DISPOSABLE PERSONAL INCOME EACH AMERICAN PLUNGES -19.4% BELOW WHAT IT WAS IN 1959. YOU ARE LIVING IN AMERICANS' GREATEST DEPRESSION

Because bankers failed to collect key banking data before 1959, there is no way to put into True Dollars™, the state of affairs before the first quarter of 1959. Otherwise, it might be quite shocking to see exactly to where today compares.



Per capital DPI has fallen -47.02% from the Q1 2008 peak of $7678.40 each American age 16 or over.



And the graph of personal income in True Dollars™ mirrors GDP without surprise. No one should expect the U.S. economy to grow when credit priced in True Dollars has fallen.





Americans are living through the consequences of the Greenspan-Bernanke Great Inflation, the greatest credit bubble in the history of mankind.



And though personal unspent profit ("saving") rate is more than double what it measured at Q2 2005, Americans hardly save as they did between 1959 and 1975.

It's hard to get capital growth and thus growth in wages when savings are weak and working-age immigration continues to swell the ranks of the working-age population.



The U.S. Congress has upped their tax collection in spite of falling personal income and falling per capita personal income.



This chart shocks the eyes and mind. States' legislators have grown their respective state governments for years. Perhaps more than Congress, the growth of state governments explains why living in America moves toward totalitarianism every year.

Without doubt, salaries and pensions for state government workers have grown unreasonably generous over many years.





Americans might have lived it right in the 1950s.

Read more ...

OBAMA FAILS TO PAY TAXES ON ALMOST 69 MILLION DOLLARS IN 2014.

Today, the propaganda agency for President Obama announced that Obama and Joe Biden, who is the vice-president of the USA, released the summary their income taxes. Josh Earnest, the propaganda agent claims Obama paid  $93,362 in total tax.



However, since Obama gets paid by Congress, it's comical to claim he pays taxes to Congress. Obama's salary for FY 2014 was $450,000. In effect, Congress reduced Obama's salary to $356,638. However, because Congress pays Obama, Obama didn't actually pay any taxes. Foolishly, Obama paid $22,640 to the State of Illinois.

What propagandist Earnest fails to mention is that Congress paid Obama an additional $68,560,000, to blow as living expenses. No charade of phony taxes were levied by Congress for this sum.

Congress gave Obama $55,110,000 to blow on the White House, another $12,700,000 to blow on his "Executive Residence" and another $750,000 to pay for plumbers, painters and electricians under the guise of "White House Repair & Restoration."

Congress was less generous to Joey Biden, giving him only another $4,520,000 in fun cash to blow.

Read more ...

THE MYTH OF TAXPAYER MONEY. IT'S CONGRESS' GREEN, NOT YOURS.

One of the stupider expressions the mindless parrot goes something like this, "The government shouldn't spend millions of taxpayer money on ...".

First, no one has money. Money is coined metal by weight and fineness. Money hasn't existed for decades upon decades. Money, if it were to exist, could exist without banks and legislators.

What everyone has is cash and bank credits. Those who have bank credits can transfer such with negotiable instruments other than cash. Cash itself is nothing more than bank credits circulating in perpetuity.

Cash can exist only with banking. Cash decreed legal tender can only exist with legislators and their agents.


Second, taxpayers don't have property (right of ownership) in anything designated as taxes. In short, it's Congress' cash and bank credit.

Where there is law, there must be duty and right. There can be no duty without right and no right without duty. Without both, there is no law.

The absence of law in the presence of legislators with agency is known as freedom and also known as liberty. Where there is an absence of law and an absence of legislators with agency, which is what most name as government, there is anarchy.

In America, Congress gave itself the right to tax income of Americans. It imposed the duty upon some Americans to pay taxes.

At first, Congress imposed strict limitation in the way in which it could levy taxes.  However, with the 16th Amendment, Congress lifted all restriction it had with respect to taxing income. Now, Congress can impose any taxes without the need of apportionment according to population of the various states.

For those muttonheads who complain, rightly, they should say something like this:

No one should be forced to pay taxes so Congress can spend it on such a waste.

Until Americans awaken to reality and force politicians to pass amendment that limits the sum of taxes any American must pay each year, say a total of 12% to whatever legislators, whether Congress, any state or any county, nothing shall change. In short, there should be a known maximum sum any should be forced to surrender to all legislators. Let the states' legislators and Congresses fight it out from a highly restricted pool of potential taxes.

It makes it oh so easy for legislators because they have trained you to believe it's "your money." In so doing, legislators have conditioned you to pay gobs of taxes willingly while tricking you into believing you have a voice in how the collected taxes get spent.

You don't. You have no say precisely because you lack right in cash and credit taken from you in the form taxes.

You have no right in any cash or credit in which Congress has property unless Congress imposes duty upon itself and grants you right. That is what Congress does with welfare programs like Social Security, Medicaid and Medicare.

Legislators have the rights to part of your income, which they call taxes. You have the duty to pay them in a manner in which they order you to do so.

Read more ...

STATE TAX RECEIPTS. THE GOOD. THE BAD. THE UGLY.

The other day in STATE TAX RECEIPTS LAG TRUE GDP. IS THE RECOVERY ON OR NOT?, I revealed to you how personal income, corporate income, sales and total taxes collected by all the states might have increased from after hitting a bottom. If so, this would support the advances in True GDP and True Loans and Leases as I showed in THE USA ECONOMY ADVANCE LIKELY HAS BEGUN AT LONG LAST.

Now, I show you how the various states stack up against each other. First, let's look at states by Individual Burden as measured by the sum of per capita True Income and True Sales taxes paid against those 18 and old in each state.

True Individual Tax Burden (per capita, 18+ in GW$)


The 21 worst states in which anyone could live are these:

1. Connecticut
2. Hawaii
3. Minnesota
4. California
5. New York
6. Massachusetts
7. North Dakota
8. New Jersey
9. Nebraska
10. Maryland
11. Kansas
12. Wisconsin
13. Arkansas
14. Maine
15. Illinois
16. Rhode Island
17. Idaho
18. Indiana
19. Iowa
20. Virginia
21. Utah

The top 21 states' legislators tax their adult citizens so much of these states skew the average. The top 29 least taxing states' legislators with the lowest individual burdens fall below the average.

That Connecticut tops the list fails to surprise me. Only the other day, before running the numbers here, I came across this work by Annie Lowrey, What’s the Matter With Connecticut? 

Though Ms. Lowrey has it right that something is wrong in Connecticut, foolishly, she claims that Thomas Piketty's book has the answer. Of course, regular readers of Bizarro Theater know that born-again socialism revivalist preacher Piketty is quite wrong. For those who have yet to learn why the past creates the future rather than Piketty's expressed foolery — the past devours the future — read these:

• THOMAS PIKETTY, 696 PAGES OF FOOLERY DESTROYED IN LESS THAN FIVE MINUTES
• UT OH, SOMEONE BETTER TELL THOMAS PIKETTY ABOUT L > G TOO.
• MORE BAD NEWS FOR THOMAS PIKETTY P > G TOO!
• THOMAS PIKETTY, REVIVALIST PREACHER OF BORN-AGAIN SOCIALISM. THE SECOND GREAT AWAKENING OF SOCIALISM HAS COME TO AMERICA

When politicians take ever greater unearned shares of profits from individuals, individuals have less to spend. The 186 members of the Connecticut General Assembly are not smart enough to know how to spend better than those 2,821,247 adult Nutmeggers from whom they swiped.

Consequently, inefficiencies build up in the economy, with some goods being over-produced and other goods, under-produced. Worse, unearned buying power gets put into the hands of some who then push up prices than what would otherwise be gained by sellers. Overtime, such meddling leads to a wind-down of the economy as true profits become harder to gain both for firms and individuals.

Here are the top 15 Least Taxing States for imposing individual burdens.

1. Alaska
2. New Hampshire
3. Montana
4. Texas
5. Florida
6. South Dakota
7. Alabama
8. Tennessee
9. Louisiana
10. Nevada
11. Arizona
12. Wyoming
13. Delaware
14. South Carolina
15. Georgia

And now, here is the map of True Personal Income Tax paid.

True Personal Income Tax Paid, 18+ in GW$


Not surprisingly, the list for highest personal income tax burdens appears quite alike to the list of individual tax burdens.

Here are the 21 worst states in which anyone could live:

1. Connecticut
2. New York
3. Massachusetts
4. California
5. Minnesota
6. Oregon
7. Delaware
8. New Jersey
9. Virginia
10. Maryland
11. Illinois
12. Hawaii
13. Nebraska
14. Wisconsin
15. Utah

And here are the top 9 best states by least personal income tax:

1. Alaska
2. Florida
3. Nevada
4. South Dakota
5. Texas
6. Washington
7. Wyoming
8. Tennessee
9. New Hampshire

Moving on, let's look at the True Sales Tax burden. Right, because if legislators don't get you one way, they get you another.

True Sales Tax Burden (per capita, 18+ in GW$)


Of the two, income tax or sales, I prefer sales tax. An income tax is an unearned share of profits for which legislators have not invested any capital either in firms or workers. Thus, an income tax is highly anti-capitalistic.

When a sales tax is borne by the buyer, it is up to the buyer to decide whether or not to pay the toll to legislators to enjoy goods bought from the fruits of work sold in purchases and sales of work for cash or credit. Such a tax is a wealth tax.

When a sales tax is borne by the seller, and in some states this is the method even though customers fail to know this and fall prey to the seller pushing the tax upon the buyer, such a tax also is anti-capitalistic, as it is a levy against capital.

For more on the kinds of taxes that exist in life, check out IF YOU DRIVE A CAR, I'LL TAX THE STREET. IF YOU TRY TO SIT, I'LL TAX YOUR SEAT. MR. WILSON. MR. HEATH. Also, you should read, ELITES SEEK TO PUNISH WORKERS WITH A CONSUMPTION TAX, OR A TAX ON WORKERS' WEALTH.

Here are the 20 worst states whose legislators levy the true highest sales taxes while also burdening the citizens with personal income taxes.

1. Hawaii
2. North Dakota
3. Connecticut
4. Mississippi
5. Tennessee
6. Indiana
7. Arkansas
8. Kansas
9. New Mexico
10. Minnesota
11. New Jersey
12. Nebraska
13. California
14. Idaho
15. Maine

That Hawaiian legislators lead this list fails to surprise. When you are stuck on an island with most goods being imported over seas and you need those goods to live, you will do what you need to do to get those goods.

Here are the states whose legislators levy sales taxes but no personal income taxes.

1. Washington
2. Wyoming
3. Nevada
4. South Dakota
5. Florida
6. Texas

The legislators of Alaska neither levy sales tax nor personal income tax.

Now, let's see how states' legislators treat their fictional personhood friends. 

True Corporate Income Tax Paid, per firm in GW$


Straight away, I acknowledge that presenting these figures suffer a small flaw. The firm count as reported in the Statistics of U.S. Businesses by the Census Bureau, though the latest figures available, only runs through 2011. Nonetheless, it's fairly accurate.

Here are the states whose legislators treat firms the worst.

1. Alaska
2. New Hampshire
3. Illinois
4. Massachusetts
5. North Dakota
6. Delaware
7. California
8. New Jersey
9. Tennessee
10. Mississippi
11. Minnesota
12. Pennsylvania
13. Connecticut
14. New York
15. Kentucky
16. Wisconsin
17. Maryland
18. New Mexico
19. Nebraska

Likely, the legislators of Alaska and North Dakota sock it to oil and nat gas drillers. 

And here are the states with the lowest corporate tax burden, falling in the top 25% lowest.

1. Nevada
2. Texas
3. Washington
4. Wyoming
5. Ohio
6. South Dakota
7. Missouri
8. Rhode Island
9. Montana
10. Michigan
11. Florida
12. Virginia
13. Oklahoma

This last map reveals the True Corporate Income Tax to Individual Burden Ratio. To make the map, the states of Alaska and New Hampshire have been excluded.

The New Hampshire ratio is 24 times higher than the next closest state's legislators, Tennessee. Alaska is 10 times New Hampshire as Alaskans lack an individual burden of sales and personal income taxes.

True Corporate Income Tax Paid (per firm) to True Individual Tax Burden (per capita, 18+) in GW$


You can think of this map revealing a proxy for competitiveness among the states' legislatures.

Here are the states falling above the average whose legislators like tax corporate entities higher than citizens.

1. Tennessee
2. Delaware
3. Illinois
4. Mississippi
5. Pennsylvania
6. Massachusetts
7. Kentucky
8. New Jersey
9. North Dakota
10. Louisiana
11. North Carolina
12. Florida
13. California
14. Montana
15. Alabama
16. New Mexico
17. West Virginia
18. Wisconsin
19. South Carolina
20. Indiana
21. Arizona
22. Minnesota
23. Maryland

And here are the states falling below the average.

1. Nevada
2. Texas
3. Washington
4. Wyoming
5. Ohio
6. South Dakota
7. Hawaii
8. Missouri
9. Rhode Island
10. Connecticut
11. Maine
12. Virginia
13. Michigan
14. Idaho
15. Oklahoma
16. Utah
17. Oregon
18. Iowa
19. New York
20. Nebraska
21. Kansas
22. Colorado
23. Vermont
24. Arkansas
25. Georgia

True Total Taxes Paid, per capita in GW$

When accounting for other taxes such as licenses, here are the top states with the lowest total taxes levied per capita whose legislators beat the average.

1. New Hampshire
2. Florida
3. Alabama
4. Georgia
5. Missouri
6. Arizona
7. South Carolina
8. South Dakota
9. Tennessee
10. Texas
11. Louisiana
12. Colorado
13. Virginia
14. North Carolina
15. Ohio
16. Oregon
17. Oklahoma
18. Utah
19. Idaho
20. Kentucky
21. Michigan
22. Iowa
23. Nevada
24. Mississippi
25. Montana
26. Indiana
27. Kansas
28. Pennsylvania
29. Washington
30. Nebraska
31. Rhode Island
32. Maine
33. New Mexico
34. Wisconsin
35. West Virginia

And overall, here are the worst states in which anyone could live.

1. North Dakota
2. Connecticut
3. Vermont
4. Minnesota
5. Hawaii
6. Wyoming
7. Alaska
8. New York
9. California
10. Massachusetts
11. Delaware
12. New Jersey
13. Maryland
14. Arkansas
15. Illinois

Read more ...

STATE TAX RECEIPTS LAG TRUE GDP. IS THE RECOVERY ON OR NOT?

“...Look, if you’ve been successful, you didn’t get there on your own. You didn’t get there on your own...If you’ve got a business — you didn’t build that. Somebody else made that happen.” ~ Barack H. Obama, II, 44th President of the United States of America

When politicians give speeches, never is it that they say something stupid because they are stupid themselves. Rather, politicians repeat what their speechwriters have written.

So are speechwriters stupid? Speechwriters write persuasion geared to appeal the majority. Speechwriters rely on the majority having easily bamboozled intellects and defective characters by appealing to their instincts of greed, envy and sloth.

It's not likely that Obama is daft about all things America and economics. It's that Obama expects most who listen to him to be daft. So, in truth, Obama's deceitful way reveals his true character.

All of those roads and bridges of the past were not built by ghosts. Men built them. But before taxes could be ripped from men to pay for those things, all of this had to happen in sequence:

production → surplus → sales > outlays = profit

For if there is no profit, in short order, any firm gets put to ruin. There is no way to pay for needed capital — products that yield goods in production of something else.

If firms can't break even first, there can be no taxes collected. Firms would go to ruin in short order if taxes could be levied below break even.

Without profit there can be no taxes. All taxes are an unearned share of profits. If no profits arise, there can be no taxes. Politicians are sharing the profits by the force of taxation  without having invested any cash or credit into the capital of anyone.

That means there can be no roads, bridges, government bureaucrats, government freebie welfare for layabouts, none of that without first there being surplus and profit. That is how reality works.

Obama ought to have said the truth. That today's businesswomen and men can sell more because of roads and bridges built and paid for by their ancestors with income ripped from their hands by politicians like Obama.

In THE USA ECONOMY ADVANCE LIKELY HAS BEGUN AT LONG LAST, I revealed the upwelling of private sector True GDP compared to public sector True GDP along with the general advance of True GDP. Yet, as you can see from the following graphs, taxes are lagging behind GDP.

States' legislators are having a hard time collecting taxes using their extant tax laws. Why is this so? Profits growth for firms and workers has yet to match the latest True GDP growth. Sales are advancing though.

However, unless those curves at least flatten and then swing up within the next few quarters,  it is hard to see how the two quarter positive turn in True GDP can sustain.

Read more ...

IF YOU DRIVE A CAR, I'LL TAX THE STREET. IF YOU TRY TO SIT, I'LL TAX YOUR SEAT. MR. WILSON. MR. HEATH.

There are only three kinds of taxes regardless of the guises politicians pitch the gullible to disguise the tax. There are taxes on wealth, there are taxes on capital and there are permission taxes.

With the rise of Born-Again Socialism revivalist preacher Thomas Piketty, there have been howls for taxes to get levied.

In ELITES SEEK TO PUNISH WORKERS WITH A CONSUMPTION TAX, OR A TAX ON WORKERS' WEALTH, I reveal the sneaky effort of some who seek to claim a consumption tax is not a tax on wealth.

Behind every tax scheme of every politician is a this: You don't have right to your property gained by profit in trade and they lack the duty to keep their hands from your property. 

Said another way: You have the duty to surrender all of your property to the amount that politicians say you do.

Wealth Taxes

Wealth is the name given to property put to purchase and sale for cash and credit. Any tax levied on property in a purchase and sale is a wealth tax.

Wealth taxes go by these names — income tax, capital gains tax, payroll tax, gift tax, estate tax, excise tax, as well as the family of ad valorem taxes such as sales tax, goods and sales tax, land tax, declared worth tax, car registration tax, legal filings tax.

Businesses get taxed on net sales, which are sales less expenses. Unfairly, workers get taxed on gross sales. Workers don't get to deduct their expenses incurred to produce their sales, which is defined as work.

So-called negative income taxes aren't taxes at all. Such is welfare. It's not full freight welfare. It's subsidy welfare, or that which subsidizes the inefficiency of workers who qualify to receive it based on an arbitrary benchmark of income.

A Capital Gains tax is a tax on income derived from the sale of an asset, most often ownership in a firm, which gets called stock or equity, or ownership in a debt owed by a firm, which gets called bond. As a capital gains tax is an income tax, it is a wealth tax.

Payroll taxes to fund social security are wealth taxes as such taxes get levied on income. As always, all taxes on income are taxes on wealth since such taxes get levied on sales in purchases and sales of wealth for wealth.

Payroll taxes that force workers to purchase unemployment insurance all the same are wealth taxes, regardless of the intent. As always, income taxes are wealth taxes. Payroll taxes are wealth taxes.

Excise taxes are taxes levied on the quantity of property being traded. Typical excise taxes are fuel taxes of gasoline and diesel, alcohol taxes on the quantity sold, tobacco taxes on the quantity sold.

Sales taxes as well as GST (goods and services tax) are known as ad valorem taxes since taxes get levied on the sum paid in a purchase and sale. Sales and GST taxes are taxes on wealth. 

Any tax on either unimproved land or improved land also is a tax on wealth whether as a one-time levy or as a recurring levy and also get consider as ad valorem taxes since the tax gets levied on a claimed fictitious resale price. 

Other sneaky ad valorem taxes include taxes on so-called declared worth of things such as car registration fees, taxes on property in chattel sent through mail, tariffs on imports or exports, taxes on cash or bank credits transferred to foreign bankers, taxes on legal document filings related to purchases and sales such as realty deed transfer filings.

Gift taxes and inheritance taxes (also said estate taxes) are among the most pernicious kinds of taxes as such are direct swipes of property by politicians.

When someone gives a gift to another, the gift giver relinquishes property in what is given without pay. As it is a gift, a trade fails to arise as all trades consist of property for property, specifically, wealth for wealth.

Capital Taxes

Capital is the name given to property put to produce work or stock. Any tax levied on property used to produce work or stock is a capital tax.

A tax on capital would be a fee paid to license a dump truck that hauls gravel to pave roads since the dump truck is the capital. If the tax levied levied on the weight of the truck, it is an excise tax. If the tax gets levied on the estimated sales price of the vehicle, it is an ad valorem tax.

A tax on capital would be a fee paid to pollute the air during the blasting of pig iron with pure oxygen while producing steel since the blast furnace is the capital. A tax paid on the tons of pollutants would be an excise tax. A tax paid on the pig iron before its conversion into steel would be an ad valorem tax.

A tax on capital would be a fee paid for a building permit since the labor put to building is capital. 

Permission Taxes

Permission taxes are taxes against the property in oneself. These are the strangest kinds of taxes. 

One kind of permission tax is a marriage license, which is a levy for a legal filing. Another kind of permission tax is a driver's license for personal use.

Permission taxes levied as licenses to do work are capital taxes. So a permission tax for a driver's license for commercial use is a capital tax. A fee paid to have a restaurant inspected before opening is a capital tax. A fee paid for any kind of license authorizing work is a capital tax.

VAT — Value Added Taxes

A VAT (value-added tax) is a wealth tax, though wrongly, many believe such taxes are capital taxes. The key to understand the difference between a wealth tax and a capital tax is this: 

A wealth tax gets levied on what you are trying either to own to rid yourself thereof. A capital tax gets levied on what you own already.

For the seller of product, if the seller bears the burden, a VAT is a wealth tax. A VAT tax can work like a capital tax if the buyer of bears the tax and uses what is acquired in a purchase and sale as capital in production because such a tax inhibits using capital.

Often, a VAT gets levied as an ad valorem tax.

Here are the Beatles in a cartoon!

Here are the Beatles performing their song Taxman.

Read more ...

FIRE, BRIMSTONE, ZOMBIE APOCALYPSES, OH AND PEAK-OIL PREACHERS. BEWARE!

The Internet has been a magnet for all kinds of crazies. One kind who can attract the crazies is the doomsayer.

While some doomsayers advocate prepping for the zombie apocalypse others preach fire and brimstone over peak oil and it's cousin, climate change.

Of late, I discovered Our Finite World by Gail Tverberg. Her blog first came to my attention through an article published at Zero Hedge written by her Russia and the Ukraine – The Worrisome Connection to World Oil and Gas Problems. 

Ms. Tverberg pitches herself as "actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change." Ms. Tverberg believes that "[o]il limits look very different from what most expect, with high prices leading to recession, and low prices leading to inadequate supply."

Ms. Tverberg has gathered what seems to be a cult into her Chicken Little church of doom over oil.

After addressing the doom and gloom of her article in PUTIN'S RUSSIANS AREN'T MEDDLING IN UKRAINE BECAUSE OF OIL and mentioning such in a comment on her blog, Ms. Tverberg directed a few comments to me among which are:

“The taxes depend on the selling price of oil and gas, as well as the cost of extraction."

and

"Russia has different tax laws that we do. It changes the taxes monthly, to get as much as the market will bear. The taxes depend both on extraction costs and price available in the market place. I am not sure how different it would be from calculating pretax profits, and taking, say, 90% of it.”

ME: Taxes have nothing to do with costs. Taxes do not depend on costs at all. Taxes are an unearned share of profits. Without profit, there cannot be taxes.

All prices get governed by the one, true, infrangible law of trade — the Law of Prices. The Law of Prices holds the winning bids of purchase and sale in the face of what is on offer sets the price. 

All firms get governed by the Axiom of Profit — the sum of sales on prices set by winning bidders must at least equal the cost of production otherwise a producer goes to ruin.

If the price of something is $10 and cost to produce is $10, there is no profit. Politicians can't levy taxes on $0. If the cost to produce is $11, there is a -$1 loss. Politicians can't levy taxes on -$1 loss.

The ability of politicians to collect taxes works the same the earth over and through all of history. Jurisdictional tax laws can't overcome reality of the constraints to trade — the Law of Prices and the Axiom of Profit. 

Only through subsidy, can politicians steal from some and either give buying power to bidders, forcing up prices to at least break even or pay for costs of producers to give the appearance of profit.

Elsewhere on her blog, she made rather outlandish claims in what seems to be attempts to support her gloom and doom preaching. 

"Since 2005, (1) world oil supply has not increased." ~ Gail Tverberg

ME: The EIA shows that world oil output has grown 6.7% since 2005.

Gail Tverberg: "Oil limits seem to be pushing us toward a permanent downturn, including a crash in credit availability, loss of jobs, and even possible government collapse."

ME: From the start of 2005 to peak credit in April 2008, loans and leases in bank credit grew 40.6%! Oil production barely grew at 1.3%. Clearly, oil is not causal for credit. 

Gail Tverberg: "Oil supply limits appear to be a primary cause of the 2008–09 recession." 

ME: An immense credit expansion arose and when expected forthcoming profit failed to materialize, collapse quickly followed. This is the same story of every undue credit expansions. 

From an interim low of $1,286.14 trillion (inflation-adjusted)  in January 1994 to a peak of $3,354.06 trillion (inflation-adjusted) in April 2008, credit grew 160.8%. During the same period, world oil output grew a whopping 23.3%! So where is the supposed oil supply limit?

In contrast, between January 1, 1980 and January 1, 1990, credit grew 19.9% (inflation-adjusted). Yet, world oil output only grew 3.8% during the same period. However, GDP grew a whopping 111%! 

[See: THE BUBBLE ALAN GREENSPAN COULDN'T SEE WITH ROUTINE DATA COLLECTED BY HIS ONE-TIME EMPLOYER, THE FEDERAL RESERVE and INFLATION REVEALED! "REAL GDP" AND FEDERAL RESERVE BANK UNITS ]

If oil were the driver of credit and economies, then doomsayers need to explain how banking and credit expansions arose before the advent of petroleum as a source of energy.

Gail Tverberg: "I have made the point several times that the price of oil is now too low for many exporters to make the money they need to and too low for energy companies to continue their exploration and drilling without borrowing huge amounts. This is a huge problem."

ME: Ms. Tverberg fails to list any exporters. Never does Ms. Tverberg mention what are the exact production costs for any of the firms much less an industry average.

If her assertion were true, there would be mass exodus of these purported many from the field of production. Supply would rapidly fall. Winning bidders would need to bid more to gain property in the smaller output of what would be on offer. Price would rise as a consequence. Excess profits would follow, which would induce new entrants.

Yet, why doesn't anyone see her false scenario happening. Instead, the EIA reports ever growing world output. 

Gail Tverberg: "Prices are either (1) too high for consumers, or (2) too low for producers, or (3) both."

ME: Exactly for which consumers and exactly for which producers? It's odd how Ms. Tverberg never identifies all whom she claims suffers.

If prices are too low for producers, then Ms. Tverberg could explain how the top revenue producers on earth with profits in the tens of billion are oil producers. The list of the world's biggest revenue producers, all highly profitable is a who's who of oil producers — Royal Dutch Shell, Exxon Mobil, Sinopec, China National Petroleum, BP, Total, Chevron, Gazprom, Petrobras, Valero.

Gail Tverberg: "You are not reading what I have written."

ME: I have read what Ms. Tverberg has written. What she writes is fiction. 

Instead, here are the facts:

In 9 of the 22 years between 1983 and 2005, as reported by the EIA, year-over-year U.S. total gasoline retail sales by refiners in thousand gallons per day fell. Yet, as reported by the Office of Highway Policy Information, Federal Highway Administration of the US DOT, in every one of those years highway vehicle miles traveled grew a whopping 80.9% from 1.6528 trillion miles to 2.9894 trillion miles!

Clearly, technological advance in automobiles has led to more miles being driven per gallon. Doomsayers never account for technological advance.

Economies grow because of efficiency in the production of property, which means the right of ownership and never the thing owned. Efficiency of production arises from technological advance.

Economies exist because those of mankind need to produce property they don’t want to trade away in purchases and sales for property they do want.

No one can enjoy something owned by someone else. They must trade for it first.

Men produce things for the purpose of trading those things through purchase and sale in effort to secure profit expressed in buying power, which today gets embodied in cash or credit. Men do so because they believe their gained buying power sooner or later will let them buy something else wanted, which better suits their living, than what it is they sell.

Credit is expected profits of the future embodied in property. Thus, credit is a kind of conditional property. 

Through borrowing and lending, a credit deal transforms hard to market property as wealth into property as capital. 

Credit coins less merchantable property into more merchantable property. Credit coins property to capital to merchantable property. In so doing, credit represents the long sought for alchemy as credit transmutes differentiated property into metaphorical gold.

Credit truly is the philosopher's stone.

The entirety of trade, or commerce, or real economics ties up with two words — property and profit. Without profit from effort, anyone would lack buying power to buy anything else. Without property, no one can trade. 

Trading property for profit is what commercial life is all about. 

Stay tuned. On, February 6, 2014, Ms. Tverberg predicted "collapse is practically right around the corner, beginning in the next year or two"  because she believes there is a limit to growth-driven worldwide trade.

Yet, the room for growth in trade is enormous almost unfathomably so. The 3.523 billion who live on less than US$2.50 a day would argue there is plenty of room for growth. The 5.637 billion who live on less than US$10 a day would argue there is plenty of room for growth. That's 80% of worldwide population!

Read more ...

KILLING THE MIDDLE CLASS AND THE "WE WANT YOU TO BELIEVE CAPITAL GAINS INCOME IS DIFFERENT" TRICK

Today, I read Stop Favoring Investors, Speculators over Middle Class by noted demographer Joel Kotkin, who is one of the few eggheads whom I like.

In the article, Koktin laments about being victim of a mafia-style shakedown when it comes to paying taxes to California legislators. 

Many believe they are middle class, but they are not. In BUT WERE YOU EVER IN THE MIDDLE CLASS?, I strip out the political rhetoric to render the most meaningful definition for the phrase middle class. 

The middle class consists of those who earn at least 51% of their income from labor and who are free-and-clear title owners to an improved parcel.

Most are among the bottom class. The bottom class consists of those who earn 100% of their income from labor or who are given up to 100% of income from welfare or some combination thereof and who rent their living space. 

Few are among the top class. The top class consists of those who earn at least 51% of their income from investments and who are free-and-clear title owners to an improved parcel, which is land with a house upon it.

The elite of the top class earn 100% of their income from investments.

Kotkin is right as have been many others. The middle class shrinks ever smaller day-by-day. In PARTY OVER OOPS OUT OF TIME. YOU SHOULD HAVE PARTIED LIKE IT WAS 1999, I show that Americans enjoyed a Reagan-Clinton prosperity era but have since suffered under a Bush-Obama hard times era.

Adroitly, Kotin points out, "Most galling is that, while the middle class has endured ever-higher taxes, those who have benefited most from the Bernanke-Obama “recovery” continue to get the biggest tax breaks. This is largely the investor class, who have been able to reap the benefits of the stock-market boom..."

In PAID CORPORATE TAXES IN DEPRESSION! CORPORATE PROFITS IN A BUBBLE!, I show how corporate profits have been in a bubble since Q3 2001 while corporate taxes paid has been in a depression since Q3 2007.

Kotin goes further saying that "the rich and corporations have all sorts of ways to avoid taxation – like offshore accounts – but the real class divider is capital gains." In short, Kotin calls for an overhaul of the federal tax code to "to stop favoring investors and speculators over middle-income earners."

The current bad design of commercial life for Americans has gamed the system unfairly for those afraid of competition. Rightfully, Senators and House members of the U.S. Congress are to blame. 

After all, members of Congress are the men and women who devise all the rules under which you live.  Members of Congress establish all of the regulation to stifle competition, thus protecting some who are entrenched with power.

In IT'S ALWAYS CRONY POLITICS, CRONY GOVERNANCE AND CRONY REGULATORY CAPTURE and in THE GREEDY ARE THE ONLY PROBLEM THE WHOLE EARTH OVER, I show how Congress gets away with foisting such a bad design upon you.

Kotin proposes what I have proposed for awhile now, taxing all income the same, whether from capital gains or from selling labor. As bad and immoral as income taxation is, as long as income taxation is going to exist, then capital gains should be taxed at the same rate as ordinary wages and salaries precisely because all income is the same.

All income is the same. Claiming there are different kinds of income and then trying to justify one's false beliefs around such is neither scientific nor accurate.

As I explain in REAPING DAY APPROACHES. THE REAPER COMES TO REAP YOU. ANOTHER TAX DAY IN AMERICA COMES, wage earners get shafted because they lack deduction on their capital. Wage earners cannot write off legitimate expenses such as food, which is energy for the mind and for the body; clothing and rent, which are shelters for the body and mind; transport, which is how wage earners bring to market (their workplaces) their wealth for sale (their work); medicine, which is how wage earners restore damaged bodies and minds; fitness, which is how wage earners educate their bodies; and skills acquisition, which is how wage earners educate their bodies and minds.

All taxpayers, who cannot shift their otherwise compulsory tax burdens upon others, subsidize the capital of incorporated firms since the rules of law let enterprise-adventurers write off capital, sometimes as direct expenses and sometimes as depreciation expenses. In short, for incorporated firms, any profits earned get earned on eventually free-to-them capital.

Any trade is merely a purchase and sale for cash or credit, which can be settled by cash. In WHY IS THE ECONOMY SO HORRIBLE? BECAUSE ACADEMIA ECONOMICS IS FAKE, I show the entirety of trade, or commerce, or real economics ties up with two words — property and profit. 

Without profit from effort, anyone would lack buying power to buy anything else. Without property, no one can trade. At less than break even, anyone would stop trying to produce property. No one works at a loss.

Labor is the poor man's capital. Capital and labor are not distinct, separate producing agents. 

The wage worker buys living space, food and transport. Those are his as capital needed produce his labor. From his labor, he expresses his skills through time, which all call work. His work is his wealth.

He trades his wealth in a purchase and sale for wages with his employer. Wages are the wealth  his employer trades away.

His wages less his expenses to live become his profit.

The investor or capitalist sells credit or cash and buys a future contract for profit. The entrepreneur-adventurer or borrower sells forward a profit share and buys credit or cash. 

The profit share gets calculated as a multiple of the sum lent or paid. What gets called interest is merely part of the profit share paid out in parts as insurance against loss.

In INTEREST, CAPITALISTS AND FUTURISTIC TIME COPS, I reveal why interest as a kind of income exists.

Let's face it. The American dream, truly which means entering into the middle class, owning a house free-and-clear, has been foreclosed upon for many.

Read more ...

KELLY PHILLIPS ERB AND HER SILLY BELIEFS ABOUT PUBLIC EDUCATION

The foregoing comes from Kelly Phillips Erb, over at Forbes.

There is no such thing as “society.” Saying so is a cheap rhetorical ploy. There are only individuals. If society exists, it consists of all the individuals as there are only individuals. Society doesn’t exist apart from the individuals who comprise it. So Ms. Erb must show that each adult individual in America enjoys a rise in purchasing power above the sum of money taken through force from each to fund public education. If Ms. Erb can not do so, her boastful claim that a benefit exists to each adult individual (aka “society”) at once becomes false. After all, Ms. Erb made the boastful claim a benefit exists, which must be a benefit to each individual. If some individuals benefit while others do not, then no one can claim “society benefits.” Regardless of her wishful thinking, Ms. Erb can not escape the choke-hold grasp of logic. Specifically with respect to Mr. Fernandes, unless his income goes up each year by something greater than $7,143.54, to cover his compliance expense as well as to yield a return, Fernandes loses. Likely, that is the case of for all adult Americans who get forced to pay to the public school district mafias. Public education benefits unionized government workers engaging in make-work as all government work is little more than overpaid welfare make-work. Also note, that public educators who pay taxes to fund public education, in effect, do not pay any taxes as they pay themselves. Thus, public educators are receiving an extra benefit that none else are. The indoctrinated and the shills parrot the same lines — "School tax is cheap insurance. Without public education, there shall be many on food stamps and other welfare who have a dozen kids each. If children become well educated they are less likely to rob me or cause my neighborhood to deteriorate. Without a public education system, a country will experience a lack of prosperity." Never do these indoctrinated ones and these shills cite peer-reviewed studies that shows by statistical significance the lack of education is causal for crime rather than coincident or causal for why all becoming a food stamp recipients or other welfare. Never do these jokers show that public education is causal for prosperity. If the lack of education were causal for crime, then why not mandate everyone earn PhD.s? Why not require persons pay taxes for everyone to attend universities through PhD.s, gratis? Educating everyone to the max would eradicate crime according to your beliefs. Right now, 1 in 6 Americans receive SNAP (food stamps). Some of them have PhD.s. How is it that some having earned PhD.s need food stamps, the same as those who might be high school drop outs? The current owner of Dole, David H. Murdock, dropped out of high school in the 9th grade. He is the 190th-richest person on earth according to Forbes with a net worth of US$2.4 billion. Why hasn’t Mr. Murdock led a life of crime? If it were so that public education were causal in prosperity, then public education must also be causal in time of pauperism and economic depression. Likely, in the history of the USA, there has never been a time with more Americans having been educated through public education and to the degree of that public education. Yet, Americans have experienced more than five years of bleak employed precisely because of the lack of prosperity. These indoctrinated and shill jokers are cowards who are are quite comfortable to have agents of the political establishment use force against some so that their preferences get provided by others, preferences which support their crazed false beliefs about Utopia.  

Read more ...