Tax, Debt, Wage and Fiat Slavery: How the Elites Extract Wealth from the People
Fiat money is at base a form of indirect wealth transfer from those forced to hold the money to those issuing the money.
I describe the pernicious servitude created by debt as debt serfdom, as serfdom implies a neofeudal arrangement that requires serfs’ acceptance of this financial yoke of servitude. In other words, debt is freely accepted as the line of least resistance in a system that incentivizes debt and places high barriers to debt-free independence from a Status Quo operated to benefit the owners and issuers of debt, not the debtors.
Correspondent Jeff W. has identified an even more insidious form of monetary servitude that he calls fiat slavery, as the servitude is enforced by fiat (unbacked government-issued) money.
In other words, being forced to use state-issued fiat currency is a form of servitude, as fiat money is at base a form of indirect wealth transfer from those forced to hold the money to those issuing the money.
Beyond this state-enforced wealth transfer from citizens to the state, there is a secondary wealth transfer going on in any fiat-money system: the neofeudal financial nobility who are closest to the money spigot get to buy whatever real-world assets and income streams offer the best return before the money trickles down to the debt-serfs paying interest and taxes.
For example, the financial nobility can borrow billions of dollars at near-zero interest from the Federal Reserve, and use this nearly-free fiat money to buy student loans that pay 7+% annually. They can also snap up houses for cash that the nobility then rents to debt-serfs who have been outbid by those with the extraordinary advantage of unlimited access to the Fed’s nearly-free fiat money.
In a world where every country prints fiat money, the entire human race today, except for its money masters, is subjected to fiat slavery.
Almost everyone understands what it means to be a tax slave. It means that people must work several months of the year for the benefit of the taxing authorities. Taxes in the U.S. today are several times higher than they were 100 years ago, and at present-day tax levels, today’s Americans are rightly called tax slaves.
What it means to be a debt slave is also easy to understand. It means that one must spend a large fraction of one’s time to earn money to pay creditors. Millions of Americans today are mired deeply in debt, but today’s America is also a country where if you personally stay out of debt, the government will go into debt for you.
Each American taxpayer is on the hook for his or her share of over $17 trillion in debt that government admits to; the real debt total is much higher. Government leaders are eagerly plunging us ever deeper into debt each year.
Most Americans also have personal experience of being a wage slave. It means that a person has no way to make a living except by selling his labor into a glutted market. Thomas Jefferson hoped that most Americans could own their own farms and thereby profit from capital improvements that they made through their own efforts. Such Americans could be their own bosses and escape wage slavery. But today we live in an age of huge factory farms, and it is more difficult than ever to establish or run any small business. Thus wage slavery is the norm for Americans today.
But few people understand what it means to be a fiat slave. Being a fiat slave means that one lives in a country where the machinery of money printing is used to maximize wealth extraction from its citizens.
How do they maximize the wealth they can extract through money printing? First of all, it is done by increasing of the volume of transactions that take place in a given fiat currency. Each newly-printed unit of fiat is a drop in the bucket in terms of the inflation it creates, and more fiat can be printed without causing serious inflation if a country has a bigger bucket.
For example, Canada’s GDP is about 11% the size of America’s. At first glance this might be taken to mean that Americans can print nine times more dollars than Canadians. But we must also remember that U.S. dollars circulate throughout the world, and Eurodollars and petrodollars also add to the total of U.S. dollar transactions.
Because of extraterritorial dollar circulation, the U.S. might actually be able to print 20 times more than Canada without causing serious (in terms of causing political problems for the money printers) inflation. From this we see why money printers may want to fight wars to protect America’s dollar circulation areas in the Middle East or in Afghanistan, where much of the opium trade is transacted in dollars.
But a country’s fiat transaction volume is only part of the equation. A more important part of the equation is the inflation level. Imagine two countries: Country A with an annual fiat transaction volume of 100 trillion units per year and Country B with a volume of 50 trillion. Everything else being equal, Country B can only print half as much fiat each year to give to its government and its banking elite.
But suppose further that the inflation rate in Country A is 5% absent any money printing, and the inflation rate in Country B is negative 2% due to global wage arbitrage, regulatory suppression of small businesses, and high unemployment. Suppose further that a real inflation rate of 5% is the money printers’ upper limit because it is the maximum asset erosion that wealthy bondholders will tolerate. Now we see that potential money printing in Country A is reduced to zero, while potential money printing in Country B is 3.5 trillion units (50 trillion times seven percent).
American money printers thus have trillions of dollars in incentive to support deflationary policies, which may include global wage arbitrage (sending work to the country where labor is cheapest), suppression of job creation by small businesses, suppression of private-sector labor unions, support for open borders immigration, commodity price suppression through market interventions, support for genetically modified seeds so as to push agricultural prices down, support for owners taking a larger share of corporate revenues so as to reduce labor’s share, and support for high levels of consumer debt so as to dampen inflationary pressure in a nation of demoralized debt slaves. All of these oppressive policies enrich the money printers at the citizens’ expense.
Tax slavery, debt slavery, wage slavery, and fiat slavery are four methods that elites employ to extract wealth from the people. To this list we should also add their encouragement of Ponzi gambling. Ponzi asset bubbles are constantly being created and citizens are encouraged to go into debt to “cash in” on bubble profits (or get wiped out in bubble crashes). Those five methods are the major wealth extraction methods they use.
Those who support the cause of human freedom must resist tax slavery by insisting on a government that keeps its spending down to the bare basics. Free people must also support a culture that discourages people from getting into debt and encourages them to get out of debt and stay out. They must demand that government debt be rolled back to zero.
Policies that favor capital accumulation in families and a supportive legal environment for small businesses are the antidotes to wage slavery, and free people must also demand that there be zero wealth extraction from the citizens through money printing. That can best be done by requiring 100% gold backing for currency and eliminating fractional reserve banking. Eliminating the inflation that comes from money printing will also go a long way toward eliminating asset bubbles and Ponzi gambling on asset bubbles.
Older Americans have watched as a once-free people have been reduced to slave-like conditions. Not only has wealth been ruthlessly extracted from the people, but today’s surveillance state is more intrusive than ever, and the police are increasingly insolent and imperious.
What are we going to do? A necessary first step is to take the blinders off and to see clearly how elites are victimizing you. A second step is to figure out what practical steps you can take as an American to secure the blessings of liberty for yourself and your posterity. Freedom is not free, as the saying goes, and the price of freedom is not only eternal vigilance, but also intelligent action. We should begin this work today.
Are you wondering why humanity can’t get its act together and tackle global warming, chronic poverty, and international terrorism? We have such incredible knowledge and abilities at our disposal among the 7 billion people on the planet. So why are things continuing to get worse with each passing day?
The answer may surprise you. My hope is that the truth I am about to share will set you free. May it empower you to see the path that must be taken for us to survive and thrive together here on Earth. It is time to look beyond the smoke and mirrors and see what is really going on.
The reason we cannot come together and solve our problems is that a massive system of wealth extraction was created by an elite group of sociopaths and those who admire them. This is unacceptable. They don’t deserve our admiration. We should not be emulating them. They are acting like spoiled children with a broken conscience. And we deserve better.
If you look at the people around you, it will quickly become evident that most people are not this way. The vast majority of us are decent, hard-working people who care about our loved ones. We are social beings who crave connection with others. Our actions are guided by emotions that give us a moral conscience. We are full human beings with hearts and souls.
The architects of our global economy are not like most people. If they were, they would redirect their massive wealth and power to bring poverty to an end (more on how we do that below); invest heavily in sustainability solutions (to avoid the harms of planetary climate disruption and ecological damage); and focus on the root causes of terrorism and violence (by bringing colonial exploitation to an end and ensuring that no one is left in a state of economic desperation where rage is kindled into being).
There are just three facts you need to know if you want to see this massive wealth extraction system—and to see what needs to be done if we are to dismantle and replace it for the betterment of everyone.
Key Fact #1: A Mere 85 People Have Amassed the Same Wealth as the Poorest 3.5 Billion.
Yes, you read that right — the number of people who could easily fit on a city bus control more wealth than the 3.5 billion poorest among us! That’s 3,500,000,000 people living in chronic desperation—quite a breeding ground for violence and rage. No wonder terrorism is on the rise.
This number should shock you. It certainly shocks me.
This tells us that the game has been rigged. The rules-of-play were set up decades ago to hoard money and concentrate power by the “winners” in a zero sum game. They win while everyone else loses. The global economy was designed to be this way. It is the outcome we should expect.
Want different outcomes? Change the game. Change the rules-of-play that incentivize money hoarding. Introduce new rules that invest it more wisely.
Key Fact #2: The Global Economy Is Orchestrated by 147 Companies.
Corporations have become the most powerful driver of global change in the last 100 years. They compete with one another to concentrate wealth in the hands of a tiny network of financial elites who guide investments across industries.
This is how the game was rigged. The same people sat on each other’s governing boards. The same people decided CEO compensation and set corporate agendas for entire industries. The same people paid lobbyists and bought politicians to ensure that public policies served private financial interests and not the public whose mission the governments are supposed to serve.
If we understand how these people are rigging the system, we can intervene by shouting them out from the rooftops. They are making their moves on the boardroom floor. We don’t have to sit idly by while they corrupt our governments and shape economic activities to serve their will. There aren’t enough of them to stop all of us.
It is 7,000,000,000 of us against a few hundred of them. That is quite an inspiring thought!
Our collective actions — if properly coordinated as purchasing power, voting blocs, and expressions of moral outrage — are more powerful than all of them. Their power is an illusion. It is all smoke and mirrors. We can take it away by realizing the Emperor has no clothes. We needn’t fear their military forces because they are in truth our military forces. The people who serve in those armies are OUR people, not theirs. They are working-class, everyday humans who serve because they believe in something larger than themselves.
Let’s give them something they can REALLY believe in.
Key Fact #3: At least $21 Trillion is hidden in the global network of tax havens.
This is why national debts have sky-rocketed. It is why students can’t afford a college education and get strapped with massive loans. Why our infrastructure is deteriorating in Western nations. Why billions of people remain trapped in poverty by a system that leaves them out of the game.
If we just had 10% of this money paid as taxes (a low rate for top earners), there would be more than 2 TRILLION DOLLARS to re-invest in society.
That would pay for scientific research, schools, hospitals, public transit, and a whole lot more. It would fund the development of new technologies for food production, energy systems, urban design, land management, nature preservation, and more!
In other words, the financing for The Great Sustainability Transition is to be found hidden in digital caves where unimaginable wealth has been looted and syphoned away by the sociopaths.
Our countries seem poor everywhere in the world because these parasites are sucking away all of our wealth. Money is stolen from the so-called “undeveloped” countries in the form of land and resource grabs, orchestrated by trade agreements written by corporate lawyers. It is stolen from “developed” countries as austerity measures that cut social programs and public expenditures through the laws created by bought politicians.
The next time you wish there was a way to pay for things our societies need, remember this fact. The money is there. It is just hidden from view in a clandestine system of financial instruments to keep you from seeing it.
We really do have enough for everyone. What’s missing is the capacity to make the greedy give back what is rightfully ours. They stole it from us. It was wealth created by the working people of this planet. The sociopaths didn’t make all that money. We did. So it is ours to direct as an inheritance of the entire human race.
We are each children of the Earth, after all. And it is our toils that produced this great bounty. So it should be us as a democratically governed body who decide how it should best be spent.
The Choice is Simple. How Shall We Live Together on Earth? Which Future Do We Prefer?