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Wednesday, 4 January 2012

Budget Deficits

If the history I was taught is correct, "Deficit Budgeting" and "Income Tax" were invented in the late 1780s by Prime Minister William Pitt the Younger to fund Britain's war with Revolutionary France. I think we're still paying for that set of bank loans, never mind the one's successive government's have taken out since then. Thanks to One Happy Dog Speaks, I was reminded of this with her short YouTube clip ...

She gives a very good example based on household figures (by simply reducing the US National numbers to something approaching normality for a family) and I reproduce her summation here -

By simply removing the last eight zeros you get -

A household budget:
* Annual family income: $21,700
* Money the family spent: $38,200
* New debt on the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts: $385



Interestingly, Income Tax, at 1 penny in the pound, came to an end after 1815, but was reintroduced in 1914 and has been a millstone round our necks ever since. It was supposed to replace all the taxes on food and other "interesting" little government fund raisers, but, as you've probably realised, as the Bureaucracy and graft associated with the Civil  Service grew, so did the need to increase the tax take. Income tax has shot up from the original 1% to a whopping 50% for top earners in the UK and the average is around 25% before taking into account the add on taxes from VAT, Road Tax and the share we all pay toward Corporate Tax, Employers Contributions and so on. The US Debt is $14 Trillion and rising and the UK debts racked up by Liebor and Brown are similarly frightening, yet the Left, Liebor and the Guardianistas, can't seem to grasp the fact that the kind of budgeting they love - tell us where you keep your money and we'll take it and spend it for you - can no longer work.

I do find it strange that so many don't seem to be able to grasp the fact that no government in the world actually "owns" the money supply. Everything they have comes out of the pockets of the tax payers. In the days of the "Gold Standard" the money governments printed and issued was actually underpinned by the value of the "Treasure" in their Treasury. That is no longer the case. Every government in the world would be bankrupt tomorrow if their citizenry simply refused to pay the rapacious taxes imposed upon them by the self serving, greedy and venal politicians and their chums in the Civil Services ...

Some taxes are necessary. We do need to ensure that pensions are provided and that those in genuine need are assisted, that roads are maintained and water, sewage and so on are dealt with. But why do we need 6 million civil servants and of the order of 2,000 MPs, MEPs, MSPs, MAs and all their associated hangers-on to govern a small island nation of 60 million inhabitants when we once ruled an Empire stretching round the globe with 460 MPs, 300,000 seamen and soldiers and 3,000 civil servants? There is something seriously wrong with a nation that needs so many bureaucrats - one 5th of the total workforce!

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