The Quality of the Lie
There was a time in my youth when my education in science and mathematics taught me to believe in a few absolute values. The most important of these were utter honesty and complete relevance. I might add that comprehensive considerations were necessary to assure within scientific endeavors, to the best of individual or group ability, that all the essential contributory information was identified and obtained to help form the most meaningful conclusions in any experiment. No candor equaled nothing reliable and thus no value. No depth equaled no substance and thus no value. No breadth equaled tunnel vision and thus little to no value. And the crown jewel was high intelligence, without which one couldnít even conceive a useful experiment.
I wasnít much of a candidate for appreciating political speeches, was I? Indeed, while I was still in high school I wrote a theme based on Vance Packardís book, "The Hidden Persuaders." It was about the psychology of advertising and how we ordinary people are manipulated into buying things via psychological tricks instead of rational decision processes, and it was published in the 1950ís! That such a thing could happen piqued my curiosity, for I was young and convinced of my total control of my mind.
Back in the 1950ís and earlier, advertising was relatively crude compared to today, due to the youth of the advertising and marketing fields. In retrospect, that is really ironic, for I have learned that to be sufficiently fact-based today requires constant vigilance against all forms of mind control used by media and advertising and our governments and our corporations. Little did I know how weird our lives would become as we approached the turn of the century and the society of deception had become a way of life in the USA. Today, it is the quality of the lie that counts.
My foundation curiosity about mind control in high school caused me to recall earlier periods in my life reading text from an encyclopedia published just prior to WWII. Slurs made against all common German citizens in the encyclopedia regarding their lack of human values and untrustworthiness were nothing but psychological warfare to evoke hatred and distrust of all Germans by all USA readers. Talk about using a truth-oriented fact-filled publication to cloak and to promote lies! I was appalled that our federal government was blatantly lying to the population even using the respected medium of the encyclopedia. But, of course, that was a well-intended isolated instance, right? Why, today we have political correctness. Uh, huh.
LIE NUMBER ONE: YOU CAN TRUST YOUR GOVERNMENT TO TELL YOU THE TRUTH.
TRUTH: NO ONE IN POWER HAS ANY RESPECT AT ALL FOR YOU OR YOUR OPINIONS UNTIL YOU COMMAND THAT RESPECT THROUGH FORCE. IF YOU WANT RESPECT, YOU HAVE TO TAKE WHAT YOU WANT WITH NO REGARD WHATSOEVER FOR THE OTHER PARTYíS "RIGHTS" OR POSITION OF PRIVILEGE. KISSING ASS IS THE DOMAIN OF THE WEAK AND THE STUPID.
One of the finest aspects of a scientific education is that scientists recognize the limits of their knowledge and tend to be humble about most any thing others less mentally disciplined or in less demanding fields might consider to be absolute, thorough, relevant knowledge. It is easily proven through time and especially through experience that apparent knowledge can be convenient to help get things done, but no knowledge or body of knowledge is necessarily absolute or complete. The more we learn the more likely that we have to discard pieces of what we believed to be true in the past, or at the least we confine past knowledge to isolated circumstances where it happens to be true.
A great example of that truth is found in the comparison of Newtonian physics to relativity physics, such that at velocities well below the speed of light Newtonian physics works pretty well to describe physical phenomena. As the speed of light is approached predictions from Newtonian physics fail utterly.
Thus it was with a scientific background I formed the basis for all things I believed or chose not to believe that I encountered in life. The scientific background became my value system for judging all that was around me, categorizing all things into the classifications of the true, the false and the unknown. One might speak with some confidence about that which could be demonstrated infallibly and everywhere as true, humbled by the likelihood that at some future time better knowledge would likely diminish the generality or applicability of something thought to be universally true. We are simply blind to that which we have yet to discover, so the truly intelligent admit their ignorance, while the remainder, with agendas, form dogma.
The failure of other major areas of human endeavor outside the sciences to have self-correcting mechanisms to fix flaws or admit ignorance made it totally obvious to me that little outside of science and scientifically based activities was worthy of more than passing interest or respect. But do understand that my use of the word science and activities based on solid research included many areas of human endeavor, like agriculture, industrial processes, various applied areas of engineering, medical services Ö in short, seriously fact-based essential and/or critically important human activities.
Nowhere, however, did I encounter a value system statement as to the fundamental purpose of approaching all things in life from a scientific perspective. Gaining knowledge purely for the sake of having knowledge, regardless of purity of method, was utterly sterile. The reason for that missing element was that science, per se, was not value driven except for utter honestly and thoroughness in the pursuit of knowledge. Thus, one might be a human or an alien and have the same fundamental belief in and value for scientific honesty, while having no value whatsoever for each other or especially the wellbeing of each other. This then caused me to look elsewhere for fundamental life purpose and the values of living within that purpose.
It didnít take much effort to understand the "Golden Rule" and itís areas of applicability and the areas of improper use/violation of rights. It didnít take much effort to recognize that fundamental value contained in the Golden Rule as the single greatest contribution of Jesus and all of Christianity. It doesnít matter if we entertain aliens among us, for that fundamental value applies to all sentient beings. Thus, if all I do in trying to have a good life for myself and for those I love considers fairly the needs and rights of others to do similarly, then I have a proper value basis. That basis is consistent with science in that it also gives real meaning for using knowledge gained from scientific endeavors to improve the human condition.
LIE NUMBER TWO: THE TRUTH OF THE LAST PARAGRAPH IS REFLECTED IN THE BEHAVIORS OF GOVERNMENTS AND WEALTHY PEOPLE DOWN THROUGH HISTORY, AS THE LEADERS WERE/ARE BASICALLY GOOD PEOPLE.
TRUTH: FAILURE OF THE CAPABLE TO LIVE BY THE GOLDEN RULE IS THE RULE THROUGHOUT HISTORY, AS PROVEN BY WARS. A PART OF CHRISTIANITY IS THE PRIMARY EXCEPTION AND AN ABERRATION FROM THE NORM. ABILITY TO USURP POWER, REGARDLESS OF SOURCE, IS THE PRIMARY DETERMINANT OF BEHAVIOR THROUGHOUT HISTORY, AND THAT IS WHY WE NEED A LEVEL INTELLECTUAL PLAYING FIELD AS A REALIZED BENEFIT OF GENETIC ENGINEERING.
The accompanying controlling value element also became obvious to me. Those humans and human activities that were considerate of gaining and applying better knowledge on behalf of a richer and fuller experience of life for all of us are to be valued in direct proportion to their contribution. Those humans and human activities that contribute little or nothing towards that goal are to be ignored or as necessary marginalized. Those humans and human activities that are anti-knowledge or which in any other way diminish any creative human endeavors are to be devalued and disempowered in proportion to their harmful or limiting effect on the present and future of humanity. That has very broad implications.
So it was that I wrote the book, Destiny, with the intent of encompassing our total human experience and forcing on it utter analytical honesty so that we might proceed towards a better future than what our history indicates to be the dismal facts of life. So it is that I am here at this moment, some eight years later, writing again, defining terms and conditions, and finding myself utterly appalled with our decline into another intellectual Dark Age in the USA. Our "leaders" in government, business and even some churches are wholly guilty of using the fruits of science selectively to enslave us, in the opposite of manifestation of the Golden Rule. The accompanying lying vastly exceeds any other acts by the powerful.
It is about that problem that this article was written. Actions need to be taken now to halt this power-mad disease of our species, locally and globally.
There is one particular environmental requirement beyond human intellect that is mandatory for scientific and thus human advancement. That requirement is a stable and generous environment within which our brightest physical and social scientists can work diligently to discover the knowledge we need to harness to advance our species. Governments must be utterly supportive of higher education and basic research with tax revenues collected from we common people without reflecting the irrational prejudice of special interest groups external to science. Rather obviously that means, for example, religion has no place at all in control of any decision-making process related to scientific study or scientific education. Religion has no place in government either as there is too much power in government to risk having irrational/dream-based control groups.
Clearly, our experience with the G. W. Bush administration and his Cabinet and his Congress has proven that irrational, lying individuals gained power within our federal government. This problem has become evident in various states as well with the foolish and transparent creationism/"intelligent design" issue. Soon I expect we will see the Supreme Court, with new "arch conservative" members, re-debate Roe vs. Wade, and likely make abortion illegal, which is unbelievably stupid as it ignores the only real societal issue surrounding unwanted birth, which is avoiding conception. Note: No legislature or court has any right to pass any laws or make decisions about anything that curtails personal freedoms, which are those things that reflect choice by natural selection, provided the exercise of those freedoms does not summarily remove freedom of choice from others. The result of all government interference has been to produce and to maintain garbage genes and ignorant citizens. Liberals and conservatives alike have become totally worthless. One wastes the best on nothing, the other steals from the productive.
LIE NUMBER THREE: IT IS OUR DUTY TO RESPECT OUR ELECTED GOVERNMENT.
TRUTH: WHEN RESULTS PROVE WE MADE A POOR CHOICE THEN A RUNOFF ELECTION TO REPLACE LEADERS IS MANDATORY AT ANY AND ALL LEVELS OF GOVERNMENT, AT ANY TIME.
This allowance of religious prejudice to enter any branch of federal government, let alone all three, is a crushing indictment of a government that needs to be reformed in entirety, both by elections and by subsequent legislation to undo all manner of narrow-minded laws and control organizations and procedures. The occupants of the Supreme Court must be reviewed with the intent of eliminating prejudicial members.
LIE NUMBER FOUR: IT IS IMPORTANT FOR US TO FOLLOW THE FORM AND PROCEDURES OF GOVERNMENT DEFINED BY OUR ANCESTORS BECAUSE IT RESULTS IN THE BEST GOVERNMENT AND IT IS OUR LEGAL OBLIGATION.
TRUTH: OUR ANCESTORS COULD NOT POSSIBLY HAVE CONCEIVED OUR EVOLUTION, AND THE VALUE OF WHAT THEY PROVIDED IS VERY SMALL NOW BECAUSE OF MODERN MEANS TO CIRCUMVENT CHECKS AND BALANCES. THE IDEAL OF 1776 IS "TOAST" TODAY.
Clearly, our experience with our wealthy individuals and super wealthy corporations indicates that they have no loyalty whatsoever to ordinary USA citizens. They have usurped power Ö financial and governmental. They have destroyed our job infrastructure and are singularly responsible for evolving the USA and other parts of the world into a rigid two class system of haves and have nots. Corporations and wealthy private individuals need to be stripped of their power globally, which means their wealth must be divided into many competing smaller interests. Individual wealth limits must be imposed to stop all manner of abuse by those wealthy people to gain and keep wealth beyond their personal living needs. Excess wealth is simply used to have excess power, which is nothing but trouble. The proof is obvious. Just consider the worthlessness and dissembling of most of the media content you have on television today. The news isnít. You hear almost nothing about anything really important that influences our future. Instead, you get weather and accident news, and sensationalism about common crimes. Snore.
LIE NUMBER FIVE: WEALTHY PEOPLE AND CORPORATIONS HAVE EARNED THEIR WEALTH THROUGH HARD WORK, AND IT IS THEIR RIGHT TO ENJOY THE FRUITS OF THEIR LABORS.
TRUTH: THE DAYS OF THE INDEPENDENT FARMER OR PROSPECTOR OR COTTAGE INDUSTRY CRAFTSMAN TOILING AND BECOMING SUCCESSFUL ARE LONG OVER. THE ADVENT OF THE LARGE CORPORATION COMPLETELY DESTROYED THE TRUTH OF LIE NUMBER FIVE, FOR AN UNEVEN PLAYING FIELD RESULTED ONCE CORPORATIONS GOT A FOOTHOLD Ö ONE THAT COULD NOT REASONABLY BE FIXED, BUT HAS INSTEAD RESULTED IN MASSIVE SHIFTING OF WEALTH AND POWER FROM THE SUM OF THE INDIVIDUALS TO THE OLIGARCHY.
Thirty years ago USA citizens were provided planned obsolescence cars, televisions, etc. Maintenance and replacement costs were high and routine. You even needed a new muffler every three years. What an absurdity! It wasnít until the late 1970ís that the Japanese and the Germans finally started cleaning the clocks of the big three automobile manufacturers in the USA, General Motors®, Ford® and Chrysler®. The Japanese in particular beat up our giant companies by marketing affordable high quality cars that didnít break down, didnít require much maintenance at all and in general lasted easily for ten years instead of three to five years. It was obvious to any intelligent person that far from being simply wrong, the USA companies were criminal in their intent to sponge off the public forever by milking them of every dollar possible via inferior products. Thank goodness the Japanese saved us from our wealthy industrialists!
Today our same USA automobile manufacturers are in deep financial trouble. One might have thought the quality lessons taught to them in the early 1980ís would have become embedded in their values and behaviors Ö but no, stupid greed returned, and now GM® and Ford® are really hurting. They deserve to lose everything to superior foreign companies. And if Diamler® hadnít bought Chrysler® and started making good cars then Chrysler® would be just as bad off as GM® and Ford®. USA businesses, particularly the large ones, are irreversibly mentally ill.
LIE NUMBER SIX: STEPS TAKEN TODAY BY CORPORATIONS TO MINIMIZE COSTS BY OUTSOURCING AND OFFSHORING OUR JOBS ARE NECESSARY TO MAXIMIZE PROFIT TO COMPETE IN BUSINESS.
TRUTH: GLOBALIZATION AND FREE TRADE NEVER WERE ANYTHING BUT A PLOT TO CONTROL GLOBAL WEALTH WITH NO REGARD TO WHO WAS HURT IN THE PROCESS IN ANY COUNTRY. OUR LARGE CORPORATIONS ARE CRIMINAL AND THEY MUST BE DISBANDED AND OUR LEGISLATORS WHO HAVE ALLOWED THIS TO HAPPEN MUST ALSO GO TO JAIL WITH THE MANAGEMENTS OF THE CORPORATIONS.
Last evening I saw a news flash about Wal-Mart® planning to build stores in India. I immediately started laughing. Here is why. Wal-Mart® has imported most of the products they sell in the USA from countries like India, where workers are grossly underpaid relative to workers here (else, as the story goes, why offshore?). How, pray tell, will Wal-Mart® find the necessary group of "Indians" with sufficient income in India to make the Wal-Mart® business enterprise as profitable there as here? Ahhh Ö maybe they want to get some of the USA dollars back that our offshoring companies have paid to Indian companies. Or maybe they believe that such a LARGE economy with so MANY people automatically means there is sales potential because there has to be money somewhere. Doesnít there? Hmmm Ö I wonder what percentage of the Indian population might participate actively as Wal-Mart® customers? Perhaps three percent, and at that I am being generous.
My wife and I were angry when our $1000 Maytag® Neptune washing machine broke after only five years of use. Cost to repair? $450 for a stupid electronic part that I will bet cost less than $20 to provide. Why so expensive? Was it made of gold, or are we the Ďfoolísí gold? So even the old trusted names for quality appliances have gone down the tubes. I kind of got that impression when I learned that a junky outfit named Whirlpool® was buying Maytag®. Yes, when the garbage makers take over the few companies that at one time were good we are in trouble. Now the only way to have assurance of functioning appliances from USA companies is through the "service contract." That evolution could never have been successful without the collusion of appliance manufacturers in making stuff that breaks long before a normal life cycle of fifteen to twenty years. Weíve had similar experiences with our top of the line Kitchen-Aid® mixer and four major high-end General Electric® appliances. In a way, we are forced to "rent" our appliances, as we never get done paying for them. Cute!
LIE NUMBER SEVEN: YOU CAN DEPEND ON YOUR GOVERNMENT AND YOUR CORPORATIONS TO BE SELF-MONITORING SO AS TO ASSURE LONG LASTING QUALITY PRODUCTS AND SERVICES AT AN HONEST PRICE.
TRUTH: THE ONLY WAY TO GUARANTEE OWNING A QUALITY APPLIANCE IS TO BUY IT FROM A EUROPEAN MANUFACTURER LIKE BOSCH OR MIELE. THE USA FEDERAL GOVERNMENT DOES NOTHING USEFUL THAT MIGHT INTERFERE WITH CORPORATE PROFITS HERE, OR THAT WOULD PROVIDE FOR FEDERALLY MANDATED PRODUCT QUALITY.
Why not add a few thoughts about managed health care? Sure. Letís start with the lie Ö
LIE NUMBER EIGHT: HEALTH CARE IN THE USA IS UNBELIEVABLY GOOD WITH NEW PROCEDURES AND DRUGS THAT WILL EXTEND OUR LIFE SPAN TO BETWEEN 80 AND 100 YEARS.
TRUTH: VERY SOON YOU WILL NOT BE ABLE TO AFFORD THE NEW PROCEDURES AND DRUGS. 90% OF US WILL DIE AT OR BEFORE AGE 80. IT IS SIMPLY TAKING OUR GOVERNMENT AND OUR MEDICAL CORPORATIONS AND OUR EMPLOYERS LONGER THAN PLANNED TO CONVINCE US THAT IT IS OKAY FOR US TO BE SCREWED. THEY ARE DOING THAT BY CONTINUOUS LARGE PRICE INCREASES AND DECLINING INSURANCE COVERAGES. THEY WILL BANKRUPT US INDIVIDUALLY AND THEN LET US DIE.
There never was managed health care, only controlled health care cost, which benefited only the corporation paying the bill. Quality of healthcare diminished markedly as physicians scrambled to maintain their profits in a confined billing environment, as in "lets see three times as many patients in a day." Drug companies are absolutely heartless in what they charge for their products, and their customers canít go to a lower cost alternative Ö so they pay or die. Hospitals put the screws to people who try to pay their absurd charges but who lack insurance coverage. Wow! Screw the weak by charging them four to fives times as much as the hospital will accept from an insurance company!
LIE NUMBER NINE: SAVE DILIGENTLY IN TAX DEFERRED SAVINGS PROGRAMS LIKE 401K PLANS AND YOU WILL BE SECURE IN YOUR RETIREMENT.
TRUTH: YOU ARE BEING HOSED, AS USUAL. READ ON.
Now letís move on to something really stimulating Ö the big lies behind the 401K plan and IRA account and other savings vehicles. Actually, let me expand the coverage to include such decision point financial items like paying off a mortgage vs. investing discretionary cash and taking the mortgage interest deduction for income tax advantage. I believe Ben Franklin was credited with the saying, "A penny saved is a penny earned." Well, back in Benís time that might have made sense, but now it is the way in which the penny is saved that determines whether the saver is ahead or behind in the long run.
As to the value of a penny I can only note that some years ago I began tossing them in shopping center parking lots or into trashcans or telling salesclerks to keep them, as they literally were not worth my time to carry or process. Iíll bet I have thrown away at least $20 to $30 over ten years. Am I ashamed? Donít be ridiculous. A penny is literally worth so little in buying power as to be stupid to have in our society. I focus my efforts on getting real income, not saving pittances.
Unlike very early times in USA history, we have inflation that in general increases prices five to ten times what they were every thirty years (big ticket items like cars and houses, and rents and medical care and repair services), with a few notable exceptions like televisions (the subsidized medium to deliver lies to the general public). Of course, you would never guess that inflation could be that serious if you believe the absurdly distorted numbers published for the Consumer Price Index (CPI) or if you lack the understanding of compound interest or declining balance effects. And if you watch that cheap television, who knows what you will be convinced to believe?
We also have a graduated income tax, which considers only the absolute numbers in assessing a higher tax rate (up to 35%), not the buying power of the dollars. And we have graduated income tax in many states as well (up to 9%) as at the federal level, so the simple earner/saver can get whammed in multiple ways. We have Social Security and pensions, both of which get chewed up in buying power by inflation during the years of working, thus diminishing the return immediately and every year thereafter.
Inflation, while somewhat complex as a subject, couldnít happen if we didnít simply print more money. Hmmm Ö I believe the new Federal Reserve chairman will have some fancy but old name for that practice like "stimulating the economy!" The question becomes, At Whose Cost? Is it only current borrowers who are affected? Is the resulting inflation that gradually sweeps across virtually all goods and services due only to the goal of expanding the economy? Perhaps it results because we overspent like fools in government and in our personal lives in earlier years and had to do something to undermine the buying power of dollars held by foreign investors (moneylenders).
Letís not forget those poor fools here who were diligent savers in simple savings accounts and/or entitlement program (Social Security income) or pension recipients. Interesting, isnít it. The government (or your employer) de facto or in actuality takes your money for a forced savings program for all your working years while they routinely ruin the buying power of what they have taken. Then they return some of the money to you piecemeal while the rest continues to deflate in purchasing power, and the government threatens to take back the pittance they do send to you if you try to supplement your income up to a living wage by working. Or, for the little saver, they tax what small interest you have gained from a passbook savings account, more than destroying any increase in net worth you might have experienced. You actually lose money by saving.
There will be some that will argue that Social Security payments are indexed to inflation. What a poor joke! If the federal government increases your Social Security payment by one percent, based on the CPI, and then takes half of that one percent back just for Medicare cost increases alone what does that tell you about your other expense increases?
There will be some employers who will argue proudly that their pension plans look at your three highest earning years as one basis for calculating your pension, as if they are doing you a favor. Well, note the following: 1) Bonuses donít get counted, just salary. 2) By the time you really retire your history of raises will look really sick, so while your three highest years may be your last years, your real income in terms of purchasing power will have gone downhill for many years. 3) There is always a multiplicative fudge factor that can be raised for those about to retire or kept strictly to the published standard. 4) Your employer may bail out in the future if paying your pension hurts profits. 5) You can forget about inflation adjustments to your pension. You are gone and forgotten. Your old employer may have increased his income with product price increases, making your pension easier to pay, but you will not have your pension kept at parity with inflation, period. You are supposed to die.
Put bluntly, most Americans donít save any money of note because only a fool would save money given the inflation and tax realities mentioned earlier. One might as well use it or burn it, or even better, donít earn any and spend someone elseís money. And that attitude accurately reflects the behavior of a lot of USA citizens today. The burning question for each individual is this: What can I do to assure myself a steady income stream that will meet my needs and keep pace with inflation and taxes? For most people there is no good answer, for their abilities limit their income generation choices. Take away strong motive and reasonable chance of success and you breed a nation of wastrels. And it isnít their fault.
Yet it is obvious that some people do have wealth on a continuing basis, and so there must be some way to gain, maintain and grow wealth without the ugly consequences of inflation and taxes and current expenses destroying the results of your hard work. Some of us learn about tax breaks for the wealthy regarding dividends and other long-term capital gains, with maximum tax rates of 15 to 20 percent. Other tax loopholes have been created to accommodate the wealthy as well, so that they can truly increase their net worth despite inflation and taxes. You might want also to check out corporate income tax rates today vs. fifty years ago, and legalized tax avoidance legislation for corporations. Your 401K plan, which is truly a long-term investment, will, however, be taxed at ordinary income rates, instead of treating about two thirds of your gain, that from the inferred gain on the after tax amount you could have saved, as long-term capital gain. Gee, isnít that ducky?
Years ago I heard a small business person talk about cash businesses like bars and restaurants that allow the owner to hide a large percentage of gross income from taxes. That is one way to get ahead, though it is illegal, and it is done by so many small business owners that the federal government simply turns and looks the other way and taxes the smallest people instead Ö the underpaid employees of the small business owner. Those little people lack any means to hide their income unless they do illegal drug sales. It is indeed a dirty story Ö more so when the accounting shenanigans and outright fraud of large corporations avoiding taxes are ignored by the federal government. If you doubt what I say, how do you think the Enron fiasco occurred? Tyco? The exact demise cause didnít matter, but failure to monitor and control behaviors and practices did matter.
Now letís work with some numbers to examine what happens with the 401K plan savings vehicle. I save $1000 per month pre-tax in my employerís 401K plan. My employer matches my savings 50 cents on the dollar up to the first $6000 saved by me within a calendar year, or, my total deferred tax savings per year becomes $15,000. (Oh, I do not consider my employerís contribution to be an act of kindness Ö instead I think of it as my earned income that he withheld without my permission that I have to get back by playing a government game.) I invest that money in a mixture of theoretically good mutual funds with both short and long-term goals. I earn a deferred tax return of five percent, which after twenty years results in a 401K plan account worth $514,000 pre-tax. Or does it? Whoops. There have been so many instances of stock market manipulation and manufactured economic concern that my account turns out to be worth only $400,000. Too bad.
So, did I double my money? Not exactly. First, the total amount paid in over twenty years was $300,000, so my apparent gross profit is $100,000. Second, inflation during the same twenty years reduced the buying power of my money to roughly thirty percent of itís starting value at the beginning of the savings program, so on average across the twenty years I lost about fifteen percent due to inflation. So my $400,000 is now worth only $340,000 in buying power relative to the average buying power of the dollars I saved across the twenty years. Now the IRS comes in to take their bite. Letís suppose I am not wealthy, so I have a marginal federal tax rate of 25%.
Now I start to withdraw funds from my 401K plan at the rate of $24,000 per year to supplement my pension. I lose $6000 right off the top for federal income tax. If I live in a state with state income tax I probably get hit for another $1000 in state income tax. This means I have $17,000 to spend for the year from my 401K plan, which buys only thirty percent of what it would have bought twenty years ago. So I really have only $5100 to spend in terms of buying power for every $24,000 saved pre-tax, starting twenty years ago.
Somehow that seems to me like I lost money Ö a lot of money Ö by being a diligent saver for twenty years! Had I spent the money twenty years ago I would have had $8500 extra per year to spend after taxes and I would have been able to buy $8500 worth of goods and services, not the inflation adjusted $3600 of goods and services that I can buy today with my degraded dollars. By playing the government game I lost around 60% of every dollar I saved!
Why would anyone in his right mind do such a stupid thing? The answer is naïve trust. If you trust your government or your employer or any of many lying financial advisors you are a fool. Nobody tells you the truth about the effect of long term inflation on your savings.
I have some personal experience in that area. When my employer started a 401K plan like the one I just described, I learned that an accounting friend of mine chose not to participate. All of us kept telling the individual he was throwing away free money by not taking the employers free contribution. He declined to take our advice, stating simply that he had expenses that didnít give him the freedom to participate in the plan. We pressed him further, noting that he could borrow money to make up any net income shortage from saving in the 401K plan and still be far ahead of the game after paying interest on the borrowed money. Still, he declined.
He never did confide his real reason for avoiding the 401K plan. To this day I do not know his real reason, but I certainly know he was wise to avoid putting his money into that stinking government/stock market game. The funny part that didnít get through my thick skull at the time was that he wasnít merely an accountant. He was the primary financial advisor to a corporate vice president and to the business conducted by that vice president. He was obviously smarter than the rest of us from the gitgo and we were too dumb to recognize that he couldnít be as important as he was to the business and also be too dull to understand 401K plan boilerplate advertising. Hereís to you, Howard W. Smith!
Now, suppose you saved $8500 in after tax dollars per year starting twenty years ago and bought gold with your money, and repeated that process every year. You hoarded your gold. Now, twenty years later you start selling it at the present market price (Near $600 per troy ounce. Zowie!) and do not declare any of the sales proceeds as profit, due to your knowledge of the impact of inflation on the cost of goods and services across the twenty years you held the gold. Are you a criminal? Do you care? Who are the real criminals? Are they not the people who suck all the financial blood from the weak and trusting employees/taxpayers, and leave them with a pittance after a twenty-year job life of diligent saving? Hey, if home owners can exclude up to $500,000 of capital gain from taxable income each time they live in a new house for only two years and sell it, why should I give one cent of my income from my twenty-year gold savings program to any government?
Speaking of home ownership, I am so tired of hearing whizbang financial advisors tell people not to pay off their mortgages due to there being investment opportunities that yield higher interest than what they pay to the mortgage company. What bullshit! Here is the only thing that matters: Today you can lose your job, your ass and your house, easily, because your job is not secure. Yet, if you pay off your house first, then any extra income you have (and you will have a lot since you have no mortgage payment) you can invest or spend as you see fit. But do not, under any circumstances, consider your home to be a risk-able asset. You actually need your home Ö so act accordingly. Pay it off. Remember Clauswitzí First Principle: Establish a secure base. Oh, about those alternative higher rate of return investments Ö will they be high when and if you have to sell them to keep from losing your home due to loss of employment income or health expense problems? Are the higher rates of return really reliable or just an estimate?
The last area I want to discuss is forced entitlement programs, like Social Security and non-contributory pension plans. You already know from earlier text in this article that inflation gradually destroys the value of fixed income sources. So your generous pension is worth very little after 10 to 15 years. Ditto Social Security, regardless of the pitiful indexed inflation adjustment. The crime, of course, is inflation itself, promoted by government and business (one and the same, really) to compensate and avoid obligations and commitments made in earlier years. This means you are screwed if you work for an employer with a pension plan, not the reverse, for you have a right to demand more income now if there is no pension plan, to prepare your own investment nest for your future security. And Social Security is a criminal disaster that needs to be eliminated as soon as possible to keep the federal governmentís hands out of your childrenís pockets during their earning years.
Oh, here is one final note about inflation, using a rather oblique approach. Hispanics are overrunning us. They are taking crap jobs and living poorly. Twenty years from now we will have six times as many of these people due simply to their excessive rate of reproduction and continued border incursions, yet we will have no jobs for the extra people, while they clog our social services and thus create a very high tax bill. Isnít it interesting that our business owners are making absurd profits by taking advantage of the illegal immigrants now and leaving all the rest of us with the longer-term employment problem for twenty and more years from now? Gee, it sounds so much like Blacks from Africa to support our southern plantations via slavery? That is because it is exactly the same shitty story done now with Hispanics, only it is even better because they provide their own transportation! And yes, all the ugly downstream results of slavery in the USA will again occur, but this time with Hispanics. We never learn. If we did, we would kill those business owners who employ illegal immigrants for destroying our future and that of our children and grandchildren.
How about a religious basis for understanding the above reality? "The sins of the fathers will be visited upon the heads of their sons." Now try this variant: The sins of any earlier powerful group of people will screw you to the wall. Isnít it time to limit the power of any group, like a business or a government, as well as that of any individual? Oh, yes!
Well, now it is time to tie a few loose ends together. The quality of the lie? What has become very clear to me and to millions of other people is that we have been hearing so many lies for so long on so many subjects that the liars arenít even bothering to be creative in their lying. Bush couldnít fool a two-year old today, for his disingenuous character is too obvious! So, no quality. If you review the capitalized portions of this article you may understand the nature of the big lies, how long we have been subject to them, and how hopeless our situation is if we fail to act harshly, very soon, to save the future of USA common citizens.
I keep harping on the need to do this through elections, preserving our legal system and avoiding civil war, but am I being overly optimistic? The balance of power has swayed so far towards wealthy corporations and individuals who essentially own the government and nearly everything in the media that it is becoming doubtful we will be able to achieve the promised goals of our democracy (life, liberty and the pursuit of happiness) without bloodshed. For that I am sad beyond belief, yet I will do whatever I can to bring the needed changes about.
What about you? The Golden Rule needs to be put away in a safe place for our future use, once we have survived the hell of now, and possibly learned to be more vigilant about protecting our lives and the lives of all future humans. And you donít have to be a scientist to understand economic necessity or freedom or the criticality of moving away from global ignorance. Think about it.