Your Tax Dollars at Work

by Jim Davies

Politicians are expert at conveying the impression that their endless library of laws bring benefit to society; that when elected or re-elected they will fight only for Truth, Justice and the American Way.

The reality is that in almost every case they deliver the exact opposite; they massively create Lies, Injustice and, increasingly often, the Soviet Way.

They are using only your money and mine, to do it. They have absolutely no money of their own; even when they print it that counterfeit money is actually a disguised form of tax, stealing what the people produce. It works by removing value from the dollar; year by year, the "dollars" they print will buy less and less. Over the last half century, government has stolen in that way over 88% of the value of the US Dollar. Put another way, today's government "dollar" buys on average only what 12 cents did in 1950.

That's the hidden tax, which the Pols call "inflation" and blame on any convenient scapegoat - usually merchants. It is in addition to the taxes that they legislated, and which are visible. Those now grab 45% of all we earn.

Bad enough; but what is far worse is how they spend it. We would actually be much better off if they took $45 of every $100 we earn and set fire to it! That's because they would not then have the means to cause damage.

Not to say I recommend burning it. On the contrary, I recommend we prevent them taking it in the first place, then use it ourselves for worthy purposes. This paper lists some of the worst pieces of damage they cause... with our money. The message is, to prevent that theft of our money, as far as is practicable, in order to reduce the mayhem they cause.

The Mayhem

Here is a short list of some of the worst things government does, in contrast to what it says it does. F stands for Federal, S for State, and L for Local. There's overlap, of course. For derivation, see footnotes.

The "% you pay" column approximates the percentage for each activity for an average household, paying taxes to all three levels of government. Since we all pay them an average of 45% of our earnings, the fourth column expresses that as a percentage of all we earn.

Who does itWhat they do The %
You Pay
% of
F S L Generate Poverty 25% 11.2%
F S L Create Injustice 6% 2.5%
F Wage War 10% 4.5%
S L Warp Young Minds 9% 4.2%
F Hurt the elderly 21% 9.3%
F Plunge into debt 10% 4.7%
F S L Everything else 19% 8.6%
F S L Total 100% 45%
Available to Spend 55%
Total Earned & Spent 100%

The appalling bottom-line is that each of us is working for more than two days every week to cause immense damage to ourselves and our neighbors.

Generation of Poverty

This is the most massive part of government spend, and consists in taking money from Peter to give to Paul; the science of this redistribution has been fine-tuned to ensure that there are many more "Paul"s than "Peter"s, and so that voters will guarantee the perpetuation of the programs and the well-rewarded but wholly parasitical jobs for their administrators.

As economist Milton Friedman well said, "If you pay more for something, you'll get more of it."

So if more is spent on unemployment benefits, surprise! - other things being equal, you'll get more unemployment. If more is spent on single-motherhood, surprise! - you'll get more single mothers, who carefully avoid marriage so as to preserve their government checks.

And thereby deprive their children of a father, and so repeat and deepen the cycle of poverty, crime and despair. The Capitol, and to a smaller extent the Town Hall, are poverty factories above everything else.

For five millennia of recorded history, the truly needy were cared for by voluntary charity (forgive the tautology) but since the twentieth century, government invented compulsory "charity" (forgive the oxymoron.) It made the problem immeasurably worse.

Creation of Injustice

While most of the money removed from productive people at the point of a tax collector's gun (yes, that's always the implied threat, and sometimes it's been carried out) is spent on generating poverty, the smallest item on the government Spending List is alleged to be "Justice, Law and Order."

It creates more damage per dollar than any other spending category.

It's less than 2% of the Federal Grab, 5% to 8% of the State Grab, and a bigger fraction of the Town Grab. It pays for the system that writes laws, finds and prosecutes those who break them, and arranges for them to be punished.

The victims - and usually there are no victims - are ignored. They may be thanked for giving Court testimony, but that's their only compensation... except the satisfaction of revenge, itself a bitterly twisted emotion. A real justice system would deliver compensation but never revenge.

The end-result of the government's massive "justice" system is that there are about two million Americans behind bars. That's about 1% of the adult population. It's the highest percentage of any country in the world; including China, Cuba and North Korea.

It does horrify me, and I hope it horrifies you.

Imprisonment is barbaric, totally unproductive (as 80% recidivism rates regularly attest) and useless. Yes, there are a very few repeat, violent criminals from whom society needs protection; but the vast majority - including the half or more whose actions had no victims - would be treated by a non-government justice system not only humanely, but productively.

In a typical case where A has damaged B, the justice system would force A to compensate B from his earnings. There would be no need to incarcerate A at all - indeed the less constrained he is, the faster he will be able to fulfill the court-ordered compensation. The system would restitute, not retribute.

And of course, if there were no victim, there would be no crime.

Waging of War

This is the activity that most clearly defines all governments in the whole of human history. Indeed, most of the "history" taught in school consists only of a record of wars and battles and kings and slaughters, way back to when writing was invented.

No doubt the families populating the Huns and Visigoths lived lives quite similar to our own, minus the abundance that relatively-free capitalism has produced; but the record of their times consists almost wholly of the wars their leaders waged. Some (Oppenheimer, for example) feel that the very institution of government had its origins in marauding bands of plunderers who would raid primitive human settlements for food, wealth and women, but later settle down with their victims to "protect" them from other warring gangs.

This author is not a pacifist. It seems to me that to allow a marauder to kill, maim or rob oneself and one's family is to deny life. If life is not worth defending, it is not worth living. As a reductio ad absurdam, if almost everyone were pacifist, only agressors would survive and that would taint the gene pool for all time.

But there is usually a very clear line between defense and offense, and US governments have repeatedly, wantonly crossed that line and are doing it now. At taxpayer expense, US military is now on the gound (on one pretext or another) in over one hundred countries around the world. The result is an American Empire, bigger than any other in history.

Certainly, the Empire is administered with more skill than most. Control is excerised with the refinement of bribery and persuasion, more than by direct rule. Even when Panamanian head of state Noriega was forcibly removed and imprisoned, his successors were not US politicians but Panamanian puppets.

When foreigner "leaders" step out of line they are summoned to Camp David for a lecture, but they are only very rarely replaced, on the orders of Washington - and the incentive to conform is nearly always largesse (at taxpayer expense) rather than a threat of assassination.

But make no mistake: the power-mad Pols in D.C. are running the world, thanks to the most powerful military machine in history; and they are willing to use that massive force if need be to stay supreme.

And in the last hundred years they have used it, time and time and time again. At our expense, without a shred of defensive need, and at the cost of enormous, almost uncountable toll of human life.

What we live in has well been called a "warfare-welfare state"; Albert Jay Nock rightly observed that "War is the health of the State" - meaning that without sustained war, the State might wither - when too many people ask the one question politicians most dread to hear: "Government, who needs it?"

One of the most recent, and most trivial, examples, was the day that Monica Lewinksy was due to give testimony embarassing to President Clinton. How did he distract public attention? - by waging war. He ordered missiles shot at a desert camp in Afghanistan and at a pharmaceutical factory in Sudan. Several were killed, but his tattered reputation was sheltered and, later, he narrowly escaped a "guilty" verdict in his impeachment trial.

The inevitable result of this huge projection of power is that all over the world, the US government is creating enemies - pockets of resistance - for all things American. And, alas, all people American. One day, that will come back to bite us; probably not the Pols who primarily caused it, but plain folk who did no more than thoughtlessly vote for it and needlessly volunteer "taxes" to finance it.

Those guerillas will shoot airliners out of the sky, release poisons into the subways and the water supply, and maybe detonate in some American city a suitcase nuclear bomb. They will be called "terrorists", so that voters will forget who started the terror, and vote for even more horrendous violence to be used in suppressing them. [NOTE: this was written before 9/11/01, the Afghan War and John Ashcroft's appalling and wholesale violation of civil rights. When one understands the true nature of government, predicting its behavior and resultant events isn't too hard.] The cycle of war and counter-war will continue, and the only winner will be the State, and the loser will be the individual, his privacy, and his freedom, all over the world.

Dumbing-Down Children

The phrase "Dumbing Down" to describe what government schools actually do, was coined by one in an excellent position to know: John Taylor Gatto, an honored teacher veteran of the New York schools system. You can obtain his book of that name here.

The Feds do impose some control over what gets done in the classroom, but the huge bulk of the damage is caused by governments at State and Local level and the structure varies by State. In mine (New Hampshire) almost all of the cost comes from local taxes on property (which on their own accomplish the shocking result of abolishing private property!) and of those local taxes, three quarters of the money goes to running the schools.

So it's a massive "industry", absorbing over a quarter of a trillion dollars a year - a cost only slightly less than the entire US military establishment.

Opinion is divided about who controls this quarter trillion. Outwardly it is of course the political class, but arguably that class is in turn held hostage by the teacher trade unions, a very active lobby that effectively controls who gets elected to political power, rather as the postal unions ensure that the USPS never loses its monopoly status and hence, pays excessive wages.

What's for sure is that those who pay the quarter trillion have virtually no control at all; they are forced, by the very fabric of the system, to accept for their own children whatever the Collective decides is good for them.

The result has been that for seven successive generations, American children have been raised to believe the ridiculous myth that government has some useful function to play in society (see here) and have been systematically taught what to think instead of how to think. Those naturally bright enough to take in the adequate material available in the arts and sciences have gone on to excellence in later life, but the great mass of the people have - as Gatto remarked - been "dumbed down." Most have extreme difficulty, for example, getting what is left of their minds around the reasoning in a paper like this; for they have, quite deliberately, not been taught how to reason, how to examine critically, how to be independent. As was always the case with government schools, since the day they were devised in Prussia and imported here by Horace Mann, they exist to indoctrinate, to produce a docile population for the "leaders" to control and exploit. In such a way does government destroy a huge part of what it means to be human.

Notice: I'm not arguing here just that the government school monopoly has taught the rising generation wrong ideas - or ideas about religion etc that are in conflict with what parents might prefer. I am proposing rather that it has destroyed its victims' ability to form any ideas of their own at all. It is at this point that I part company with the Religious Right, who seem to me to be content to leave the machinery of indoctrination in place - at taxpayer expense - if only the content of the indoctrination is changed to their liking. Not good enough!

Politicians are fond of justifying their every latest measure of control and oppression by claiming it's "for the sake of the children", and that not to support it amounts to child abuse. The truth is that the entire, quarter trillion dollar a year, 160-year-old monster the politicians are preserving is the real child-abuser, for it is ravaging the minds of three million of them every year.

Impoverishing the Elderly

While government ruins the enjoyment of the first two decades of life by imprisoning children in its Youth Indoctrination Camps, it devastates the last two by actively preventing people providing for their own retirement.

The spend involved is two thirds of a trillion dollars a year - at 37%, by far the biggest single element in the Federal budget and only narrowly second to the total expenditure of all three levels of government on the Poverty Factory. With unbelievable cynicism, the Pols call this destructive program "Social Security Insurance."

They exempted themselves from having to pay the compulsory "premium" - they knew something they didn't tell! - but otherwise the only way to avoid pouring money into this doomed and fraudulent scheme is to become self employed and then stop volunteering to pay income tax.

It is called an "insurance" plan, but bears no resemblance to any honest, commercial insurance policy; the naming is just part of the massive tissue of lies that Pols have woven. There is no competition (that alone dooms it to be far too expensive) and no opting out (that, too) and no genuine "trust fund" from which benefits can be paid (that would make it illegal if offered commercially!) which means that current benefits can come only from current receipts.

Such a plan would be wholly unmarketable by any insurance company even if were legal; for the buyer would inform himself about the vendor's financial instability and shop elsewhere. That structure means that if for any reason revenues were to dry up, those claiming benefits would be left hanging, without recourse; they would starve to death.

The Pols' response to this is that it will never be allowed to happen, because "general revenues" (ie, taxes) will be used to make up any shortfall. True; but only for as long as this dumbed-down population consents to continue to pay taxes. Not very long, I hope.

Above all this chicanery, stands the immutable fact that since Pols can never invest as wisely as professionals in the market, the rate of return in that market, on the Trust Fund if it existed, would be far less than for a free-market retirement- and sickness-insurance plan. In practice, the Pols have played a shell game with all surpluses in the "social security" account for many decades, and the net result is that our money paid in to the scheme has returned an equivalent of 2% per year. The stock market, meanwhile, has averaged a 12% annual return. Allow for insurance-company conservatism and profit, and the claim that "social security" pays at least two and a half times less than a comparable free-market insurance policy would, is probably understated.

Thus, SS dependents - the elderly, for the most part - have been systematically robbed, of at least 60% of their retirement incomes. They are obliged to live at no more than 40% of the standard of living they would have otherwise enjoyed. They are impoverished.

Don't know about you, but I think that's no accident. Think: power (which is all that politicians live for) springs very largely from money (and the barrel of a gun, but that's another story.) So if the Gray Lobby had two or three times as much wealth as they have, and time available to use it, there can be no doubt that politicians would enjoy a lot less power. That is in my view the primary reason they keep promising to "save" this monstrous ripoff.

Plunging into Debt

Governments spend more than they take in, because they love buying votes by handing out "goodies" but fear to pass on their true cost by raising taxes - that might lose votes. And without votes, how could they continue their power-trip?

So, they borrow. They borrow, and borrow, and borrow. And guess who gets to pay the interest on those loans, and to repay the principals in due course?

The Feds have borrowed, in total, about six trillion dollars. They don't like mentioning that figure in polite company, so instead they try to focus our attention on the far smaller "deficits" or "surpluses" which happen from year-to-year. Example: in 1998 they took $69 billion (4% of current spend) to pay down 1.15% of that $6 trillion total debt. And congratulated themselves ad nauseam.

Unfortunately, I have no figures for the indebtedness of town, city and state governments so here I'll make the rather generous assumption that they are twice as frugal and responsible as the very profligate Feds. Since their total tax-and-spend is about $1.44 trillion a year (four fifths of the Feds') that says their total debt load is about (6 x 0.8 x 0.5 =) $2.4 trillion. If any reader has a better figure, please let me know.

If I'm right, then at the very favorable rates at which government people borrow, the total paid in interest is just under $100B/yr and that leads to the per-household figure in the table above; in sum, $340 billion a year.

How shall I characterize this item of expenditure? - should not the government pay its debts, and so ought we not to pay at least enough tax for it to do so?

No, and no. My reason is that when somebody purchased a government loan (ie, lent it the money) that somebody knew full well that the contract was fraudulent on its face, for payment of principal and interest could only be made after an act of theft - namely, to tax somebody else.

Those lenders were therefore accessories to that theft, and deserve to lose the lot. When they have lost it, this American society - and very likely a lot of others - will be rid of the vicious cycle of government debt for a long, long time to come.

The Rats'-Nest Remainder

Above are the big ones. All the rest of what Federal, State and Local governments spend finances a vast range of activities that include several that, in their absence, would certainly be performed by free enterprise for profit, to meet a public demand. Roads spring to mind as an obvious example, both in building and maintenance; but those would be built competitively with the best available predictions of likely demand - and not because the politician from one State or area had more clout than one from another. Schools, likewise, would be founded by a wide variety of providers, competing for parents' business and striving to meet the standards those customers wanted.

But there would also be tens of thousands of activities that nobody would willingly buy, and which would therefore vanish along with the force of government. I'll select just three, to illustrate that in this residual "rats' nest" too, a whole heap of damage is being done: Business, Health & Environment.

Distorting Business

Few of these parasites could make such a living themselves, but politicians just love to get orders issued to entrepreneurs trying to serve customers so as to make money. The result is, MUCH higher operating costs - which are, naturally, passed along to the buyer; you and me.

Are these higher prices "tax"? - not really. The money doesn't usually go to government. It goes to other providers, who furnish for example the service of helping manufacturers comply with environmental regulations. Or perhaps the law is for the employer to hire workers at a minimum wage higher than would prevail in a free labor market.

All such intermediaries are absorbing more of our money than their work is actually worth, to us the end-customers. This delivers a double whammy:

(1) you and I can afford to buy fewer of other things, for the price we pay is inflated by government action, and

(2) those who perform those surplus functions mandated by law are wasting their talents and time. Absent that kind of employment, they would find work that somebody DOES want to buy; they would actually contribute to society's wealth.

It's hard to estimate how big this kind of distortion is, but it's huge. Anyone who is operating a small business will have a good intuitive "feel" for its magnitude and it would not surprise me to hear that it artifically hikes prices of goods and services by at least 50%. In a $7 trillion ecomony, that's a government-caused waste of $3.5 trillion a year. If so, its termination would boost living standards by 33% on its own.

Harming Health

Just as government causes huge price inflation by interfering with business, so it causes huge distortion of health care by its busybody regulations - making it less effective and far more expensive that it would otherwise be.

This too is not primarily a large tax expense, additional to the large portions of welfare and "social security", above, that are health-related. Instead, it simply causes wholesale waste.

Example: shortly after Medicare was introduced, in the 1960s, the rate of increase in the overall cost of health care doubled. Probable reason: when people think they are getting something for "free", they demand more of it.

Example: by law in every State, physicians must obtain a very expensive license, before hanging out a shingle. Why??!

The usual trite answer is that nobody would want to be treated by an amateur, but to the extent that that is true, it proves that compulsory licensure is not required! - because the market demand for treatment would put untrained physicians out of business. It's a circular argument.

In fact I doubt that it is true; there are many maladies, like persistent colds, that could be well treated by someone without a decade of training in neurology - and for a much lower fee. For that matter, why should not patients treat and prescribe for themselves, on their own responsibility? - instead of having to pay first $50 for a doctor's consultation and then another $50 for a drug, whose identity they could have figured out for themselves from a Web page. That may or may not be wise, but it ought certainly to be legal. But it isn't, and so the price we pay is again inflated artificially, By Law.

Example: the government's FDA mandates an exhaustive period of testing for new pharmaceuticals. This more than doubles the cost of producing them, and so the cost of buying them. Now, in a free-market environment where damaged customers could sue for huge compensation, no manufacturer is about to cut corners on product safety; but the FDA requires by law far more testing than is needed.

In so doing it not only magnifies the drug's price, it also delays its availability and thereby kills people. It's been recently estimated that in the last thirty years, 100,000 Americans have died as a result of that delay. Thus government decreases the quality of health care as well as raising its cost.

Hard to put a dollar figure on this waste; but if one's health is not what it might be, or if life itself is shortened by government action, of what use are any of the other benefits that would flow from ending its existence?

Damaging the Environment

It's widely claimed that government intrusion helps preserve the environment, which would otherwise see dirty water, smoky air, and a decimation of the variety of plant and animal life as "greedy capitalists and robber barons" roamed rapaciously throughout the land.

More hogwash, from the government school monopoly; as is easy to verify, in principle, by considering: who cares more for any resource, its owner, or someone else? - and who would tolerate his stream being polluted, if government did not prevent him (as now) filing suit against the polluter?

The answers are obvious; nobody cares for property like an owner does. The idea that politicians (whose planning horizon is never longer than six years) care more for a forest, for example, than a logging company whose shareholders expect a dividend every year for the next fifty, is absurd.

The answer is confirmed by a peep behind the old Iron Curtain. There, where governments were even more pervasive than here, is where to find most of the world's polluted streams and atmosphere. Even the two halves of Germany, in 1990, were clearly identifiable by those criteria alone. Today, visitors to Red China are horrified that smog is almost everywhere; often fabulous scenery is difficult to photograph, the air is so dirty.

I love the beauty of nature, so I'm an environmentalist. For that reason, I want history's worst actual polluter - government - as far removed from it as possible.

Action Needed

So much for the sad catalog of massive mayhem, that all governments cause. Now, what can ordinary people do about it?

Make sure first that we agree the objective - what the action is intended to produce. Given the whole catalog of destruction shown above, can it be anything less than: to eliminate government altogether?

I don't think so. No government anywhere, at any time, has ever brought net benefit to any society, and there is no desirable function that any government performs that could not be performed better, or less expensively, by free people operating on a voluntary basis for profit or for charity. So, with all this massive evidence, it's high time to scrap it and start over. America came close, in 1776; now let's finish the job.

That being so, the action needed must be designed to get rid of that cause, the monstrous institution we call "government", in the shortest possible time and at the least possible cost.

Education is the first priority, and you have already started by visiting this page. The link here provides your next step. Then do the needed in-depth study to make sure you are solidly convinced. The step after that is systematically to bring those you know to the same educational process one at a time, and help them to do the same themselves. Result: an exponential growth in the number of those taking back control of their own lives - in a surprisingly few years.

At the end of that period the re-educated population will simply walk off the government job; it will collapse for want of support, and the wise vision of the 15th Century French philosopher Etienne de la Boëtie will be realized at last:

"I do not ask that you place hands upon the tyrant to topple him over, but simply that you support him no longer. Then you will behold him, like a great colossus whose pedestal has been pulled away, fall of his own weight and break in pieces."