Friday, October 25, 2013

American vs. European Taxation on the Example of the G20 Countries

America shows great unwillingness in its citizenry and political bodies to levy the taxes necessary to pay for:
  • past government spending, mostly of a military nature to finance wars for its own national security, or to pay for
  • current running costs of federal government.
The average taxation per person in the leading G20 countries of the world in 2010 was ca. US$ 16000. In the USA that average taxation was nearly half that, at ca. $10000. See

America thus financed its premiere standing among nations over past decades through deficit spending and thus in part also via money borrowed from other nations (who had that money through taxes levied on THEIR citizens).

Incredibly, much citizenry and many politicians in the USA now want to refuse to pay for the blessings so received.

Rather, they are ignorantly pushing already comparatively low levels of American federal taxation and government spending even lower.

In fact, if American levels of taxation were raised to at least an average world standard, the federal debt could be repaid and seriously necessary government programs could be financed.

If that is not done, America could drop into the status of being a "banana republic", no longer the big boy on the block.

Indeed, according to many parameters, it is well on its way in that falling direction.

See NYTimes: In Search of Republican Grown-Ups.

Bicycles Outselling Cars in Europe

In Almost Every European Country, Bikes Are Outselling New Cars

Wednesday, October 16, 2013

Populist Emergence in Europe (and America) Creates Serious Political Problems and Endangers Stability

Populism is a term that loosely defines any anti-establishment political movement by more or less naive but well-meaning common elements in society who oppose the traditional political parties and their traditional programs.

The Republican "Tea Party" emergence in America is a type of populist movement. Also Europe currently has similar populist political movements that have emerged in numerous countries, mostly due to economic problems.

See Europe’s Populist Backlash.

Populism may sound fine at first glance, but the experience of history shows that rising populism can destabilize traditional governments and established nations, leading to terrible upheavals and wars -- often based on good intentions -- which result from what are essentially "amateurs" thinking they can do better what the professionals have been doing. Usually, that is not anywhere near the case.

We see in America what chaos such misguided "greenhorn" populist politicans can cause, not realizing that good intentions alone are never a qualification for good government.

Friday, October 11, 2013

Astounding Economic Recovery in Latvia as a Model for Other Nations of the European Union?

What are the essential elements for economic recovery?

This is a question that can be asked regarding the arguably complete economic recovery in Latvia over the last 3 years.

A Fistful of Euros in fact asks:

As Good As It Gets In Latvia?


Dual Citizenship Permitted in Latvia by Amendments to Citizenship Law Effective 1 October 2013

Amendments to the Citizenship Law of the Republic of Latvia have now made it officially possible under given circumstances for emigrated Latvian "nationals" or their descendants to obtain dual citizenship.

Previously, there was a requirement that a previously existing citizenship in another country had to be relinquished to obtain Latvian citizenship.

See the details at News in Assistance obtaining dual citizenship in Latvia.

Russia, Law and Courts: Supreme Arbitration Court (VAS) proposed to be merged with the Russian Supreme Court

President Putin has proposed to merge the Russian Supreme Arbitration Court with the Russian Supreme Court, thus making the judicial system consolidated at the top in one supreme court.

See Putin's Legal Vertical: Kremlin Seeks To Consolidate Court System

Conflicting court decisions by the two courts are given as the rationale for the consolidation. Putin is quoted as saying:
"People take a dispute before courts of general jurisdiction and then the side that is unsatisfied with the ruling appeals with the same question to the arbitration system and receives the opposite ruling."
That reasoning is understandable enough, without attaching speculative political significance to the development, which may, or may not, bear upon the question.

Economics Nobel Prize Winner Becker and Most Cited Jurist Judge Posner on the Debt Ceiling as A WASTE OF TIME

Both Gary S. Becker (Nobel Prize winner, Economics, 1992) and Richard D. Posner (probably the world's most cited modern jurist and judge) at the The Becker-Posner Blog have postings about the debt ceiling.

It is remarkable that people in Congress and elsewhere do not look to brilliant heavyweight minds such as these for legal and economic guidance, rather than to lightweight extremist demagogues in their midst.

Becker writes, inter alia:
"Conservatives who have supported a debt ceiling to reduce deficits are really usually mainly concerned about the size of government. However, government size depends not on deficits, but rather fundamentally on the level of government spending. Since deficits can be reduced either by cutting spending or raising taxes, both liberals and conservatives can agree on the value of reducing deficits while strongly disagreeing on how to reduce them. Liberals want to raise taxes to cut deficits, while conservatives want to limit many kinds of government spending in order to reduce the size of the government.

To the extent that debt ceilings mainly induce tax increases to slow the growth in debt, a focus on debt ceilings and deficits does not help rein in the size of government. Moreover, the substantial growth in federal spending during the past 50 years under both Democratic and Republican control of Congress and the presidency strongly suggests that the many debt ceilings during this period did little to reduce the size of government. The numerous deficits over this period even suggest that the ceiling has accomplished little, if anything, in reducing deficits.

For those worried about the growth of government, there is no substitute for a focus on the scale of government spending. Having debt ceilings may not be completely innocuous because they may detract from that focus."
Posner writes, inter alia:
"So a debt ceiling is unlikely to reduce the size of government. But it is pernicious, in inviting political tactics that could well be thought to violate the Constitution, or at least the spirit of the Constitution. Republicans want to destroy, or in the short run greatly weaken, Obama’s health care law (“Obamacare”), even though it resembles a health care reform proposed by President Nixon and successfully championed by Mitt Romney when he was governor of Massachusetts. The Republican preoccupation with Obamacare is thus rather surprising, but may reflect a fear that when once Obamacare is debugged and up and running it will prove popular, which will boost the Democrats. Yet the Republicans are not in a position to repeal or even amend the law by constitutionally authorized means, because repeal or amendment would require a majority vote in both houses of Congress (actually a two-thirds vote in both houses, for given a lesser majority Obama could veto a repeal or amendment without fear of being overridden). The intention, which is contrary to the structure of the federal legislative process ordained by the Constitution, is to coerce Congress to repeal (or by amendments to defang) Obamacare by threatening to precipitate an economic crisis by refusing to vote for an increase in the debt ceiling. If the tactic succeeded, it would mean that a minority in Congress had succeeded in amending a federal statute."
So, essentially, they agree. Using the debt ceiling to try to reduce the size of government is a waste of time. A WASTE OF TIME.

Of course, the minority in Congress has no chance of winning, so that the entire farce of the Republican extremist led extortion-based government shutdown is either simply political "posturing", which has backfired against them, or worse, intentional destabilization of the government, for which those responsible should be criminally punished for "conspiring against rights" outside of their normal and legal House duties, which could then be regarded as a criminal violation of 18 USC § 241 - Conspiracy Against Rights.

U.S. House of Representatives Extortionist Debt Ceiling Crisis Poses Presidential Dilemma of Three Unconstitutional Options: Should Obama Take the "Least Unconstitutional" Path?

Section 4 of the 14th Amendment to the U.S. Constitution provides:
"The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."
Several law professors have recently analyzed the Constitutional aspects of the debt ceiling crisis.

See As Debt-Ceiling Crisis Looms, Dorf and Buchanan Urge the President to Take the "Least Unconstitutional" Option.

In our view, the House of Representatives has no legal option on raising the debt ceiling -- they must raise it to finance laws in force, otherwise they are calling the validity of the public debt into question, contrary to Section 4 of the 14th Amendment. They MUST pay these bills.

A failure to do so is prima facie illegal in terms of the U.S. Constitution by the very fact that it puts the executive branch of government into a position where no Constitutional options are left open to the executive branch in fulfilling Constitutional duties and where an unConstitutional situation results because of a basic failure of the House of Representatives to do its job as the Constitution provides.

The House is currently trying to do an end run around the Constitutionally set legislative process, and its conspiring ringleaders should in our opinion be strongly punished for doing so as "conspiring against rights", which is a criminal violation of 18 USC § 241 - Conspiracy Against Rights. What the House is doing now is beyond their powers, and therefore they have no immunity for it against criminal prosecution -- so our opinion.

The President is Constitutionally obligated by law to pay debts, salaries, and pay for government programs legally in force as a matter of law, but can not do so Constitutionally if a debt ceiling is imposed by Congress that makes it impossible for the executive branch to make all the required payments.

Abraham Lincoln was put in this position and invoked emergency executive powers, bypassing Congress, and that was correct. But Obama likely does not have the character strength of an Abraham Lincoln.

In any case, that is why reductions in spending by the federal government -- if they are to occur -- must ONLY occur via normal legislation of both houses of Congress and not by unilateral extortionist runs by the House acting outside its powers, as if the Senate did not exist, and is if the House ran the nation.

Any attempt in so-called pending "negotiations" of the House with the President on the debt ceiling to bypass the Senate is doomed to failure. That is not the way the Constitution set up the legislative system. The House must go through Senate in legislation, any and all legislation. That's the law.

The present shutdown crisis is what inexorably happens when Congress and especially the House of Representatives is filled with "American Idol"-like doctors, veterinarians, businessmen, real estate brokers, wrestlers, singers, housewives, darlings of their influential parents, etc., i.e. amateurs "playing" legislator, i.e. with people who have not studied law and have been taught no comprehensive understanding of the American legal system or how to legislate in it, and who should rightly be out practising THEIR learned professions and not screwing up the country with their amateurish notions of government.

There are exceptions in legal background, such as the extremist Ted Cruz, whose alleged brilliance has unfortunately led him down an absolutist path in which he, like the very similar Supreme Court Justic Antonin Scalia, thinks he has found the holy grail of government that has eluded all the other brilliant judicial minds in America over the more than 200-year storied history of the USA.

Beware of these people who think they have all the answers. They do not. Rather, in following their absolutist theories, they cause much more harm than good to others, as the government shutdown shows.

What do Cruz and other leading extremists care about your average American? What do they care about America? Very little.
Their own careers and dogmas are more important to them.

If many "small" people in America do not get their paychecks and have to struggle while these politicos bask in the political limelight, what do they care?

Indeed, as many "small" people in America have no health care while the government shutdowners have no worries about THEIR own health care, it is clear that THEY do not care about YOU or your problems.

It appears to this observer that these misguided people are destructive political "theoreticians", nothing more, and they are terribly, terribly wrong, even if some of them are well-meaning. They are on the path of destruction.

See our previous posting on

Tea Party Political Nihilism: "WE DON'T CARE" as a Philosophy of Anarchism in the Russian Tradition of Mikhail Bakunin

Wednesday, October 09, 2013

American Tea Party Political Nihilism: "WE DON'T CARE" as a Philosophy of Anarchism Comparable to the 19th Century Russian Legacy of Mikhail Bakunin

See the Business Insider reporting the results of a questioning of Tea Party persons by the Potomac Research Group's Greg Valliere at Wall Street Doesn't Get The Tea Party.

Based on that report, the philosophy of the Tea Party appears to be:


The destructive actions taking place via the House of Representatives thus become clearer in placing the Tea Party in the category of

political nihilism,

which we found defined at the Wikipedia as follows:
"Political nihilism is a branch of nihilism that follows the characteristic nihilist's rejection of ... the necessity of the most fundamental social and political structures, such as government, family or even law and law enforcement." [emphasis added by LawPundit]
Political nihilism is a doctrine that originated in Russia.

It is an irony that those who regard themselves to be the most right wing of all American factional fundamentalist political groups are in fact comparable in their political attitudes to the most left wing of all fundamentalist Russian groups in the 19th century.

Political nihilism led in Russia to anarchism and to a series of terrible wars and great loss of life.

Its leading instigator was Mikhail Bakunin.
"Mikhail Alexandrovich Bakunin (Russian: Михаил Александрович Бакунин, IPA: [mʲɪxɐˈil ˌbaˈkunʲin]) (30 May [O.S. 18 May] 1814 – 1 July 1876) was a Russian revolutionary, libertarian socialist, and founder of "collectivist anarchism" philosophy. He is considered among the most influential figures of anarchism, and one of the principle founders of the "social anarchist" tradition of anarchism.[2] Bakunin's enormous prestige as an activist, made him one of the most famous ideologues in Europe; during his lifetime, he was arguably more infamous than Karl Marx. He gained substantial influence among radicals throughout Russia and Europe."
Interesting is that the Tea Party "Town Hall" movement can be compared to the building of Russian socialist communes:
"The 1872 Hague Congress was dominated by a struggle between Marx and his followers, who argued for the use of the state to bring about socialism, and the Bakunin/anarchist faction, which argued instead for the replacement of the state by federations of self-governing workplaces and communes".
In the present USA, the Tea Party is similarly trying to sabotage federal government in favor of local rule in their electorate districts.

Public Spending as the Socialization of Risk and Unavoidable Losses that the Dominant Private Class in Capitalism Avoids Via Local, State and Federal Government

Men are by and large greedy, selfish yahoos (see Gulliver's Travels for the origin of the term) and that is why capitalism is so successful, because its economic and political doctrines are based on a recognition of that human condition.

One area of great and often unrecognized or unacknowledged selfishness is the socialization of risk and losses by the private sector using the government as their handmaiden.

No one who discusses capitalism and socialism can fail to deal with that issue because public debt is primarily the result of the socialization of risk and losses by the dominant economic class and not the result of waste by the have-nots, who have little to say in the running of the system.

Philosopher, life-long socialist, born-again capitalist, and economics historian Robert L. Heilbronner was one of the most popular economic writers of all time, and is the author of the following sentence (1989), written in the New Yorker magazine at "Reflections: The Triumph of Capitalism", just prior to the collapse of the Marxist-Leninist Soviet Union:
"Less than 75 years after it officially began, the contest between capitalism and socialism is over: capitalism has won... Capitalism organizes the material affairs of humankind more satisfactorily than socialism."
Heilbronner wrote further in 1992 in Dissent magazine, as referred to by David Boaz in the Free Republic:
"Capitalism has been as unmistakable a success as socialism has been a failure. Here is the part that's hard to swallow. It has been the Friedmans, Hayeks, and von Miseses who have maintained that capitalism would flourish and that socialism would develop incurable ailments. All three have regarded capitalism as the 'natural' system of free men; all have maintained that left to its own devices capitalism would achieve material growth more successfully than any other system. From [my samplings] I draw the following discomforting generalization: The farther to the right one looks, the more prescient has been the historical foresight; the farther to the left, the less so."
Heilbronner was a 100%-er rather than a man of prudence and judgment, who rather tended to make unsupportable and extreme statements and theories, whether on the subjects of capitalism or socialism, and thus was probably as wrong in supporting capitalism completely as he was previously equally wrong in being a staunch advocate of socialism. His strength is the recognition of problems and issues. His weakness is their resolution.

It is unfortunate that Heilbronner is often cited as an authority in the arguments between socialism and capitalism. He is simply too absolute.

The fact is, it all depends on what you define as "capitalism" and what you define as "socialism".

We ourselves are staunch capitalists because we acknowledge the selfish nature of humankind, and the necessity of a political and economic system that understands that. Hence, we define capitalism similarly to what is found in the Wikipedia:
"Capitalism is an economic system in which capital assets are privately owned and goods and services are produced for profit in a market economy."
Socialism in turn is defined quite the opposite, again taking the Wikipedia as a representative definition:
"Socialism is an economic system characterised by social ownership of the means of production and co-operative management of the economy."
The reason "pure" socialism as defined above does not work well is because people by nature tend to work for themselves and their loved ones and not for society as a whole. That is why Marxism-Leninism failed and will always fail.

On the other hand, we must be aware that pure capitalism exists nowhere, otherwise there would be toll booths on every street and road and you could not go anywhere without paying some private person or enterprise for the privilege of going beyond your front door, from one piece of property to the next.

PUBLIC property and especially PUBLIC roads, lands and services are an essential part of democracy, because they provide YOU, the citizen with freedom of movement. For that you need people in government, e.g. the Park Authority.

Indeed, many activities of human beings involve actions other than production of commercial goods and services, and that is where the problems begin.

Simple examples are the military and police protection.

Protection of the self, of loved ones, of private property (!), of one's local region, of the state, of the nation, or of an alliance of nations is not "capitalistic" per se, because it does not really involve an issue of the commercial production of goods and services. 

Rather, men and women "pool their resources" via varied forms of group taxation, fees or tithes in order to finance e.g. "a safe neighborhood" or, on a broader scale, "national security".

These things could of course be done "privately", and on a local level, and indeed sometimes are done privately, but all ultimately involve a "social" pooling of resources and money, especially at the national FEDERAL level. That is neither capitalism nor socialism, but it is the socialization of risk.

Heilbronner in his book The Nature and Logic of Capitalism talks about this side of the social order as the necessary:
"... provision of the law and order essential for the preservation of [the capitalist system and of private property]".
This encompasses the entire scope of local and federal civil government, including the legal system, its rules and regulations, the lawyers, the courts, the legislatures, etc., including of course the funding of that government.

As Adam Smith correctly wrote in The Wealth of Nations:
"The acquisition of valuable and extensive property ... necessarily required the establishment of civil government".

"...erecting and maintaining those public institutions and those public works which ... may be in the highest degree advantageous to a great society ...  [but these institutions and works ] could never repay the expense to any individual or small number of individuals [because they are not profit-making]...." [emphasis added by LawPundit]
 Heilbronner in this context correctly points out that:
"... the state foists upon the public the costs of those activities that would result in monetary "losses" if they were carried out by the economic sphere, while recognizing as inviolable the right of private enterprise to benefit from its profitable undertakings.

This socialization of losses applies to much of the the network of canals, railways, highways, and airways that have played an indispensable part in capitalist growth, as well as the provision of literate and socialized work forced through public education programs, the protection of public health, and the like.

All these are examples of "public works", behind whose manifest usefulness for the citizenry at large lies the latent economic function of providing necessary inputs for [the circuit of money to commodity to more money], and the political function of strengthening the regime of the dominant class." [emphasis and link added by LawPundit]
The problem in today's America is that the dominant capitalist elite who already control the mass of American wealth and income no longer want to pay anything near their fair share for those very same government services and advantages which benefit primarily the existing capitalist system that enables their wealth and their income.

Tuesday, October 08, 2013

Debt Default Risk in America and the Prophecy of the Bandersnatch Who Grabbed a Banker after a Federal Government Shutdown Closed the House of Representatives

Today, we received a most curious letter from a sender unknown, who left a rather strange photographic image titled as if it were from the National Snark Service, U..S.. Department of Jabberwocky, along with a rather bizarre poem that looked very similar to something we recognized as similar to Alice in Wonderland.

Our advisors suggested that both objects were undeciphered true prophecies long found in Jabberwocky and similar "allegedly" nonsense works of the writer Lewis Carroll, unexpectedly foretelling a similarly nonsensical appearing government shutdown and debt default crisis, led by a bandersnatch:
'bander' archaic word for a 'leader' [so that]  a 'bandersnatch' [was] an animal that hunt[ed] the leader of a group".
In their analysis these advisors equate the "bandersnatch" with a modern Böhner ("a stupid mistake") going after a Barak ("a shining one") with a view to take his place, but ultimately being defeated and disgraced.

We share these objects with you for whatever it is worth:
"And the Banker, inspired with a courage so new
It was matter for general remark,
Rushed madly ahead and was lost to their view
 In his zeal to discover the Snark.

But while he was seeking with thimbles and care,
A Bandersnatch swiftly drew nigh
And grabbed at the Banker, who shrieked in despair,
 For he knew it was useless to fly.

He offered large discount—he offered a check
 (Drawn "to bearer") for seven-pounds-ten:
But the Bandersnatch merely extended its neck
And grabbed at the Banker again.

Without rest or pause—while those frumious jaws
Went savagely snapping around—
He skipped and he hopped, and he floundered and flopped,
Till fainting he fell to the ground.

The Bandersnatch fled as the others appeared
 Led on by that fear-stricken yell:
And the Bellman remarked "It is just as I feared!"
And solemnly tolled on his bell."
 -- with apologies to Lewis Carroll, The Hunting of the Snark

CNN's Fareed Zakaria Correctly Analyzes Actions of U.S. House of Representatives Leading to Government Shutdown as Unconstitutional

See Daily Kos and US Debt Ceiling Impasse is a Constitutional Crisis in the Making where Maynard writes, correctly in our opinion:
"But it's the ACA [Affordable Care Act] measure in this shutdown battle that has really roiled widespread protest against these tactics. In a CNN video editorial, Fareed Zakaria does a good job explaining why in simple terms.

In short, his argument is that: Because this is settled law that has already passed through congress, already been signed by the President, and already even been confirmed as constitutional by the Supreme Court, for the House - a single legislative body - to use the threat of default to overrule agreement with the Senate and the President in prior lawmaking, is to extra-constitutionally usurp powers it does not enjoy. Essentially, the House asserts a new postfacto veto authority over prior Senate and conference committee deliberations after reconciliation and passage. Even a law agreed upon by all three branches of government, as is the case of the ACA, could - after the fact - be 'vetoed' by only the House of Representatives simply with the procedural move of refusing to pass a budget or continuing resolution.
This appears unconstitutional. Article I Section VII requires that budgetary bills originate in the House, where they are debated in the Senate. Differences between House and Senate Bills are reconciled in conference committee. The final bill passed is then sent to the President for a signature or vetoed.
Article IV Section I ('full faith and credit') of the US Constitution demands the financial solvency of states, and provides the judiciary with the authority to resolve private financial disputes.
The Fourteenth Amendment clearly states that US Federal debt is sacrosanct and must be honored. This was affirmed in 1935 by the Supreme Court in Perry v. United States.
The Fourteenth Amendment, in its fourth section, explicitly declares: 'The validity of the public debt of the United States, authorized by law, ... shall not be questioned.' While this provision was undoubtedly inspired by the desire to put beyond question the obligations of the government issued during the Civil War, its language indicates a broader connotation. We regard it as confirmatory of a fundamental principle which applies as well to the government bonds in question, and to others duly authorized by the Congress, as to those issued before the amendment was adopted. Nor can we perceive any reason for not considering the expression 'the validity of the public debt' as embracing whatever concerns the integrity of the public obligations."
We conclude that the Joint Resolution of June 5, 1933, in so far as it attempted to override the obligation created by the bond in suit, went beyond the congressional power.
There is absolutely no rational argument that either legislative body in congress has the authority to withhold fulfilling its constitutional fiduciary responsibilities for the sole purpose of exacting policy concessions otherwise unrealizable through normal legislative practice. Funding the government is explicitly their job. For one legislative body to refuse to fund government without policy concessions from either another legislative body, the Executive, or Judicial clearly expropriates authority in an extra-constitutional manner and thus violates the balance of powers our founders initially intended." [emphasis added]
Not only that, but as we noted in our previous posting,

Government Shutdown Crisis Planned in Secret, Months in Advance by Republican Anarchists: A Criminal Conspiracy?

the criminal "conspirators against rights" in the House of Representatives and those outside of it should be sent to jail.

Tuesday, October 01, 2013

European Health Care Costs and Obamacare : The True Facts About Medical Charges

This is an important day for Americans because October 1, 2013 opens affordable health care for everyone. See the guide at the NY Daily News:

Your guide to Obamacare: Affordable Care Act to open Oct. 1

To its great shame, the United States of America was not the FIRST but rather the LAST industrialized nation in the world to provide its citizens with national health care.

Small wonder then that America lags far behind other nations in the quality of its health care, even though it SPENDS more -- obviously, only for the chosen few. If you doubt that statement, read the links below.

The Affordable Care Act will change that -- for the better.

In fact, we recently talked to someone about a hip replaced in America for a total cost of $110,000 (NOT unusual in the USA) -- whereas comparable hip replacement in Europe costs a fraction of that as the OECD writes

"[i]n 2009, the estimated price of a hip replacement on average across European countries was about EUR 7300, while the price of a knee replacement was EUR 6800"

-- those figures showing the great failings of the pre-existing US health care system -- a system that well-meaning but badly informed government shutdowners are inexcusably trying to maintain,
at the cost of many people's health.

See these postings for the true facts:

Europe Leads Global Agewatch Wellbeing Index : Income Security : Health Status : Employment and Education : Enabling Environment

See the Global Agewatch Index of income security, health status, employment and education, and enabling environment at First ever Index to measure the wellbeing of older people.

The current federal government shutdown and debt chaos in the USA surely drops America in these world rankings which are nevertheless dominated by European countries, as well they should be.

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