International Man: Elizabeth Warren proposed an annual tax on a person’s wealth. What do you make of this?
Doug Casey: When you tax something, you discourage it. If Elizabeth Warren wants to tax people’s wealth, that’s going to encourage people to hide their wealth. And discourage them from getting wealthy. So, it’s poison from an economic point of view.
But it’s even worse from an ethical or spiritual point of view. It sends a signal that wealth is evil. That it has to be kept under control and limited. That a political priesthood should determine how much is enough and who should get it. It’s especially perverse in that people like Warren act like they have the moral high ground. When in fact, they’re in the moral gutter.
She says she’s pushing it to keep people from getting “too wealthy,” which is actually insane. It’s exactly the opposite of what we should want. We want to encourage everybody to become very wealthy so that everybody’s a capitalist. Worse, the proceeds of a wealth tax go to the state—the worst place it can go. It will increase the size of government, and the capital will be dissipated, at best. Perhaps it will be redistributed to a well-connected crony capitalist or used to further corrupt the poor with handouts. Bad news all around.
The hatred of the rich is, however, somewhat understandable. Why? Because so many of them became incredibly wealthy by becoming cronies and gaming the political system. Most of their money was gained through theft, not production. The way to prevent that is to get the state out of the economy. Not make the state and its cronies bigger and stronger by directing more tax revenues to it.
But there are other consequences of a wealth tax.
Every American is going to have to file a balance sheet with the government, not just an income statement the way we currently do for the IRS. They’ll know, under penalty of perjury, not just what we earn, but what we have.
A wealth tax is extremely anti-freedom. Plus, it will require the hiring of thousands more IRS agents, just the opposite of what we want to do. We want to abolish the IRS, not make it larger.
A wealth tax is a completely insane idea, from absolutely every point of view. It has no positives.
International Man: Initially, the government would hit only the rich with the wealth tax. But that’s precisely how proponents sold the federal income tax to the American people, and look at the monstrosity it has grown into today. Do you think the same thing could happen if someone like Warren institutes a wealth tax?
Doug Casey: Unquestionably. The federal income tax started out in 1913, at 1% on net personal incomes above $3,000 (about $50,000 in today’s dollars) and 7% on incomes above $500,000 (about $8 million today).
International Man: Cory Booker wants reparations for descendants of slavery. What are your thoughts on this?
Doug Casey: Another completely insane idea. It’s guaranteed to create much more antagonism between the races—where just by virtue of being black, you receive lots of money from white people. Even though no American blacks have ever been slaves.
Nor their parents. In fact, no black person in the country today has anything closer than a great-great-grandparent who was a slave. The idea is criminally insane. It’s all about theft based on race. So it’ll only create more antagonism between whites and blacks. In addition to opening up questions like, “What percentage black do you have to be?” 100%? 50%? A quarter? An eighth?
Would you lie like Elizabeth Warren to capture a benefit based on your possible racial background? This opens up a Pandora’s box filled with race hatred, corruption, and millions of lawsuits
Entirely apart from that—although it’s perverse—blacks in the United States should be happy their ancestors were stolen from Africa. As bad as things were for slaves in this country, they would have been even worse off in Africa—where they would also have been slaves. Africa is full of de facto slavery even today, even though it was legally—cosmetically—abolished in 1982 in the last country to have it, Mauritania. And their descendants would have been much, much worse off. They would have had none of the myriad advantages of being in a Western country.
Actually, most of the blacks who were stolen from Africa went to Brazil and the Caribbean. I believe the number is about 80%. So does Booker mean that the Caribbean islands, which are today mostly black, and Brazil, which is over 50% black, should get reparations too?
He makes the argument that American prosperity was built on black slavery. This is historically not just false, but the opposite of the truth. Slavery discouraged industrialization of the South, keeping it a century behind the North in technology. The slaves were an actual detriment to development. There was no “surplus value” created to be distributed to anybody 150 years later.
Booker is a slick race hustler with a criminal mentality, from a wealthy family. He’s in the tradition of Jesse Jackson and Al Sharpton. It’s a sign of how degraded the US has become that he’s taken seriously in any way.
International Man: Andrew Yang wants to give every adult an unconditional $1,000 a month—in other words, a universal basic income. Yang calls this a “freedom dividend.” But the government is not a profit-seeking corporation, and it can’t pay a “dividend.” What is really going on here?
Doug Casey: A freedom dividend? A dividend can be paid to an investor only if capital is deployed in a way that it creates a profit. Who are the investors here? Where is the capital they saved to “invest”? Where is the profit the government makes to distribute? What does any of this have to do with “freedom”? It’s a goofy idea based on theft.
There’s two ways that money can be generated to give everybody $12,000 per year. Either steal it from people who actually produce it or have the Federal Reserve print it up and give it to everybody—in which case you’ll destroy the currency.
The fact is that when there’s any kind of an economic transaction, there has to be an exchange, you have to give something to get something. Where is the exchange here? It’s pure institutionalized theft.
Most of the people getting the $12,000 will simply stop working at their minimum wage jobs and just fritter it away. Many might use it for a down payment on a $50,000 pickup truck. Which might be smart, because next year the same truck might cost $70,000 due to all the extra money creation. It’s another criminally insane idea. Yang’s main qualification to be president is that he rides a skateboard reasonably well—better than Beto for sure.
International Man: Robert O’Rourke—who prefers to be called “Beto” to give himself a more Hispanic-sounding name—has openly embraced gun confiscation. What are the implications here?
Doug Casey: Once again, this is just more overt theft to increase social engineering. If you can take somebody’s gun away from them, why stop there? You should be able to take their car away from them too. Cars are much more deadly than guns.
It’s not just a question of the Second Amendment, either. The Constitution in general has been interpreted out of existence—except for meaningless administrative niceties like who gets to cast a tie-breaking vote in the Senate or the order of succession if the president dies. The Bill of Rights is basically a dead letter.
When talking about guns, however, it’s a mistake to reference the Constitution. It means nothing to the 96% of the world outside the US. And it is just a document, which can be—and probably will be—changed or abandoned entirely. The essential issue here about guns is that it differentiates a free man from a slave. Historically a free man has the right to be armed and defend himself. A slave does not.
Sam Colt made it possible for a 90-pound woman to be equal to a 200-pound man who was attacking her. Sam Colt did more to protect the rights of the weak than every legislature since Day One.
Gun control seems to be Beto O’Rourke’s signature proposal. But all of his other ideas are equally bad. Like every other presidential wannabe this year, he’s glib and thoughtless. And may actually be evil.
I hate to use that word, because it’s been so overused and degraded by Church Lady and tent-show preacher types. But it’s appropriate when talking about people like Beto and the others. It simply means purposefully destructive or morally insane.
The fact that evil is disguised or smiles sincerely or looks well intentioned or seems like a good idea at the time, doesn’t mean it isn’t evil. It’s mostly, as Hannah Arendt pointed out, banal. Like all these candidates. That said, I rarely use the word “evil” in referring to these people. Not because it isn’t appropriate, but because few Americans take the concept seriously anymore.
International Man: At one of the debates, the moderator asked the candidates if they would support the government providing medical care to illegal aliens. All of them supported the idea.
Bernie Sanders has advocated a “Medicare for all” plan and wants to cancel student loan debt.
Elizabeth Warren wants to give all Social Security recipients an extra $200 a month.
These are just a few examples of how the welfare state is about to skyrocket. What is your take on this?
Doug Casey: Yeah, Bernie—a roiling mass of antagonism, bitterness, hatred, and aggression. The best thing about him is his psychological transparency. Frankly, it’s unseemly for a 78-year-old to want to force other people to pay his medical bills.
Also, doctors today don’t even get to practice medicine. Most of their time is spent filling out forms and complying with regulations. Many doctors are leaving the practice because they simply don’t have time to practice medicine properly. And the risks and aggravations aren’t worth the reward—certainly when they likely have hundreds of thousands of dollars of student loans to pay off and can really start practicing only when they’re pushing 30.
If you’re an American and don’t have a company paying your insurance and you need a serious medical operation, a smart thing for you to do is to fly to Thailand or another medical tourism venue. Have the procedure done there at perhaps an 80 or 90% discount from what it costs in this country.
If we have Medicare or Medicaid for all, no matter where you came from or who you are or what you can pay, I would expect people from Thailand would be flying here to the United States. The idea is economically and medically impossible. But legally plausible.
Here’s an idea. Your body is your primary possession. But it’s like a car—try to keep it in good condition. If it breaks, you pay for it—it’s not up to the government or the taxpayer to fix it. The idea of free medical care—like free education, free housing, free food, and the rest of it—is both destructive and degrading. The fact these things are discussed as practical possibilities shows that the society as a whole is irresponsible and apparently no longer capable of thinking in economic, ethical, or philosophical terms.
It’s going to end badly.
International Man: Putting it all together, what does the state of American politics today say about society and the future of the country?
Doug Casey: These people, these political types, like to talk about America being an exceptional country. In fact, it once was exceptional. It really was different from every other country of the world. But now it’s philosophically and ethically identical to every other country in the world. Property rights are no longer taken seriously. The public doesn’t really believe in them anymore. Most of the country wants to have socialism.
We’re on the slippery slope and it augers very poorly.
The United States is only a generation or two behind Argentina, which was actually on par with the US in the early 20th century. But today Argentina is moving in the direction of Venezuela, which 30 years ago was the richest country in South America. Too bad. I like both the US and Argentina, but it’s sad to see Argentina leading the way.
International Man: What are the investment implications?
Doug Casey: It’s very hard to be an investor. At this point, you can only attempt to speculate, to stay ahead of what these people are doing. It’s becoming a zero-sum game.
The Democrats are basically setting the country up for a civil war between the people who have things and produce things and the people who don’t have things and don’t want to produce. Not only are the ideas they’re promoting stupid; they’re really dangerous.
Here’s a gratuitous prediction: Unless magic happens, Elizabeth Warren—Pocahontas—is likely your next president.
Editor’s Note: Misguided economic ideas are advancing rapidly in the US. In all likelihood, the public will vote itself more and more “free stuff” until it causes an economic crisis.
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