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April 30, 2021 | The Democrats Are Trying to Buy Votes

Is an American author of books and articles on economic and financial subjects. He is the founder and president of Agora Publishing, and author of the daily financial column, Diary of a Rogue Economist.

All governments use force and all assert that they are founded on reason. In fact, whether universal suffrage prevails or not, it is always an oligarchy that governs, finding ways to give to “the will of the people” that expression which the few desire.

– Italian economist Vilfredo Pareto

YOUGHAL, IRELAND – “We the People are the government,” said Joe Biden in this week’s historic address to Congress.

No truth alarms went off. But the big lie – that government = the people – is central to the whole flimflam of spending proposals unveiled in Biden’s discourse.

Just to keep it simple: Some people govern… Others are governed. Some people owe… Some are owed. Some pay… Others are paid.

Here at the Diary headquarters, we take our verbs seriously. We govern no one but ourselves.

But the Biden Administration – with the support and complicity of the bureaucracy, academia, a majority in Congress, the media, and Big Business – governs 330 million people.

And with its armies and sanctions, it attempts to boss around hundreds of millions more.

Elite Scam

It was the great early-twentieth-century Italian economist, Vilfredo Pareto, who popularized the idea of an “elite.” It doesn’t matter what you call your government, he explained, there are always some who control it… and others who are controlled by it.

Pareto is famous for the “80/20 principle” derived from his observation. Eighty percent of the work is done by 20% of the population. Eighty percent of the wealth is owned by 20% of the population. Etc.

But the 20% are not always the same people. The barrier between the elite and everyone else is not like a prison wall. It is more like a prison gate. There’s always a trickle of people coming and going under the watchful eye of the guards.

And occasionally – in a revolution, war, or social collapse – the prison walls come down, as they did at the Bastille in 1789.

But the idea that “the people” govern is a fraud. And it is just one of many scams that help the real governors – the elite – remain in power.

Today, we explore another one.

Back to Basics

This week, we saw how the Left Wing of the Deep State aims to get an almost permanent grip on the White House. It is going back to age-old basics. To bribery, that is.

Again, keeping it simple… Rich people have always used their wealth to get power. And powerful people use their power to get more wealth.

(“The richest man in Rome,” Marcus Licinius Crassus, is often said to have bought his way into the triumvirate with Caesar and Pompey, for example.

But he was also a competent military man, the hero of the Battle of the Colline Gate and of the Third Servile War. The latter was the war with Spartacus, in which Crassus raised an army at his own expense.

After he put down the slave uprising, he crucified his 6,000 prisoners, leaving their rotting bodies along the Appian Way as a warning to others.)

Now in control of the full faith and credit of the U.S. government, Team Biden aims to use it to get both more wealth and more power.

$4 Trillion Vote-Buying Scheme

The Democrats are already the party of the elite and “minorities.” But they need to recover at least some of their support among the working classes.

Free college, free child care, more paid leave – 12 weeks! – more stimmy, along with new make-work jobs in “infrastructure”…

The whole package will cost about $4.1 trillion ($2.3 trillion for the infrastructure plan and $1.8 trillion for the families plan)… but it might be enough to give the Democrats a lock on the White House for decades.

Tax the Rich

But how to pay for all this?

Joe Biden proposes not only to give the masses more stuff, but to give them the pleasure of seeing “the rich” get squeezed. From CNBC:

Taxes may soon be going up for the wealthy.

President Joe Biden aims to fund expanded education, child care, paid leave and other reforms by collecting more tax revenue from Americans who make more than $400,000 a year.

He would do so by raising the top income and capital gains tax rates, changing the taxation of wealthy estates, closing so-called tax loopholes and focusing audits of the rich to prevent tax evasion.

And yes, the plan appeals to the masses. Here’s CNN:

About half of Americans who watched President Joe Biden’s address to Congress had a very positive reaction to the speech, and 71% said they walked away feeling more optimistic about the country’s direction, according to a CNN Poll conducted by SSRS.

But the Democrats are now the party of the rich. Are they going to allow the taxman to take a bite out of their own fat derrières?

We have our doubts.

Tax increases will get no support from Republicans. And many Democrats are nervous about them, too. Already, they are reassuring their rich donors. The Washington Examiner:

The truth, in this case, is that the Democratic Party is currently “pushing a tax cut for the wealthy” by trying to get rid of the cap on state and local tax payment deductions, also known as SALT. […]

The only people who would benefit from getting rid of the SALT deduction cap, which is currently set at $10,000 per family, are the wealthy. The average taxpayers who accept the standard deductions and pay less than $10,000 in state and local taxes would not be affected at all.

Elite Rule

What will happen? Most likely, taxes will go up. But while there will be big talk, few will want to walk the walk and really squeeze the rich with substantially higher taxes.

And then, when the grandstanding is over… and the committees and tax policy wonks get to work…

…on subsection 21(a) of Chapter 1031… Part D, as amended by Temporary Federal Statute # 105935, further updated by Tax Court ruling on January 21, Year of Our Lord, 2006, describing how amortization schedules for fully funded legacy accounts, created on or before the 32nd of February by the light of a full moon… are to be discounted…

…the rich will still be in the 20% who rule… and the 80% will still be ruled.

After all, it is the elite who write the laws. It is they who interpret and enforce the laws. And they know which side their bread is buttered on.

So, Dear Reader, there’s no need to sob for the rich this weekend. They’ll be okay.

But if the rich don’t pay, who will? Stay tuned…




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April 30th, 2021

Posted In: Bill Bonner's Diary

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