Governance versus Politics

Posted by JaxGary 9 years, 3 months ago to Government
68 comments | Share | Best of... | Flag

Now that the 2014 mid-term election cycle is behind us we see the early stages of the 2016 presidential election, we should consider the desired role of government. Do we want a government that protects the people or one that rules over them? Do we want governance or politics as usual?

Governance is simply fulfilling the responsibilities assigned to their office; and restricting ALL of their official activities to doing only those things. Our founders thought the only proper role of government is to protect the people and the property owned by them. Government exists to do only those things for the people that the people cannot do for themselves. Governance is the essence of preserving individual liberty and freedoms.

Politics, on the other hand, is a system of coercion that concentrates power in a few individuals so they may exert that power over others to achieve whatever personal goals those rulers have established for themselves. Politics is most effective in state and national government as the body of elected officials have the legal authority to lay and collect taxes and then use those revenues to reward their friends and punish their enemies. Politics is antithetical to individual freedom!

There are really only two choices; a government that protects the people or a government that abuses the people.

The American people need to recognize politics for what it is – an abusive power grab by elected and appointed elites who believe only they are smart enough to make decisions for the average person. The reality is that no government system or form can endure unless the majority of the people support it. Why do so many Americans today support a corrupt system that takes from some and gives to others while burdening all?

Our economy in in total shambles compared to where it was shortly after the industrial revolution when we produced more than half of the manufactured goods in the world. The dollar has lost almost all of its value in the last hundred years. According to the Bureau of Labor Statistics, CPI inflation calculator, it would take $23.62 today to purchase what could have been purchased in 1913 for $1.00; an inflation rate of 2,362%! Another way of looking it is that only 3 cents would have bought in 1913 what $1.00 will buy today. A penny had real value at that time.

Politics has created government growth resulting in an out-of-control behemoth that currently has an insatiable appetite for taxing and spending. Today Congress, as an institution, is only respected by a single-digit percentage of Americans who think they are doing a good job of governing.

My question is why any American thinks Congress is governing!


All Comments

  • Posted by CircuitGuy 9 years, 3 months ago in reply to this comment.
    "Are you implying the money supply NEEDS to be flexible?"
    I see what you're saying. If we didn't expand the money supply, you could gain value from a growing economy just by parking money under your mattress. You wouldn't have to use financial services companies and tax efficient strategies. That has appeal.
    Reply | Permalink  
  • Comment hidden due to member score or comment score too low. View Comment
  • Posted by Robbie53024 9 years, 3 months ago
    I'm not talking about the growth of the investment, but the issue with the growth of value in a currency that would cause the scenario I presented using Berkshire as an example of growth without dilution via stock splits.
    Reply | Permalink  
  • Posted by 9 years, 3 months ago in reply to this comment.
    You are completely IGNORING the GROWTH of the investments under the control of Buffet with BH. The increase in share price IS NOT the result of inflation; it is primarily a result of capital appreciation, or growth. If you want to see the inflation rate for that time period compare the dollar since it does not contain any capital appreciation. Talk about cherry picking facts!
    Reply | Permalink  
    • Robbie53024 replied 9 years, 3 months ago
  • Comment hidden due to member score or comment score too low. View Comment
  • Posted by Robbie53024 9 years, 3 months ago in reply to this comment.
    Yes, I understand. But take the growth of Berkshire Hathaway. In April of 1980 the share price was $320. Yesterday's close was $225,140. If that represented our currency, that penny that purchased 2 candies in 1980 (well, it didn't then, but this is only for illustration), you would now take away over 1400 pieces for that same penny. That's unwieldy. You would need a 1/703 fraction of a penny for those 2 pieces. I don't know that I could slice a penny that thin. Of course, digital currency would solve all that, but we don't have one (and I pray we never do, as at that point there will be absolutely no control on the amount of currency in existence).

    No, I see smaller fractional currency as not workable, thus some form of currency growth is useful.
    Reply | Permalink  
  • Posted by 9 years, 3 months ago in reply to this comment.
    Smaller fractions are not a problem at all. One of the requirements of money is to be devisable. My mom used to tell me when she was a child penny candy, clack jacks for example, were sold as two for a penny because the half-penny was not a coin of the realm. Realistically, our government is seriously considering eliminating the penny as a result of inflation. When I was a child I could actually buy things for a penny, a nickel, or a dime; there was even a chain store, Franklin's Five and Dime, in which all items sold either a nickel or a dime - today we have Dollar General! Can a penny, nickel, or dime buy ANYTHING today? I don't think so unless it is to purchase a special promotion of some sort. Our economy would have to change dramatically before the need for a half-penny surfaces!
    Reply | Permalink  
  • Comment hidden due to member score or comment score too low. View Comment
  • Posted by Robbie53024 9 years, 3 months ago in reply to this comment.
    True. But at some point, you need to develop smaller fractions of currency, as the value of one unit far exceeds the purchase price of minor goods. Theoretically, a dollar could purchase a car, but what unit would you use to purchase a loaf of bread? You'd need some sub-fraction of a penny. Doesn't that cause similar problems?
    Reply | Permalink  
  • Posted by 9 years, 3 months ago in reply to this comment.
    A stock split is an expensive way to provide two 5-dollar bills for each 10 dollar bill. 100 shares at $20 each = 200 shares at $10 each. The value is the same but resources were expended to change from one condition to another condition that are both equal! Buffett has it correct; avoid stock splits and continue to invest the money that would have gone to funding one. There is no free lunch in the real economic world; everything has a cost and someone has to bear it.
    Reply | Permalink  
  • Comment hidden due to member score or comment score too low. View Comment
  • Posted by Robbie53024 9 years, 3 months ago in reply to this comment.
    Kind of like the difference between a regular stock that splits when the price gets to a level that "seems" too high, compared to Berkshire Hathaway, that never splits. It's mostly window dressing, isn't it? More money than economic growth causes degradation to the value of the currency, certainly.
    Reply | Permalink  
  • Posted by 9 years, 3 months ago in reply to this comment.
    Thanks for pointing out my error. I stand corrected; one cannot prove a definition because a definition is a given, as you correctly state. But I stand by the first part of the sentence; The only logical definition of inflation is an increase in the supply of money. It is logical because it accurately describes the current situation. The Keynesian definition of a general rise in the price level adds to the confusion that exists today; we know that government has inflated the money supply, but prices haven't risen enough to be in sync. Why not? Because the USD is still being used as the world's reserve currency. This lulls some into a false sense of security; as if we can freely inflate without consequences and a belief that those world-currency dollars will NEVER come back to wreak havoc on our economy.
    Reply | Permalink  
  • Posted by 9 years, 3 months ago in reply to this comment.
    Are you implying the money supply NEEDS to be flexible? Does a greater amount of goods and services REQUIRE more money in circulation? Monetarists think so; but Austrians think that situation (economic growth with a stable monetary base) would simply result in stronger money and lower prices.
    Reply | Permalink  
  • Comment hidden due to member score or comment score too low. View Comment
  • Posted by Robbie53024 9 years, 3 months ago in reply to this comment.
    No offense. I think that's what I was saying - or at least that was what I intended to say ;-)
    Reply | Permalink  
  • Posted by $ CBJ 9 years, 3 months ago in reply to this comment.
    My original statement was:

    “The true rate of inflation is also being masked by rapid improvements in technology, which would significantly reduce the price of just about everything if the government were not always adding to the money supply.” Nothing in that sentence is refuted by your post, and nothing in that sentence necessitates a “belief that inflation is a general rise in price levels.”

    You said, “The only logical, and provable definition of inflation is an increase in the money supply.” How do you prove a definition? Definitions must precede proofs, as defined terms are necessary components of logical proofs. I have never seen a logical proof of the form "the definition of this word is so-and-so because . . . "
    Reply | Permalink  
  • Posted by CircuitGuy 9 years, 3 months ago in reply to this comment.
    "The only logical, and provable definition of inflation is an increase in the money supply."
    This is true only if the number of goods/services in the economy remains constant.

    "It worked really well for a few hundred years until Keynes published his book of lies."
    The number of goods/services in an agricultural economy is more constant. An industrial economy creates more goods and services all the time. An information economy accelerates this further.
    Reply | Permalink  
  • Posted by CircuitGuy 9 years, 3 months ago in reply to this comment.
    "standard of living being eroded as a result of inflation."
    This is the argument that inflation only affects good/services you buy but not those you sell.
    Reply | Permalink  
  • Posted by CircuitGuy 9 years, 3 months ago in reply to this comment.
    "rapid improvements in technology, which would significantly reduce the price of just about everything"
    [bad joke]Just about everything, but not actually everything
    Reply | Permalink  
  • Posted by 9 years, 3 months ago in reply to this comment.
    The CAUSE of inflation is an increase in the money supply.
    The EFFECT of inflation is that more of those dollars that are now worth less are required to purchase the same goods that could have been bought for less in the past.
    There is a HUGH distinction in viewing the price are rising as the effect compared to the real effect that the dollar is losing value.
    It may appear to be a matter of semantics but it boils down to are we people or sheeple? I like to call liars and thieves by their proper terms when they lie to me and steal from me. I am not inclined to let them slide by saying, with a shrug of their shoulders; "It's not fault; inflation is the culprit". I hope I do not offend you with my insistence on using words correctly; I am strongly anti-PC and I teach for a living. PC speech is bridge to controlling the thoughts (and minds) of sheeple.
    Reply | Permalink  
  • Comment hidden due to member score or comment score too low. View Comment
  • Posted by Robbie53024 9 years, 3 months ago in reply to this comment.
    That's why I called it personal inflation. It is that which I face personally. If my income keeps pace with my costs, then it is merely a change in transaction fees. If I get less goods this year than I did last year, and my incoming is the same, that is inflationary to me.

    I understand the Austrian view on the cause of inflation (and I agree with it). But that is the cause, not the effect. The effect of inflation is either benign (income grows at the same or faster pace as price increases - which comes about via improvements in efficiency) or it is negative (prices increase due to more money, but that money isn't distributed throughout the system but rather is "stuck"). There is no positive effect of inflation.
    Reply | Permalink  
  • Posted by 9 years, 3 months ago in reply to this comment.
    Robbie, I believe you are confusing cost of living increases with inflation; they are not the same. It is scary to see our standard of living being eroded as a result of inflation. I am retired, but work part time to avoid that scenario. When I am unable to work, I will feel the pinch that is felt by all fixed-income retirees; ouch!
    Reply | Permalink  
  • Posted by 9 years, 3 months ago in reply to this comment.
    That is why I will have no sympathy for federal workers when their jobs disappear due to an economic collapse or a highly improbable "rampant infection" of economic sense in DC.
    The fairly tale of the Golden Goose comes to mind.
    Riddle: How many private sector workers are required to support ONE public sector worker?
    Answer: None; the public sector workers are being paid with "magic money" that is created as needed in Washington, DC.
    Reply | Permalink  
  • Posted by 9 years, 3 months ago in reply to this comment.
    The two definitions have distinction, mainly because there is no such thing as "a general price level". Inflation does not cause PRICES to rise; inflation cause the VALUE of our currency to diminish; thereby requiring more of those dollars to buy goods. I agree that rollovers do not increase the money supply, they also do not decrease it as a loan is simultaneously paid and reissued. The only thing we seem to disagree on is your support for a Keynesian concept; you deny believing that inflation is defined by price changes and at the same time cling to that belief that inflation is a general rise in price levels. The only logical, and provable definition of inflation is an increase in the money supply. It worked really well for a few hundred years until Keynes published his book of lies. The Keynesian definition allowed lawmakers to play the Wizard of Oz and declare, "Pay not attention to that man behind the curtain", while they continued to increase the money supply and blame the poor economic conditions on inflation; which they promise to tame and keep under control for our benefit!
    Reply | Permalink  
  • Posted by Rocky_Road 9 years, 3 months ago in reply to this comment.
    "A December 2014 Cato Institute report on federal and private sector worker pay finds, “In 2013 federal civilian workers had an average wage of $81,076, according to data from the U.S. Bureau of Economic Analysis. By comparison, the average wage of the nation’s 107 million private-sector workers was $55,424.”

    When benefits like health care and pensions are included, "federal worker compensation averaged $115,524, or 74 percent more than the private-sector average of $66,357."

    http://cnsnews.com/news/article/eric-sch...
    Reply | Permalink  
  • Comment hidden due to member score or comment score too low. View Comment
  • Posted by Robbie53024 9 years, 3 months ago in reply to this comment.
    If you use any type of money management or budgeting tool (I used to use MS Money, and now am forced to use Quicken), you can get your own personal inflation by looking at your expenditures for things like food, clothing, gas, etc.
    Reply | Permalink  
  • Posted by $ CBJ 9 years, 3 months ago in reply to this comment.
    No, I’m not a Keynesian. My statement above holds true regardless of which definition of inflation is used. And loan rollovers do not increase the money supply; the amount of the loan stays the same, and the net effect is no different than if the loan is repaid (decreasing the money supply) and then immediately borrowed again (increasing the money supply by a like amount).
    Reply | Permalink  
  • Posted by 9 years, 3 months ago in reply to this comment.
    So CBJ, you believe that inflation is a general rise in the price levels. Are you a Keynesian? Technological advances will improve productive efficiency and tend to lower production costs which should lead to lower prices. Keynesians refer to this as deflation and somehow believe it is one of the two deadly sins for an economy, the other one is hoarding; most of us qualify as Keynesian hoarders by saving and NOT spending every dollar we have for consumer goods. Austrians believe inflation is an increase in the money supply regardless of the source; it could be government printing new money, counterfeiters printing new money, or banks creating new money when they make loans. In fairness to banks, money is destroyed and the money supply is reduced when loans are repaid. Too many people and business do not repay their loans, they simply roll it over. Individuals with credit card balances that are not reset to zero each month are also rolling over a loan. Both of these roll overs tend to increase the money supply.
    Reply | Permalink  
  • Posted by $ CBJ 9 years, 3 months ago in reply to this comment.
    The true rate of inflation is also being masked by rapid improvements in technology, which would significantly reduce the price of just about everything if the government were not always adding to the money supply.
    Reply | Permalink  

  • Comment hidden. Undo