View Full Version : Extraction of Wealth: Are We Slaves to the System?

11-23-2013, 08:58 AM
Extraction of Wealth: Are we slaves to the system?
by Mike Ash 11/23/13

Imagine a 4th grade child being bullied. Every week the bully tells the child to give him half of his weekly lunch money or he will push him down and beat him up. The child complies out of fear. Now suppose the price of school lunches goes up every few weeks. The child has already given half his money away and the only thing he can afford is a banana and a small milk. Now that goes up 10% by mid-year and this child is down to just a banana for lunch every day. Even a 10 year old would eventually become fed up with this and stand up to the bully.

Well this is exactly what we as adults tolerate from our government.

We are a society full of 4th graders being bullied and having our wealth extracted by the combination of taxation from the government and inflation caused by the non-stop money printing of the Federal Reserve.

Don't believe me? Do the math yourself. How much of your earnings goes directly to the government. Income tax, sales tax, SS tax, Property tax, transportation tax (tolls/tunnels/gasoline), Communications tax (yes there are extra taxes added in to your cell phone bill. Ditto for your cable bill), Alcohol, cigarettes, marriage license, gas and electric bill.... the list goes on and on. Nearly everything you use or purchase today has a tax attached to it.

I paid roughly 50% of my total income last year to the government through taxes. That means that I worked from the month of January through the end of June just to pay all of my taxes for the year. In essence, the government owned me for those 6 months out of the year.

Like the 4th grader above, I complied out of fear of the use of force. Lets face it, if there was no threat of arrest for not paying taxes, nobody would pay them. We can debate all day the necessity of certain taxes but I think we can all agree that taxing 50% of somebody's labor is outrageous. If that is not enough, there is another force at work against us here. The hidden tax of inflation.

According to the US Bureau of Labor Statistics, the inflation rate for the 12 month period from October 2013 to October 2013 is 1%. However, as usual, the government is lying to us. Use your common sense and look at the price of goods and services over the last 12 months and decide for yourself if your prices have only gone up 1%.

The chart below is a small study I did simply on the price of some common groceries you might find in your shopping cart. The increase for each item is measured during the same 12 month period as th official BLS number. The difference is staggering.

The cause for this inflation can be traced back to the Federal Reserve's infinite money printing policies. Quite obviously, the more money in circulation, the less valuable it becomes and the more you need to purchase the goods and services you desire. Even in the 4th grade I understood that as I traded baseball cards with friends. The more common ones, nobody wanted as their were plenty to go around. If I wanted to trade for a 1984 Don Mattingly Rookie Card I would need to give up 1 of something of equal value or several of my lesser value cards. The other kids knew instinctively that they should hang on to the ones of value so the more common cards became wothless as they were readily available for trade. Well the same thing goes for our currency. As more dollars become available (money prnting or QE) you will need more of them to trade for the desirables.

It is quite clear that the middle class is being destroyed in this process as between inflation and taxation, we are forced to give up 50%-60% of our wealth. We may not be slaves in the classical sense where one person is completely subserveant to another, but we are certainly not free to keep the fruits of our labor. Remember in part one of this article we determined that our wealth is our time. If our wealth is being extracted then our time is not our own. In this sense, we are slaves to a system of banking and government. A system we can not escape. A system many of our forefathers warned us against and a system which is destroying the freedom of each individual who must live within it.

Thomas Jefferson said it best.

"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them, will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered."

As the velocity of this picks up, will we continue to be bullied like the 4th grader or will we stand up and say no more?