On The Actual Problem – Today’s Math Lesson


Let’s cut it all down to a short, easily-digested set of facts.

  • With a few notable exceptions everyone believes that government at some level is good, not bad. (your host is in this group.)
  • All governments inherently exist only due to the consent of the governed, as all governments require the active cooperation of the individuals living under that government to perform useful output of some form that they can then tap and distribute.
  • Some governments have resorted to slavery (effective or actual) to maintain power but this is a losing proposition over willing cooperation, as a slave doesn’t produce to anywhere near his or her full potential.  Slavery by trickery is far more common than slavery by force for this very reason.

There is only one debate to have in this regard: What services do you wish to demand of your government at all levels — federal, state and local?

Now temper that with the following: Every service you demand must be paid for in current taxes.

Violation of that second precept is why we’re in this mess.  It is why the unholy game between Wall Street and Washington exists.  This violation is exploited by both major political parties (e.g. ads showing Bush “pushing Granny down the stairs”) to play you off the guy or gal next door through intentional lies in this regard.

This scam is now coming to a close not due to the ethics of the people in DC and on Wall Street but simply because mathematical limits have been reached.  We’re seeing the dislocation first in Europe and that should not surprise either — they too made promises they couldn’t pay for with tax revenues, and in general made more expensive promises than we did.

But this is small consolation because of how exponents work.  If you’re only half as bad as the other guy and he blows up you might think you avoided the blast, but in fact all that happened was that you have one more doubling time before you find yourself in the exact same soup he’s in.

Let’s look at another example: The CPI report out this morning claims that health care expenses are up a bit more than 3% annualized over year-ago costs.  That’s a lie: I just got my insurance renewal and it rose by almost-exactly 10% and that increase in cost has been nearly constant on an annualized basis for 20 years going back to when I was the guy negotiating our group plan for MCSNet!

The willful and intentional misconduct from various agencies in our government in the form of false reporting and willful and intentional aversion of eyes from outright scams and frauds, however, does not and cannot change mathematical outcomes.  Arithmetic does not care about political promises.

WE MUST decide as a people, via the political process, exactly what services we want our government to provide.  WE MUST give our government the charge to provide those services only for that which we are willing to pay for with current taxes, without exception.

That’s the beginning and end of it folks.

There is no other answer.  There is no other alternative.  This isn’t about wanting something different, it’s about facts.  The schemes and scams in DC and through the financial system are at their core attempts to avoid the outcome of basic arithmetic.  Medicare, for example, cannot be fixed under our current medical system where costs are escalating at 10% a year and have been for two decades.  Nothing you can do will fix Medicare until the underlying cost escalations stop; wages have not gone up at all over the last decade!

Note that if salaries go up 3% a year (which was a reasonable expectation until the last decade) then they double every 35 years (approximately.)  At 10% a year in cost escalation prices double every 7 years (approximately.) 

In 35 years, when salaries double once, costs double five times, or 2 X 2 X 2 X 2 X 2 = 32 times the original cost while wages have only multiplied by 2!

It doesn’t matter how high taxes are set — there is no tax system you can design that will allow this outcome to occur.

The wonks and “high level” people in DC know this.  Bernanke knows this.  The bankers know this.  In fact the bankers have their own formula for estimating doubling time called “The Rule of 72” that dates back to before we had pocket calculators and math had to be worked on an abacus, slide rule or pencil and paper.

You had better come to grips with these FACTS and demand that the lies stop, because if we don’t and continue to allow votes to be bought with fraudulent promises that cannot be kept then it is inevitable that our nation’s economy and government will collapse.

That’s not an opinion, it’s a mathematical certainty.

Discussion (registration required to post)