Internal Migration – The Cycle or City States | Armstrong Economics

There is an interesting book entitled The Chinese Exodus. This work explores the sociological and theological discussion going on concerning China’s internal migration since the marketization reform in 1978. While the book documents the social and political processes impacting the experiences of internal migrants from the countryside to the city within China, the attempt is to reconstruct the political, economic, social and spiritual dimensions of this urban underclass in China who made up the economic backbone of the Asian superpower. History repeats BECAUSE human nature never changes. Humans will ALWAYS act in the same manner to the same set of circumstances no matter what culture or century. Yet what is more interesting to me is the pattern. As taxes are low and the economy booms in the city, the youth are attracted to the city and leave their parents in the farms or suburbs and head off to make their fortune in the world. Rome became the largest city in history reaching a population in excess of 1 million by its peak in 180AD. It had crossed that 1 million mark in 133AD during the reign of Hadrian (117-138AD). With the death of Marcus Aurelius in 180AD, the decline and fall began. Gradually the population declined until it fell to just 15,000 during the middle ages. The city of London, England reached the 1 million mark in 1810 during the reign of George III (1760-1820) and New York City finally reached that level in 1875. Our understanding of the economy is incredibly important, yet it is completely ignored by those in power. Nothing is possible without a properly functioning economy for the very existence of civilization depends entirely upon the function of the economy. People come together from the suburbs to form great societies in a trend of urbanization only when it is to the advantage. Historically, when the government loses sight of their purpose and sees itself as the embodiment of sovereignty instead of the people, then it begins to abuse the people with regulation and taxation. Once that takes place, the trend of coming together is reversed. Edward Gibbon wrote in his Decline and Fall of the Roman Empire about the son of Marcus Aurelius and how he set in motion the collapse of Rome. He wrote of Commodus (177-192AD): “distinction of every kind soon became criminal. The possession of wealth stimulated the diligence of the informers; rigid virtue implied a tacit censure of the irregularities of Commodus; important services implied a dangerous superiority of merit; and the friendship of the father always insured the aversion of the son. Suspicion was equivalent to proof; trial to condemnation. The execution of a considerable senator was attended with the death of all who might lament or revenge his fate; and when Commodus had once tasted human blood, he became incapable of pity or remorse” (Book 1, Chapter 4). When the people begin to flee the cities because of corruption and taxation, the Romans had a word for it “suburbium” meaning the people began fleeing from the cities to what we call today suburbia. The population of Rome itself just collapsed. This is how empires die. The cost of government always rises to oppress the private sector since the public sector becomes addicted to revenue. The people either leave or revolt in their struggle to cope with the persistent unpredictable demands of the government that historically NEVER lives within its means. In the earliest days of the Republic, Rome’s taxes were quite modest, and were not direct, but were a property tax or a wealth tax on all forms of property, including land, houses, slaves, animals, money and personal effects. The basic rate was just 1% and sometimes it would occasionally rise to 3%. This was to fund the pay for the army during the war. The tax would often be rebated to the people out of the spoils of war. It was levied directly upon individuals, which required the government to conduct a census. The flat tax of Augustus (27BC-14AD) created the biggest economic boom in Roman history. Augustus once said, “I found Rome a city of bricks and left it a city of marble.” Indeed, Augustus commissioned several large marble structures, some of which took 40 years to complete. There was evidence that massive marble blocks were constantly being moved through the city, causing congestion in the streets. Marble-paved public spaces began to appear where marble was previously reserved for sacred temples and houses of the elite. The flat tax system really did create the economic boom as people turned to peace and business – Pax Romano. Rome became prosperous because it began with the conquest model whereby it consumed the wealth of the nations it conquered. Once Rome had expanded and there was no longer anything worthwhile to bring home wealth, then the cost of maintaining its borders and security became unsustainable. The pension system it had created which we still use in government to this day where 20 years of service gets you a pension, acted like cancer which devoured the Empire from within. As this weakened its defenses, then the barbarians were able to invade. Consequently, the fiscal mismanagement of Rome and its economic model of conquest failed. This led the government to turn inward against its own people that resulted in not merely the collapse of the Rule of Law, but that opened the door ‘for wider demands for taxation and the confiscation of property under the pretense of some offense. The over taxation of the people caused the suburbanization of Roman culture as they fled the cities. As the government tried to stretch its grasp of taxation, they were, in fact, planting to the seed of its own destruction. Taxation is not a divine right of government. It is to be limited to the voluntary contribution from the people to share the benefits of communal living. Once taxation is seen as a divine right of government this will lead to the diminished rights of the people and then the rise of economic tyranny. Historically, this has been the difference between movable and immovable assets, such as real estate. Collectibles, stocks, and precious metals are in the moveable category. Of course, this is what governments are now attempting to seize. If we look at the fall of Rome, the first asset class to decline was real estate, as you cannot take it with you when you leave town. Thus, the population of Rome collapsed from 1 million to 15,000 by the Middle Ages. People had no choice and just walked away, unable to pay the taxes demanded. Taxes are the great destroyer. You are an economic slave if you simply cannot retire without having to pay taxes. Taxes reduce economic growth and lower productivity for they are no different, economically speaking, from some gangster demanding “protection” money to operate a business. Rome prospered as long as it had a minimal flat tax. The Democrats preach they want to tax the rich, but what they actually do is create higher tax rates with all sorts of deductions they sell to lobbyists for big campaign donations. A flat tax is far more economically more of an incentive and it will be closer to the indirect taxation that the Founding Fathers incorporated into the Constitution until the Marxists alter everything. The cycle is very clear. First, we have the attraction of the city with low taxes and regulation where people come together to create economic booms. Governments will then become greedy with taxes and over-regulation. This will then lead to the downside of the Bell Curve and result in the death of the empire, nation, or city-state. It is always the same pattern no matter what century or culture.
— Read on www.armstrongeconomics.com/armstrongeconomics101/understanding-cycles/internal-migration-the-cycle-or-city-states/

In a nutshell. Excellent history lesson here.

Governments Are Sucking in Assets like a Black Hole | Armstrong Economics

QUESTION: Hello Sir, I am French and have been reading you for many years (I already read you while you published papers while you were very unfairly imprisoned). I signed up for Socrates on 6th January and must thank you warmly for opening my eyes to the real state of the global economy and its cycles. Unfortunately, I live in France and taxes weigh heavily on us. Unemployment is preponderant. I do not think our President E.Macron knows exactly what he is doing by reforming our economy in his own way… My question please: You explained that the next crisis would be a debt crisis and that banks and the economy would be severely heckled. So, I really think about quickly withdrawing my assets (about 50,000 euros) from the bank and I wonder if converting them into foreign currency and keeping them in a safe in my house would not be a good idea … If the euro is devalued or disappears as I fear, would not it be smart to convert them as soon as possible into Swiss francs? Indeed, their economy seems stable and it is really a country apart, bordering on France. (Of course, I also thought about owning dollars and yen (although the yen inspires me less confidence) Thanking you for everything you do for us, Sincerely, F.C ANSWER: Dollars are probably the best because the USA does not cancel currency as they do in Europe. Dollars from 1860s are still legal tender today. You might want to open an account in the USA, which ironically is not part of the tax reporting schemes. Therefore, you can have an account in the USA with no problem for probably the next 3 years. Governments are becoming like a black hole. They are sucking up all the money to sustain their existence. Keeping cash at home in a safe is good. Keep in mind that you will never be able to travel with even $10,000. That is why I say opening an account may be best. The cash problem is still unfolding as the governments try to eliminate paper money. I doubt Trump would allow that to happen in the States. But once Trump is gone, it really does not matter if the next president is a career politician from either party. They will look at eliminating cash to increase taxation. That is when it will be keen to have tangible assets (equity mostly). Precious metals may have the same problem as cash insofar as if you attempt to travel with it. That is the whole problem going forward. They are closing in on the movability of money.
— Read on www.armstrongeconomics.com/world-news/taxes/governments-are-sucking-in-assets-like-a-black-hole/

Margaret Thatcher on the True Duty of Government | Armstrong Economics

I have been asked many times why I was friends with Margaret Thatcher. I’ve also been asked if I have known any other politicians since who I was proud to call a friend. This video explains a lot as to why we were friends. We shared a view that really no longer exists in government be it among the Republicans in the USA or the Conservatives in the UK. I have not met any politicians ever since who truly understands the role of government and its impact upon the people. I suppose I am not suited for this time period. I cannot change the course of events for the whole. All I can do is watch the consequences of our own stupidity. I am proud to have met Maggie. She had a brilliant mind. I named that report “It’s Just Time” after her remark when we were discussing politics. She predicted Tony Blair would win in Britain long before he even appeared. When I asked her why, she replied, “It’s just time,” and that the Conservatives had been in power too long. Maggie addressed our 1996 World Economic Conference. For a head of state to come to our WEC and publicly address the audience was an endorsement of the fact that Maggie herself understood cycles existed.
— Read on www.armstrongeconomics.com/armstrongeconomics101/understanding-cycles/margaret-thatcher-on-the-true-duty-of-government/

Truer words were never spoken on this topic.

Direct Taxation Reduces Economic Growth | Armstrong Economics

QUESTION: Happy New Year; Am I correct in noticing a global connection in the money supply, M1 & M2? You directed us to this long ago. The global banks have found the turning point so this affects everything no? Even the US consumer is sliding to the cautious side of spending – fewer mortgages, cars, etc. The coffee shops are now worried about a market melt-down. Martin, you’re starting to make my brain hurt. But it’s a good hurt. Thank you; RH ANSWER: Yes, but there is another influence — rising taxes. The economy declines when taxes rise for the simple reason that when politicians raise taxes, they are reducing the net disposable income. Simply put, if I give you $100 and then demand you give $90 back, but the year before I gave you $80, you can point to the fact that your income rose. However, you can only spend what you have left in your pocket. Women may have won the independence they were protesting for in the 1960s, but now they have lost the right to stay home and raise the kids. What use to take one income to support a family BEFORE the payroll tax now requires two. Once the government began income taxes (DIRECT TAXATION) economic growth rates gradually declined. We have been in a protracted decline since World War II. Tax revenue in France is 46% of GDP as people leave to invest elsewhere.
— Read on www.armstrongeconomics.com/world-news/taxes/direct-taxation-reduces-economic-growth/

Indeed it does by pulling wealth out of the private sector and running it through the government black hole.

Norway to Track Cars GPS to Tax Per KM (Mile) – Your Govt is Next | Armstrong Economics

COMMENT: Hi, The Norwegian Data Protection Authority is now arguing that GPS based taxation, for the amount of kilometers driven by car, can be done within 5-6 years! Norwegians trust the government way too much, because they believe that this system will eliminate the need for road tax, fuel tax, toll roads and reduce the cost of car insurance. No way will the tax be reduced! GPS based taxation is a governments dream! Who is to stop them from issuing parking fees or speeding tickets? Norway also has a high number of electric cars, and an electric car is sold without any tax or VAT, has reduced road tax, free of reduced toll road passage and does not contribute to fuel taxation. With GPS active, the government can finally collect taxes from electric cars without the messy environmentalists meddling. In the worst case, a corrupt government can use the system against its people to create implications, push the burden of proof over to a troublesome citizen, in court. Norway may be a great country regards to statistics, but will be some kind of self-imposed totalitarianism if this nonsense continues. Stay away from Norway if you cherish your hard-earned cash! And as always, thank you, Mr. Armstrong, for your service and enlightenment. AA Ex-social democrat (see source #1) REPLY: The political-economic system post-World War II has been a socialist driven agenda. “Vote for me and I will give you other people’s money.” This system cannot be sustained when those in power have promised themselves pensions. As government workers retire, they need to be replaced. The growth rate of government has started to explode. Instead of looking at the problem objectively, they are simply looking from paycheck to paycheck on how to meet the next payroll. This leads them to become more and more aggressive in hunting things to tax. Any rational person would look at this economic model and see it leads to massive civil unrest. They pretend that socialism is to help people, but they come first. As this gets far worse, nothing trickles down to the people. Even former President Grover Cleveland, who was a Democrat, saw the insanity his party unleashed with the Silver Democrats. Taxing the rich does not present a solution. They will simply leave. The rich, through their investments, create jobs. This proposal to use GPS to track movements for taxes will allow the government to end tolls, and thus reduce their own workforce and pension liabilities. This has been the very idea behind E-Z Pass in the USA where you drive through tolls and are automatically charged.
— Read on www.armstrongeconomics.com/world-news/taxes/norway-to-track-your-car-with-gps-to-tax-you-per-km-mile-you-drive-your-govt-is-next/

The hunt for taxes

Paul Krugman’s Conversion to a 70-Percent Income Tax | Mises Wire

Paul Krugman was the featured speaker at a special session of the 2004 Southern Economic Association meetings, held the weekend before Thanksgiving, and a number of economists listened intently as the most famous man at the conference spoke religiously about the glories of Keynesian economics.
— Read on mises.org/wire/paul-krugmans-conversion-70-percent-income-tax-0

Drinking the Cortez Commie Cocktail 🍹

New Governor of California Want to Tax Water | Armstrong Economics

The total mismanagement and incompetence of government is just beyond description. The new California Governor Gavin Newsom presented his first state budget during a news conference, last week on January 10th, 2019. While he won bashing Trump over the illegal aliens because he care so much for families, he could care less about how much of a burden the state imposes upon families. His new proposal to tax drinking water will impact everyone – not the rich they always point to. He is claiming to tax water to help the poor afford water. His the newly-released budge calls for the creation of a “safe and affordable drinking water fund” that would “enable the State Water Resources Control Board to assist communities, particularly disadvantaged communities, in paying for the short-term and long-term costs of obtaining access to safe and affordable drinking water.” It’s like labeling the most abusive taking of our rights the “Patriot Act” whenever you need to hide the real abuse. He is calling the tax as suddenly necessary to ensure “safe” water. They paid for a study to show that 6 million Californians rely on water providers that violated state standards at some point in the last six years. The area impacted was Southern San Joaquin Valley and the Mojave Desert. Hey, that’s a great excuse to tax the entire state. Sources behind the curtain have states deeply concerned because they can see we are headed into a recession. This leg down should be harder moving into 2020. The whispers behind the curtain fear that revenues will decline sharply as costs will rise further with pensions for state employees. Nobody is yet willing to step up and say this system is collapsing and it is unsustainable long-term. They are only interested in raising taxes just to get by for the year. Newsom is concerned that revenue could drop $25 billion in 2019-2020. They are simply looking for other excuses to raise taxes. Ironically, California is the fourth-largest oil producing state. Before he left office, former Governor Jerry Brown signed a mandate that the state obtain all of its electricity from zero-carbon sources by 2045. That in itself was a very, very big deal. However, Brown also issued an executive order calling for the entire California economy to become carbon-neutral by 2045. The sheer cost of that where California is already the highest taxed state will most likely push its taxes perhaps even beyond France. This will become a major test for those cheering to stop Climate Change. It was precisely the Global Warming taxes that began the French protests of the Yellow Vests. Those in government NEVER look at what they are doing to society. They believe they possess the Divine Right of Kings to do whatever they please without regard for the people.
— Read on www.armstrongeconomics.com/world-news/taxes/new-governor-of-california-want-to-tax-water/

The hunt for taxes intensifies as social programs are expanded to illegal immigrants.