If you are interested in more; http://www.debtdeflation.com/blogs/2009/01/31/therovingcavaliersofcredit/ and the crash course http://www.chrismartenson.com/crashcourse and anything by Niall Fergusson

It’s exactly the same as cancer, it has to grow to survive. Just how long we wait before dragging it back down is one of those questions no one knows the answer to. I would say it is relatively close. Nobody minds a bit of regulation and governance but we are close to the point of ridiculous.

Did you see the report that came out of the USA today that said that the government wastes 50c of every dollar they take in tax.

“The pharaoh collected a large amount of taxes that he used for large government projects such as building pyramids and temples. These taxes also supported the wages of skilled workers, scribes, artisans, and military personnel, as well as financing large projects done by peasants during times of flood.”
History Link

Sound familiar?

The ancient Egyptians were quite fond of a bit of slavery too.

You know slavery, it’s where you work and work and work for someone else but you don’t get to enjoy the fruits of your labour.

Well, if Pharaohs Kevin Rudd and Ken Henry have their way with the upcoming tax stitch-up, chances are you’ll be pushed even further into servitude.

Already, the average Australian worker (that’s right, the average) has more than 20% of his or her salary confiscated by the government before it even hits their bank account.

That’s just the beginning. Think about it this way though. If you work a five-day week, every Monday, the work you do is to pay off the Federal government’s income tax demand.

Come Tuesday and you have to work half the day to pay off your superannuation guarantee. That’s money which is guaranteed to be taken from you, but without any guarantee you’ll get it back.

The rest of Tuesday and into Wednesday is taken up with paying off the GST and other levies and surcharges you find yourself paying for every day.

By the time you get to the close of business on Wednesday you should have paid off a raft of other taxes, such as rates, vehicle registration, medicare levy, medicare surcharge (or private healthcare), payroll tax, and don’t forget all the company taxes you ultimately pay for through higher prices for products and services.

So, as you roll into work on Thursday morning, it looks as though you’re about to earn some cash for yourself…

Not so fast bucko. If you’ve got a mortgage, chances are that’s another 20-30% of your income going straight to banks, just to keep a roof over your head. Now, all that by my calculations brings us up to – about right now on a Friday morning.

That means you’ve got the rest of the day to work for yourself. But as if it couldn’t get much worse there’s one more hurdle for you – inflation.

By the time you finish work this week and get paid next week (if you’re lucky) or next month, the dollars that you worked 40 hours for will actually be worth less to you than the dollars you worked for last month. Your average salary of $62,000 at the start of the year, adjusted for inflation will only be worth about $60,000 by the end of the year.

You need a 3% pay rise just to get back to breakeven. Talk about running just to stand still.

So, at about the time of the two o’clock smoko this afternoon, the money you earn for the rest of the day is yours to earn and spend as you please.

But don’t worry, if that doesn’t sound like much, because you’ve always got the credit card to fall back on. Out of interest, the total purchases on credit cards in July by Australians was $19.1 billion.

Look, play around with those numbers as much as you like. Chances are I’m not far off the mark.

And what does the mainstream press have to say about any of this? Nothing of course. The best they can come up with is rubbish like, “Rudd helped you hang onto your job.”

No! No he didn’t. It was your money. You helped yourself hold on to your job.

That was the money you worked for which was confiscated by the government and then divvied out to its favourite chums, are handed back as a bribe.

Rudd didn’t help anyone. Remember, if you were lucky enough to get the $900 bribe, it actually cost you around $4,200 from your taxes to fund the Fairy Ruddfather’s spending.

Only, you haven’t really paid for it yet, but you will. Because the government has just borrowed the money and will demand that you pay it back. Even though you’ve gotten nothing for it, and didn’t even ask to go into debt.

But in reality, the Fairy Ruddfather is just one of the Pharaohs. His co-conspirator is the real danger man.

That’s Treasury Secretary, Ken Henry. Without exaggeration, this man is one of the biggest threats to the individual rights and freedoms of all Australians.

The man is a menace.

Maybe you think that’s a bit harsh. After all, he is a public servant. And people aren’t supposed to criticize public servants. Doubtless he would tell everyone he could be earning much more in the private sector but he’s forsaken that to “do his bit” for society.

Let me explain what I mean when I label this man as the biggest threat to individual rights and freedom…

Reading the story in yesterday’s Australian Financial Review (AFR), your editor was stunned by two things. The reporting of the story, and the content.

To quote from the article:

“Dr Henry has invited about 20 representatives of key business and tax groups to attend a meeting in Sydney on October 15 to give feedback on reform directions to him and panel colleagues Heather Ridout and Greg Smith.”

The article goes on to quote from the letter of invitation:

“This consultation session provides an opportunity for you to provide feedback on the refore directions that the review panel is considering. The views of stakeholders are important to the review panel in ensuring that the possible reforms take business circumstances into account and are sustainable.”

He’s also planning on meeting with other accounting lobby groups.

Anything ridiculous strike you about consulting accountants about tax proposals? It’s like asking a butcher if we should all become vegetarians. Tax groups are hardly likely to recommend abolishing taxes, or even making the tax code simpler.

It’s in their interest for it to be as complicated as possible.

But more than that, where’s our invitation? Where’s your invitation? I mean it’s you that contributes every dollar to tax revenue whether it’s direct or indirect.

Of course, you’ll be told “this is much too complicated to trouble you with. You just get along and concentrate on working, that’s a good citizen!”

It got us thinking. Have you ever watched someone talk to someone who’s disabled in a wheelchair? In many cases they’ll either talk to them slowly like a six year-old, as though loss of leg usage has someone affected their brain power, or they’ll completely ignore them and talk to the carer instead.

Well, reading that story in the AFR yesterday it seems like the pollies view the humble taxpayer as nothing more than a cripple in a wheelchair…

Just go to the Treasury website and take a look at the submissions. There’s thousands of them.

Special interest groups as far as the eye can see. Each backed by research and PhDs and tax experts by the dozen.

Granted, there are also many submissions from individuals. Self funded retirees scared out of their wits at the prospect of Pharaoh Rudd and Henry swiping their life savings outrights or by stealth.

Here’s a sample:

“I am writing to you about my growing concerns with the direction being taken by ‘Australian’s Future Tax System Review’ and the possible harmful impact on my retirement savings.”
Carol Anderson

“I am greatly concerned at reports that the Henry Tax Review is considering recommendations to remove or change the dividend imputation scheme.”
Jan Attwood

“I am shocked to hear that government is considering the abolition of dividend franking credits. At this time when elderly self-funded retirees such as ourselves, are having difficulties meeting costs with reduced dividends and low interest rates; to also lose franking credits, would drive many of us to having to rely on the pension, and to give up private health insurance.”
Jocelyn Banks

“I am concerned that the proposed possible changes will negatively affect dividend income I was planning to live on.”
Elizabeth Every

Those are just four individual submissions. Like most of those from individuals they barely make it onto a second page. And like most of them we can guarantee anything they have to say will be ignored.

Thankfully the Tax Review panel received submissions like the 55 pages from the likes of the Australian Bankers Association.

Or the Australian Social Inclusion Board which laments, “Varied treatment of income, as well as exemptions, deductions and concessions available in the existing system provide opportunities for people to pay less than their share of tax.”

That would involve the government deciding what the “share of tax” would be we assume. Or maybe the Australian Social Inclusion Board could quantify what the “share” should be.

Then there’s the fund managers of course, AXA have chimed in with the unsurprising declaration that, “AXA believes that in order to achieve Australia’s desired objectives in relation to self funded retirement, an increase in the Superannuation Guarantee is required.”

And we shouldn’t forget the trade unions who will do all they can to ensure you don’t get to keep your hard earned wages:

“This Review is ideally placed to consider a series of taxation measures to ensure that the top income earners in our community, who benefited from neo liberalism over the last three decades (while their share of total income doubled) are those in the forefront of new progressive taxation policies.”

You’ve got to give the unions some credit. They may as well have quoted Wolfie Smith, “come the glorious revolution they’ll be the first against the wall!”

For ‘progressive taxation’ read, “give us what you’ve earned.”

It’s nothing more than theft of your property (income). Can we really believe that Pharaoh Henry will turn his back on the ‘progressive’ taxationists and declare taxation to be immoral?

Of course not. Pharaoh Henry has carte blanche re-form (that’s right re-form, not reform) the tax system. It will be a re-forming that ensures individual tax burdens are increased while special interest groups and lobby groups are thrown a few bones to keep them quiet.

Individuals will find a greater tax burden either directly or indirectly, and a destruction of their retirement savings.

Increased public spending and borrowing by the government in your name with the demand that you pay for is nothing short of coercive rule by a bunch of megalomaniacal bunch of bureaucrats.

We’ll wait to see what Pharaoh Henry has to say when his report is published, but we can guarantee you’re not going to like it.

The reason the Poles and Czechs were keen to have it installed in their countries is that it represented a firm visible symbol of the USA’s security guarantee, particularly guaranteeing added protection from the Russians. Which is precisely why the Russians have objected so hard about it.

Personally I see dropping the BMD system in Eastern Europe suggests the USA is confident the Iranians won’t have an ICBM before 2015. Sure, the Iranians have medium range missiles derived from Scud technology (which in turn is basically an updated German V2 from WWII). But this move by the Americans suggests they know the Iranians won’t have a multi-stage ICBM with a reliable warhead any time soon.

Also interesting to comment on the Arctic Sea (that mysterious missing Russian ship). Obviously something very dubious has been going on there, and none of the explanations to date (which have been provided by the Russians) stack up. Unlikely though that it was shipping long-range anti-aircraft missiles to Iran. If Russia wanted to send that sort of ordnance to Iran it’d be much much easier to send it direct to Iran by air or by ground. Why put it on a ship which will travel through seas you don’t control, and when your “enemies” have the most powerful navy in the world and can basically intercept any ship they like? Also, the Arctic Sea’s class of ship has had numerous reliability problems … why entrust such a valuable cargo to a dodgy ship?

It will give ammunition to the rabid US right, though, which could have negative consequences for the Obama administration when dealing with security conservatives in the general electorate at a time when it is already besieged by a disloyal ultra-nationalist-fundamentalist coalition. The fact that Gates signed off on it provides a bit of cover on that score.l

For the analytically inclined, you have to love these geostrategic chess games.

Surely that brings about an entirely new foreign policy strategy for the USA. Will economic sanctions against Iran now be lifted, if Iran is no longer seen by POTUS as a threat?

I hadn’t thought of it like that, Tom. Well caught. Things are definitely hotting up: the mysterious missing Russian ship supposedly carrying long-range anti-aircraft missiles to Iran, Netanyahu’s secret trip to the Kremlin, talks in October where Russia has already said they won’t institute sections and Iran won’t slow its nuclear development, Sarkozy saying Iran is developing a nuclear arsenal and former Israeli ministers saying that Israel will likely attack Iran by the end of the year if harsher sanctions aren’t put on Tehran. Concerning times indeed.

Obama got thoroughly condemned by Lech Walesa, though considering that he helped bring down the USSR it won’t affect Barry that much.

racer1, stick the dihydrogen monoxide where the global warming sun don’t shine. Dihydrogen monoxide enima is a good brain cleanser

Eg: post cold war borders.

Because I can’t see any good options. Lots of options sure. Just no good ones.

Sure, most Presidents make a howler or two. Often times though what looks like a howler is, with analysis, the best option from a bad hand. I don’t see Iran/Contra as Reagan per se making a howler. Reagan’s overall intent seemed the best option from a bad hand, and Ollie North and a few others seemed to take the ball and run with it a little too far.

And no, I’m not a leftie trying to bag those God-fearing Republicans. I’m not a partisan leftie or rightie – I see both as having their strengths and weaknesses, both being equally capable of stuffing things up (just stuffing different things up), and more than anything else I believe that it doesn’t matter what political leaning you have, 90% of what a President/PM/Government end up doing is forced on them with little ability to be “left” or “right”.

But George W … that man managed to make howlers with no redeeming features. It’s to our lasting regret that he didn’t get his first choice of job (being Baseball Commissioner). Because the guy was a pillock at his second choice job.

tom hunter … re the September 17th date, I very much doubt that the US was unaware of that history – how many people do you think the US has in its embassy in Warsaw? Don’t you think they’d have pointed out the symbolism in the date? Perhaps the date of the announcement though has been driven by other things?

CraigM … as for whether the Iranians will ever try to nuke Israel. For my part I just don’t see that happening. States tend to be led by highly rational actors, and I don’t think Iran is any exception. But certainly, a highly rational actor could well think that his best strategy could be to appear quite irrational. When Ahmadinejad talks about wiping Israel off the map he’s arguably playing mainly to his domestic audience. And to sow enough seeds of doubt in the minds of other states that they feel they can’t dismiss him and must deal with him. But you can’t tell me that Ahmadinejad doesn’t know full well that one nuke at Israel means total annihilation for Iran. He might look crazy, but if truly was crazy then he wouldn’t be where he is.

Remember, the main motivation of authoritarian regimes like Iran’s (and North Korea’s) is regime protection. Ranting about Israel … that’s mainly to build a domestic following. Unaffordable nuclear programmes … that’s about driving patriotism (the West are agin us!) and laying down a marker that means the major powers have to deal with you and have to think twice before trying to topple you.