The Daily Bell features consistently solid analysis of and thoughtful challenges to contemporary statism. I am proud to be on the team.
AHEAD OF THE CURVE
The Daily Bell has come out of nowhere to introduce to the Internet community some of the most intriguing and proactive interviews there are out there. Let's hear it for creativity and being ahead of the curve.
SEPARATES WHEAT FROM CHAFF
The Daily Bell is a true beacon to lead in helping the reader to separate the wheat from the chaff.
The Daily Bell affords an excellent alternative perspective on some of the noise and nonsense of mainstream media. In particular, I enjoy reading Anthony Wile's 'free-market analysis' on current subjects and articles. Very insightful.
For alternative views on contemporary politics, culture and science, from a libertarian point of view, check out The Daily Bell.
A MUST-READ FOR EVERYONE
The Daily Bell is a must-read for anyone who wants to understand the effects of the state on our economic future.
I read The Daily Bell every day and I find it very informative.
GREAT JOB, DAILY BELL
I can say that, unlike the mainstream press, The Daily Bell knows the questions to ask and has the chutzpah to ask them. They realize that socialism and Keynesianism are wrecking the world and they are helping to save what is left of liberty and free markets.
PART OF MY DAILY NEWS DIET
I read it every day!
There is no other publication in print or on the Internet like The Daily Bell. They have the courage to report the truth and analyze current foreign policy, politics and economic events in the context of a formerly hidden history of financial elites.
Sit down to read from The Daily Bell and experience a jolt of intellectual energy.
CUTTING EDGE ANALYSIS
At a time when growing majorities worldwide are tuning out mainstream news, people are seeking the cutting edge, insightful and thought provoking analysis that The Daily Bell consistently provides.
The Daily Bell has a great libertarian point of view, and excellent economic analysis. Add it to your daily reading.
THE DAILY BELL IS A MUST-READ
Because the world is changing so rapidly, it is difficult to keep up, which means The Daily Bell is a must read. I consider the information critically important reading.
I enjoy reading The Daily Bell because it often has refreshing and novel ways of looking at things.
PREMIER FREE-MARKET ANALYSIS
The Daily Bell rings out for liberty every day. It is the premier online source for insightful and hard-hitting free-market analysis and interpretation of economic, political and business events.
The Daily Bell is a fantastic source of challenging thought from a wide range of freedom loving people.
PROFOUND AND PROVOCATIVE
Every day, I rely on the Daily Bell for a different perspective you'll never find in the regular media. It's an analysis and timely insight that is profound and provocative.
VOICE OF REASON
I have thoroughly enjoyed the analysis and interviews at The Daily Bell, which has so often been a voice of reason during these perilous times
GUTS, OBJECTIVITY, WISDOM
Rarely does a publication have the guts and objectivity to tell it like it is, yet the eloquence and wisdom to listen carefully to the ‘other side.’ This is The Daily Bell accomplishing its daily mission.
I consider The Daily Bell essential reading for anyone desirous of understanding the way the world really works.
INFORMATIVE SOURCE OF INFORMATION
The Daily Bell is an informative source of information and commentary from leading figures in the liberty movement. It's a pleasure to be interviewed alongside far more notable individuals.
A VIRTUAL WHO'S WHO
The good and the bad, the big dogs and the small, the thinkers and the doers among libertarians and on the "Right" – you can encounter them all in The Daily Bell's exclusive weekly interviews. Indispensable.
SOURCES YOU CAN TRUST
The Daily Bell should be on everyone's shortlist of news sources you can trust. It's on mine, and we often refer to it in our own weekly news service at The Reality Zone.
The Daily Bell is one of the most innovative and in-depth websites on the Internet. The breadth of the content is awe inspiring and the amount of knowledge imparted is almost impossible to quantify. For me, as a liberty minded seeker of knowledge, it is a must read.
Get outside the box with The Daily Bell and experience independent views.
The Daily Bell is an indispensable source of news and information for those seeking to curtail the power of the welfare-warfare state.
The Daily Bell does a remarkable job of exposing how money power uses central banking to crush people into submission via global government with economic and political slavery being the desired end result.
MESSAGES OF TRUTH
The Daily Bell website is one of the authentic voices cutting through the clouds of vapid opinion, the morass of mediocre media and the confusion of Orwellian doublespeak. The Bell website lives up to its name, ringing unheard messages of truth in our ears.
THOUGHTFUL NEWS, EXCLUSIVE INTERVIEWS
I always read the Bell. The news items are thoughtfully selected, and the interviews are unavailable elsewhere.
Liberty is under assault by Big Government. The Daily Bell is an essential tool for information for those who want to fight for freedom.
TRUTH AT WORK
There are very few publications out there that have the smarts and guts to tell the truth about the dictatorial forces at work destroying our civilization. Thankfully The Daily Bell is one of them, and it appears in the mailbox every day.
A LEADING LIGHT
The future is created by the people who build it, not the people who predict it will not exist. You can meet lots of important builders by reading The Daily Bell.
INSIGHT YOU CANNOT IGNORE
The Daily Bell provides unique insights on contemporary political, economic and social problems that can be found in such a concentrated form nowhere else. Whether one agrees or disagrees with it, one cannot afford to ignore it.
I really enjoy reading The Daily Bell for the excellent research and content provided on a wide variety of issues vital to the Freedom Movement.
READ IT EVERYDAY
A defender of free markets, The Daily Bell takes a libertarian approach to expose and unravel this global misinformation campaign. Read The Daily Bell – every day!
GREAT INVESTMENT INFORMATION
I love reading The Daily Bell! Interesting investment information, a political and social viewpoint that lets me know I'm not alone in the world and "annotated" with analysis. I highly recommend it to all interested readers.
GREAT THINKERS YOU CAN'T GET ANYWHERE ELSE
The Daily Bell has revived that great old institution of the personal interview, extracting information from today's great thinkers you can't get anywhere else. Outstanding!
NEVER MISS AN ISSUE
I love the Daily Bell. Every issue is principled and informative.
ONE OF MY FAVORITE SITES
The Daily Bell is one of five sites that I review every day because I find there a clear, common-sense interpretation of everyday events.
OUT OF THE DARK
The Daily Bell leads us out of the dark tunnel of manipulated press into the light of free press.
America's Fiscal Folly and Squandering of the "Reserve Fund"
July 20, 2011
Editorial By Richard Ebeling
The economic crisis through which the United States and much of the rest of the world are now passing is not another supposed instance of the "failure" of unrestrained capitalism. It is the failure of the government's own policies. In other words, it is a crisis of the Interventionist State.
The recession has been the inevitable outcome of the prior artificial investment boom and housing bubble, which were caused by the misguided and highly expansionary monetary policy of the Federal Reserve between 2003 and 2008. The money supply was increased by nearly 50 percent during this five-year period, and key interest rates, when adjusted for inflation, were at or below zero. Investment and housing decisions were radically out of balance with available real savings to sustain such long-term financial commitments. Consumers and homeowners were induced by low interest rates and easy mortgage policies to get in way over their heads.
The duration and slowness of the recovery, and especially the sluggish delay in anything approaching "full employment," is also the consequence of the government's policies. The Federal Reserve went on another massive monetary expansionist binge that has increased the money supply in the form of additional bank reserves by well over $2 trillion in just a less than three years. Interest rates have, again, been kept at or even below zero when adjusted for inflation, with the affect of continued highly distorted investment and housing sectors.
Fiscal Folly and Burdensome Government
All of this has been exacerbated by the U.S. government's radically loose fiscal policies. But all that the massive trillion-dollar-a-year government deficits for the last three years have done is to accelerate a disastrous trend in government budget financing that had been growing worse for nearly a decade. When George W. Bush entered the White House in 2001, total accumulated government debt stood at $5 trillion. When Bush left office in January 2009, the government's debt had more than doubled to over $10 trillion.
Now in less than the three years of the Obama administration, Uncle Sam's debt stands at over $14.5 trillion – and growing. This debt practically is equal to the estimated total market value of the country's Gross Domestic Product (GDP), a level not seen since the cost of fighting the Second World War. The government, right now, is borrowing approximately 40 percent of all the money it is spending. Under current spending projections government debt will total well over $20 trillion by 2016.
For decades, the United States government has been gobbling up more and more of the wealth and resources of American society. If we take a long-term perspective, in 1902, all levels of government in the U.S. only absorbed slightly more than 7 percent of GDP. By 1998, nearly a century later, all government expenditures as a percentage of GDP had grown to 28.1 percent; ten years later, by 2008, government spending had increased to 38.3 percent of GDP. And in 2010, it has approached 43 percent of GDP. Last year, in other words, 43 cents out of every dollar was spent either by local, state or federal governments.
To at least partly fund these growing expenditures, taxation had eaten into more and more of the American taxpayers' income and wealth. Again, looking back to over a century ago, in 1902 Federal, state and local taxes combined took only 6.7 percent of GDP. Almost a century later in 1998, tax-cost of all levels of government in the U.S. had increased to 29.2 percent of GDP. This has fallen closer to 25 percent of GDP in the last few years due to the recession, with a decline in taxable incomes and corporate profits. But as we saw, this has not stopped the government's growth in spending by borrowing, instead, all that it has needed.
Government spending on defense, entitlements (Social Security and Medicare), and illusionary and counter-productive "stimulus" programs has been and is pushing the United States into the fiscal crisis that threatens America's economic future.
In spite of the rhetoric from a wide variety of politicians and media outlets, the problem is not that taxes are too low or that "the rich" are not paying their "fair share." According to data from the Organization for Economic Cooperation and Development (OECD), among twelve prominent members of the organization (Australia, Canada, France, Germany, Ireland, Italy, Japan, Mexico, Netherlands, Sweden Switzerland, and United States), the U.S. had the third lowest personal income tax rate in 1990 (with only Switzerland and Sweden's rates being less). By 2010, the U.S. was among the higher personal income tax rate nations, along with France, Italy and the Netherlands. Even Mexico's personal income tax rate was noticeably less than America's
Among the same group of OECD members the U.S. corporate income tax rate was far below Germany, Sweden, Japan, Italy, and Ireland in 1990. By 2010, the U.S. corporate income tax rate was exceeded only by Japan's, with Canadian, French, Irish, Italian, Mexican, Dutch, Swedish, and Swiss corporate income tax rates being anywhere between 10 to 50 percent less than America's.
"Soaking the Rich" – Still Not Enough
Nor are "the rich" not paying some hypothetical "fair share." In 1990, those in the top five percent of income earners in the United States earned about 28 percent of total gross personal income in the country. In that same year, those in this income category paid around 42 percent of all personal income taxes collected by the government.
In 2008, that top five percent of income earners earned around 32 percent of total gross personal income in America. But their personal income tax burden had increased to nearly 60 percent of all personal income taxes collected by the government.
Thus, while the "share" of personal income earned in the U.S. in the hands of this top five percent had increased by 14 percent between 1990 and 2008, their tax burden rose during this time period by nearly 43 percent.
Indeed, the top ten percent of all personal income earners paid 70 percent of all personal income taxes collected by the government in 2008, compared to 55 percent in 1990. The top 50 percent of all those earning personal income in 2008 paid 97 percent of all personal income taxes collected that year. And the latest data suggests that since 2009, at least 51 percent of all American households now pay no personal income tax. A minority of income earners now provides all the income taxes paid to partly defray the cost of government in the United States.
U.S. Spending and Debt: More than the Economy Can Bear
Government spending and the accumulated debt is fast approaching more than the American economy can bear. What is collected in both personal and corporate taxes is not enough to cover all that the government spends because government's promises to an ever-expanding spider's web of special interest groups vastly exceeds what the country can afford to pay out of currently earned income. If the government attempted to raise that additional 40 cents out of every dollar it presently spends through borrowing by raising taxes it would bring the economy to a screeching halt.
It would soon be discovered that "soaking the rich" even more would barely provide a handful of drops to cover the spending in excess of taxes collected. It would have to be admitted that the only source of additional government revenue to fill the deficit gap would be significantly higher taxes on the broad middle class of income earners, as well as adding to the tax rolls many of those currently paying no taxes.
Income earners would save even less than now; incentives and resource availability for private sector investment in new or existing businesses in the U.S. would be crushed – along with any market- based job creation. The capital for research and technological development would dry up even more in America, and capital that could get away would flee to more business-friendly countries.
Nor can the borrowing binge continue for very much longer. Net interest payments on U.S. government debt presently equals about 1.3 percent of GDP. Under current borrowing projections, with no change in planned government spending, by 2020 interest payments on the government debt would nearly double to 3.2 percent of GDP. Between 2011 and 2020, this would mean that the United States government would have to pay a total of $4.8 trillion in interest payments.
And this ignores the costs of Uncle Sam's unfunded liabilities for Social Security and Medicare, which, under current law and eligibility rules, is estimated to equal more than $65 trillion over the next seven decades.
For most of the post-World War II period, the U.S. national "economic pie" was able to grow fast enough due to private sector capital investment, technological innovations, and improvements in the skills and education of the American work force that it could offer a rising standard and improved quality of living for virtually everyone in the country.
It was able to do this in spite of the fact that the government's "slice" of the national economic pie and its cost on the private sector kept growing. Growing government costs in the form of rising taxes; increased expenditures and welfare transfers; nearly annual deficit spending; growing regulations and restrictions on competitive private enterprise; along with bouts of serious price inflation and Federal Reserve-induced business cycles.
Exhausting the "Reserve Fund" of the Market Economy
We seem now to be reaching the end of what Austrian economist, Ludwig von Mises, referred to as the "reserve fund" of the market economy. The rate of growth in government taxing, spending and borrowing, and the intrusiveness of government regulations, controls, and prohibitions on the innovative competitiveness of market enterprises is resulting in a situation in which that government slice of the national economic pie is growing so much that it is seriously slowing down the ability of the economic pie to expand.
The "reserve fund" to which Mises referred is that surplus of productive output that a competitive market is able to annually generate in excess of maintaining existing capital intact and preserving present levels and standards of living. That "reserve fund" provides the resources and financial means to invest in new, more and better capital equipment; to invest in training and improving the skills of the work force, so wages over time can rise due to gains in more valuable "human capital"; it generates the greater output of desired consumer goods and services in terms of quality and variety, as well as quantity. It is the economic "fountain" from which flow the advancements in the material and cultural potentials of our civilization.
However, this "reserve fund" does not just exist "out there" to be taxed and squandered away through the fiscal spigot of government largess. It only exists through the intentional choices and deliberative decisions of members of society to save rather than consume; to invest and bear the risks of an uncertain future with the hope of profits if wise business decisions are made; to make long-run plans and develop new and innovative technologies and ways of organizing enterprises to supply those more and better consumer goods over many tomorrows.
The sluggish growth and stagnant labor market are possible indications that government taxing, spending, borrowing, and regulation are absorbing and weakening so much of the society's productive resources and wealth that the private sector is not able to expand fast enough to counteract the "drag" of that burdensome government slice of the national economic pie.
Austria's Past in America's Future?
Where can this all lead? In 1930, just as the Great Depression was beginning, Ludwig von Mises authored a study of the taxing, spending, and regulatory policies that the governments of his native Austria had been following in the 1920s. He was able to show, based on the historical evidence, that fiscal and regulatory burdens on businessmen, entrepreneurs, and investors – "the rich" – had been so great during that period that not only had capital formation and net investment stopped. The fiscal and regulatory drag had actually resulted in capital consumption. The capital stock could not be maintained because of insufficient reinvestment and the productive capacity of the Austrian economy declined; standards of living decreased for many in society as the burden of government, in fact, resulted in the Austrian economy going into "reverse." Fiscal mismanagement in interwar Austria, Mises explained, had resulted in the country's governments consuming a portion of the "seed corn," without which the existing standard and quality of life in a society cannot long be maintained.
In 1935, a summary of Mises' findings was published in English by a former student of his, Fritz Machlup, in an article on, "The Consumption of Capital in Austria" (Review of Economic Statistics, January 15, 1935). Machlup concluded by saying:
Austria was successful in pushing through policies that are popular all over the world. Austria has the most impressive records in five lines: she increased public expenditures, she increased wages, she increased social benefits, she increased bank credits [monetary expansion], she increased consumption. After all these achievements she was on the verge of ruin.
It is easy enough to say and want to believe, "It can't happen here." But like causes do tend to bring about like effects. And unless the current fiscal folly is brought to an end, America's "reserve fund" of productive potential may also be squandered away through government taxing, spending and borrowing, leaving us with poorer tomorrows than our more prosperous past and present.