The New Normal – Taxation Without Representation by Tom Luongo

 The Revolutionary War began as a tax revolt.  The country it spawned may end with a similar event.

The colonists of the 1770’s parlayed the phrase, “Taxation without Representation,” into a rallying cry which ended with the birth of a new nation after five years of war.

 We all know the story.  The U.S. was the first nation founded on Enlightenment principles of popular sovereignty, in opposition to the hereditary rule of kings.

Less than two hundred and fifty years later, however, the U.S. is headed, in my opinion, towards a similar fate as those kings of Europe. 

In a recent blog post economic adviser Martin Armstrong made the very salient point that with the return of the Democrats to complete power in Washington the two states Americans are fleeing from in record numbers, New York and California, are the two states leading the policy agenda.

With Speaker Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY) these two states, are ruling those who don’t wish to be ruled by them. 

Their $1.9 trillion stimulus bill is a massive tax on future production and just one example of this unsustainable rule. This is money that doesn’t exist, and they will issue debt for.  That debt is an obligation on the lives of future Americans yet to be born.

This is the essence of debt-slavery, birthing people into bondage and obligation without their consent. 

It is the height of tyranny. 

And yet, none of the High Priests of Fiscal Orthodoxy questions this because there are no principles governing their thinking, only the application of power.

Don’t think I object to this stimulus in particular but favor other government debt, because I’m not.  All government debt is, in effect, an invitation to debt slavery.  But there is a big difference philosophically between the first dollar of debt and the $28^th trillion.

That first dollar, one could argue, is being taken on by the very people who will pay it back.  It’s their debt, not the debt of their children, or in our case, grandchildren.

But the $28^th trillion dollar?  That debt isn’t being paid back by the Gerontocracy on Capitol Hill who are the ones forcing it onto the people.

Further, make no mistake, this debt will be paid on but not back.  And the primary payers will be the political opponents of New York and California; those who produce the wealth of this nation, not the collapsing hyper-financialized casino-owners on Wall St. and tech companies now actively fleeing Silicon Valley.

When looked at this way is there any real difference between taxes levied today and the taxes on tea imposed by King George in the 18^th century?

In many ways these new taxes mirror the Tariff of Abomination that was also at the heart of another war for secession, that which is known as the American Civil War or what I hear described here in the south as “The Recent Unpleasantness.”

To pay for this latest round of fiscal madness, no less mad, by the way, then what we saw under Donald Trump, the Biden administration wants to raise taxes on the very thing – investment and production – which could, in theory, actually pay for it.

At least Trump cut taxes and invited capital back to the U.S. while he spent money in ways that would make drunken sailors look sheepish.

At least Trump understood that investment in productivity produces long-term employment and that taxing that at lower levels encourages this behavior.

By contrast, in her first major policy statement as Treasury Secretary, Janet Yellen advanced four talking points which support the exact opposite.

1. Raise the corporate income tax back to 28%, after it was cut to 20% by Trump. 
2. Raise capital gains taxes as well, punishing investors for sharing in the wealth generated by their investments.
3. Move to a Digital Dollar
4. Potentially implement a Wealth Tax – a tax on unrealized stock gains.

The first two points are there to encourage the buyers of this new debt that there will be enough money coming in to pay the coupons. 

Since the U.S. is indebted up to its grandchildren’s eyeballs this seems reasonable.  But, of course, the problem is that raising investment taxes, at the same time, retards investment, and exacerbates the problem which has plagued us for the whole of the 21^st century, falling money velocity.

And Janet Yellen knows this.  She spent most of her time at the Federal Reserve combatting falling money velocity… badly, I might add.

Yellen also knows that it is the private sector that is more capable than government in directing capital to where it is most needed and can be most effective. 

So, this begs the question, if she knows these things why would she advocate for these policies which she knows won’t be successful? 

If Yellen knows that raising taxes and going farther into debt isn’t likely to create the kind of sustainable recovery the U.S., and by extension, the world needs in the wake of COVID-19, why go along with the insanity promoted by Biden, Pelosi, and Schumer?

Occam’s Razor leads us to two possible answers.  The first answer is simple.  Janet Yellen is an idiot.  I’m not sure I buy that, but it’s far preferable to the other answer.

Because the second answer is that these taxes are part of a planned destruction of the middle class which began with the Coronapocalypse lockdowns and ends with making the U.S. an economic wasteland to satisfy the World Economic Forum’s Great Reset.

Following that train of thought leads us to the conclusion that the entire point of our current government is to weaken the U.S. economically and radicalize us politically to subordinate it to the whims of foreign powers, namely China but more specifically the European Union.

And that leads me back to my original assertion that most of the U.S. now, namely the states that voted for Trump in November, are in a very similar to that which led to the country’s formation, taxation without representation. 

Only today it is our Congress in Washington enforcing taxing and regulatory policies which benefit the rulers of Europe by proxy rather than being literal subjects of a British king.

This is a Congress that is openly calling its political opposition ‘domestic terrorists.’  Democratic members of the House are openly pressuring cable and streaming services to drop conservative news outlets like Newsmax, OANN and even Fox News from their distribution platforms. 

The January 6^th Capitol ‘riot’ is still being used like 9/11 to advance an agenda of division and fear to hound political enemies and stifle dissent. 

The Biden administration continues to ‘work with’ the big tech firms to stifle all dissent against the COVID-19 vaccines, any suggestion of election fraud or anything else it finds an inconvenient truth countering its hollow cries for ‘unity.’

But at its heart this is a government that is acting increasingly like it knows it is illegitimate and will do everything in its power to punish the states which are most likely to oppose its agenda.

And that means we are headed for the same kind of moment the Southern states faced with the election of Lincoln in 1860 and the colonists faced before them.  Do they openly defy a failing government demanding undeserved tribute in ever-greater quantities or do they succumb to the inevitable collapse?

That question won’t be answered this year or even at the 2022 mid-terms.  But it’s a question more people are asking every day that this New Normal fails to Build Back Better for those left without a voice.