Balanced Budgets?

[Martin Hash]

All the talk of "balancing the state's coffers” is a complete red herring. Government stimulus policy has little in common with a household budget. To compare the two is a false analogy and misleading. The reason governments try to receive as much cash as they pay out is to prevent vast accumulation of wealth in private hands. America is founded on the rejection of a class system but unfortunately that’s the greatest weakness of capitalism – concentration of wealth in a tiny fraction of the population who become de facto aristocrats. Without redistribution of wealth, America will devolve into feudalism.

Let me give you an example debunking the concept of a “balanced” budget. What if the government had an endless supply of gold, and they simply paid it out without ever collecting a cent in taxes? There are governments like that now, except they use oil, and there are other ways that governments can pay, pay, pay without collecting taxes – the Vikings figured it out, so did the Conquistadors. Collecting taxes to replenish the payout is not really an essential part of the equation. As long as the stimulating effects of the gold (money) is doing its part, and people are buying things from each other, large deficits result in little except psychological insecurity.

Then why, you ask, is it important to collect taxes? Interestingly, it is an engineering concept rather than an economic one. All engineers know that without a "feedback" mechanism to maintain equilibrium, a system will soon become unstable and ultimately singular - taxes are feedback. But an equally important reason for taxes has to do with sustaining a Middle Class in society. As stated above, the weakness of capitalism is the eventual concentration of wealth in the few. The more money flowing through the system, the more vast wealth these powerful private interests can accumulate – until they actually rival the power of government! Most Americans are individualistic types, not particularly fond of any kind of authority, but we were at least able to get together and accept the relatively-weak (compared to historical precedence) leaders we have now – and those people are in the iron fist of Checks-and-Balances, but powerful private aristocracies have no such plebiscitic approval nor public oversight. Without a redistribution of wealth in the public’s best interest, we will all be serfs in the future. We may be already…