The government depends on the citizens to produce, to create value from which the ruling classes can leech. They need to keep us working and spending in ways that they prescribe in order to insert themselves into transactions which would otherwise have nothing to do with them. Here are five ways that they keep the tax farm going.
1. Credit Cards and Debt
Credit cards, student loan debt, home loans, and car loans all represent an obligation to work full time. Once you have been saddled with debt, you cannot make the choice to take time off to pursue a business endeavor you are passionate about. You are on the hampster wheel.
The more debt you have, the more you have to earn, and the more taxes you will pay on those earnings. The less freedom you have to be productive in an alternative way.
The housing bubble was no accident; the government doesn’t care if you can afford it, they want you to “own” a home–or rather own a mortgage.
Of course, debt has it’s place, for instance taking on a home loan in order to have lower monthly payments than rent, and put that money into an asset.
But the problem comes when people take on an expensive home loan because they currently have a great job, ignoring the possibility that the job may not always be there. There are people who take out loans for a car–a clever trick GM started back in the day–in order to keep up with their neighbors or squeeze some momentary satisfaction out of the purchase.
And of course, credit cards give us a dangerous “solution” to depression: shop therapy! Just like a drug, it can give a momentary high, replaced by an anxious desperation when the bill comes. And all the while you are paying sales tax on almost every purchase.
That is why we must avoid debt at all costs. Spend within your means. Delay gratification by saving before purchasing rather than paying interest after a purchase. And really consider whether a purchase is going to make your life easier, or make you happier, or if you are using it like a drug for a momentary high.
When it comes to college debt, the thing to do is spread awareness of alternatives to college if you think someone you know may be making a big mistake.
JP has the answers:
2. Full-Time Corporate Employment
Corporate employment is a cycle in itself; it keeps you going for the next raise, for the next promotion, and for all the benefits. Corporations are a creation of government, and would otherwise not exist in their current structure.
Health insurance through work was once an extra incentive to make a job attractive; now it is necessary to avoid a government fine. Better work more than 29 hours to make sure your employer has to cover it!
And when you are self-employed, the government punishes you by making you pay twice the Social Security contribution, since technically you employ yourself.
A corporate job alone is not always a bad thing, it works for some people. But there are plenty of people who push themselves into a job which cannot allow them to reach their full potential. People get a job in order to pay off student loan debt, or in order to get a nice car or to spend more on clothes, alcohol, and novelties.
The government likes this because the entire tax extraction process is designed around this system. Even bonus pay is taxed at a higher rate, like lottery winnings.
But there is a way to use a corporate job as an out. If you can manage to get a nice paying job, not rack up debt or long term obligations, and save, then you have the freedom to turn that saved capital into freedom.
This doesn’t work if you save up just to travel or buy a house on the beach to pursue the #SurfLife. It works if your capital is used to create value.
Here’s an example from my own life. My sister worked a corporate job in Massachusetts and took out a home loan to buy an undervalued house. By improving the property, selling it, and moving to an area with a much lower cost of land, she was able to buy a nice chunk of property without needing a loan.
That piece of property is now being used as a mini-farm with various avenues for making money. She is now her own boss and can pursue more personally fulfilling ways of earning a living, which does not always involve fiat currency.
3. Regulations and Laws
Okay, so let’s say you have managed to avoid debt, and have saved up enough from your corporate employment to start your own enterprise. The government creates barriers to competing against their corporate lovers.
I’ll continue with the example of my sister’s mini-farm. An easy way to start earning money would have been to sell the delicious hard cider she and her husband were already producing as a hobby. But the law said that they could not produce it on their own property, they could not distribute it without paying about $10,000 for entry into the market, and a host of other tight regulations.
Okay, they also wanted to run a hot dog cart. They already owned the cart from toying with the idea in Massachusetts. Well, you can’t do a cart, come to find out. In that area, all food trucks must be enclosed. They already had a cart, they did not have a food truck.
They are powering through and creating a great business based around the farm, but her husband had to continue to work instead of being able to immediately pursue the business dreams.
There are a million other examples of government throwing roadblocks in the way of unique self-employment or starting a small business.
Let me know in the comments if you have run into these issues in your own business endeavors.
4. A Fiat Currency
Here is an easy way to extract money from the population: continue to print money. The Fed says openly they aim for an inflation rate of 2%. What does that really mean? It means they aim to steal 2% of the value from all cash and saved dollars every year.
The Fed prints the money, and therefore it is they who gets to spend the value they rob from our savings. It is just another back door tax, a harvest, to reap the products of our labor.
On the flip side inflation is a little gift to those citizens who are behaving properly, according to the government, and taking on debt. They get to pay back their debt in inflated dollars.
But the best part for the government is they don’t have to deal with any resistance to raising tax rates. Most people don’t even understand what inflation is, they simply think stuff just gets a little more expensive each year.
Having a currency with no true value means whoever controls it has the ultimate power.
The old standby strategy to mitigate inflation is to hold reserves in tangible assets such as silver or land.
But cryptocurrencies are another promising innovation. They aren’t where they need to be yet, but there is reason to be hopeful for their development in divorcing us from the Federal Reserve system.
You’ll want to subscribe (and get our free metals report) to hear more about the difference between investment, speculation, and currency when it comes to crypto-coins–our discussion on the topic is about to heat up.
5. Advertising to Promote Consumerism
Just like GM encouraged car owners early on to trade in their vehicle each year for the newest model, citizens are now conditioned to trade in their expensive iPhone for the newest model.
TV programming has long highlighted the lifestyle of the rich and famous, encouraging ridiculous spending on wedding dresses and birthday parties, and glorifying rich spoiled brats.
This article does a nice job summing up the disease of consumerism:
Under our current working conditions, people are forced to build a life in the evenings and their days-off. We find ourselves more inclined to spend heavily on entertainment and conveniences because we rarely have any free time. When we do have time to ourselves, it’s usually fleeting, and we eventually find ourselves neglecting those activities which are free—walking, exercising, reading, meditating, sports, hobbies, etc.—because they take too much time.
While having extra money comes at the sacrifice of personal time for some, for others they not only are robbed of their personal freedom, but they struggle to make ends meet on top of it. The “perfect” consumer works full-time, earns a fair amount of money, indulges during their free time, and somehow just makes it by each month. However, even those who don’t earn fair wages sometimes find themselves wasting small increments of money on unnecessary items for the wrong reasons—a cup of Starbucks here, a McDonald’s cheeseburger there, and those really cool fuzzy dice hanging from the rear-view of your 1993 Honda Civic.
Any way you look at it, we have become an unhappy, mindless, over-worked society. We buy silly items for a few moments of happiness before getting bored and moving on. We feel a need to keep up with fads, or to fulfill our childhood vision of what adulthood would be like. We hide our insecurities, avoid issues, and replace psychological needs with material items. By keeping society’s free time scarce, people will pay more for convenience, gratification, and any other relief they can buy.
But at the end of the day, the choice is still our own. With a little mental toughness, we can train ourselves to psychologically exit the system, which is the first step to bringing it down.