to be an unreasonable demand.

It’s pointless to debate what words “really mean.” There are no platonic definitions. Language is usage, which is what dictionaries have traditionally reported on. and word usage changes. So we should dispense with that conversation or else time will be wasted.

As I say, we’re in a linguistic mess. Bernie Sanders is the country’s best-known “democratic socialist.” Asked during one of his campaigns what democratic socialism is, Sanders said something like, “It’s an economy that works for everyone.” Real informative, Bern. Thank you very much.

The fact is that most younger Americans today seem to think that socialism is just a bigger welfare state. For example, they would probably say socialism would include Medicare for all, a program in which the government would pay everyone’s medical bills through taxation. But that’s not what socialist ideologues have traditionally had in mind. For Marx and his socialist predecessors, socialism meant the abolition of private property, money, and hence the market: the state would own the factories, hospitals, and other means of production. I don’t think most people who call themselves socialists today favor that.

How about capitalism? As I wrote some years ago, as the word is used, capitalism

designates a system in which the means of production are de jure privately owned. Left open is the question of government intervention. Thus the phrases “free-market capitalism” and “laissez-faire capitalism” are typically not seen as redundant and the phrases “state capitalism” or “crony capitalism” are not seen as contradictions. If without controversy “capitalism” can take the qualifiers “free-market” and “state,” that tells us something. [I discuss the many problems with the word capitalism here.]

It tells us that the word itself is a muddle. The word capitalism has been called an “anti-concept,” a term I associate with Ayn Rand, who wrote:

An anti-concept is an unnecessary and rationally unusable term designed to replace and obliterate some legitimate concept. The use of anti-concepts gives the listeners a sense of approximate understanding. But in the realm of cognition, nothing is as bad as the approximate….

But the word capitalism is worse than an anti-concept because it’s not merely approximate; it contains contradictory elements. As philosopher Roderick Long writes:

Now I think the word “capitalism,” if used with the meaning most people give it, is a package-deal term. By “capitalism” most people mean neither the free market simpliciter nor the prevailing neomercantilist system simpliciter. Rather, what most people mean by “capitalism” is this free-market system that currently prevails in the western world. In short, the term “capitalism” as generally used conceals an assumption that the prevailing system is a free market. And since the prevailing system is in fact one of government favoritism toward business, the ordinary use of the term carries with it the assumption that the free market is government favoritism toward business.

And similar considerations apply to the term “socialism.”…

Ironically Rand, like Ludwig von Mises but unlike F. A. Hayek, favored the name capitalism for her “unknown ideal.” But Rand, again like Mises, left no doubt about what she meant. The other day I caught a YouTube short of Rand talking about capitalism in which she said she meant “real, free, uncontrolled, unregulated, laissez-faire capitalism, not the mongrel mixed economy we have today.” (I prefer self-controlling and self-regulating to uncontrolled and unregulated, but let that go. See my “Regulation Red Herring.”)

If people define their terms before plunging into the debate, the time will likely be more fruitfully spent. If I were in such a discussion, I would insist that the issue is not whether we really have capitalism, but whether we, individually, are fully free, politically and legally, to produce, consume, invest, and exchange in unmolested self-regulating markets.

And I would ask the self-described socialist if he favors the abolition of property, money, and markets. If he says no but favors Medicare for all, housing subsidies, and regulatory agencies, I would say he sounds like an advocate of a mixed economy in which markets exist but are routinely manipulated by state personnel aiming to effect outcomes they believe that voluntary exchange will not achieve.

As for the actual socialist, I’d start by saying what H. L. Mencken said:

The chief difference between free capitalism and State socialism seems to be this: that under the former a man pursues his own advantage openly, frankly and honestly, whereas under the latter he does so hypocritically and under false pretenses.

People with an overwrought sense of romance love the phrase, which Marx did not originate, “From each according to his ability, to each according to  his need.” But how does that not describe a nightmare world? Under socialism, would each individual freely decide what he thinks his abilities and needs are? (What is a need?) If so, central planning is out of the question. So some presumptuous person or bureaucracy with dictatorial powers would make those decisions. Oh happy days! The promised withering away of the state is about as likely as an honest politician.

I can’t see that socialism has anything at all to be said in its favor. Even Benjamin Tucker, the prominent American free-market anarchist, who was seduced by the valueless labor theory of value, said, “[State] Capitalism is at least tolerable, which cannot be said of Socialism or Communism.”

What the free-market advocate must not do is let his interlocutor get away with claiming that “our capitalist system” is the free market. When, for example, Briahna Joy Gray says, as she did in the discussion I linked to above, that homelessness or (undefined) inequality is capitalism, she must be called to account with a question: “But are people free in the market?” Considering how thoroughly government bureaucracies at every level encumber necessarily win-win voluntary exchange, it can’t be the free-market order that’s causing homelessness. Coercive corporate power, which Gray and her ilk see as the prime culprit in so many ills, derives from coercive political power and cannot exist without it — thus, it’s what I call the most dangerous derivative.

Influencing the language is like herding cats. Nevertheless, I’d love to come up with a single word ending in ism for what free-market champions favor. We could simply say, “the free market,” “laissez-faire capitalism,” or Adam Smith’s marvelous term “the system of natural liberty,” but they seem clunky in some sentences. “Individualism” has its virtues, but it’s not quite on point in this context because markets are founded on social cooperation and the division of labor. “Enterpriseism” is contrived, although it makes the point. I’ll keep working on it.

For Further Study

Sheldon Richman, “Capitalism versus the Free Market” (video), Future of Freedom Foundation, 2010.

Sheldon Richman, “Capitalism and the Free Market, Part 1 and Part 2, Future of Freedom Foundation, 2010.

Sheldon Richman, “Is Capitalism Something Good?” Foundation for Economic Education, 2010.

Sheldon Richman, “Wall Street Couldn’t Have Done It Alone,” Counterpunch, 2011.

Roderick T. Long, “Corporations Versus the Free Market, Or Whip Conflation Now,” Cato Institute.

Roderick T. Long, “Rothbard’s ‘Left and Right’: Forty Years Later,” 2006.

The Year of Living Dangerously: Global Economic Prospects at a Turning Point

Recently, Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), suggested that the year 2023 could “represent a turning point, with inflation declining and growth bottoming out.” She based the prediction on economic assumptions. Unfortunately, we no longer live under an economic status quo.

Since the mid-2010s and the advanced economies’ trade protectionism, sanctions and militarization, geopolitics has driven global prospects, as it did in the interwar period. As long as these underlying conditions prevail, so will persistent inflation.

The year 2023 could represent a turning point. Not the kind Georgieva had in mind—but a negative reversal.

Poor Economies Driving Global Growth

While the latest IMF projections show global growth slowing to 2.9 percent this year, the IMF anticipates a modest rebound to 3.1 percent in 2024. But it is the emerging and developing economies that are providing the momentum.

In 2021-24, the share of global growth by the largest emerging and developing economies will climb from 63 to over 80 percent. Accordingly, the share of the advanced economies will almost halve to less than 20 percent (Figure 1).

Figure 1 Global Growth, 2021-E2024












Source: IMF

Starting from a low base, India’s GDP is still barely an eighth relative to the US and its growth is now slowing from the 7% growth projected to 6.8% in the 2023/24 fiscal year, as the global slowdown is likely to hurt exports. However, China’s GDP is already three-fourths of that of the US and this year growth in the mainland (5.8-6.5%) could prove almost as fast as that of India (6.0-6.8%).

Together, China and India are likely to account for almost a third of global growth in 2023, as the major advanced economies are coping with recessionary conditions. Furthermore, the share of emerging and developing economies of global growth will progressively increase, whereas that of advanced economies will continue to fall as secular stagnation is spreading among them.

The Fed As a Global Risk

Global economic prospects have been further penalized by the U.S. Federal Reserve’s ill-advised monetary policies, particularly since fall 2021. After years of easy money and rounds of quantitative easing, the Fed misread the market signals after mid-2021, when inflation started to climb rapidly, and Fed chairman Jerome Powell downplayed the threat of soaring prices calling them “transitionary.”

It was a fatal policy mistake, which a year ago led to my warning that U.S. inflation was the global risk of 2022. With the onset of the proxy war only a month later, I predicted that the world economy would have to cope with the risk of stagflationary recession, compounded by energy and food inflation. The rest, as they say, is history.

In its February 2023 meeting, the Fed raised the interest rate to 4.5-4.8 percent, pushing borrowing costs to the highest since 2007. Recently, Powell warned of more rate hikes and seems to be aiming at a rate of 5.25 to 5.5 percent, thus flirting with a recession.

Rather than transitionary, inflation has proved sticky and persistent. Thanks to America’s central role of the U.S. in the world economy, what happens in America won’t stay in America.

Rich Economies’ Geopolitics Penalizes Global Growth

Recently, U.S. stocks sank to their lowest levels in a month, with the S&P 500 Index dropping under 4000. Despite interest rate at almost 5 percent, the inflation rate, which soared close to 10 percent in summer 2022, slowed only to 6.4 percent in January.

After the U.S. hit its $31.4 trillion debt limit set by Congress, Treasury Secretary Janet Yellen warned that a failure to make payments that are due “would undoubtedly cause a recession in the U.S. economy and could cause a global financial crisis.” New debt limit can be enacted, but not without unsustainable debt-taking.

In January, euro area bank lending fell again amid downturn, while cash and liquid deposits declined for the first time ever, thanks to rapid rate hikes by the European Central Bank (ECB). The ECB analysts stressed that the euro area has “ shown remarkable economic resilience to the effects of the war [in Ukraine].” But that resilience is elusive because it’s also based on massive debt-taking.

Consumer price inflation was revised slightly higher to 8.6 percent year-on-year in January. That’s significantly below the peak of 11.1 percent in November, yet remains far above the ECB’s target of 2.0 percent. It is likely to result in half a percentage hike at the Bank’s mid-March meeting.

In Japan, inflation was negative until fall 2021. By January, it soared to 4.2 percent; the biggest increase since September 1981. Core inflation has been well above the Bank of Japan’s (BOJ) 2% target for nine months in a row. This is largely attributable to continued increases in the cost of fuel and raw materials. Hence, the market’s rising concern about global bond market spillovers if and when the BOJ’s new chief Kazuo Ueda will hike interest rates (Figure 2).

Figure 2 Inflation and interest rates: U.S., euro area, Japan, and China


Source: Tradingeconomics, Difference Group

China’s Rebound Offsets the Fed’s Risks

When Chinese policymakers began to prepare the reopening of the world’s second-largest economy, many international observers warned it would unleash inflationary headwinds. But numbers do not back up the story.

China’s annual inflation rate rose to only 2.1 percent in January. Expectedly, prices of food jumped and those of non-food gained further on the back of the Lunar New Year festival and the removal of pandemic measures. Nonetheless, the inflation rate remains only half relative to Japan, a third to the US and a fifth compared to the euro area.

At the eve of the Two Sessions, Chinese leaders pledged stronger growth. Recovery is taking hold and economic activity picking up pace with the country’s reopening. China’s GDP growth could soar to 5.5 to 6 percent in 2023, or over 6 percent on a quarter-to-quarter basis.

Internally, China’s emphasis on social policies promoting a moderately prosperous society supports rising purchasing power among new middle-income groups. External risks have been in part reduced by the misguided U.S. trade wars and protectionism, which have compelled Chinese policy authorities to stress the importance of self-sufficiency. Spillovers will be significant in those economies that participate in China’s huge Belt and Road Initiative (BRI), and the Regional Comprehensive Economic Partnership (RCEP), the vast new trade bloc.

Global Growth Engines, Without Voice

The U.S., the euro area and Japan are struggling with secular stagnation and exporting runaway inflation. By contrast, China’s growth is accelerating while inflation remains in check. Its reopening could lift global GDP up to a stunning 1 percent in 2023.

Large emerging and developing economies are today’s global growth engines. Currently, their share of global growth exceeds 80 percent. While cyclical recession will end in the major advanced economies, their secular stagnation has barely begun. In the coming decade, the growth gap between the rich and poor economies won’t go away. It is positioned to deepen.

With broadening secular stagnation, the long-run economic growth in the major advanced economies will approach zero. Perhaps that’s why they are now so eager to use geopolitics and military muscle.

This article was originally featured at China-U.S. Focus and is republished with permission.

Could a National Sales Tax Be a Viable Alternative to the Income Tax?

Sometime during this 117th U.S. Congress, the long-proposed “Fair Tax” will likely receive its first-ever floor vote in the House. A national sales tax, it would replace not only personal and corporate income taxes, but Social Security, Medicare, estate and gift taxes too.

Though every tax scheme has its pitfalls and moral failings, the net impact of a switch from the income tax to a sales tax could be positive for the citizenry and the economy. While entrenched interests and the opportunity for misleading political attacks on Fair Tax proponents make its adoption in the near-term a long shot, it’s a concept worth keeping on the country’s collective back burner.

Fair Tax Basics

HR25, the “Fair Tax Act of 2023,” advances a national sales tax “on the use or consumption in the United States of taxable property or services in lieu of the current income taxes, payroll taxes, and estate and gift taxes.” The Internal Revenue Service would be sent into history’s dustbin, while a much smaller federal tax bureaucracy would administer the sales tax.

The federal tax rate would be a whopping 30%. The bill and many FairTax advocates describe it a 23% “tax-inclusive” rate, which means they arrive at by expressing the tax as a percent of the total outlay—including the tax itself.

While there’s actually some financial logic to that methodology when comparing it to income taxes, Fair Tax proponents should abandon the practice. Everyday Americans are fully accustomed to state and local sales taxes being expressed as a percent of the purchase price, and will never grasp the arcane reasoning that leads to 23%. They should emphasize the fact that paychecks would have no more federal income tax or payroll tax deductions and make the case for the 30% rate.

Opponents are quick to decry sales taxes’ lack of progressiveness. Setting aside the question of whether it’s actually just for governments to confiscate a higher proportion of money from those who earn or spend more of it, the proposed Fair Tax does include a “prebate”—money sent to every household that effectively negates federal sales tax for spending up to the poverty level.

For 2023, it would be about $6,900 a year for a family of four. It should be noted that the least prosperous Americans currently receive money through the income tax system, via “refundable” credits. If Congress wants to replace that largesse, it will have to create new entitlements.

Ridding America of The Income Tax’s Worst Traits

A federal sales tax would addresses the worst evils of the income tax, which include:

Complexity. Even for the financially astute, the income tax code is mind-numbing. Congress and the IRS create a wickedly complex maze, and then—with threats of penalties and jail time—put the burden of navigating it on people and businesses.

Wasted time and money. Americans spent an estimated 6.5 billion hours and more than $200 billion to comply with IRS filing and reporting requirements in 2022. While tax preparation fees and effort are top-of-mind, the income tax is a weed that drains time, money and energy throughout our economy—from all the record-keeping required by financial institutions, to the legions of lawyers and financial advisors straining to find loopholes for corporate and individual clients.

Intrusiveness. The income tax requires individuals and businesses to disclose an enormous amount of information—and to be prepared to share much more if the IRS comes knocking. With a sales tax, the government doesn’t need to know about your choice of charities, your marital status, how many nights you slept in your vacation home, how much alimony you paid, which investments you sold and how much you paid for them.

Read the rest of this article at Stark Realities


scotthortonshow logosq

coi banner sq2@0.5x

liberty weekly thumbnail

Don't Tread on Anyone Logo

313x0w (1)

Pin It on Pinterest