Huge Revenue Demands

This political and bureaucratic interest in ever expanding government has had a tremendous effect on the revenue demands made by governments everywhere. In the western world, from a base of practically zero, governments are now spending close to half of your paycheck each and every week. For example, income tax was first introduced in the US in 1913. Apparently the public found it easy to swallow as the rate was only 6 per cent and even that only applied to those earning US $500,000 or more. That was over eight decades ago, today the story has changed dramatically. Not only has the tax rate since increased by a whopping 30 per cent, but state and local governments have also entered the game, ensuring that you see less and less of your money each year. You may not be a slave yet, but half of you is.
Europeans fare even worse. Although overall rates of taxation hover around the 50 per cent range, many hidden taxes assault the public. VAT, a sort of recurrent sales tax, seems to be the government’s favorite way of raising yet more revenue. Just about everything from fuel to building supplies to consumer items are taxed at rates that often approach 20 per cent. Politicians in the US have recently proposed instituting a similar tax. They must understand that invariably the public grumbles less when these figures are tinkered with than when yet more money is extracted from paychecks each week.
Nonetheless, even this enormous amount of funding does not cover the annual expenses of governments around the world. Budget deficits in developed countries have been growing at truly phenomenal rates. Again, the US is the leader of the pack with annual deficits in the US $200 billion range, assuming of course that you believe government figures. A more realistic figure would be twice that amount, but even the government admits that overall it is close to US $5 trillion in the hole. That’s twelve zeros for those of you who are wondering.
These figures are truly amazing when one considers that as recently as 1981, the US actually possessed net assets of US $141 billion. Then along came a man named Ronald Reagan and such nice things as positive net worth became a thing of the past. By 1986, the country had accumulated foreign debt of US $264 billion, that is an overall loss of US $404 billion in five years. During the Reagan years, the US saw larger public deficits than at all other times in US history. Try running any company under such lunatic principles and see how long you stay in business.
It was sheer fallacy to think that a country can survive economically while both increasing spending and cutting taxes. The eventual outcome is obvious, yet the public swallowed Reaganomics hook, line and sinker. Reagan was re-elected, which was, presumably, his primary objective. He has since retired, claiming to have forgotten most of what he did while in office, although it really need not affect him as he will be long dead before the debts that he managed to ring up are paid off. His replacement, George Bush, made a great deal of noise about the fact that America had finally won the cold war. He failed to mention the fact that it has yet to pay for this victory.
The situation may not be quite as bleak for European countries, but it is still far from rosy. The welfare state has had a crippling effect on economies throughout the continent. Among European governments the average budget deficit has rocketed to a frightening 7 per cent of Gross Domestic Product (GDP). This is the highest level since the end of World War П and again this number was reached by using government’s own fiddled figures. The true picture is undoubtedly grimmer still. Furthermore, as all developed countries go down together, there will be no outsiders who can gallop in to save the day. For the schemers and politicians in charge of these countries, the sad truth is that their foreign friends are just as bogged down as they are.