Whose money? Not our money of course!

The ongoing horror story about the confiscation of the savings of ordinary people led M. Simon to ask a question more people ought to be asking.

Some one has to pay for the welfare state. Will the US be next?

Unless something is done fast, eventually we will. This is a classic illustration of Margaret Thatcher’s simple observation about the problem with socialism:

eventually you run out of other people’s money.

This is so self-apparently obvious that you would think that the “other people” would have wised up.

But they haven’t. The question becomes why?

Why is it that so many of the people who know (at least, who are smart enough to know) that the money has to come from somewhere simply do not seem to care? I find it hard to believe that they are all like the proverbial teenager with his first checkbook who doesn’t realize that if the money isn’t there the checks will bounce.

I have been trying (and failing) to figure this out for a long time.

As I put it in September of 2008:

Amidst the endless talk about bailouts, I have a nagging question for those who think “the government” is a blank check:

Who will bail out the bailout?

(Or, if we look at the government the way a college kid looks at daddy’s money, “What happens when Daddy’s check bounces?”)

In another post, I wondered whether the denial might be fueled by mechanisms like tax withholding by employers (which condition people to see their money as not really theirs at all):

…for reasons that elude me, a large number of people do not understand that the government is simply not a huge, magical, money-producing pot. Nor is it a blank check. The worst thing about this is that many of the people who do not seem to understand this are intelligent and educated people who ought to know better. People who learned in school that the government derives its revenue from taxpayers, but who still think the government is a giant magical money pot.

People who know that taxes are deducted from their paycheck, yet who somehow (through an inexplicable and irrational thought process) simply don’t think it’s their money.

If I could understand the precise mechanism of how seemingly rational and thinking people can both know something and not know it at the same time, I could probably make millions.

Or murder millions; Stalin famously observed that one man dead is a tragedy, a million men dead a statistic. The same principle is implicated with money. A guy who haggles over a couple of dollars will look the other way as the government automatically deducts thousands — because he doesn’t think the money is “his.” Yet he knows it is, because he knows he earned it.

Shrinks would call it denial, maybe cognitive dissonance. In the case of not knowing where the government gets its money, it’s collective denial.

Do they know it is their money?* Maybe that’s the problem. And with respected, um, thinkers like Paul Krugman repeating endlessly the lie that printing money which has nothing to back it will be good for the economy, people can rationalize away the problem even further.

“These are top experts. Leading economists. They know what they’re doing.”

* Actually, if you think about it, worthless money issued from government presses really isn’t their money. Whether it is their debt in the moral sense is debatable. I didn’t vote for the bastards, so I don’t consider it to be my debt in the moral sense, but that won’t save me WTSHTF.


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12 responses to “Whose money? Not our money of course!”

  1. Will Avatar
    Will

    Karl Denninger said today; “Nothing you have that you cannot (or will not) stand in front of with a gun and defend is yours. If you’re either unable or unwilling to die to keep it the government will steal it to give to someone else, including someone else who did an irresponsible or even criminal thing.”

    The problem with that is, they’ve got more guns, bigger guns, and almost all of the ammo.

    In line ahead of us: Italy, Spain, and New Zealand?

  2. Will Avatar
    Will

    Fiat currency has two elements that give it value. The first is that it is a “legal tender” which means that the government(s) can force citizens to accept it as a means of payment. The other is belief(s); not just a vague belief in the currency but belief in the nation’s leadership, the economy, the nation’s work ethic, future, innovation, and more are what give value to what is just a symbol. They still have the first element.

  3. Neil Avatar
    Neil

    If I might paraphrase, they came for Cyprus and I did not speak up because I am not Cypriot…

    The conversations I’ve had with people who think everything is going to be OK would seem to indicate that they are simply ignorant. They really think that somebody else is going to pay the tax, or that their own portion of the increased taxes will be bearable and simply the “price of civilization”. They just don’t understand the change in magnitude that we’re looking at. They don’t understand the ways that oppressive taxation will change society.

    Furthermore, this ignorance is the product of overt efforts to mis-educate the nation for the last 90 years.

  4. Simon Avatar

    Neil,

    I run into the same “genetics”.

    I was discussing the Calif. gun confiscations with some people who are nominally gunners and they thought it was fine. Not a harbinger of things to come. A rational move.

    I said, “They will do the easy things first. Then they will get serious if there is no outcry.” I was called “insane”. I mentioned “First they came for….” and was criticized intensely.

    I’m getting a very Germany 1935 feeling these days. We are in for a very rough ride.

    The frog is being boiled. And the powers have figured out how to divide “right” and “left” so no unified action against them is possible.

  5. Frank Avatar
    Frank

    M. Simon, if you want a REALLY dystopian look into a nightmare future, read ol remus…

    Detention without charges. Expect precautionary arrests, pre-crime prosecution, warrantless no-knock home invasions and mass internment. Should anybody believe mass internment is a stretch, recall the forced removal of Japanese Americans from the western coastal states to inland camps.

    Confiscation of property. This includes wealth in any form: croplands, the family car, real estate—especially if adjacent to federal facilities or major bridges or power transmission nodes or international borders, or if it has a view some Diversity Director really likes. Expect industries or entire sectors of the economy to be nationalized, railroads and power plants for example.

    Restricted travel. Expect a universal identification system, curfews, travel permits amounting to internal passports, no-travel lists, no-go areas art-link-symbol-tiny-grey-arrow-only-rev01.gif, security check points and a priority system for users of each mode of travel. Expect “refugees” and “domestic terrorists” being transported to “resettlement centers” to have a high priority.

  6. Frank Avatar
    Frank

    ol remus, contd…

    Restricted communications. Expect disinformation, anti-rumor campaigns, on-site advisors for editors and news broadcasters, and protective custody or worse for dissident commentators.

    Weapons confiscation. Expect revocation of licenses and permits, an expanded list of proscribed weapons—muzzle loaders, bows, knives, even sporting slingshots…Zero tolerance in the schools was a first step. It originated in Nazi-occupied Europe, merely touching the rusted remains of a gun found among the rubble meant on-the-spot execution.

    Centralized allocation of commodities and goods. Expect rationing of necessities, including food, clothing, fuel, water, and electricity. The rationing system will be complex, ever-changing, incentivized and corrupt.

    Citizen surveillance. Expect the “See something, Say something” campaign to become a fully developed citizen surveillance system along the lines of Cuba ‘s Rapid Action Brigades with “guidance” on reportable instances using “public service” announcements.

    Price, wage and currency control. Expect prices and wages to be capped, all money transfers to be restricted, all bank accounts monitored and “taxed” arbitrarily. Currency control is already under way. Aside from confiscation via inflation, cash is routinely seized by law enforcement art-link-symbol-tiny-grey-arrow-only-rev01.gif as “evidence” of presumed criminal activity—no charges need be brought.

    http://www.woodpilereport.com/

    He doesn’t save posts. What you read this week will disappear down the road. No archives.

  7. Veeshir Avatar

    We’ve been paying for Europe’s welfare state for more than 60 years.

    Life is easier when someone else pays to protect you.

  8. […] Classical Values » Whose money? Not our money of course! Do they know it is their money?* Maybe that’s the problem. And with respected, um, thinkers like Paul Krugman repeating endlessly the lie that printing money which has nothing to back it will be good for the economy, people can rationalize away the problem even further. […]

  9. […] Whose money? Not our money of course! […]

  10. Henry Cybulski Avatar
    Henry Cybulski

    Yeah, people will haggle over a couple of bucks, but that’s because they’re dealing face-to-face with the person and feel they can manage the situation basically on an equal level. If the government raises taxes who are you going to grab by the throat and say “stop it.” The authorities have most of the guns (even worse, many, many more people willing to use their guns against the upstart citizens) and the system to impose their will.

    Henry Cybulski