The Hidden Tax Of This And That

Authored by Bruce Wilds via Advancing Time,

Life is full of hidden taxes. Governments, banks, and businesses all benefit from taking advantage of us by shifting costs and then nibbling away at us. This often occurs when we are distracted by a larger attack on us coming from another direction. All this should be considered part of a larger ruse, or ploy to mask how we are being weakened by a thousand cuts. Such schemes promote the idea these “little” penalties and taxes upon us are minor tolls that must be paid for society to function rather than a theft fostered upon us. 

Of course, this is becoming much easier as we move towards a cashless society where systems allow people to pay bills without even looking at them. In general, most people have come to accept a little pilfering here and there as normal. Fighting such incursions into our lives usually fails and many people deem the effort more trouble than it is worth.

No matter how much we rile at the failure of our institutions and governments, the biggest problem we face is things will most likely get far worse. Many of the trends that are developing indicate that society is having a very difficult time adjusting to the rapid rate of change taking place. This can be seen in the large number of people that are being left behind. 

While many people have been lifted out of poverty we have also witnessed a growing percentage of the population with both physical and mental ailments. These “disabilities.” often take the form of  things such as addiction, alcoholism, and eating disorders. The demographic picture unfolding across the world combined with huge government deficits does not bode well for future growth. When you mix these dysfunctional people into the demographic soup it becomes downright ugly. 

We should expect more and more of our resources to be funneled into this deep hole created by horrible policies that weaken rather than strengthen society. Obamacare failed to achieve its goals of lowering the cost of healthcare but it is now accepted as the law of the land. Open borders benefit the immigrants flowing into our country far more than the average citizen, but it is allowed. Big companies are given huge advantages over the small businesses lining Main Street and few people care, it is just another small “tax” on the way we live. What people don’t understand is that over time this has a drastic effect on the economy.

Too much of the world, too much of what we see, too much of what we are told is a lie and that is a fact. The small hidden taxes on this and that almost guarantee that further declines in both society and the financial system are likely. We are constantly bombarded with charts showing where things are going based on historical references but a question we must ask is just how relevant today’s comparisons are with prior economic cycles. Changes in how the economy is structured do not take place overnight. This does not mean it will be worse, just different. 

Real growth and productivity are generally a direct result of private enterprise being able to move forward without barriers from the government constantly impeding progress. Increased productivity is a huge factor contributing to real growth. Sadly, it is becoming apparent that qualitative easing failed to bring much growth. Easy money was an experiment that did not fulfill its promise. The side effects of unlimited and false liquidity have proven toxic. They include bigger government, more regulation, less productivity, and malinvestment of capital.

The term trueflation merits a great deal more attention than it gets, how the government arrives at these numbers matter. Inflation is viewed on a year-over-year basis, which means as the higher months drop away the numbers tend to give the impression we have it on the run. This should not be seen as prices now going back to “normal” but rather that they are not moving up as fast. Unfortunately, this method of computing inflation creates a “base effect” on inflation rates setting them up for another wave higher. Inflation is not gone and this means long-term investment in government bonds remains problematic.

It is important to note that a fundamental change has occurred in the economy related to productivity. The hidden tax resulting from the acceptance of continued incompetence is no longer an exception, it is the rule. AI and all the newfangled improvements be damned, many things no-longer work and productivity is falling. Government regulation is monkey-hammering businesses, especially small businesses. High wages kill small businesses that can’t afford to automate. Many small businesses are being forced to cut hours and staffing until they simply go out of existence. If you want you can declare this the plan of a government seeking to control everything and everyone.