When ordinary folk are “Enemies of the State”, the “State” is the enemy

Regular readers will be familiar with my view that “All taxation is theft”. We can tolerate a small amount of “leakage” of what we earn to provide help and security when “the state” an employ economies of scale that individuals cannot achieve, but, in general, beyond a small amount of “leakage” ALL local, city, state and federal spending represents theft via a political system that imposes worse and worse outcomes per dollar the larger those centralizing “government” organs become.

The more corrupt the “government” the bigger the theft. Money legitimately earned is taken and spent. Where political decisions can’t be funded through the theft of taxation, debt is used to make up the shortfall. The US federal debt is cruising up 34 trillion bucks – from the accumulation of annual fiscal deficits – the interest bill on that debt mountain will increase to 1.7 trillion a year at5%. The combined debt of the States is another 1.3 trillion – add some city and local debt to that.

U.S. National Debt Clock : Real Time (usdebtclock.org)

This debt pile represents the decades long FAILURE of the Federal government to live within the means of its citizens ability to pay for all the “pork” promised by successive politicians, of all stripes, BEYOND the taxes raised. Don’t forget this debt is BEYOND the taxes paid over decades to pay for Federal government “services”.

I am going to leave aside defence spending in order to fund “forever wars” and the failure of the DoD to account for its spending for many years. Perhaps territory occupied by the Pentagon has an offsetting value whilst occupied and perhaps trade has been directed to America’s “benefit” during and after “occupation”. Better ask the Syrians, Japanese and German for a few clues on that.

And the US is NOT the worst at playing this “great game”. Japan is by far the worst. Italy, the UK Greece, Spain, Ireland are ahead if not close behind.

It is evidence of the failure of big government and “pork barrel” vote buying democracy. Pandering in exchange for mountains of debt and a failing economy where each dollar of debt raised produces less and less economic activity.

So, where an I going with all this?

At the core of “living beyond our means, because the Government is in charge” lie some core unaffordable spending activities These are complicated by the theft by government of the contributions (another tax) of Americans into social welfare programs. People, responsibly, pay money for government insurance. You know the names – all under the umbrella of “Social Security”. To fund those “social programs” the government issues… drum roll.. debt. People’s savings are converted into government debt.

Let’s pull apart one or two. Note I will not go into the other fraudulent schemes drafted by the likes of Fauxcahontas and her Consumer Protection Act – a fraud from start to finish.

There are three main pillars of the socialist state – health, education and welfare.

For health, we know that outcomes for the US are amongst the worst in the world.

Maybe life expectancy against health spending per capita is one metric, though it does not represent quality of life. There will be some countries where people “drop” quickly and others where life is prolonged with ever more expensive “treatment”.

The draconian measures imposed during the fake pandemic – from lockdowns, masking, social distancing through to experimental injections – were ALL state imposed with those not complying “enemies of the state – and subject to the enforcement of compliance by the state.

Here’s just one example of the pricing of drugs – insulin in 2018.

Cost of Insulin by Country 2023 (worldpopulationreview.com)

Top 10 Countries Where Insulin is Most Expensive (2018 RAND Corporation):

United States — $98.70

Chile — $21.48

Mexico — $16.48

Japan — $14.40

Switzerland — $12.46

Canada — $12.00

Germany — $11.00

Korea — $10.30

Luxembourg — $10.15

Italy — $10.03

These are the ten most expensive countries. Why would insulin in the US be ten times more expensive than in Italy?

Just a couple of bucks in Turkey. The US is 50 times the price! Of course, an entrepreneur buying from Turkey and selling to the US would be immediately put I jail, right? The differences in regulations are massive. Similar “arbitrage” opportunities exist in the US – not just in health, but in energy, booze and tobacco and so and so forth. How much would a container cost, 10 grand? Bribes a million or so to turn a blind eye at relevant customs points? Just kidding.

A prettier chart here:

Charted: The Average Cost of Insulin By Country (visualcapitalist.com)

Some context here for the tripling of insulin price I the US over the last ten years.

Insulin Prices: How Much Does Insulin Cost and Why? (verywellhealth.com)

Check this quote out:

“A person with diabetes who lives alone could be spending more than half of their annual income on out-of-pocket insulin costs.”

Mouth watering hey? Buy a million does of insulin in Turkey for 2 million bucks and sell in the U for 100 million! What’s not to like. Of course that would be illegal, since the “game” must be played and if you do this you are an “enemy of the state”.

Maybe political action by Biden is yielding results. From March 2023.

FACT SHEET: President Biden’s Cap on the Cost of Insulin Could Benefit Millions of Americans in All 50 States | The White House

“This week, Eli Lilly, the largest manufacturer of insulin in the United States is lowering their prices and meeting that call.”

CA Governor Just Vetoed Price Caps on Insulin. Now What? | UC San Francisco (ucsf.edu)

“This week, California Gov. Gavin Newsom vetoed a law that would cap the price of insulin for consumers at $35 a month, saying the state will focus instead on producing its own insulin for $30 per vial – a plan that Newsom announced last March.”

Illinois capped insulin costs, but most people can't take advantage of it | WICS (newschannel20.com)

“A new law, SB 667, that caps the cost of insulin at $100 per 30 days went into effect on Jan. 1, 2021 in Illinois, but most Illinoisans can’t take advantage of it.

Hmm.

Let’s be clear. The state does not employ experts. It employs those whose only expertise is in “playing the game”. Real experts with talent, experience and knowledge do not work in the state sector. They work in areas where their talents and potential mean they are free to blossom – they are not in a bureaucracy that stifles them and rewards inertia.

As opposed to housing and education, the health system is insurance based. You pay whether you ever use or underuse or overuse, “health services”. There is precious little transparency of pricing and portability – though measures like “abortion tourism” are available,

Let’s move onto housing. Maybe you are familiar with Freddie Mac 9FHLB) and Fannie Mae (Federal National Mortgage Association)?

Freddie and Fanie (that I call Fraudie and Funny) were created by the likes of Barney Frank a long tie ago. They were intimately involved with the “Crash of 2008/9). Their original intent as to provide cheap finance to the poor. Not any more.

From page 18 of 127 here: Form 10-Q Third Quarter 2023 (fanniemae.com) Fannie Mae has a balance sheet of 4.3 trillion bucks.

FHLB System collateral here: 2023 Annual Collateral Report to Congress (fhfa.gov) – a balance sheet of close to 3 trillion bucks at end 2022.

So here, is the rough deal. Fraudie and Funny – woops – Freddie and Fannie – have a deal with the banks. Remember the intention was to provide mortgage interest rate support for low income families. That is, provide financing at subsidised interest rates.

But this is what happens. Banks lend money to individuals :

“As of today, Dec. 13, 2023, the benchmark 30-year fixed mortgage rate is 7.40%, FHA 30-year fixed is 6.93%, jumbo 30-year fixed is 6.69%, and 15-year fixed is 6.76%.”

Okay, let’s use 7% as a mortgage rate.

The bank does not lend at a subsided rate, it lends at the 7% rate. What happens next is that banks “bundle” the loans into a “portfolio” – maybe a thousand loans of 100,000 each, so the portfolio has  100 million of loans on the bank balance sheet.

Next the bank immediately “sells” them to Fraudie and Funny. Not at the 7% lending rate but at a margin.

Let’s run the maths on that.

Mortgages, even 30 year mortgages have an average duration of around, say, ten years – as people move around or refinance etc. It’s a little shorter, but I will keep the numbers simple.

Each 1% change in the interest rate/yield of the “portfolio” results in a 1% times the duration change in the capital value – so 10%.

The bank has “bought” the portfolio of mortgages for a 7% yield – it now sells the portfolio to Fraudie and Funny at 5.5%! Profit to the bank – a immediate profit – of 15% of 100 million = 15 million bucks! Nor bad for a few weeks work, right?

But how can Fraudie and Funny afford to do business line this? Well, it’s easy. Fraudie and Funny go to the “market#” with an implicit Government guarantee, they are after all Federal agencies and the government would not let them fail, right?

So Fraudie and Funny can borrow money from the market at close to US Government bond yields

The ten year US government bod is currently at around 4%. Fraudie and Funny “pay” a margin over that rate – something like 0.75% or so.

Fraudie and Funny finance that 100 million portfolio of mortgages that it “bought” at 5.5% for a cost of around 4.75% - bingo, a profit of another 7.5 million bucks.

Who loses? Well the low income borrower of course, who should be paying around 4% for his mortgage instead of the 7% charged right at the top of the scheme!

Now, let’s go back to the start of this. Fraudie and Funny have a combined balance sheet of over seven trillion bucks.

They got there by doing the 100 million portfolio game 70,000 times over the decades. The banks have received 70,000 times the profit of 15 million over the decades and Fraudie and Funny 70,000 times their cut of 7.5 million bucks. The low income earners have been well and truly shafted PLUS Fraudie ad Funny have expanded their business way beyond the low income market.

Low income earners are victim of the State and have been treated like enemies. Thet suffer 3,000 bucks in tax per 100,000 borrowed from banks.

Try explaining that to a socialist. They do not know how they have shafted the poor.

Let’s look now at education.

We know that the Biden junta has identified parents that attend school board meetings as “domestic terrorists” and instructed the FBI to act accordingly. The same designation has bee applied to Christians and Catholics.

Let’s go a little deeper. Aside from this overt classification, American parents are subjected to the damage inflicted on kids via the “woke” ideology of the extremist freaks that feature on “Libs of Tik Tok” videos. The state views kids as belonging to the state, not the parents.

It would be interesting to check out the “carbon footprint” of home schooled kids v taking them to school – as it would be for parents that home school kids to claim tax rebates for the money seized by the state for “education”. Why should home schooling parents pay for ay money spent by the state on education?

Then there’s the Student Loan Marketing Association – Sallle Mae – that I call Silly May.

Check out its website here:

Sallie Mae | Education Loans, College Planning & Online Banking

Which as this on the splash page:

“Stress less about your undergraduate loan

Fixed rates: 4.50% - 15.49% APR Variable rates: 6.37% - 16.70% APR Lowest fixed and variable rates include the auto debit discount.”

Yeah, really. The government borrows at 4% and students can “benefit” from loans at up to 16.7%. Socialism at its finest, right?

And that’s before we go into the people who can afford to sign up to this sort of price gouging. Only the well-ff can afford this  - the poor cannot. The cost of education only heads one way, these interest rates are on top of that for many.

The poor cannot participate, because.. drum roll.. they are an enemy of the state!

Here is an analogy. Countries like the UK take 40% of activity in taxes: the French pay half.

Put yourself in the position of a hunter with a family. Times are tough but you manage to bag a deer that will replace your worn out clothes and feed the family for a week or so. You gut and dress it, but ,, along comes the “government” which takes half you kill. How do you feel? Now watch as the “government” keeps the prime cuts for itself and hands out the rest to others who have not managed to bag a deer, Feel better?

I could go on and get into energy “policy” – like, consumers already pay taxes o fuel, in the UK these make up half the cost at the pump – so how is a “carbon tax” or “emissions tax” not a tax on a tax?

But I hope you get the picture!

All taxation is theft, the bigger the government or “state” – the bigger the theft.

And, just think, the UN and WHO want to impose more laws, rules and regulations that will result in more taxes! The UN even has a department for outer space” Well, NASA is tasked with identifying 90% of all asteroids that could hit the earth. 90% of an unknown number after billions of year of the Earth’s existence? Sounds like an open check book right? Lots of tax dollars needed to “estimate” a percentage of the unknown!

Lots of micro level data on government waste here:

Transparent Government Spending | Open The Books

Onwards!

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