By Doug Casey
May 16, 2024
International Man: Almost every government worldwide is moving to increase taxes and regulations on its citizens while at the same time engaging in ever-increasing currency debasement.
What do you think of this trend, and where is it going?
Doug Casey: Higher taxes, more money printing, and more regulations are long-standing trends. The cat first got out of the bag with the French Revolution and the triumph of the Jacobins, who wanted to collectivize French society. They almost succeeded. Not many years later, Karl Marx wrote The Communist Manifesto and Das Capital, letting another feral meme loose into society. The idea that the State was a good thing and should grow is now everywhere.
With the turn of the 20th century, roughly 120 years ago, governments all over the world created central banks and the income tax. They started small but have become behemoths, funding welfare and warfare. Both things are highly destructive. In the 19th century there was no welfare and very few wars, because wars are expensive. Governments were hard-pressed to extract adequate revenue from their populations for fighting.
Like all living creatures, the prime directive of the State is to survive and grow. But the State is unique. The State, as Mao said, comes out of the barrel of a gun. Since it's based on coercion, it's only natural that some form of socialism would be its preferred way to organize society. Currency inflation, income taxes, and debt have enabled governments to get completely out of control. The prognosis is not good.
International Man: There seems to be a coordinated effort to increase capital gains taxes.
For example, Canada just announced an increase in the capital gains tax from 50% to 67%. President Biden has proposed increasing the US capital gains tax to 44.6% and adding a tax on unrealized capital gains.
What is going on here?
Doug Casey: The "powers that be" actually want to destroy the middle class. That's not something they'd say, but it's apparent that the elite would prefer a society with a small number of themselves supported by a sufficient number of plebs but without a troublesome middle class. They don't like having to rub shoulders with masses of hoi polloi when they visit St Mark's Square in Venice or Macchu Pichu in Peru. They want just enough service personnel around to make it an enjoyable experience. They see the middle llass as an enemy and a risk. They agree with Lenin, who said the middle class should be ground between the millstones of taxes and inflation.
These two tax increases you mentioned are harbingers of more to come. That's guaranteed by the bankruptcy of governments everywhere; they want and need more revenue to maintain the status quo.
Meanwhile, institutions-foundations, pensions, NGOs, and the like-operate tax-free; most taxes don't directly affect them. That suits the elite just fine because the elite control the institutions, and the institutions increasingly hold most of the middle class's assets. The middle class and the plebs don't really own the assets that they have in institutions, except in theory. They're held at a distance from their money, which is just ephemeral digits on a computer. They certainly don't control corporate voting to install directors, who in turn hire management. The way things are developing, more and more powerful institutions are controlled by BlackRock types. The elite love to talk democracy, but it's just a smokescreen.
The WEF wasn't kidding when they promoted the concept that "You'll own nothing, and be happy". Well, at least the elite will be happy.
International Man: If the government can issue new debt and print money by the trillions, why does it even bother imposing taxes on individuals?
Is it a control mechanism, a humiliation ritual, or something else?
Doug Casey: It represents the triumph of Modern Monetary Theory or MMT. Most people don't have a good grip on what MMT is. But, in brief, it's the idea that, as a matter of policy, the government should create as much currency as it needs for whatever it wants and inject it into society towards favored projects.
To counteract the inflationary effects of huge amounts of money going into society, specially directed taxes will be imposed. The taxes will suck inflationary currency out of society while both increasing the government's revenue and-very importantly-diverting capital from things they don't like.
MMT takes the essential idea behind Keynesianism-that wise government officials should manipulate the economy-and puts it on steroids. Injecting money directly into the things they want via corporate contracts and simultaneously withdrawing taxes from people and things that they don't like is the ultimate form of control. It's genuinely dangerous and evil, and it's being put into effect today. The elite in corporations like it since they will be very direct beneficiaries. It's the perfect private-public partnership, the melding of corporations with the State. Mussolini's dream given reality in America.
I urge you to 𝕏 listen to Jared Bernstein, who is the Chief of the President's Council of Economic Advisers, as he attempts to explain MMT. He is an utter and complete buffoon. This is further proof that the lunatics are running the asylum. They're not even smart lunatics. They're stupid, incompetent, and unintentionally hilarious. Listening to Bernstein is like listening to a vintage Saturday Night Live sketch.
International Man: How can individuals protect themselves from bankrupt governments looking to shake them down?
Doug Casey: Things are getting worse everywhere in the world, with just one exception: Argentina.
With approximately 50% of the country reduced to poverty by many decades of socialism and fascism, the voters were finally ready to listen to Javier Milei six months ago. The new president is an avowed and sincere anarcho-capitalist. Despite active sabotage from the usual suspects-the unions, the media, government employees, and academia-he's turning Argentina around. I believe he'll succeed because he has reality and morality on his side.
But everywhere else in the world, or let's say everywhere else in the Western world-especially Europe, the US, and Canada-Third World migrants are being used as a vehicle to give the elite more power. Their voting will be directed towards the elite, who encourage them to immigrate by offering a smorgasbord of welfare goodies. They'll form an automatic plebeian class, paid for by the old middle class.
In addition to that, governments all over the world are moving towards what they call "tax harmonization," which is a euphemism, meaning that tax rates will be similar in all countries. You may try to run but you won't be able to hide, because all governments will be equally predatory.
On the bright side, Argentina should be a good refuge for the next election cycle or so, as it prospers under Milei and his ideas. And, eternal optimist that I am, maybe other countries hitting bottom will follow Argentina's example, if only from desperation. So maybe it's not all doom and gloom in the world.
Reprinted with permission from International Man.