소득세는 정부가 시민들의 생명과 노동을 소유하고 있다는 의미이다. 따라서 그것은 반헌법적이고 전체주의적 발상이다. 폐지하라!

 

 

 

No Income Tax

 

Ron Paul supports the elimination of the income tax and the Internal Revenue Service (IRS). He asserts that Congress had no power to impose a direct income tax and has introduced legislation to repeal of the 16th Amendment to the Constitution, which was ratified on February 3, 1913.

 

An income tax is the most degrading and totalitarian of all possible taxes. Its implementation wrongly suggests that the government owns the lives and labor of the citizens it is supposed to represent. Tellingly, “a heavy progressive or graduated income tax” is Plank #2 of the Communist Manifesto, which was written by Karl Marx and Friedrich Engels and first published in 1848.

 

To provide funding for the federal government, Ron Paul supports excise taxes, non-protectionist tariffs, massive cuts in spending.

 

 

 

 

On November 20, 2008 Ron Paul said in a New York Times / Freakonomics interview:

 

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“I want to abolish the income tax, but I don’t want to replace it with anything. About 45 percent of all federal revenue comes from the personal income tax. That means that about 55 percent — over half of all revenue — comes from other sources, like excise taxes, fees, and corporate taxes.

 

We could eliminate the income tax, replace it with nothing, and still fund the same level of big government we had in the late 1990s. We don’t need to “replace” the income tax at all. I see a consumption tax as being a little better than the personal income tax, and I would vote for the Fair-Tax if it came up in the House of Representatives, but it is not my goal. We can do better.”

 

On May 7, 2001, Ron Paul wrote the following column:

 

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The Case Against the Income Tax

 

Could America exist without an income tax? The idea seems radical, yet in truth America did just fine without a federal income tax for the first 126 years of its history. Prior to 1913, the government operated with revenues raised through tariffs, excise taxes, and property taxes, without ever touching a worker’s paycheck. In the late 1800s, when Congress first attempted to impose an income tax, the notion of taxing a citizen’s hard work was considered radical! Public outcry ensued; more importantly, the Supreme Court ruled the income tax unconstitutional. Only with passage of the 16th Amendment did Congress gain the ability to tax the productive endeavors of its citizens.

 

Yet don’t we need an income tax to fund the important functions of the federal government? You may be surprised to know that the income tax accounts for only approximately one-third of federal revenue. Only 10 years ago, the federal budget was roughly one-third less than it is today. Surely we could find ways to cut spending back to 1990 levels, especially when the Treasury has single year tax surpluses for the past several years. So perhaps the idea of an America without an income tax is not so radical after all.

 

The harmful effects of the income tax are obvious. First and foremost, it has enabled government to expand far beyond its proper constitutional limits, regulating virtually every aspect of our lives. It has given government a claim on our lives and work, destroying our privacy in the process. It takes billions of dollars out of the legitimate private economy, with most Americans giving more than a third of everything they make to the federal government. This economic drain destroys jobs and penalizes productive behavior. The ridiculous complexity of the tax laws makes compliance a nightmare for both individuals and businesses. All things considered, our Founders would be dismayed by the income tax mess and the tragic loss of liberty which results.

 

America without an income tax would be far more prosperous and far more free, but we must be prepared to fight to regain the liberty we have lost incrementally over the past century. I recently introduced “The Liberty Amendment,” legislation which would repeal the 16th Amendment and effectively abolish the income tax. I truly believe that real tax reform, reform that so many frustrated Americans desperately want, requires bold legislation that challenges the Washington mind set. Congress talks about reform, but the current tax debate really involves nothing of substance. Both parties are content to continue tinkering with the edges of the tax code to please various special interests. The Liberty Amendment is an attempt to eliminate the system altogether, forcing Congress to find a simple and fair way to collect limited federal revenues. Most of all, the Liberty Amendment is an initiative aimed at reducing the size and scope of the federal government.

 

Is it impossible to end the income tax? I don’t believe so. In fact, I believe a serious groundswell movement of disaffected taxpayers is growing in this country. Millions of Americans are fed up with the current tax system, and they will bring pressure on Congress. Some sidestep Congress completely, bringing legal challenges questioning the validity of the tax code and the 16th Amendment itself. Ultimately, the Liberty Amendment could serve as a flashpoint for these millions of voices.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

100 Years Old And Still Killing Us: America Was Much Better Off Before The Income Tax

 

By Michael Snyder, on April 14th, 2013

 

 

 

 

 

100 Years Old And Still Killing UsDid you know that the greatest period of economic growth in American history was during a time when there was absolutely no federal income tax? Between the end of the Civil War and 1913, there was an explosion of economic activity in the United States unlike anything ever seen before or since. Unfortunately, a federal income tax was instituted in 1913, and this year it turned 100 years old. But there was no fanfare, was there? There was no celebration because the federal income tax is universally hated. Sadly, most Americans just assume that there is no other option to an income tax. Most Americans just assume that it has always been with us and that it will always be with us. This year, the American people will shell out approximately $4.22 trillion in state and federal income taxes. That amount is equivalent to approximately 29.4 percent of all income that Americans will bring in this year, and that does not even take into account the dozens of other taxes that Americans pay each year. At this point, the U.S. tax code is about 13 miles long, and those that are honest and pay their taxes every year are being absolutely shredded by this system. But wouldn’t the federal government go broke if we didn’t have a federal income tax? No, actually the truth is that the federal government did just fine before there was an income tax. In fact, the U.S. national debt has gotten more than 5000 times larger since the federal income tax and the Federal Reserve were created by Congress back in 1913. As I have written about previously, the Federal Reserve system was actually designed to trap the United States in a debt spiral from which it could never possibly escape, and the federal income tax was needed to greatly expand the size of the federal government and to soak the American people of the funds necessary to service that debt. But it doesn’t have to be this way. America was once much better off before the income tax and the Federal Reserve were created, and we could easily go to such a system again.

 

What we desperately need to do is to teach the American people a little history lesson. The truth is that the greatest period of economic growth in U.S. history was between the Civil War and 1913 when there was no federal income tax at all. The following is from Wikipedia…

 

 

The Gilded Age saw the greatest period of economic growth in American history. After the short-lived panic of 1873, the economy recovered with the advent of hard money policies and industrialization. From 1869 to 1879, the US economy grew at a rate of 6.8% for real GDP and 4.5% for real GDP per capita, despite the panic of 1873. The economy repeated this period of growth in the 1880s, in which the wealth of the nation grew at an annual rate of 3.8%, while the GDP was also doubled.

 

Sadly, most Americans cannot even conceive of an economy like that. Most Americans cannot even imagine having a nation without a massively bloated federal government and without an unelected central bank centrally planning our financial system.

 

But you know what?

 

It worked. In fact, it worked fantastically well.

 

The period between the Civil War and 1913 propelled the United States to greatness. Just check out all of the good things that Wikipedia says happened for the U.S. economy during those years…

 

 

The rapid economic development following the Civil War laid the groundwork for the modern U.S. industrial economy. By 1890, the USA leaped ahead of Britain for first place in manufacturing output.

 

An explosion of new discoveries and inventions took place, a process called the “Second Industrial Revolution.” Railroads greatly expanded the mileage and built stronger tracks and bridges that handled heavier cars and locomotives, carrying far more goods and people at lower rates. Refrigeration railroad cars came into use. The telephone, phonograph, typewriter and electric light were invented. By the dawn of the 20th century, cars had begun to replace horse-drawn carriages.

 

Parallel to these achievements was the development of the nation’s industrial infrastructure. Coal was found in abundance in the Appalachian Mountains from Pennsylvania south to Kentucky. Oil was discovered in western Pennsylvania; it was mainly used for lubricants and for kerosene for lamps. Large iron ore mines opened in the Lake Superior region of the upper Midwest. Steel mills thrived in places where these coal and iron ore could be brought together to produce steel. Large copper and silver mines opened, followed by lead mines and cement factories.

 

In 1913 Henry Ford introduced the assembly line, a step in the process that became known as mass-production.

 

But if we didn’t have an income tax, how did we fund the government? Well, we mostly did it with tariffs and excise taxes. The following is from a recent article by Thomas R. Eddlem…

 

 

Prior to ratification of the 16th (income tax) Amendment in February 1913, the federal government managed its few constitutional responsibilities without an income tax, except during the Civil War period. During peacetime, it did so largely — or even entirely — on import taxes called “tariffs.” Congress could afford to run the federal government on tariffs alone because federal responsibilities did not include welfare programs, agricultural subsidies, or social insurance programs like Social Security or Medicare. After the Civil War, tariff revenues sometimes suffered under a protectionist policy ushered in by the Republican Party that supplemented federal income via excises on alcohol, tobacco, and inheritances. But before the war, the need for tariff revenue to finance the federal government generally kept the tariff at reasonable levels. During wartime throughout early American history, the Founding Fathers were able to raise additional revenue employing a different method of direct taxation authorized by the U.S. Constitution prior to the 16th Amendment. These alternative taxing methods gave the young American nation embarrassing peacetime budget surpluses that several times came close to paying off the national debt.

 

So why didn’t we stick with that system?

 

Well, early in the 20th century the “progressives” and the social planners started to take control in Washington.

 

And one of the things that “progressives” and social planners love is an income tax. In fact, the second plank of the Communist Manifesto is a “heavy progressive or graduated income tax”.

 

Of course they promised us that income tax rates would always remain low. And at first they were quite low. The following is from an article by Adam Young…

 

 

The presidential election of 1912 was contested between three advocates of an income tax. The winner, Woodrow Wilson, after the ratification of the Sixteenth Amendment, called a special session of Congress in April 1913, which proceeded to pass an income tax of 1% on incomes above $3,000 and applied surcharges between 2% and 7% on income from $20,000 to $500,000.

 

But once the “progressives” and the social planners get their feet in the door, they always want more.

 

And we have seen how things have worked out. Today, the American people are being taxed into oblivion.

 

In a previous article entitled “Show This To Anyone That Believes That Taxes Are Too Low“, I listed dozens of other taxes that the American people pay each year in addition to federal and state income taxes…

 

#1 Building Permit Taxes

 

#2 Capital Gains Taxes

 

#3 Cigarette Taxes

 

#4 Court Fines (indirect taxes)

 

#5 Dog License Taxes

 

#6 Drivers License Fees (another form of taxation)

 

#7 Federal Unemployment Taxes

 

#8 Fishing License Taxes

 

#9 Food License Taxes

 

#10 Gasoline Taxes

 

#11 Gift Taxes

 

#12 Hunting License Taxes

 

#13 Inheritance Taxes

 

#14 Inventory Taxes

 

#15 IRS Interest Charges (tax on top of tax)

 

#16 IRS Penalties (tax on top of tax)

 

#17 Liquor Taxes

 

#18 Luxury Taxes

 

#19 Marriage License Taxes

 

#20 Medicare Taxes

 

#21 Medicare Tax Surcharge On High Earning Americans Under Obamacare

 

#22 Obamacare Individual Mandate Excise Tax (if you don’t buy “qualifying” health insurance under Obamacare you will have to pay an additional tax)

 

#23 Obamacare Surtax On Investment Income (a new 3.8% surtax on investment income that goes into effect next year)

 

#24 Property Taxes

 

#25 Recreational Vehicle Taxes

 

#26 Toll Booth Taxes

 

#27 Sales Taxes

 

#28 Self-Employment Taxes

 

#29 School Taxes

 

#30 Septic Permit Taxes

 

#31 Service Charge Taxes

 

#32 Social Security Taxes

 

#33 State Unemployment Taxes (SUTA)

 

#34 Tanning Tax (a new Obamacare tax on tanning services)

 

#35 Telephone Federal Excise Taxes

 

#36 Telephone Federal Universal Service Fee Taxes

 

#37 Telephone Minimum Usage Surcharge Taxes

 

#38 Telephone State And Local Taxes

 

#39 Tire Taxes

 

#40 Tolls (another form of taxation)

 

#41 Traffic Fines (indirect taxation)

 

#42 Utility Taxes

 

#43 Vehicle Registration Taxes

 

#44 Workers Compensation Taxes

 

Yet even with all of these taxes, our local governments, our state governments and our federal government are all absolutely drowning in debt.

 

In another previous article entitled “24 Outrageous Facts About Taxes In The United States That Will Blow Your Mind“, I listed a number of reasons why our federal income tax system has become a complete and utter abomination that can never be fixed…

 

1 – The U.S. tax code is now 3.8 million words long. If you took all of William Shakespeare’s works and collected them together, the entire collection would only be about 900,000 words long.

 

2 – According to the National Taxpayers Union, U.S. taxpayers spend more than 7.6 billion hours complying with federal tax requirements. Imagine what our society would look like if all that time was spent on more economically profitable activities.

 

3 – 75 years ago, the instructions for Form 1040 were two pages long. Today, they are 189 pages long.

 

4 – There have been 4,428 changes to the tax code over the last decade. It is incredibly costly to change tax software, tax manuals and tax instruction booklets for all of those changes.

 

5 – According to the National Taxpayers Union, the IRS currently has 1,999 different publications, forms, and instruction sheets that you can download from the IRS website.

 

6 – Our tax system has become so complicated that it is almost impossible to file your taxes correctly. For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household. All 46 of them came up with a different result.

 

7 – In 2009, PC World had five of the most popular tax preparation software websites prepare a tax return for a hypothetical household. All five of them came up with a different result.

 

8 – The IRS spends $2.45 for every $100 that it collects in taxes.

 

9 – According to The Tax Foundation, the average American has to work until April 17th just to pay federal, state, and local taxes. Back in 1900, “Tax Freedom Day” came on January 22nd.

 

10 – When the U.S. government first implemented a personal income tax back in 1913, the vast majority of the population paid a rate of just 1 percent, and the highest marginal tax rate was just 7 percent.

 

11 – Residents of New Jersey pay $1.64 in taxes for every $1.00 of federal spending that they get back.

 

12 – The United States is the only nation on the planet that tries to tax citizens on what they earn in foreign countries.

 

13 – According to Forbes, the 400 highest earning Americans pay an average federal income tax rate of just 18 percent.

 

14 – Warren Buffett had an effective tax rate of just 17.4 percent for 2010.

 

15 – The top 20 percent of all income earners in the United States pay approximately 86 percent of all federal income taxes.

 

16 – Sadly, as Bill Whittle has shown, you could take every single penny that every American earns above $250,000 and it would only fund about 38 percent of the federal budget.

 

17 – The United States has the highest corporate tax rate in the world (35 percent). In Ireland, the corporate tax rate is only 12.5 percent. This is causing thousands of corporations to move operations out of the United States and into other countries.

 

18 – Some tax havens are doing a booming business in setting up sham headquarters for U.S. corporations. For example, the city of Zug, Switzerland only has a population of 26,000 people but it is the headquarters for 30,000 companies.

 

19 – In 1950, corporate taxes accounted for about 30 percent of all federal revenue. In 2012, corporate taxes will account for less than 7 percent of all federal revenue.

 

The wealthy have become absolute masters at avoiding taxes, and the poor are not able to pay much.

 

So who always gets squeezed?

 

The middle class does.

 

No matter what our politicians promise us, the hammer is always brought down on the middle class.

 

And now, according to The Huffington Post, the IRS says that it can even read our old emails without a warrant to make sure that we are paying all of the taxes that we should be…

 

 

The IRS apparently interprets that authority very broadly, the documents show: as long as you’ve stored your email in a cloud service like Google Mail, and as long as those emails haven’t been deleted after a few months, the agency thinks it doesn’t need a warrant to read them.

 

The idea of IRS agents poking through your email account might sound at the very least creepy, and maybe unconstitutional. But the IRS does have a legal leg to stand on: the Electronic Communications Privacy Act of 1986 allows government agencies to in many cases obtain emails older than 180 days without a warrant.

 

That’s why an internal 2009 IRS document claimed that “the government may obtain the contents of electronic communication that has been in storage for more than 180 days” without a warrant.

 

It should be noted that the IRS is claiming that it does not use emails “to target” specific taxpayers, but notice that they are not promising not to use old emails against taxpayers once they are officially being audited or investigated…

 

 

“Contrary to some suggestions, the IRS does not use emails to target taxpayers. Any suggestion to the contrary is wrong.”

 

In any event, the truth is that we have one of the most complicated and one of the most intrusive tax systems in the history of the world.

 

Don’t the American people deserve better?

 

What do you think?

 

Should America go back to a system where there is no income tax and no Federal Reserve?

 

Please feel free to share what you think by leaving a comment below…

 

 

쿠바의 독재자 카스트로가 한 짓

 

 

Fidel Castro: Hero or Cold-blooded Murderer?

 

12/01/2016•Yuri N. Maltsev

 

 

Fidel Castro is dead, and the mainstream media in the US and elsewhere are beside themselves with grief over their fallen hero. If you are not sickened by the disease of Castrophilia, it is obvious that there is nothing good to say about this mass murderer, except that he was lucky enough to live into his 90s.

 

I've been to Cuba several times. Everything worth looking at was built either under the Spanish or Batista (including highways, bridges, and big universities). The complete lack of reliable statistics makes it impossible to offer any exact numbers on the state of the Cuban economy. I've traveled to over 80 countries and can compare Cuba only to Malawi or Lesotho in standard of living by visual approximation. Guatemala with its $3,800 per capita GDP looks like a superpower in comparison with the prison island. In the same manner, the proper central planning system of the economy makes it impossible (even in theory) to analyze its production in monetary value.

 

Wages in Cuba increased to a whopping 687 CUP (Cuban peso)/month (US $26.5) in 2015 from 584 CUP/month (US $22.03) in 2014 according to official Cuban stats.

 

Castrophiliacs at the World Bank came with absurd numbers claiming that Cuban GDP per capita is $6,156.62 and the Cuba GDP per capita by purchasing power parity is $19,950.28. Castrophiliacs at the CIA estimate Cuban GDP — per capita (PPP) at an equally implausible $10,200.

 

Boston Consulting Group surveyed the purchasing power of Cuban households and found that about half the Cuban population lives with a median household income of $300 to $400 a year while another half of Cuban consumers — in urban areas — had a household income of $1,000 to $2,000 a year.1

 

 

 

“Store” for the masses: rationing norms displayed

 

 

 

 

Since late 2000, Venezuela has provided petroleum products to Cuba supplying nearly 100,000 barrels per day. Cuba has been paying for the oil with the services of their forced laborers including some 30,000 medical-trained slaves.

 

Pre-Castro Cuba of Afro-Cuban leader Fulgencio Batista was no paradise, but there were economic opportunities. People owned themselves.

 

 

People could get actual jobs, producing and selling goods and services people wanted to buy: rum and sugar, cigars, tourist vacations. The system was as corrupt as Chicago, but corruption is a source of opportunity for those willing to take it. The Castro system monopolized wealth and power in the hands of a tiny minority consisting of Fidel and his flunkies. Sure, he gave them free education — or rather Marxist indoctrination — and free healthcare on par with America in the 1950s. Of course, in a country where many people earn only $2 per day, the major health problems are starvation and malnutrition.2

 

 

Pre-Castro Cuba maintained a stable developing economy well incorporated in the international markets, second in per capita income in Latin America. At that time, the Cuban peso and the US dollar shared the same values. National and international financial institutions cooperated in incrementing its lending operations to Cuban businesses and foreign investors willing to invest their capital in the island.

 

 

 

The economic system established in Cuba by the murderous Castro brothers is nothing but a regime of public slavery where a Lockean self-ownership was replaced by the government ownership of the populace. In 1959, a meltdown was felt when Fidel Castro began a massive program of nationalization. The Soviet Stalinist model of government and central planning was introduced and caused an enslavement of the populace and radical change in the country's economy.

 

Cuban masses are not only physically separated from the elites, but there is complete socio-economic apartheid between the slaves and their masters with separate monetary systems, retail facilities, and health care and educational systems. Copied from the USSR in the beginning of the 1960s, Castro implemented a system in which some comrades became more equal than the others and separated themselves from the gray masses with checkpoints and fences, and different currencies and rationing cards.

 

The masses are being paid in the Cuban Peso (CUP), whereas their owners — the government elite — use the Cuban Convertible Peso (CUC). The CUC is worth about 30 times the value of the CUP on the black market, and Cuba’s “special stores.” Tourist areas, restaurants, and other attractions for elites and foreigners do not accept Cuban pesos, effectively keeping the workers out of the “workers’ paradise” so much adored by Jesse Jackson, Michael Moore, Oliver Stone, Robert Redford, and the like.

 

 

 

Like at the height of apartheid in South Africa the Cuban people are banned from the beaches, where the elites and foreign tourists have the white sand all to themselves. There are actual walls around these beaches. On the other side of the wall, the people have nothing.

 

During one visit to Cuba, my students befriended a joyful Afro-Cuban teenager with a Russian name, Yevgeny, and invited him to a beach at our hotel. He was arrested in our presence and all my attempts to release him from custody failed. I tried to explain at the police precinct that Yevgeny is our friend. The police thug asked me what his last name was, which, unfortunately, I did not know. They escorted me out and threatened to deport me.

 

 

 

In the cities, the people live in squalor of communal apartments literally falling apart as they have not been properly maintained since 1959. In many old high rises that I have visited, elevators and indoor plumbing was gone and the buildings were surrounded by primitive outhouses. Under socialism, the Cuban government, with help from Moscow, built Soviet-style pre-fabricated housing units known as “Khruscheba” — Khrushchev’s slums — which look like slabs of concrete with windows. The lifeless grey barracks are similar to the same visual pollution that we see in all ex-socialist countries from Russia to Kazakhstan to the Czech Republic. I visited one of these complexes, and the number who lived there well exceeded the numbers of comrades squeezed in similar buildings in the USSR. There were about 10–12 people living in a small studio apartment, including small children and old age very frail looking seniors. The stench was excruciating.

 

The countryside looked as devastating as that in the Soviet Union. There were dilapidated pre-revolutionary houses, rusting agricultural equipment left from the “oppressive” days of the Batista regime, and the people — like in Malawi — were traveling on foot (often barefoot) or in a hot crowded “Camel” trailer bus pulled by a conventional truck. Like in Malawi, the Cubans have to endure frequent police checkpoints. The only successful part of the Cuban economy — the tourism sector — is off limits to ordinary Cubans.

 

Fidel Castro and his Communist Party cronies trumpeted that everyone in Cuba would have free health services, and the system would eliminate “waste” stemming from “unnecessary duplication and parallelism”; i.e., market competition. Communist Party officials and their intellectual servants found it, however, expedient to exempt themselves from the egalitarian medical system that they created and controlled for the gray masses. They provided themselves with an elite medical system to go along with their elite social positions. While ordinary Cuban “workers and peasants” — which is how their masters see them — died in state-run hospitals. Equipment and medicine that could have saved their lives were in the elite facilities out of ordinary Cubans' reach.4

 

The clinics for Cuban elites and foreigners were pristine and well equipped. They were portrayed in the infamous propaganda video “Sicko” concocted by a Castro maniac Michael Moore in 2007. I did not get to visit a clinic or hospital for the Cuban people, but the conditions were indicated to me by my Cuban friend who told me that “excellent” the health care system would have room for improvement if only it had real doctors, medicines, clinics, and ambulances.

 

 

 

To enforce socialist slavery, more than a 100,000 were murdered and millions squeezed out. There are 4 million Cubans living outside of Cuba. The estimates of Cubans killed range from 35,000 to 141,000 (1959–1987) according to a renowned demographer R.J. Rummel. More estimates of death tolls are listed below:

 

Non-Combat Victims of the Castro Regime (January 1, 1959 to December 31, 2007)

 

Documented Cases5

Firing squad executions: 4,074

Extrajudicial killings not in prison:1,334

Missing and disappeared: 219

Other, including deaths in prison: 2,215

“Balseros” (estimate to 2003): 77,833

 

Total: 85,675

 

My Polish friend Krzysztof Ostaszewski came to the right conclusion that I wholeheartedly share:

 

 

Socialist policies are often proclaimed by their opponents to be well-intentioned, but producing unintended consequences. Given nearly two hundred years of vast experience with those policies, and their unqualified and undisturbed record of producing slaughter, misery and poverty, isn’t it time to conclude that the “unintended” consequences are actually fully intended by socialism's proponents?

 

GDP는 소비 중심의 잘못된 개념이다. 생산 중심의 Gross Output (GO)으로 가야 한다.

 

 

The Faulty Logic of GDP Necessitates an Economic Paradigm Shift

 

By Per Bylund • 11/30/16

After almost eight decades of flawed logic, we're due for an economic paradigm shift.

After almost eight decades of flawed logic, we’re due for an economic paradigm shift. Pexels

 

Nearly 80 years ago — during the height of the Great Depression — economist Simon Kuznets envisioned a system capable of measuring productivity and economic activity. In a report to Congress, Kuznets proposed charting all economic production with a single measurement that would decrease when the economy struggled and increase when it thrived. He called it gross domestic product, or GDP.

 

Nations throughout the world embraced GDP as the standard for measuring economic activity; Kuznets eventually won the Nobel Prize for his creation. The popularity of GDP belies its effectiveness, however, as the measure systematically under-reports the significance of production.

 

#GDProblems

 

The most recent data from the U.S. Bureau of Economic Analysis showed that the country’s GDP increased by about 1.4 percent in the second quarter of this year, which was encouraging news to some. GDP in the U.S. had increased by about 0.8 percent in the first quarter of the year. While this seems like positive news, it’s difficult to say exactly what it means for the average consumer.

 

GDP was the only available option for a long time, but it has always been flawed because it assumes a net contribution to consumer value through production. A business that produces a certain good is believed to add only the difference between the product’s monetary value and the cost of all inputs combined.

 

GDP also mistakenly places too much emphasis on business-to-consumer activity compared to business-to-business transactions, which account for a significant amount of investment and opportunity. In fact, money invested in B2B startups through the end of March increased by about 40 percent compared to 2015 figures.

 

Moreover, GDP is useless because it measures official statistics rather than actual value. Dollar amounts measured in statistics don’t capture the actual satisfaction — or real value — being produced. It also fails to accurately measure innovations until after the fact, meaning investments are considered a loss until they pan out. An economy investing for future production might, therefore, appear to be contracting.

 

Quantifying Value

 

By only measuring monetary values — primarily consumption data under the guise of “produced” goods — GDP ignores the fact that value is added in each step along the production chain. It also specifically tracks expenditure and income rather than well-being.

 

What truly matters in economic growth is how our well-being has improved: how our lives become more convenient, how we get more time for leisure, and how we can afford everything. This is a matter of perception and ability to consume.

 

It can be argued that we experience economic growth when prices fall but wages are steady. Those same incomes can buy more goods and services, consequently making us wealthier.

 

When we talk about inequality, we’re almost always speaking of income rather than well-being. But what does it matter if one person earns $1,000 and another earns $1 million if the goods they both consume are identical? If we’re unable to satisfy more wants by earning significantly more money, income becomes irrelevant.

 

This is often the case in Western nations, where income inequality is on the rise. The U.S. has seen income inequality increase since the 1970s, with the top 1 percent of U.S. families earning about 25 times as much as the remaining 99 percent. While income inequality is growing, well-being inequality is actually shrinking.

 

The price difference between a Mercedes-Benz and a Toyota is greater than the gap between having a car and not having one, but the well-being differential is reversed. A Mercedes-Benz doesn’t offer more transportation than a Toyota, but having any car is tremendously better than not having one in terms of well-being.

 

A Better Indicator

 

While GDP ultimately fails to track the size of an economy, a different measure offers a much broader view of economic activity.

 

Economist Mark Skousen has long advocated for gross output as a viable alternative to GDP. Gross output goes beyond finished goods and services that don’t necessarily have a final “value.”

 

For instance, a business breaking even without any profits still contributes to the economy through production — it consumes inputs to produce outputs, pays suppliers and employees, and provides goods, services, and capital to other businesses. A lack of profit doesn’t mean the economy is smaller or that this business isn’t contributing to the economy. Instead, consumers of its products have added to their well-being.

 

It’s a matter of perspective. The GDP is based on a faulty theory of the economy as consumption-driven when it’s actually more production-driven. Consumption happens where production facilitates it, through goods and services produced as well as income generated by selling those goods and services.

 

In a market society, we produce for market needs rather than our own benefit. This allows us to generate income to satisfy our own needs and wants by consuming the goods and services others produce. This allows us to specialize and develop expertise to innovate and simplify our own production, which eventually helps us increase our output, serve more consumers, and generate more money to spend on goods.

 

Reversing Course

 

GDP effectively ignores all attempts to improve production because they don’t result in increased consumption. It falsely assumes that consumption drives production; therefore, it’s pointless to map out and measure the latter. In other words, GDP adopts a backward economic perspective.

 

In reality, entrepreneurs produce what they believe consumers want to buy. The fact that they undertake uncertain production projects helps contribute to our common prosperity and standard of living.

 

Whereas gross output takes a broader view of economic activity, GDP misunderstands economics by simply counting what statistics capture: net consumption, net profits, net this, and net that. After almost eight decades of flawed logic, we’re due for an economic paradigm shift.

 

Per Bylund is Assistant Professor of Entrepreneurship and Records-Johnston Professor of Free Enterprise in the School of Entrepreneurship at Oklahoma State University. His areas of research are entrepreneurship, management, and economic organization. Connect with him on Twitter.

 

 

 

 

2. What is GO? GO is a broader measure of economic activity, adding up sales/revenues at all stages of production, and serves as a complement to GDP.

 

 

“Now, it’s official. With Gross Output (GO), the U.S. government will provide official data on the supply side of the economy and its structure. How did this counter revolution come about? There have been many counter revolutionaries, but one stands out: Mark Skousen of Chapman University. Skousen’s book The Structure of Production, which was first published in 1990, backed his advocacy with heavy artillery. Indeed, it is Skousen who is, in part, responsible for the government’s move to provide a clearer, more comprehensive picture of the economy, with GO.” – Steve H. Hanke, Johns Hopkins University (2014)

 

 

 

 

“The two most important works on ‘Austrian’ capital theory since Hayek’s winning of the Nobel Prize are Roger Garrison’s Time and Money and Mark Skousen’s Structure of Production. All members of the Austrian School should take his book seriously.” – Richard Ebeling, Northwood University

 

 

 

 

 

 

 

 

인재들이 자유롭게 이동할 수 있었던 게 유럽이 번영한 원인이다. 국가 간의 경쟁은 혁신을 낳는다. 이에 반해 제국은 재능을 억압해서 국가주의를 확산하게 한다.

 

 

 

Europe’s divisions have driven our success

 

Matt Ridley

 

Competition between states produces innovation, while empires stifle flair and lead to explosions of nationalism

 

“Free movement of genius was crucial to Europe’s prosperity

 

 

The Italian referendum and close-shave Austrian election are symptoms of a continent that may be teetering on the brink of political disintegration. It’s just possible that an empire may be collapsing before our eyes, as the Habsburg and Ottoman empires did before it, in or around the same neighbourhood.

 

With the rise of nationalist parties in Italy, Austria, Hungary, Poland, the Netherlands, France, Germany and Britain, the possibility that the Brussels union has fomented, rather than suppressed, nationalism can no longer be dismissed. The Habsburg empire, which also tried to make a whole out of linguistically and culturally diverse parts, and ended in a war sparked by Serbian nationalism, is an unhappy precedent. The European Union may be encouraging precisely what it was founded to avert.

 

True, it is an empire without a hereditary emperor, founded on high ideals of peace and prosperity. But at least initially, Napoleon’s empire was also founded on the principle of replacing old regimes with a more meritocratic and modern system.

 

Against this background, it is worth recalling that the leading theory among economic historians for why Europe after 1400 became the wealthiest and most innovative continent is political fragmentation. Precisely because it was not unified, Europe became a laboratory for different ways of governing, enabling the discovery of regimes that allowed free markets and invention to flourish, first in northern Italy and some parts of Germany, then the low countries, then Britain. By contrast, China’s unity under one ruler prevented such experimentation.

 

It is generally assumed that it was Charles, Baron Montesquieu who first articulated this theory, in De L’Esprit Des Lois (1748). In contrast to the great empires of Asia, he remarked, Europe’s “many medium-sized states” had incubated “a genius for liberty, which makes it very difficult to subjugate each part and to put it under a foreign force other than by laws and by what is useful to its commerce”.

 

 

I think David Hume got there first, however. In his 1742 essay Of the Rise and Progress of the Arts and Sciences, he mused on why China’s “considerable stock of politeness and science” had not ripened, and blamed the fact that it was one vast empire, so “the authority of any teacher, such as Confucius, was propagated easily from one corner of the empire to the other. None had courage to resist the torrent of popular opinion.” By contrast, Europe is the continent “most broken by seas, rivers, and mountains” and so “the divisions into small states are favourable to learning, by stopping the progress of authority as well as that of power”.

 

 

Whoever first thought of it, the idea has gained almost universal agreement among historians that a disunited Europe, while frequently wracked by war, was also prone to innovation and liberty — thanks to the ability of innovators and skilled craftsmen to cross borders in search of more congenial regimes.

 

In The European Miracle (1981), Eric Jones claimed that “Against the economies of scale that large empires could offer, the decentralisation of Europe’s states-system offered flexibility and a family of experiments in government decision-making”. Since then, the historians Nathan Rosenberg, Paul Kennedy, Jared Diamond and Joel Mokyr have all echoed the same point in books. Mokyr, in a 2007 essay, pointed out that Paracelsus, Comenius, Descartes, Hobbes and Bayle “survived through strategic moves across national boundaries”. He could have added Gutenberg, Columbus, Papin, Voltaire and more to his list.

 

In the early 18th century an ambitious chemist and would-be alchemist named Johann Friedrich Böttger showed up at the court of Augustus the Strong, elector of Saxony, claiming to have discovered how to make gold. He was promptly imprisoned in a castle by the prince lest he move on and offer his technology to a rival ruler — thus illustrating Hume’s point. Böttger did not of course know how to make gold, but he did work out how to make fine porcelain to rival China’s. The castle was called Meissen.

 

During the 18th century, Britain experimented with a light tax burden compared with the Dutch Republic. Dutch businessmen moved to Britain in large numbers, bringing with them their technologies and ideas. In China, they could not have escaped uniform taxes, at whatever level they were. The differential between the Dutch Republic and England narrowed, suggesting that the Dutch authorities were trying to hold taxation back to slow the exodus.

 

In other words, free movement of genius was crucial to Europe’s success. Perhaps equally important was the free movement of skilled artisans. Jones noted that “the Murano glassmakers spread their arts across Europe despite severe penalties threatened by the Venetian authorities”. But there was a crucial difference from what the European Union means by free movement of people today. These people were moving not because the rules were the same everywhere, but because they were different. The European Commission’s obsession with harmonisation prevents the very pattern of experimentation that encourages innovation.

 

Whereas the states system positively encouraged governments to be moderate in political, religious and fiscal terms or lose their talent, the commission detests jurisdictional competition, in taxes and regulations. The larger the empire, the less brake there is on governmental excess.

 

So, an ambitious genetic engineer, who has devised a way in the laboratory to suppress agricultural pests and eradicate disease-carrying mosquitoes, by releasing genetically modified males that cause infertility among their offspring, has nowhere to go within the EU to find a regime that will license his experiment in the wild. Like Columbus leaving Genoa for Spain, he goes to the United States instead, eventually selling his British-born business to an American company that can afford to build a GM-mosquito factory in Brazil to combat the zika and dengue viruses. This is a real example: the company is called Oxitec.

 

In effect, the European continent is saying to innovative thinkers the opposite of what it said for centuries. Where once it signalled that they could exile themselves and take their ideas with them to sow in more fertile ground, now it is saying: it does not matter how far you move within Europe, we want to be sure you can never escape the same rules. With east-west and north-south differences within the EU building, that feels increasingly like a tension that must break in the years ahead.

 

오바마 대통령은 9조 달러의 재정 적자를 편성해 미국 경제를 지탱해 왔다. 이로써 미국은 단기적으로 불황을 건너게 되었지만, 약 19조 달러에 달하는 재정 적자는 향후 미국 경제에 장기적으로 악영향을 끼칠 것이다.

 

The Shocking Truth About How Barack Obama Was Able To Prop Up The U.S. Economy

 

By Michael Snyder, on December 2nd, 2016

 

 

 

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barack-obama-looking-into-a-mirror-public-domainBarack Obama is one of the biggest “Keynesians” of all time, but unfortunately most Americans don’t even understand what that means. In this article, I am going to share with you the primary reason why Barack Obama has been able to prop up the U.S. economy over the past eight years. If Barack Obama had not taken the extreme measures that he did, we would be in the midst of a historic economic depression right now. But by propping things up in the short-term, he has absolutely demolished our long-term economic future. But like most politicians, Obama has been willing to sacrifice the future for short-term political gain.

 

If you take any basic college course in economics, you are going to learn about John Maynard Keynes. Without a doubt, Keynes was one of the most famous economists of the 20th century, and one of the things that he believed was that governments should go into debt and spend more money when an economic downturn strikes. By injecting additional funds into the economy during a time of crisis, he believed that the severity of recessions and depressions could be reduced. This approach ultimately become known as “Keynesian economics”, and in the post-World War II era virtually the entire world embraced it at least to some degree. Here is more on Keynes from Investopedia…

 

 

An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed by the British economist John Maynard Keynes during the 1930s in an attempt to understand the Great Depression. Keynes advocated increased government expenditures and lower taxes to stimulate demand and pull the global economy out of the Depression. Subsequently, the term “Keynesian economics” was used to refer to the concept that optimal economic performance could be achieved – and economic slumps prevented – by influencing aggregate demand through activist stabilization and economic intervention policies by the government. Keynesian economics is considered to be a “demand-side” theory that focuses on changes in the economy over the short run.

 

Keynesian economists correctly point out that there is a “multiplier effect” to government spending. In other words, when the government spends money it ends up in the hands of ordinary people. In turn, those people spend that money on various goods and services that they need, thus boosting overall economic activity. And the more the money circulates, the more the economy is stimulated. So one dollar of additional government spending does not just add one dollar to GDP. Rather, the impact on GDP is often significantly greater than that.

 

Of course the bad news is that whenever the government borrows money it is stealing consumption from the future. So we are literally destroying the future that our children and our grandchildren were supposed to have in order to make the present look a little bit brighter.

 

When Barack Obama entered the White House, the U.S. was in the midst of the worst financial crisis since the Great Depression. The Bush administration had already begun to ramp up spending, but Barack Obama took “government stimulus” to ridiculous new levels. The national debt has risen by an average of more than 1.1 trillion dollars a year while Obama has been in charge, and this fiscal year we are on pace to add more than 2 trillion dollars to the debt.

 

At this moment, the U.S. national debt is a whopping $19,901,545,151,126.51, and it will cross the 20 trillion dollar mark by the time Donald Trump is inaugurated on January 20th.

 

But when Barack Obama was inaugurated, the national debt was only 10.6 trillion dollars. That means that we have added about 9.3 trillion dollars to the debt since that time.

 

So we have borrowed and spent 9.3 trillion dollars under Obama that we did not have. But because of the “multiplier effect”, that 9.3 trillion dollars actually had a far greater impact on the U.S. economy.

 

Let’s be conservative and just double that number. So that would give us an 18.6 trillion dollar overall impact on U.S. economic activity. Spread over eight years, that comes to an average GDP impact of 2.325 trillion dollars a year.

 

But over the last eight years U.S. GDP has only been averaging about 16 trillion dollars a year. So if you took away 2.3 trillion dollars a year, that would be about one-eighth of our entire economy.

 

In other words, without all of this debt that Barack Obama and Congress have been getting us into, we would be in the worst economic depression in U.S. history right now.

 

And I haven’t even factored in state and local government debt, corporate debt or household debt. The truth is that I am not exaggerating one bit when I say that we are enjoying a debt-fueled standard of living that we simply do not deserve.

 

But even with all of this debt, the U.S. economy has still not been performing really well. In fact, Barack Obama is going to be the only president in U.S. history to not have a single year when U.S. GDP grew by at least three percent.

 

Despite what many in the mainstream media are telling you, the reality of the matter is that Donald Trump is going to inherit an economy that is deeply troubled. If you doubt this, please see my previous article entitled “11 Very Depressing Economic Realities That Donald Trump Will Inherit From Barack Obama“.

 

Donald Trump is talking about cutting taxes and reducing regulations, and all of those things are good, but ultimately those measures are not going to matter that much.

 

What is going to matter is what Donald Trump decides to do about our exploding debt.

 

If Donald Trump wants the U.S. economy to continue to remain at least somewhat stable in the short-term, he is going to have to keep piling up debt like Obama has. Because if Trump and the Republicans decide that they want to get our debt under control, that will plunge us into a horrifying economic depression almost immediately.

 

But if Donald Trump continues to steal money from future generations of Americans at the same pace that Barack Obama has been doing, he will literally be destroying the future of America. It will be a crime on a scale that is almost beyond words, and if they get a chance to do it, future generations of Americans will look back and curse him for what he has done to us.

 

So Donald Trump is really in a no-win situation when it comes to the economy.

 

The only way that he can match Obama’s performance is to do what Obama did, but by doing so he would literally be killing the future.

 

As a nation we have been consuming far more wealth than we produce for a very, very long time, and the only way that we have been able to do this is because we have been able to go into so much debt.

 

But now a day of reckoning is fast approaching, and I am not sure if Donald Trump even realizes that he will soon be faced with some incredibly heartbreaking choices.