Wednesday, October 9, 2019

A Land Value Tax is The Only Right Way to Pay Reparations

Sources: Torn From the Land, Chicago Tribune, Citymetric, Victimizing the Vulnerable: The Demographics of Eminent Domain Abuse, Eminent Domain and African Americans, The Loss and Persistence of Black-Owned Farms and Farmland

The 2020 Democratic primaries has brought social justice into the mainstream and one of the common issues appears to be racial disparities in wealth, especially the wealth gap between black and white americans. The consensus on the left is that the wealth gap between white and black Americans is wholly a result of the legacy of slavery and jim crow. Their ready made remedy of course is reparations. While the democrat’s proposal to pay Black Americans reparations for slavery appears absurd on its face and is based on the false premise that white Americans today financially benefit from an institution that was abolished 150 year ago it does contain, like Marxism, a modicum of truth. While all of the wealth appropriated through slavery was destroyed during the civil war, other unlawful institutions were errected to give whites an economic advantage over blacks. Several of the post civil war black codes restricted former slaves from working in certain occupations, freely traveling, conducting business or owning property all which are essential to build wealth. However, like slavery, these too are long gone and have very little barring on the wealth created today. A more cogent answer is to be found in how land and its rents have been redistributed throughout American history. As I explained in The Myth of Original Appropriation, the basis for land tenure in the United States, and the rest of Western world, is the doctrine of discovery; in a nutshell, the federal government extinguished aboriginal title, a power they still possess, and claimed the land for white settlers moving west. However, American Indians are not the only minority group that was dispossessed of land. Land has also been taken from black families and communities and redistributed to white families and communities in the past, through a combination of mob violence, crooked judicial proceedings, forced partition sales, property tax foreclosures and eminent domain seizures. Much of the apparent wealth gap between white and black Americans is actually due to the appreciation in land values (which is not technically wealth). The case for reparations isn’t to be found in the legacy of slavery or jim crow, both of which are dubious, but in the legacy of land theft. Unlike those two institutions, private land ownership is still around and has a clear and measurable value.

Dispossession of Rural land

In 1910, Black Americans owned 15 million acres of agricultural farmland in the south. Today black americans own only 1.1 million acres of farmland and partially own another million. In 2001, the Associated Press investigated 107 documented land takings in 13 southern states. The investigation, combing through thousands of public records and interviews, discovered that 406 black landowners had been dispossessed of 24,000 acres of farm and timberland as well as 85 stores and city lots since reconstruction. These properties have since been transferred to white landowners or corporations. In some instances, black families were driven off their own property by violent mobs or the klan. The full extent of black land ownership may never be known as some deeds have been lost in courthouse fires. In many instances, black families were dispossessed by state courts in rigged proceedings. Most black families held their land under a tenancy in common wherein each heir had an undivided ownership over the entire property. This ownership arrangement often led to forced land sales either because a non-family member bought a share and forced a partition sale or for unpaid property taxes. White landowners often used forced partition sales to assume ownership over the adjacent parcels of black families. Since no individual heir had a clear title to the land they could not use it as collateral to secure a loan, which made it difficult and often impossible to efficiently develop the land and raise enough income from it to pay their county’s property taxes. When heirs could not pay the property tax, the country foreclosed on their property and sold it to pay off their tax debt. These problems were compounded by the fact that black farmers were often precluded from USDA programs or received less money from them than their white counterparts. In 1997, the civil rights action team within the USDA found a consistent pattern of discriminatory behavior against black farmers such as loans arriving after planting season, arbitrary reductions in loan amounts requested, and a much higher rejection rate for loans than white applicants. Discriminatory implementation of USDA programs often stems from the fact that black farmers are not represented on the local committees that implement them.

Dispossession of Urban land

Even in the present, Black Americans are disproportionately stripped of their homes, businesses and communities through eminent domain takings. Perhaps the most infamous case is the creation of Central Park in New York City, which was the location of Seneca Village prior to the mid 19th century. The majority of the inhabitants were freemen of color, half of whom owned land within the village. In the 1850’s the city condemned their property and razed their community to provide a public space for affluent white families to have picnics. In the mid 20th century, urban renewal, authorized by the Federal Housing Act of 1949, displaced one million people in almost a thousand cities over the course of 24 years (1949-1973). Two-thirds of those displaced and dispossessed of homes and businesses were Black Americans who were confined to the “blighted neighborhoods” targeted by urban planners through previous redlining, exclusionary zoning and other instruments of racial segregation. Urban renewal projects razed 400,000 housing units and only replaced them with only 10,760 housing units that the residents of the condemned properties could afford. Instead of affordable housing, the condemned “blighted properties” were replaced with structures that catered to the wealthy upper class, what is called “higher uses” such as luxury condos and shopping malls. Eminent domain seizures of businesses were rarely followed with fair compensation that covered total losses incurred such relocation costs and profit losses. Of course, they didn’t just lose land and buildings; they also lost a community and without the community that had supported them most of these businesses failed in new locations. The loss of community didn’t just affect businesses either; many former residents of condemned neighborhoods found it difficult to cope with the loss of their community. With very few affordable housing options, most were crammed into subpar public housing that was eventually torn down.

The eminent domain abuse that redistributes land from the poor minority communities to the wealthy majority white communities did not end in 1973. The Supreme Court’s decision in the 1954 case Berman v. Parker set a precedent for allowing cities to use eminent domain for private development by perverting the doctrine of public use into “public purpose.” The Court’s decision in the 2005 case of Kelo v. City of New London put the final nail in the coffin of property rights interpreting public purpose to now mean “public benefit” which could be any purported financial windfall such as increased tax revenue or claims of job creation. Even in contemporary times, eminent domain is disproportionately used against lower class and minority homeowners. The Institute for Justice conducted a demographic survey of 184 communities where eminent domain was used to take property for private development and found that 58% of the residents in these communities are minorities (non-white), half of the residents earn less than $19,000 annually, 25% of the residents live at or below the federal poverty line and typically have less than a high school education. In comparison, only 45% of the residents in surrounding communities not targeted for condemnation are minorities, half of residents make more than $23,000 annually, only 16% live below the federal poverty line, and a greater percentage of residents have a high school diploma and some college education. While we cannot read the minds of city officials and private developers who collude to rob people of their property it is easy to understand why they disportionately target poor and minority communities. Like any other predator, predatory government preys on the weak and vulnerable. Not only is the land cheaper in these communities, the people who reside there have little means to defend themselves in civil court much less get a fair price for their property. Private developers can easily buy up the land and low ball the property owners knowing they probably can’t afford an attorney to fight for fair market value. As I’ve noted in a previous post on eminent domain, what courts determine to be “just compensation” is completely subjective and more often than not depends on whether a property owner can afford to litigate. Given the fact that minority communities tend to have less wealth and lower incomes than white communities it is not surprising that eminent domain for private development would have an adverse impact on them.

Reparations Rightly Done

As the author of Reparations - Going All the Way succinctly points out, the best and most just way to implement reparations isn’t to pay restitution to a specific minority group for a specific past injustice, but to pay restitution to all groups and individuals harmed by both past and present injustices. The most accurate way to measure the harm done to them, and thus the compensation due to them, is to appraise the value of the land they have been dispossessed of and excluded from. Any material advantages derived from past injustices, whether it be slavery or racial segregation, is ultimately concentrated in the government granted monopoly in land. Since land has historically appreciated in value (with the exception of recessions) it is the only institution remaining from these past injustices that can be conclusively shown to financially benefit its heirs. A land value tax would not only achieve the left wing goal of reducing racial (and overall) disparities in wealth it would also serve as a superior substitute to the myriad of taxes currently levied on people’s earnings including the so called wealth tax and carbon tax proposed by leading democratic presidential candidates.

Monday, September 23, 2019

DMVs Are Selling Your Information to Third Parties

Sources: Motherboard, EPIC

State DMVs across the country are selling driver’s license and vehicle registration information, for a profit, to legitimate businesses such as insurance companies and towing services as well as to third parties with more dubious intentions such as private investigators, bounty hunters and consumer credit reporting agencies. DMVs establish agreements with requesting third parties called memorandums of understanding that allow them to remotely access personal information from driver’s licenses and vehicle registration either through bulk data collection or targeted searches of specific citizens. A little known law ironically called the Driver’s Privacy Protection Act provides loopholes that allow DMVs to sell drivers’ information, without the permission of the driver’s themselves, to private investigators and other authorized third parties. These loopholes provide exemptions for market research and surveys, insurance activities and licensed investigators or security services. This information can include a person’s name, address, zip code, date of birth, phone number and email address. With these loopholes in place, DMVs can reap windfalls from selling drivers’ information. The Wisconsin DMV has MOUs (memorandums of understanding) with over 3,000 private entities, including two dozen private investigative firms, and collected over $17 million in additional revenue from selling driver data. The Florida Department of Highway Safety and Motor Vehicles made a staggering $77 million selling driver data in 2017 alone.

Sunday, September 22, 2019

Housing First: A Simple But Radical Solution to Homelessness

Sources: Relevant Magazine, Lincoln Land Institute, Housing First Feasibility Study for the Liverpool City Region, The Economic Round table, Department of Corrections Institutional costs, Permanent Supportive Housing: An Operating Cost Analysis

While numerous risk factors and contingencies shape homelessness only one thing is common in each case: a lack of stable housing. Throughout most of Europe, homelessness is on the rise even in the presence of massive welfare states. In the UK, it has risen 7% over the last year. In Germany, it has risen 35% over the last two years, and in France, homelessness has risen 50% over the same time period. Exacerbated by the migrant crisis, homelessness has risen in all but one EU country. Finland has managed to reduce their homeless population by 35% over the past decade and completely eliminate unsheltered homelessness by unconditionally providing stable housing to homeless individuals before tackling any of the mental health or substance abuse problems they may have. The Housing First approach has not only been found to be more effective at reducing homelessness than approaches that prioritize treatment of underlying disorders or, alternatively, doing nothing, it has also been found to be more cost effective. Cities can either pay for homelessness on the front end or the back end and the latter is much more expensive. For instance, in Los Angeles County, criminalization and hospitalization costs about $5,100 more per homeless person and $10,800 more per chronically homeless person compared to those with stable housing. For chronically homeless persons, healthcare costs can be four to five times higher than the non-homeless population while criminal justice costs can be as much as seven to nine times higher. In Washington State, incarcerating an individual can average anywhere between $2,364 to $4,272 per month or $28,370 to $51,264 annually. In contrast, permanent supportive housing and affordable housing is much cheaper, coming in between $6,180 and $5,567 per unit annually.

The Problem with City Shelters

While emergency shelters are usually the go to solution for alleviating homelessness they do not provide stable housing needed to prevent chronic homelessness and exemplify the tragedy of the commons problem. The New York City shelter system, which accommodates 95% of the homeless population there, furnishes a case study in how overcrowded shelters can quickly fall into disrepair and become practical bio-hazards. An investigation conducted by a homeless advocacy group found that shelters often become contaminated with mold and infested with rats and insects. Shelter bathrooms have routine sanitary problems with mold and plumbing problems with clogged toilets and showers that do not work. Shelter staff exacerbate these problems by providing insufficient portions of food and failing to provide laundry services, leaving many residents to wear dirty clothes.

Housing solution for Single Homeless Persons: Tiny House Villages

Roughly two-thirds of the national homeless population is single people. A unique housing solution that many cities have begun to experiment with is allowing the construction of tiny house villages. Local non-profit organizations, churches and community volunteers in Seattle have built some 250 tiny houses, within 8 tiny house villages, on a combination of public and private land. The housing units measure between 100 and 120 square feet, the size of a small bedroom, and cost between $2,200 and $2,500 to produce, which is funded through donations and the Low Income Housing Institute, a local non-profit organization. Cities such as Austin, Denver, and Portland have begun to conduct similar experiments in tiny house production. Most residents of tiny house villages are gainfully employed and, unlike city shelters, these self-governing communities provide homeless persons with independence, reduce their reliance on social services and their burden on the criminal justice system, and most importantly allow them to escape homelessness. Municipal governments could help establish tiny house villages through land banking. Public land as well as vacant and abandoned lots could be rezoned and appropriated to build villages, ideally by private charities and non-profit organizations, while the municipality provides all of the necessary utilities.

Tuesday, September 17, 2019

Little Rock Police Sued for No Knock Raids

Source: The Appeal

It appears Rodrick Talley isn’t the only no knock raid victim to come forward. The Little Rock, AR police are facing bash lash in the form of civil rights lawsuits after coming up empty handed in several no knock raids that victimized innocent people. The lawsuits allege that police not only failed to announce their presence and intention to search the property, with prior authorization from a judge, but that they lied to obtain no knock search warrants and fabricated probable cause to search for drugs that people didn’t have. As I mentioned in When Exceptions to Our Rights Become The Norm, out of some 1,600 warrants that the Little Rock narcotics unit served over the past decade only 80 of them were not no knock warrants and nearly every probable cause affidavit and warrant contained identical language justifying their exemption from the common law standard of knock and announce, likely copied and pasted from previous affidavits and warrants. As I mentioned previously, only five percent of the suspects targeted in no knock raids even ended up in jail.

Like Talley, Derrick Davis and his finance also had their front door blown up and were surrounded by Jackboot thugs threatening to kill them for selling cocaine they never had. It turns out that they searched his home, and nearly killed him, on a false pretense just as they had done to Talley. In another instance, the narcotics unit broke into the Caldwell family home, fortunately in their absence, for some non-existent meth, vandalized it and stole their home surveillance system. In another lawsuit, the narcotics unit arbitrarily decided to search a home near a home they had a warrant for, shot the homeowner in the back multiple times, and then claimed the homeowner, Lloyd St. Clair, had pointed a gun at them (apparently he has eyes in the back of his head). All bogus charges against each of the four victims were dropped.

Wednesday, September 11, 2019

Restoring Aboriginal Title is Key to Reducing Deforestation and Preserving Biodiversity

Sources: Intergovernmental Panel on Climate Change Special Report, Climate Benefits, Tenure Costs: The Economic Case for Securing Indigenous Land Rights,
Queensland extinguishes native title over Indigenous land to make way for Adani coalmine, Thousands of goldminers invade Yanomami territory, Injustice on the carbon frontier in GuaraqueƧaba, Brazil

A matching analysis on the effect of land tenure on deforestation rates in the Amazon forests of Bolivia, Brazil and Colombia concluded that deforestation rates are significantly lower where indigenous communities have secure land tenure compared to areas where they do not have secure tenure, for all three countries. The study specifically found that areas of the Amazon rainforest where tenure was secured to indigenous communities experienced significant reductions in deforestation between 2000 and 2012. In Bolivia, forestlands where indigenous communities held tenure experienced an average deforestation rate of 0.15% while forestlands outside of indigenous tenure experienced an average deforestation rate of 0.43%. In Brazil, forestlands where indigenous communities held tenure experienced an average deforestation rate of 0.06% while forestlands outside of indigenous tenure declined at an average rate of 0.15%. In Colombia, the average deforestation rate was exactly twice as high outside of indigenous land tenure (0.08%) than within indigenous land tenure (0.04%). The total value of carbon sequestered within forestlands where indigenous communities have secure tenure is estimated to be between $25-35 billion over the next two decades and the equivalent of removing between 9 and 12.6 million cars from the roads for a year. The monetary value of additional benefits secured by securing aboriginal title such as more efficient regulation of the regional ecosystem, local climate dynamics, water cycle, pollination, nutrient retention and even tourism are estimated to be between $679 billion and $1.53 trillion over the same time period. The estimated costs of securing aboriginal title and indigenous land tenure to forestlands traditionally occupied and used by indigenous communities is about one percent of the value of the total benefits derived from securing the title and tenure of these communities over the same time period. As I noted in A Conservative Approach to Protecting the Environment, a prior six nation study conducted by the World Bank program on Forests also found significantly lower rates of deforestation in areas where local communities had legal rights to forestland, with government enforcement of their rights, than so called “protected areas” where local communities have been excluded from their forests. Similar results are found in a comparable study of the biodiversity of forests lands and other habitats across the world. A study of 15,000 geographical areas in Canada, Brazil, and Australia concluded that habitats managed or co-managed by indigenous communities had higher numbers of species than government established protected areas.

Local communities have legal rights to about one-eighth of the world’s forest, which contains 37.7 billion tons of carbon - 29 times the annual footprint of all vehicles, but this is only a fraction of all customary aboriginal land. While indigenous peoples customarily have tenure over 50% of the earth’s surface, governments only recognize their legal right to 10% of it. Despite evidence that preserving indigenous land tenure is one of the most effective policies for reducing carbon emissions and protecting the environment, governments are still in the habit of extinguishing aboriginal title (the doctrine of discovery) in favor of extraction industries. In a recent case, the Queensland government of Australia used a divide and conquer strategy to seize 1,400 hectares of aboriginal land for a coalmine. The Brazilian government, infamous for its genocidal campaigns against indigenous Amazon tribes, has allowed thousands of gold miners to seize land demarcated for the Yanomami people. Local communities in the Amazon rainforest have also been forced out of land that they have customarily used for subsistence so multinationals such as Chevron and GM can trade carbon credits. The thin veneer of democracy has lent legitimacy to such claims (as if natural rights can be voted away) and placed the issue of land rights, especially indigenous land rights, on the back burner in popular discourse about climate change and the environment. The left-wing framing of this issue would have us believe that we must make drastic changes and great sacrifices to avoid a future global catastrophe, when in fact there are several simple things we can do to achieve the same end. Restoring and preserving indigenous land tenure is one of them. I have also written about other solutions in previous posts throughout this site.

Wednesday, September 4, 2019

Religious Beliefs Do Not Provide Carte Blanche for Discrimination

Source: Deep South Voice

There’s a viral story circulating twitter this week about a Mississippi wedding venue business turning down an interracial couple because it supposedly violated their deeply held religious beliefs. The owner of Boone’s Camp Event Hall, LLC, located in Booneville, Mississippi, refuses to host both same sex and interracial marriages on faith based grounds. While Mississippi’s religious freedom statute, HB 1523, gives businesses that provide wedding services a pass to refuse their services to same sex couples it does not sanction racial discrimination. In the past, Mississippi, like all southern states had anti-miscegenation laws that made it illegal for whites, defined under the blood quantum laws as at least 15/16 White European, to marry spouses of other races. Of course, these laws were overturned by the ruling in Loving v. Virginia; thus, any government agents or companies that attempt to enforce a ban on interracial marriage are doing so under the color of law. As I have already explained in a previous post, companies that offer their goods or services to the public at large have no right to discriminate on the basis of any federally protected class.

While discrimination on the basis of sexual orientation is still a legal grey area in many states racial discrimination is not. If Boone’s Camp Event Hall advertises its services to the public at large, engages in interstate commerce, and enjoys certain legal benefits under state law, such as limited liability, then it is a place of public accommodation subject to federal civil rights statute, especially title II of the 1964 Civil Rights Act. Only private clubs, that only provide services on a membership basis, religious organizations and private citizens that sell goods and services through word-of-mouth networks are exempt. While faith based discrimination has been limited to wedding services, Mississippi’s religious freedom statute, and similar laws passed by other state legislatures, could set a dangerous precedent that allows faith based discrimination for services that have nothing to do religion, perhaps even allowing denial of medical care on religious grounds. The line must be clearly drawn between those circumstances in which religious objections are material and those in which they are not. For instance, while it might be impermissible to allow bakers to refuse service to gay customers they should be allowed to refuse to decorate a cake specifically tailored to a gay wedding and only offer a plain wedding cake. In other words, they should be given discretion over the types and designs of the products they sell. This would strike a balance between civil rights of gay customers and Christian bakers.

Friday, August 30, 2019

You Shouldn't Need The Government's Permission to Make A Living

If you are a citizen of the United States, finding employment, either through yourself or another, is one of your unenumerated civil rights. It is also your natural right to earn a living so you can satisfy your basic human needs. Unfortunately, like most of our rights, even those explicitly mentioned in the constitution, local and state governments violate it with impunity. This has been recently illustrated in the case of a South Carolina florist who was arrested for selling floral arrangements without a business license - a permission slip to earn a living as your own boss. Unlike some criminal offences, this man’s actions, continuing to sell his products after his license had been revoked for unpaid taxes, were not immoral. The only harm done was to the city of Columbia’s coffers because they decided to draw their revenue from the wages and capital investments of workers and businesses instead of the rents of landlords and mortgage lenders; a just tax scheme would place the burden on the latter and leave the business owner and workers with their full earnings. While I’m not exactly sure how you sure how you create a wealthier more prosperous society, I’m pretty sure making it more difficult for people to find work or make work for themselves is not how you do it.

Monday, August 26, 2019

March For Our Lives Release Plan for an American Police State

If you want more military style policing, warrantless surveillance, warrantless searches and seizures, and mass incarceration then the parkland kids have the perfect plan for you. Their plan includes creating a director of gun violence prevention, a federal gun registry, an assault weapons ban (read: scary looking semi-autos with pistol grips), red flag laws, and a mandatory buy-back (i.e. armed robbery) program. Just like all authoritarian ideologies this peace plan is based on a number of false premises and lies. For example: mentally ill people are inherently violent (an old eugenics lie), you can infer causation from correlation data (post hoc fallacy), and apparently our constitutional rights are optional and can be discarded if they become an inconvenience to power hungry psychopaths.

The bill of rights is not a buffet where you can pick and choose which one’s you’ll uphold at your own convenience. They are all inextricably linked; you cannot compromise one without compromising the others. Gun grabbers have already demonstrated this with such awful proposals as red flag laws and no buy lists, which not only removes firearms but also the right to due process and 4th amendment property protections. We have already witnessed the erosion of our constitutional rights with the war on drugs and the war on terror. The war on drugs gave us civil asset forfeiture, which is more often than not used to rob legitimate businesses of their hard earned money, Anti-Structuring Statutes, which allows LEOs to wipe out your bank account for making multiple deposits under an arbitrary amount, stop and frisk, an unconstitutional policy even gun control leftists protested, has allowed police to force college students to become informants and has led to the gutting almost all of our 4th amendment protections against searches and seizures without probable cause or a warrant. The war on terror has resulted in warrantless and suspicionless surveillance through the prism program, National Security letters, infiltration of minority communities, and cell site simulators. The war on terror has allowed the Feds to add Americans to a no fly list or FBI terrorist watch list and deprive them of certain liberties without their knowledge or ability to challenge their decision. Arming local police departments and sheriff’s offices with military grade weaponry such as .50 BMGs, mine resistant MRAPS, and tanks, things you would only need in an actual war zone, has been another perhaps intended effect of the war on terror.The war on terror has been the single most overused excuse for expanding the scope of executive power to allow the president to commit atrocities that we could only imagine a tin pot dictator doing such as extrajudicial execution and indefinite detention of American citizens. It is beyond naive to think a war on “gun violence” would not produce similar results. Of course, gun grabbers are really only concerned about private violence. State violence both as it currently exists and as a means to disarm American citizens is perfectly acceptable to them. If their plan came to fruition, you wouldn’t hear a peep from them about the people killed and maimed in no knock raids to seize weapons, as they currently do with drug raids, or the number of additional lives ruined in our injustice system for the heinous crime of possessing a firearm without the government’s permission. They don’t care that their plan would create a national police state where federal law enforcement agencies, like the FBI and ATF, have absolute power. Jack bootlickers like David Hogg wouldn’t care about these unintended consequences as long as it doesn’t personally inconvenience them.

The Real Solution to Gun Violence

As I’ve already pointed out in a previous post, mass shootings and other forms of violent crimes are positively correlated with higher levels of economic deprivation, income inequality and low social mobility. This is a better starting point for dealing with something as nebulous as gun violence than trying to make causal inferences from isolated case studies that use correlational data. While the level of income inequality, and the mass shootings it predicts, cannot be directly reduced we can take small steps in this direction by relieving local and state tax burdens on lower income people, providing more affordable housing options, access to cheaper credit, higher education, and more lucrative job opportunities. Reforms in taxation, city planning, higher education, and occupational licensing, would also be needed to encourage greater social mobility and narrow the distance between social classes.

Friday, August 23, 2019

Federal Student Loan Debt is A Policy Choice

On Wednesday Trump signed an executive order directing the department of education to forgive $750 million in federal student loan debt for 25,000 disabled veterans. While this is only a drop in the bucket compared to the almost $1.5 trillion in total outstanding federal student loan debt it demonstrates a remarkable point about the tenuous nature of both federal student loans and our entire monetary system as a whole. Despite evidence to the contrary, most Americans still think of our money, federal reserve notes, as some tangible commodity that must be extracted from the private sector and not, as the very term ‘fiat’ currency implies, a credit created by a monopoly on legal tender that only holds value via force of law i.e. mandatory taxation. Without an antiquated sound money view of the dollar, they would easily see that federal student loans and the inevitable debt crisis it created are both policy choices. The program itself drove up the cost of tuition by allowing universities to charge more than what most students would have otherwise been able to afford on their own. Just as cheap money from the federal reserve inflates stock and bond values, cheap money from the federal government to universities inflated college tuition costs. The resulting $1.5 trillion in outstanding student loan debt, 90% of which is federal student loan debt, serves no other purpose than being a drag on the economy. Forcing all other borrowers, who aren’t disabled veterans, to pay back their federal student loans does not create any additional wealth or add any value to the economy; the industry itself is rent-seeking and parasitic in nature. Instead of building actual equity by taking out home mortgages, borrowers have to delay home ownership until they pay off loans that do nothing except contribute to the tuition bubble the federal government created in the first place. They money loaned to them was not extracted from taxpayers, as many falsely believe, and they are not paying back taxpayers. The federal government, and its agents like Sallie Mae, simply credited student borrowers, and debited their accounts later at a set rate of interest. All student loan debt could be cancelled without raising taxes because taxes do not fund federal spending in the first place, they drive aggregate demand for federal reserve notes and curb inflation by taking these very bank notes out of circulation. The effect of canceling all outstanding federal student loan debt would be to redistribute money from the public sector to the private sector, by allowing borrowers to spend more on consumer goods and home mortgages rather than give more to Uncle Sam. Ignorance of fiat currencies and modern monetary theory is the only thing holding this country back.

Thursday, August 15, 2019

Mass Immigration is not Necessary for Economic Growth or Funding Social Security Benefits

Mass immigration, a staple of modern left wing politics, is not necessary for future growth or funding of social security benefits. Case in point: Japan, despite shrinking in population by 3.5 million people over the past decade, is still experiencing economic growth albeit at a very low 1.2% rate. Of course, everyone understands that increasing the labor force isn't the only way to raise labor productivity; things like automation and artificial intelligence can do this just as the industrialization of farming at the turn of the 20th century raised crop yields while also shrinking the agricultural labor force. At the turn of the 20th century about 40% of Americans were still employed in agriculture, today it is less than 2% (and could be even less without the farm bill). The same is true of manufacturing, which at it's peak employed more than 1/3 of the American labor force, but now employs less than 9% of the current labor force. Even though employment in both sectors declined steadily labor productivity in both sectors also grew. Much of our aging work force will not need to be replaced by younger workers because their jobs will likely by automated. Perhaps as much as 47% of current jobs, mainly low skill and blue collar but some white collar jobs as well, will be automated in some capacity in the next 25 years. Why import more people to do jobs that won't exist? More importantly why import unskilled labor from countries like Guatemala and El Salvador, people with less than a high school education, when almost all future job growth is in fields that require either a four year college degree or vocational school education?

A separate but equally false claim peddled by the pro-mass immigration left is that we need more immigrants to pay into social security to support our ageing population. This claim rests on the false presumption that social security taxes fund social security benefits. This type of thinking is a remnant of the gold standard era. Taxes do not fund spending at the federal level; they drive aggregate demand (for federal reserve notes) and curb inflation. If the federal government needed taxes to fund spending it would have already become insolvent by now; our entire national debt exceeds both net federal revenue and GDP. The national debt is the private assets of federal reserve banks and foreign countries not something our grand children will pay back in the future to god knows who. Furthermore, the current array of programs for the elderly such as SSI, medicare, and medicaid could be replaced by a basic income guarantee for senior citizens without needing to tax the wages of the working age population or fulfilling a multitude of applications and eligibility requirements.