Passively implicit

When looking at the US Constitution I take a view of it as a structuralist, that is to say that the form of government is given as a structure that has a number of interlocking parts that are defined, limited and created to serve a purpose.  Structural analysis means that you take the words as they are presented in the context of the English language.  I laid this out in Structural analysis of Amendment II, and that rests on the work that I looked at earlier by Nicholas Rosencranz who laid out how the sentence structure of the English language creates the structure of government in the Subjects and Objects of the Constitution.  The lineage of the US Constitution starts with agreements outlined in the Anglo-Saxon Chronicle and King Alfred all the way through to Bill of Rights put in place with James II, which I went over in Roots of constitutional government.  For this article I'm going to be building off my article on Taxation via sales.

Taxation was part of the trigger for the US Revolution and it is understood that the Founders and Framers both had a view that taxation is a necessary evil to run the organ of society known as government.  As a necessary evil it must be limited so that it does not over stress the body which is society that requires the functioning of government to do the few and necessary things to allow for the individuals to be free.  With that said taxation takes many forms and the US Congress gets some particular types taxation in Art I, Sec 8, in part:

Section. 8.

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

If Congress was getting the complete taxation power with this clause then there would be no need to put in Duties, Imposts and Excises, now, would there?  In fact it took an Amendment for Congress to get the income tax, and even that Amendment has been misused as it nowhere indicates that Congress may levy different taxes on different income levels.  The Progressive Income Tax requires not just the Income Tax part, but a specific exemption of the Privileges and Immunities clause and Amendment V and Due Process of Law which is to be applied equally to all citizens.  Be that as it may, later in Sec 8 is a clause that indicates what the scope of the Taxation power actually is:

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

Duties, Imposts and Excises are generally taxes aimed at the National level and at international trade.  Thus the regulatory or regularizing power of Congress writing law in support of Treaties or, in cases where there are no trade treaties, setting the Nation's tax policy towards importation of goods to sustain trade, thus are complementary to the Duties, Imposts and Excises previously mentioned.  That is to say there is an explicit venue given for the Taxation power that is complete for Congress for international trade modified by Treaties.  Thus even where it is a complete power it is one that has limitations via Treaty.

Next is Sec 9 where one tax power is restricted and then modified by Amendment:

No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or enumeration herein before directed to be taken.

This is the first outright restriction to the Taxation power and now limiting it.  Do note that this is a passive clause and that it does not mention Congress nor does it mention any other branch or any other government.  Thus this applies to all governments and all branches of all governments in the United States.  Remember in Sec 8 there is the language 'The Congress shall have...' is an explicit grant of power and as all of Sec 8 is a single sentence with many semi-colons, all of that is covered under that.  There is no need to repeat it per line as the separate grants are broken up for clarity's sake, for readability, and to let someone catch their breath if they had to read it as a single sentence.

In Section 9 each clause is a single, stand-alone sentence, complete in and of itself.  These sentences are not started by explicit and active restrictions upon, say, Congress, but are passive and general in nature.  The Framers were more than capable of starting a sentence 'Congress shall make no law...' but these clauses do not start with that beginning.  As the Constitution is about the organization of the United States and what the role of the States shall be, when States require separate coverage they are mentioned, as in Sec 10, and I'm coming back to Sec 9, but here is the language on Taxation in 10:

No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it's inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.

With 'No State shall...' we are given a definitive subject and then a set of Objects with modifiers.  It is this language that is absent in Sec 9 and without an actual Subject that is defined then the generalized Subject is being addressed to all levels of all governments.

Imposts and Duties on Imports or Exports is a linking of topics in Sec 10 and due to that linkage these powers are addressed to those objects.  That explicit language and linkage then gives proper definition to the prior Congressional power on Imposts and Duties: Imports and Exports.  If a State wants a special exemption it must go to Congress and that only for the necessary execution of inspection laws.  By making those funds go to the US Treasury this is seen as a federal power granted to Congress and is for Imports and Exports.

Now back in Sec 9 there is the final clause and one that clearly de-limits powers and it is this:

No Tax or Duty shall be laid on Articles exported from any State.

As with the prior prohibition this one is given a passive voice and does not state 'Congress shall make no law...' nor does it start 'No State shall...' but, instead, addresses Taxation as a whole.  This is a restriction on the Taxation power, itself.  By not having either Congress or the States as the subject, as with the previous passive and standalone clause, this clause then addresses all governments in the United States.

This is an implicit restriction on taxation of goods moved from State to State on goods exported from one State to another State.  No government may do this in the United States.

Now lets flip this around into a different arena and ask: what is the form of this restriction on an international scale?

The States of the United States are seen as Sovereign entities and actually have an escape hatch from the US Constitution embedded within it in Sec 10:

No State shall, without the Consent of Congress, lay any Duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.

This language also shows up later in the Constitution in Art IV:

Section. 4.

The United States shall guarantee to every State in this Union a Republican Form of Government, and shall protect each of them against Invasion; and on Application of the Legislature, or of the Executive (when the Legislature cannot be convened), against domestic Violence.

In Art IV, Sec 4 the guarantee of a Republican Form of Government is to the States, which are signatories to the US Constitution after ratification by the people of that State.  The protections against having this subverted are to protect the States against Invasion and domestic Violence.  In Art I, Sec 10 there are a set of powers that a State recovers if the United States does not support this and it is the ones they agree to set aside outside of these specific causes.  When you examine that list you get the conception of the broad headings that the States recover in full upon invasion, imminent threat of Danger or having their government threatened with being overturned via non-Republican means are broad and sweeping.  These powers are what we call the Foreign Policy power and the Military power, not just the defensive Militia power which is due to all men, but the assertive and external Military power.  Also it regains all the taxation powers and the powers to build new military fortifications and equipment to guard itself.

In International Affairs a State with the full Foreign Policy, Military and Taxation power is known as an independent Nation State: a country.

Thus the States must have these powers to set aside in this agreement known as the US Constitution, as you cannot recover what you did not have to start with.  That is simple logic.

Taking the US Constitution as a TREATY DOCUMENT and examining what the form of Taxation is we then come to a conclusion of the limitation on the Taxation power that is startling due to the understanding that is underlying it.  It is the scope and form of Treaty that many who have argued on the necessity of unburdened trade have used at the International scale and has its full form seen with an organizations of States that agree to this view so as to have a coherent Nation amongst them.

What is a trade agreement that unburdens trade amongst equals and limits the power of an oversight group so that it may not burden such trade via direct taxation?

What is a trade agreement that sets up a system whereby sellers in one State that is signatory to the Treaty cannot have its goods or services taxed by a recipient State and its citizens?

What is the form of trade agreement that abolishes duties, imposts and excises save for necessary inspection and then those funds applied only to those inspections to ensure that agreed-upon legal trade is all that is going on between States?

Why this does have a modern term, doesn't it?

This is known as a FREE TRADE AGREEMENT.

Right there, in the US Constitution, powerfully stated by not being explicit, not a direct power grant, but by restricting all the governments involved, including the agreed-upon oversight body.  It is one of the most subtle and yet powerful statements on the positive value of trade between States to knit a Union together and to allow that free men when trading with other free men in States that all fall under the Treaty shall have NO TAXATION applied to that direct sale from individual to individual, State to State.

And that means no 'Value Added Tax', 'Sales Tax' or any other thing not directly related to quantity, amount or hazard of a given good.  Taxation for tonnage is also removed unless it has safety or verification inspections involved.  The federal government can tax per gallon, per carton of cigarettes, or by any other gross weight and measure so long as it involves upkeep of infrastructure due to those particular items in the way of hazard or safety.

What no government can do is tax by VALUE of the trade involved.

Thus a nickel per gallon on tax is there without regard to the actual cost per galloon.  It is there if it is a penny per gallon and it is there if it is ten thousand dollars per gallon: the quantity is what matters, not the value.  And do note that is for interstate sales, only, so that in-State sales remain the realm of the State government.

Governments will always seek new sources of revenue and tax the hell out of anything they can get their hands on and yet still be unable to balance their budgets.

A free people have an 'out' from onerous taxation: our fellow citizens in the other States under this Free Trade Agreement embedded in the US Constitution.  As a remedy to overburdening of taxes this is one of the most sublime resorts that the ordinary citizen has to escape taxes, become closer with his fellow citizens and support the Union between the States.

Because that is the realm of the Preamble of the US Constitution and note who is invoking it and what we promise to do:

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

Ideology of Tyranny

Recently I've looked at how Russia has moved from a Communist State to a Police State run by the secret police.  This shift from totalitarianism via political ideology derived from Marx to one derived from the pure use of power is one that is a direct flow, culturally, in Russia dating back to the early Czars all the way to Vladimir Putin.  The horror of such a regime isn't in its biased enforcement of laws to keep a regime elite in power, but in the violation of the social compact with those that merely try to enforce an equality of law upon all citizens.  That is the End Game Against Freedom article that centers on a film documentary by Andrei Nekrasov who recounted the murder of Alexander Litvinenko in Poisoned by Polonium.  Litvinenko attempted to simply put down a moral basis to do his job of law enforcement so that the law could be upheld in a neutral manner.  This was inside the FSB, the secret police organization that traces its roots directly back to the Cheka of the Czars, and he had an entire unit of men who also viewed with horror the things they were being asked to do to keep the regime in power: harass citizens, extort money from businessmen, plant evidence, use blackmail on judges, and even murder those who had the temerity to simply want a common law enforced for everyone.  Not only was the man they were going after inside the police, but he upheld an ideological point of view that Litvinenko's unit was in agreement with.  The men of the unit went on record as to what they had been ordered to do, who ordered them to do it, and why they thought they had been given such orders.  By revealing that the secret police, as individuals and units, had their own, separate funding garnered by extortion and blackmail of businesses, this unit had exposed how a secret police can act secretly even to its own budget to the enrichment of the police officers involved.  From Alexander Litvinenko:

Everyone realizes I don't know any secrets.  The only secrets I know are about organized crime and corruption, and they can't legally be considered state secrets.  Even if I wanted to work for British intelligence, I have nothing to tell them.  How can I be a traitor to my country?

Why are they so angry with me?

Because I have spoken about the one thing that is important, holy to them.  One officer said to me, "You can out all our agents, to hell with them.  We'll recruit new ones.  But you did one deadly thing.  You made public our system of earning money.  Do you want us to use the underground?"

That is why they hate me so much.

In any normal society this would be the activity of organized crime, but in Russia there is a political blending between the FSB and organized crime: between the State and criminals. I went over that in A taste of Oil For Food and its chefs, and it works out like this:  Marc Rich (the man who was on the run from FBI prosecution and who would be pardoned by President Clinton at the behest of Eric Holder) ran in a predatory investment environment so that he was willing to invest in places where there were either sanctions against investing or steep penalties for doing so, so that he could make money off of troubled regions of the world.  Russia, just in the post-USSR period, was very troubled in that it had no foreign cash reserves and its industrial base had no owners and no way to run things.  Organized crime in Russia had cash, and so did Marc Rich and together they were able to get legislation put in place that would allow criminal money to be used for purchasing ex-State run industries.  From that there were three types of owners for these businesses at the start of modern Russia: the State, Organized Crime, and corrupt outside investors.  This is a pattern from Marc Rich of finding raw materials concerns in foreign Nations that have limited access to markets via sanctions, purchasing those goods at a pittance, and then working those black market goods into the grey and open markets.  In Russia this was augmented by a process of 'tolling' which was exchanging goods from the USSR for cash, and not having any taxes to pay for the importation of any other goods.

When dealing with sums involved in such transactions the banking system must be used, and it was (and still is) relatively porous to criminal funds moving through the global financial system. In my article on the Red Mafia and its connectivity, I outline how the Bank of New York was penetrated by at least one organization of the Red Mafia (and because it still has not been thoroughly investigated, no one can say for sure just what the current extent of the penetration actually is nor how many organizations have penetrated it) that was moving $70 billion worth of funds and transactions over a period of years between other Nations and Russia.  Most of that was for Oligarchs, yes, but there are definite tracks that lead to an outfit run by the Chernoy brothers, who used the unique method of not being computerized and having one brother with an eidetic memory to remember where all the paper front companies were.  Literally no one working inside their main front organization actually suspected that the transactions that were taking place were between off-shore companies stood up just for the length of the transaction and then dissolved soon thereafter.  Without a paper trail, no one can be prosecuted, and that unique approach means that just how much illicit money through drug running, extortion overseas, white slavery and murder for hire went through the system is unknown.  What can be said is that one large swindle involving Semion Mogilevich in the YBM Magnex scandal netted $1 billion over its 4 years of operation in cornering the permanent magnet market via illegal trades.  Note that this was the Canadian market that was penetrated by a Russian operation started by a Red Mafia leader in Virginia, USA, with funds then being funneled through the penetrating group of the Bank of New York in NYC and then filtered out to Cypress, where Mogilevich had a holding company, and then filtered into Russia to support his organized crime syndicate that stretched all the way from Moscow to China.

This puts the life and times of Mikhail Khodorkovsky (from Khodorkovsky a documentary by Cyril Tuschi ), which I went through in End of the moral State, into fine focus.  The USSR had no banks, no one had a checking or savings account, nor credit cards, nor owned stock or bonds in companies.  Yet the Red Mafia had been dealing with capitalist regions for decades, faced brutal repression in the USSR and became far more brutal because of the repression.  Khodorkovsky saw the need for a banking system in Russia if it was to make a post-Communist transition, but knew little of what banks were, what they did or how they operated.  Those few with any cash standing up Menatap Bank had to go to Great Britain's banking industry for help on just the basics, and that also led to problems in those early days of keeping track of just where funds were coming from.  Surely funds coming from a well established, well known Western global banking system were secure, right?

Yet that was not the case and Menatap suffered because it was becoming known as a conduit for funds that was not transparent, did not keep open books and was suspected of helping to funnel organized crime funds into Russia.  This was the result as seen from Irina Yasina journalist who worked with Khodorkovsky to help establish his education works and who was the director of Open Russia:

At some point, Yukos was also a non-transparent company.  Minority shareholders were treated badly and no quarterly reports were submitted, like in the West.  That's what it was like in the beginning. After a series of scandals, Khodorkovsky understood:  If you make a company transparent, you attract investment.  He learned from his mistakes and knew this would also make money.  So it was actually a business project.

What happened is that Mikhail Khodorkovsky learned the basis for a capitalist system:  open books and transparency of accounts.  This would wind him up in Siberia, now having his sentence extended by the Putin regime for a third time because he was running an organization that could no longer be extorted for funds.  Both Menatap and Yukos would demonstrate that the fundamental requirement for a working capitalist system is open accounting, transparency and equal application of the law to all businesses with favoritism towards none.  This changed the course of Khodorkovsky's life and businesses from those that were not transparent with few willing to invest, to ones with open transparency and books and loads of investors.  Going from nothing to the richest man under 40 on the planet in less than a decade can be done legally, and Khodorkovsky proved it.  If he had not actually pushed back against the corrupt politicians put in place by the FSB, he would now be the richest man on planet Earth.

What did he run up against?

Again from the Litvinenko film:

In our country, the special services are, in fact, a secret political organization that uses sharp methods, secret methods, not against spies and terrorists, but solely to keep a ruling class in power.  In 1999, for example, to seize power, the FSB used secret methods that are only allowed against terrorists and spies.  If the army were to seize power, they'd roll in with tanks and guns and fly in with jets maybe.  But everyone would notice. The FSB, on the other hand, has secret methods, and nobody noticed anything until chekists made up the government and seized every organ of power.  If the KGB was the armed unit of the Communist Party, then the FSB is the armed unit of – of a caste of corrupt Russian officials.

In the USA, Congress has been willing to hand over more and more policing powers not just to individual agencies (which they are allowed to do) but to larger police organizations which now fall under the Dept. of Justice rubric.  Further the tax collection system has also garnered not only its own policing powers but its own court system, which is run to the interest of collecting taxes, not protecting individual rights and freedoms.  Under the guise of 'financial penalties' Congress has empowered the IRS to use both jail time and punitive fines as coercement techniques and that has now spread via special 'categories' of companies to allow the forceful hand of the elite to put pressure on citizen political concerns.  If the IRS were to seize power by disenfranchisement of individuals through: suppression of freedom of speech,  suppression of freedom of association, intimidation tactics against not just those wishing to start companies but their families, donors and families of donors, discourage the citizen's protected right to directly address government, and then hold the penalty of perjury over any wrong detail... would you notice?

This coercion and intimidation did not start with the election of Barack Obama, no this had started long before that.  Long before Richard Nixon threatened to do this.  Coming from The Federalist #12 (Courtesy: constitution.org) by Alexander Hamilton we get this view on taxation after looking at wartime taxation:

But it is not in this aspect of the subject alone that Union will be seen to conduce to the purpose of revenue. There are other points of view, in which its influence will appear more immediate and decisive. It is evident from the state of the country, from the habits of the people, from the experience we have had on the point itself, that it is impracticable to raise any very considerable sums by direct taxation. Tax laws have in vain been multiplied; new methods to enforce the collection have in vain been tried; the public expectation has been uniformly disappointed, and the treasuries of the States have remained empty. The popular system of administration inherent in the nature of popular government, coinciding with the real scarcity of money incident to a languid and mutilated state of trade, has hitherto defeated every experiment for extensive collections, and has at length taught the different legislatures the folly of attempting them.

And then further on:

In France, there is an army of patrols (as they are called) constantly employed to secure their fiscal regulations against the inroads of the dealers in contraband trade. Mr. Neckar computes the number of these patrols at upwards of twenty thousand. This shows the immense difficulty in preventing that species of traffic, where there is an inland communication, and places in a strong light the disadvantages with which the collection of duties in this country would be encumbered, if by disunion the States should be placed in a situation, with respect to each other, resembling that of France with respect to her neighbors. The arbitrary and vexatious powers with which the patrols are necessarily armed, would be intolerable in a free country.

In the modern USA all attempts to garner more and more money for government by taxation has found that after a certain point the increases become detractions to revenue generation, as was demonstrated by Art Laffer.  Yet tax regulation has gone inexorably upwards, more and more power over personal information is vested in the IRS, and it now has an army of agents willing to roam the land to enforce its own form of political viewpoint AND use arbitrary and capricious audits against not just businesses but individuals as well to both garner revenue and suppress speech.  And as the IRS is the agency put in to the role of collecting your medical information under Obamacare, the inroads and reach of the US federal government into the lives of individuals is about to increase many fold.

This, too, was seen by Hamilton:

What will be the consequence, if we are not able to avail ourselves of the resource in question in its full extent? A nation cannot long exist without revenues. Destitute of this essential support, it must resign its independence, and sink into the degraded condition of a province. This is an extremity to which no government will of choice accede. Revenue, therefore, must be had at all events. In this country, if the principal part be not drawn from commerce, it must fall with oppressive weight upon land. It has been already intimated that excises, in their true signification, are too little in unison with the feelings of the people, to admit of great use being made of that mode of taxation; nor, indeed, in the States where almost the sole employment is agriculture, are the objects proper for excise sufficiently numerous to permit very ample collections in that way. Personal estate (as has been before remarked), from the difficulty in tracing it, cannot be subjected to large contributions, by any other means than by taxes on consumption. In populous cities, it may be enough the subject of conjecture, to occasion the oppression of individuals, without much aggregate benefit to the State; but beyond these circles, it must, in a great measure, escape the eye and the hand of the tax-gatherer. As the necessities of the State, nevertheless, must be satisfied in some mode or other, the defect of other resources must throw the principal weight of public burdens on the possessors of land. And as, on the other hand, the wants of the government can never obtain an adequate supply, unless all the sources of revenue are open to its demands, the finances of the community, under such embarrassments, cannot be put into a situation consistent with its respectability or its security. Thus we shall not even have the consolations of a full treasury, to atone for the oppression of that valuable class of the citizens who are employed in the cultivation of the soil. But public and private distress will keep pace with each other in gloomy concert; and unite in deploring the infatuation of those counsels which led to disunion.

The wants of any government can only be met by totalitarian excesses of control of all parts of the economy: and yet even that will not fund it nor will it guarantee security and, in failing that, it will lose respect and support.

In Russia the secret police (Cheka, KGB, FSB) gained control by infiltrating all levels of law, and then moving into politics to control all levels of the economy.  Taxation plays only a small role in Russia where the population has never had a democratic expression of the popular will without the influence of the elite or organized crime, when the two can be told apart from each other.  Vladimir Putin swindled St. Petersburg, Russia of tens if not hundreds of millions of dollars in what was supposed to be a goods for food arrangement with Western Europe.  The goods went out and he pocketed the cash, and formed a money laundering bank that then reached out to the Colombian cartels.  With that personal money he was then able to help push the FSB forward with political candidates directly FROM the FSB, so that the second generation of laws could be geared towards the FSB and the elite, with the FSB serving not only on the criminal apprehension and prosecution side of things, but also serving as 'advisors' to courts and judges, letting them know who to judge guilty.

In the USA we have a system of politicians using the laws to create an arm of government that reaches into the financial and now health concerns of every American and suppresses attempts by citizens to form organizations to cut all of government down to an accountable size, remove broad powers from unaccountable agencies and their agents, all while trying to keep out of a court system run by and for those same agencies and agents.  On the DoJ side there are abuses of power under the rubric of National Security to wiretap journalists without informing those organizations they are tapping of who they are tapping and why they are tapping them and how long such taps will be used, and for what purposes as is required by law.  Further the DoJ goes 'judge shopping' to find a judge who will sign off on such open-ended, clandestine wiretaps, all to try and find out who the sources for a journalist are when that journalist is exercising First Amendment rights.

That same DoJ is given oversight on running the BATFE and then abusing that privilege by sending unaccountable arms to organized crime across the border and even overseas, without using proper IMEX treaty controls to do so, thus contravening not just federal law but international law as agreed to by the USA and places like Mexico and Honduras.  Those arms then filter back into the USA via those criminal organizations, and has led to the death of Brian Terry and other federal agents inside the USA.  This is only surpassed by the State Dept. running arms to other organized crime organizations in Mexico, moving Libyan MANPADs to 'rebels' in Syria affiliated with the Muslim Brotherhood and al Qaeda and then not bothering to protect Ambassador Stevens when the same jihadi-based organizations we got to protect him then turned on him, thus obscuring just which arms were shipped into and out of Libya and by whom.

Apparently there is another group of elites in the world who see fit to use the government of the USA and its organs against the people of America and who then create disorder overseas via US federal agencies and organs to their own ends which are neither legal nor lawful in any way, shape or form.

Do note that this is caused by both parties in the USA, over a number of decades and slowly built to control not just the lives of American Citizens, but to bring to heel multiple Nations through different means via the utilization of corrupt politicians with the Ideology of Tyranny.

What is that Ideology of Tyranny?

Raw power for the elites in charge to terrorize the lives of the common man on all corners of the Earth.

You can see it in small scale in Russia.

It is about to be on your doorstep and the doorstep of billions of people across the globe.

The only thing to stop it is each of us being awake, pointing out the outlines of such Tyranny, and continuing the civil discourse until the Tyrants can't take it any longer.  Then comes our Natural Right to protect ourselves, our loved ones, our property and our society against the inroads of such Totalitarianism.

And, just so you know, the best form of attack to bring the Tyrants of the world up short: humor, derision, and just pointing out how damned stupid they are to think that power, control and force actually make THEM safe.  There are plenty of fine examples of elites with lopped off heads, spilled guts, sudden attempts to fly out of 10 story windows, and just plain old numbers on their backs so they can be worked to death by the thing they create.  In their attempts to make everyone heel to them, they always forget to heel themselves to any inner guidance beyond all consuming power.  All consuming power consumes all, including those doing the holding.  Laugh at them for their willful ignorance of history, deride them in thinking that a necessary evil can be given good things to do and not become a pure evil, and that societies are created amongst men and governments mere temporary things used to help sustain society and that when government attempts to become society it becomes its own enemy and will soon be attacking itself.

You can't ask Litvinenko about that.

You might get a word from Khodorkovsky.

And you might just want to physically write down that you will not be pushed, filed, stamped, indexed, briefed, de-briefed or numbered.

Your life is your own.

And smile when you do it.

Tyrants hate those who smile in freedom.

It will make you a target, but soon, very soon, the targets will all be pointing in at the elites.  When everyone else is the target, then you aren't in a good situation because it is you that are the violent one and it is you that are in the 10 ring: target all others and you become the target.

And that day is also coming.

The deals, fiscal cliff and Weimar

When the Weimar Republic went into a tailspin it was due to outstanding debt (war debt from WWI) that it couldn't repay coupled with a hoarding binge set off by the need to actually feed returning soldiers.  Hoarding of food started the German Mark going on an inflationary spiral as the amount of food dwindled the price of the remaining food skyrocketed.  As costs rose the German government tried to cover that by printing more money, thereby devaluing their currency which then caused foreign debt holders to doubt the value of their debt assets as they were getting paid in money worth less and less because it was not pegged to the gold standard.  When that happened hyper-inflation set in to the point where you had to spend a paycheck when you got it just to get anything of value from your work.

Money is an exchange value of work put in to perceived value for final goods, after all, so when any government starts to print money they are saying: your work is worth less to you because we can't manage the value of the currency.  Because there is an inherent work valuation in finished products delivered to market, when more money is printed the goods are worth more, as well, which is inflation: it is more money trying to chase a set intrinsic value of work investment in goods production and when the currency is devalued then more of it is needed to get that intrinsic value.

When the foreign creditors came knocking the German economy imploded with hyper-inflation as the government tried printing more money to the point where you needed carts and wheelbarrows to get money to a store on the hour you were paid... yes you were paid by the hour at that point and the government had set up rationing of how much you were allowed to get, but that was meaningless when you couldn't buy anything.  Finally the German Mark was worthless and everything ground to a halt in Germany: the banks shut down, the industries imploded and stopped manufacturing, and the agricultural sector only got by if they could barter actual food for work.  Thus you had barter.

Welcome to the land of the US 'fiscal cliff' brought on to you by the debt given to you by the US federal government which went off the gold standard under Richard Nixon!

The US debt by our government is $16 trillion and growing at a phenomenal rate.  The annual deficit, per year, of the federal government is heading north of $1.5 trillion/year.  The Federal Reserve (that set of private banks the US government allows to handle our debt servicing for a fee, lucky them! and the printers of cash) are now inflating the US dollar under the guise of 'Quantative Easing' I, I II and a limitless III, with worthless cash now sitting in reserve to cover the US federal government's spending because, surprise!, no one overseas wants to buy it.  The largest holder of the US federal debt is the Federal Reserve.

What is the 'fiscal cliff'?  The inability of the US federal government to get spending under control and wanting to turn the US economy into the Weimar Republic by being unable to stop the red spread of ink to cover the stuff that can't be covered by taxes.  This was approached just after the prior election cycle and a deal was made to keep the economy going: raise the debt ceiling for more deficit spending in exchange for keeping tax rates where they were under what became the Bush/Obama tax cuts.  Now the debt ceiling is approaching, the deal is about to end and the tax rates are about to skyrocket taking another chunk out of the US economy to go into the federal bottomless pit.  Capital gains taxes will rise from 15% to 20%.  The Alternative Minimum Tax, set up to hit 'the rich' way back when, is not indexed to inflation and will go up to take in about 30 million citizens who are far and away just in the upper middle class to rich category.  Because everyone, to some extent, has money in the equity markets and capital gains are utilized to garner money from the growth of companies, all Americans will suffer.  Once the taxes are in place there will be less incentive to gain money from capital growth and less reason to increase wages and earnings due to the cost of running companies rising due to the Quantative Easing.

The rich get this hit, the poor get this hit, everyone gets this hit.  Income tax goes up in each bracket so the lowest bracket goes up from 10% to 15%, the middle class goes from 33% to 36%,  and the highest bracket  goes up from 35% to about 40%.  Some other cuts expiring are the child tax credit, some higher education expenses tax credits and FICA goes up 2% on every wage earner.  Added tax for Medicare goes up by 3.8% as well as the brandy-new Obamacare. The Estate Tax goes up.  You see?  Fairness!  Everyone suffers.

Net amount gained?  $440 billion

Because of the deal there are also some spending cuts, mostly to the military, which are a figurative 'drop in the bucket'.  The entire US military could drop out of the budget and you would still have over $1 trillion in deficit spending without 'the deal'.  The 99 weeks of unemployment goes back to 26 weeks... and good luck in finding a job, eh?

So while the US economy locks up, there is that other thing coming around again: the debt ceiling.

For the $2 trillion plus $440 billion and change the US government gets in tax revenue, it spends $3.5 trillion per year.   And if you did make the military magically go away as the Left keeps on wanting it to do, you would only have... $3 trillion in spending.  Needless to say there needs to be some military to protect the Nation and we can start shutting down bases wholesale overseas to trim just a bit more out of structural costs.  In other words due to the amount the Obama Administration has asked for in structurally increased spending, the expiring tax cuts would only lower deficit spending from $1.5 trillion to $1.1 trillion per year.

Now what are the major line items that the federal government will have to rack up?  First is servicing that $16 trillion debt:

Debt Service: $250 billion

After that the military.  Now lets take a 20% across the board hit plus a bit more and give every Leftists a wet dream just to paint the rosiest of rosy pictures for them and they can't say I didn't give them what they asked for:

DoD: $400 billion

Say that leaves $1.75 trillion per year!  Say did you know that Social Security (FICA tax) and the Medicare tax don't cover the cost of those programs?  They are both running in the red with SSA cashing out 'special bonds' which will increase the cost of our Debt Service line... but lets say that it doesn't just to keep things simple.  Now you would think that ANY GOVERNMENT should be able to do basic functions on that remaining haul, right?

First up paying up on SSA:

SSA: $880 billion

Ok, you are down to having a total of $870 billion of revenue to spend!  Geeze, can't we get by on that?  Next up are the M&M's, Medicare and Medicaid (sans Obamacare), which aren't bad but aren't all that hot, either:

M&Ms: $800 billion, approx. no one can give exacting figures due to Obamacare cuts and changes

For $70 billion you can now fund the rest of the federal budget.

Now to be fair, Obamacare rightly belongs with the M&Ms, making them the MMO, so lets add in that to get the actual cost change to the system:

MMO: $920 billion (again inexact as NO ONE has an idea of the TRUE COST of Obamacare)

Your $70 billion to spend now goes into a $50 billion deficit, red ink in other words.

The rest of the federal government has not been funded at this point.  Here are some relatively mandatory agencies based on what their functions are (although do regard them with a huge grain of salt as they are summaries and, unfortunately, the actual functions tend to be small parts of a bureaucratic morass):

Homeland Security:  $40 billion

VA:  $61 billion

State Dept: $48 billion

INTEL Community: $0.5 billion

HHS: $78 billion (the overhead cost in personnel and such  to run MMO)

Interior:  $11 billion (but they want to close the parks!!!)

Treasury: $4.7 billion (remember the Federal Reserve is a quasi-governmentally chartered organization, NOT the Treasury)

SSA: $9 billion (the overhead cost of personnel and such to run SSA)

Cost to run these parts that are Constitutionally required (in whole or in part) or to keep discretionary wealth transfer payments going is thus

Cats & Dogs: $255 billion

To fund the C&Ds with Obamacare gets a $305 billion deficit, and without it a $185 billion deficit.

Everything else (EPA, Education, Justice, Labor, HUD, Agriculture, Commerce, Energy, Transportation, Corps. of Engineers, NSF, SBA, all of this stuff) gets zeroed out and eliminated from the US federal government.  The big goose-egg for funding, but the property can be sold off to get a bit of revenue, which doesn't matter a lot, but gets you something.  Also the regulatory behemoth gets it right in the heart and topples over dead as a doornail.

If the agreement made post-2010 is actually kept for taxes and then the debt limit is NOT RAISED, then what to fund in the federal government becomes a very interesting proposition.  Take all the truly mandatory (as in specified in the US Constitution) stuff and you get, in spending:

Debt Service: $250 billion

DoD: $400 billion (unrealistic, but fun to tweak the Left with on their wet dreams)

Cats & Dogs: $255 billion

Absolutely mandatory, by the US Constitution required spending: $0.905 trillion

That isn't bad.

Cost of voluntary spending:

SSA: $880 billion

MMO: $920 billion (again inexact as NO ONE has an idea of the TRUE COST of Obamacare)

Total spending on Entitlements: $1.8 trillion

Total spending: $2.705 trillion (but probably more as these things go)

Total revenue from all sources: $2.44 trillion

Total deficit in 2013:  $300 billion (approx.)

And no other parts of the US federal government left outside the mandatory Cats & Dogs.

This is the sort of math that gets done if you don't raise the debt ceiling: you make hard choices of what to cut, and something else outside of DoD (which I gave the Leftists a wet dream on) and more taxes is the issue as that voluntary or discretionary portion of the budget is set to be the long-term budget buster as no one forecasts those outlays to go DOWN as a structural portion of the budget, but only UP and sharply upwards.  Remember that before Obamacare was factored in you had a $70 billion surplus before you got to other mandatory spending and that other mandatory spending would have given you a deficit of $800 billion without Obamacare.  There is no way to run any of the math on Obamacare and have it come out cost neutral or actually cut the cost of the government because it RAISES the cost of government.  That one CBO report was so rigged, so based on non-adjusted numbers and static (meaning it didn't take into considerations responses to the law) that it was a lie, pure and outright.  It just doesn't work that way.

So if you cap off spending you then have areas you must cut.  You can save a bit trimming at mandatory spending, but that is not the problem in this budget: 'entitlements' are.

Let's say that everything was capped and, say, Obamacare not funded, a bit of trimming at State, HHS (unfunded Obamacare), unnecessary functions at DHS (like the TSA) and Interior (like handing back land to the States to get rid of overhead functions) and you get a deficit neutral budget.  What happens, firstly, is the regulatory overburden from the rest of the government, plus the subsidies to do inefficient things (like corn based ethanol and 'green' energy) go away.  So does DoJ, which includes the FBI, BATFE, and a number of other functions all blow into dust and Eric Holder is out of a job.  Labor goes away as an agency, and so does OSHA and all the federal overhead with it.  The EPA becomes dry gulch of unsustainable regulations no one will enforce at the federal level.  After that the Cost of Living Adjustments for SSA and M&Ms might be frozen for a few years and harsh means testing put in place to get the upper middle class off of the M&Ms.

Basically it is saying to the States: you are on your own.

It also gives a major signal to the credit markets: the US is now serious about paying off its debt and can be considered a secure place to invest as we are no longer in the red at the federal level.

The Federal Reserve to liquidate its worthless cash then starts to jack up interest rates to, say, 25-30% for 4-6 years which has a two-fold effect of making loans for a number of banks nearly impossible to make, but also draws in external capital and cash to start funding companies in the US that are now unshackled from the federal regulatory monster (although the tax problem is a major one, still, that regulatory overburden will allow companies to free up their own capital to invest).  Unemployment goes up for 2-5 years as the job market expands and new entrants try to find positions in it and labor participation rates increase, and this is a GOOD THING, unlike now where labor participation rate is dropping which is a BAD THING.

The worst of all scenarios is just agreeing on anything like the path we are on.

A half-way decent agreement would be one to scrap Obamacare and all the stuff Obama has put in, for an exchange of another debt ceiling limit raise which will also be the LAST time and that will be made clear to everyone.  This gets a couple of years to restructure entitlements, roll back government slowly, and get the Federal Reserve to stop filling up the swimming pool sized punch bowl for us to drown in and pull out the plug on the monetary Debt Star.

The best of all scenarios is for the House to hold out that Obama asked for the cliff in exchange for a one-time ceiling hike, and now that he has gotten all the taxes he wanted, he should be smart enough to figure out how to fund the government with $2.44 trillion.  He asked for it, so give it to him.  If this is what all these bozos got elected on (and that is what the Left is saying for taxes) then the agreement MUST be good.  Hard medicine to go cold turkey on spending, yes.  But it is, after all, what was agreed-upon: the deficit addict goes cold turkey after one last hit on taxes and then balances the budget in one year.  The Left wanted, with a vengeance, the 'Clinton Era Tax Rates' so GIVE IT TO THEM and demand a return to CLINTON ERA SPENDING RATES and the CLINTON SIZE OF GOVERNMENT to boot.  They loved the Clinton era so much, then tell them to bring it ALL BACK on both taxes and spending.   You can formulate your own approach, but the basics are to get spending in line, kill regulations, put the States on their own and let them all know: no bailouts for you.

These idiots Upon The Hill I expect to be the worst of all possible people.

Idiots.

Fools.

Debt Junkies.

And they HATE that your WORK is worth something to YOU and want to PUNISH you for being PRODUCTIVE.  They want to CONTROL YOUR LIFE from cradle to grave, take all you own and then have you THANK THEM for being so nice to you.

When you hear the words 'Grand Bargain' and it doesn't include any rollback, then you will have your answer if we are going Weimar or not.

No rollback: Weimar.

Rollback and government accountable to citizens: America.

I'm preparing for Weimar.

I am hoping for America, but hope is not a strategy, preparation is and sends a message all its own that is unmistakable.

The clothes have no emperor

In watching the first Presidential debate I came away with a few basic ideas and wrote those up at Hot Air, which appears to be my initial post point for ideas.  I slept on the ideas, and posted them the day after and will now put that out with all my standard provisos on WYSIWYG, no corrections for anything, just simple copy and past and then concentrate on one area:

So much good from last night it is hard to know where to begin.

Just in overview I noticed that Romney was transitioning between topics to keep up with the debate outlines, so that when Lehrer had to go to the next area it had been softened up by Romney ahead of time. Giving Obama the lead position meant a lot in that Romney could get the last word in which shifted Obama from offense to defense at a few points throughout the night. Together this effect was devastating.

On the major plus side Romney put out how an executive deals with problems in government: you lay out a policy and then have to adapt it to the legislative branch and what it is willing to do. This is what an executive DOES – lay out policy which then drives the argument and direction of legislation. You don’t need miniscule, point by point things to do if you give the overall direction and theme of what you want to accomplish. Those were laid out quite well in multiple instances.

Taxes would go down but exemptions would be eliminated meaning that the end marginal rate is a goal and it is a rate with few exemptions to it. This reduces overhead and makes understanding the code easier, not harder. It also is an aim to remove all the loopholes put in by the letter street cronies that the Left used to complain about. In the end more people pay taxes, but the rate is lower so that there is less taken out of the paycheck, meaning more take home pay. This was not lost on me and seems like a good way to start repealing the crony tax system to get to a flatter tax. A good start.

Thematically Romney laid out that all government expenditures must be balanced by asking: ‘Do we want to pay China for this by having them bankroll our deficit spending that our children and grandchildren MUST pay off for us?’ This is killer. If he really and for true means this, then the morality of spending has just been put into play in a big, big way and everyone wanting ‘entitlements’ is now on the defensive having to justify putting future generations in debt for current spending. That is a game changer if pressed home and to the hilt. Putting the spenders in the position of immorality (instead of the cloak of doing good) is killer: put the red letter D for DEBT around their necks and point out how wicked their spending is to future generations and how lacking we are in wanting to do that.

Just so many good points… Mitt Romney did the startling thing of knowing Obamacare AND Dodd-Frank better than Obama, inside and out, which is no mean feat. Dancing through the problems of the legislation and making it sensible was stunning as NO ONE on the Left or Right has done that to-date in such a thorough way going point-by-point. And that point-by-point way of addressing concerns is yet another executive trait, meaning that problems are assessed and prioritized before-hand. Just amazing.

In one night Mitt Romney has demonstrated that he at least gets the fundamentals of the Constitution and Declaration and why they are intertwined and what that means for policy. Giving an overview of the 10th Amendment, while short, means that he has another area to flesh out beyond just block granting stuff to the States. Combined with the morality, or lack thereof, of spending, he has a potent arsenal that can only be utilized if it is backed as POLICY. Not programmatics but that thing that drives programmatics. If done as POLICY then this is the beginning of a sea-change in politics.

His job would not be one of reaching across the aisle, however, as the Tea Party begins to dominate the Republican Party… if 1/3 or more of Congress is held by Tea Party members, then they become the drivers of legislation because of the two parties and the fights become one of the establishment against the Tea Party which is a whole other fight and unlike anything seen for over a century in America. If we put in the hard work, then we will give Romney a very, very hard job to do and require him to live up to what he has laid out for us tonight. It isn’t about an election, but changing the course of the Nation away from its current disastrous path. I do disagree with some programmatics from Romney, yes, but it is up to him to show that he really does understand his policy direction… and if he doesn’t live up to those themes, I will have no problem in 4 years voting for someone else. As of last night, however, it can be said that the direction of not just this race but the entire dialogue of what is moral and just in government has been put into play. Fairness is in the eye of the beholder and that loses out to equality for all and upholding a moral standard and good so that our children will have the chance to prosper without our debt loading them down.

Prepare for weeping, wailing and gnashing of teeth from the Left over this as the basis for politics is now changing beneath their feet.

ajacksonian on October 4, 2012 at 6:19 AM

Here I would like to concentrate not on the morality of debt or spending, although morality does come into play, but of taxes.  I know the morality of taxes is a dry subject that the Left figures it won somewhere around President Wilson, but lets start with the can opener and look at taxes, deductions and marginal tax rates.

For this exercise I will use totally made up numbers for a highly simplified tax system with some embedded carrots to get you, the taxpayer, to do what the government wants you to do.

In this case there will be two families, they will have definite similarities in that they will be a 4 person household with two parents and two children.  In this tax code they will each get 'benefits' of deducting $100 per person and an additional $500 per child per year.  Each family gets a 15% write-off on their home mortgage interest payments and a general write-off on all income of 5% which I'm tagging for medical expenses.

Family 1 has an aggregate income of $30,000 per year, a 25% tax rate, a home mortgage payment of $1000 per month and 95 percent of that is interest as they haven't been in the home long.

Family 2 has an aggregate income of $55,000 per year, a 30% tax rate, a home mortgage payment of $1500 per month and 90 percent of that is interest as they have been in a somewhat better home for just a bit longer.

Now let me break down the numbers a bit so you can get an idea of how this 'removing deductions and lowering rates' works.  These numbers just reflect this made-up tax code system with just a few simple parts to it, so no griping about how they don't reflect 'reality' or real numbers – they are just math.

	Family 1	Family 2
Federal Taxes	$7,500	$16,500
Standard deductions	-$400	-$400
Child tax credit	-$1,000	-$1,000
Mortgage interest deduction	-$1,710	-$2,754
Standard medical deduction	-$1,500	-$2,750
Net Taxes	$2,890	$9,596
Net tax rate	9.6%	17.4%

 

When it is pointed out that NO ONE pays the tax rate for their bracket, this is a truism as NO ONE  actually pays that load due to the loopholes, give-aways and write-offs in the tax code.

Is a tax code that rewards behavior by the power of government a moral one?

On the positive sides it does things that government in the form of Congress and bureaucrats want to see happen in the economy.  It is, in other words an enticement to you to do certain things even if they don't make any sense at all for you to do them.

Taking the deductions line by line:

1) Why should you have a deduction for being yourself?  And why do those who live with you who depend on you get a deduction?  You are a citizen, after all, and so (with a bit of luck) are the members of your family.  What is the earthly reason that you should be able to deduct anything on taxes for these people just as citizens?  And, really, isn't that a bit denigrating to say that you 'deserve' to write-off such individuals who are, after all, part of the whole of the people?  Why not lower the tax rate and just do away with that? If this is meant for 'the poor' then set a point of minimal, subsistence living under which no taxes can be paid and be done with it.  Be generous and peg that at 4x this deduction and you now have the ability of a family of 4 to earn just enough to feed themselves.  Putting this loophole in is condescending from government and treats you as a dependent of government... yet YOU are the one earning the income which government is trying to take away from you.

2) The child tax credit is a simple loophole to make children more 'affordable', sort of like that new home you wanted to buy at inflated prices, but with a higher cost of consumables over time.  This is treating children as a 'burden' to adults, not as new life to be cherished. It is also a very recent addition to the tax code (with the income tax, itself, being only 100 years old in the US) and much fought over for a few years until it got inserted due to 'family values'... of which are included kick-backs from the US government, apparently.  Isn't that a lovely 'conservative family value'?  Call it what it is, not what it is sold as, and that changes the entire view of the deductions and their purpose.  Plus it is small ball, stuff, meaning that you can be easily bribed to have a larger family.  Yet another 'family value' apparently.  Even better if you make so little in taxes that your marginal rate drops below zero, you get a bonus gift from the US government: a pay-off.  Kick-backs, pay-offs and bribes: all 'family values' via the tax code.  Just what you want children to learn about growing up, isn't it?  How to become a nice, subservient crony to the system taught right there at home with the tax code.  With the tax code as it is, why do we need a Dept. of Education?

3) Next up is the vaunted, much lusted after mortgage interest deduction, one of the two main ways to reduce your tax obligation!  Yes, say that you want to touch that and you get roasted over an open flame.  Yet what, exactly, is it?  You take out a mortgage based on a few things: you need a home, you seek to limit tax liability, you believe that you will make more in the future, you think the home will appreciate in value.   These are not the traditional things that people have thought about prior to Ginnie Mae and the 'securitizing' of debt vehicles in the home mortgage market by the federal government (done under the Nixon Administration at the suggestion of the Dept. of Labor, of all places), at least some of the latter – the need for a home and reducing tax liability were key before that era starting in 1970, and prior to the 1930's only the ability to actually pay for a home mattered due to lack of write-offs before then and the FHA.

What is this yet another side of kick-backs, pay-offs and bribes by the US federal government via the tax code?  Unfortunately, yes.

When the banks were left to their own devices they required some things of people purchasing a home: 20% down, a work history, a known business you worked for or (as an owner) a steady ownership record, and the ability to actually afford maintenance on your home (about 1% of its cost per year).  Back in that era the bank was local, the person who managed mortgages knew the area and neighborhoods, and your mortgage was kept locally as a part of a portfolio held by the bank.  You, as the lendee, were known and probably had a working relationship with that bank to start with, meaning they knew your family's situation and could give some leeway on paying back during hard times.  To achieve all of that you had to demonstrate the ability to work, to save, lead a thrifty life, manage your household expenses, be reliable and understand just what the burden of owning a home was.

Today we have the enticement to banks to lend to NINJAs, people with No Income, No Job or Assets.  Your mortgage interest deduction started as a way to 'ease the burden' of home ownership and to entice more people to purchase homes.  All well and good if you still had to place 20% down, I suppose, but it is a kick-back just the same.  Still the larger banks saw that there was an 'opportunity' in the mortgage market if only the pesky regulations could be changed to stop them from entering it and if they could get some assurance on the value of the debts in far off parts of the country.  Aren't you glad the US federal government got that done to destroy the Savings & Loan industry and press local banks out of the market and out of business?  Because of the S&L crash the opportunity to change regulations further to open up the spigots for the larger commercial banks was done through the crisis of that crash: never let a good crisis go to waste.  Through activists at the bottom, local banks were pressed into giving loans in bad neighborhoods where home values were at threat from local conditions, and then made to give loans to those with lesser work histories and less down on the mortgage.  Home values, with the entry of the commercial banks, started to rise far faster than their 1-2% appreciation that was historical to the late 1960's, and the idea of a home being an 'investment' safe from most of the problems of normal affairs took root.  Once a final safe haven of IRA's were put in, then homes just became another investment vehicle with an expectation of appreciation over much shorter periods of time.

That was achieved by the home mortgage interest deduction, the lowering of lending standards for commercial banks, and the forcing of loans into areas that were marginal and required some civic renewal (read: redevelopment and investment) to be worthy of having loans floated to them.  These conditions created a bubble in the home mortgage sector of the economy and it popped circa 2007-2008.  The regulations pushing all of this are still, to this day, in place.  Including the vaunted home mortgage interest deduction which makes it 'affordable' to own far too much home for a given income (because those restrictions were 'loosened' as part of all of this, too).

Doesn't that 'old fashioned', local and largely unregulated but highly protected banking system with stable neighborhoods and firms sound nice today?  Wouldn't it be nice to have people who actually were thrifty, were able to understand the value of a home as a place to live, and who didn't look for kick-backs and bribes (if not outright coercion) to banks to give loans?  The large commercial banks are only a part of this problem, albeit a large one with enormous long-term impact and structural degradation to local communities. Every individual who bought more than they could afford, purchased without income or assets, or who could only swing purchasing a home with the deduction or because of the deduction is part of the  problem.

Is this deduction a moral one?

Are the regulations that followed on to it, that inflated expectations, reduced valuations and were in search of more money flowing through the system to cause a large-scale systemic collapse moral?  For these regulations are the problem, not the solution.  In this imaginary system this line item accounts for 1/5 to 1/7 of the reduction in liability, but in the actual world people searching the quick flips, the quick turnarounds, the easy sale, the inflated home value up to as much as 10% per year allows for the exploitation of this write-off to reduce liability even further.  It was a tax dodge put in by cronyism with the willing assent of the bought off citizen who purchased a home.  It is the money-grubbing that was exploited by government and banks to utilize the home owner via pay-offs to inflate the system artificially to cause temporary 'prosperity' that then crashed hard and deep, and has a major crater still lingering  in the financial structure of the Nation that neither Democrats nor Republicans want to remove.

Are these the values you want to teach to your children: that pay-offs and kick-backs, cronyism and the expectation of getting ripped off are the norm for government regulations and that one should take part to make a quick buck while they can?  Is that the basis for a moral family arrangement when your children see YOU in that light?  And when you happily slap that bumper sticker on your RV that you are spending your children's inheritance then what, exactly, is the message that you are sending?  That you got yours?  Hurray for me and fuck you?  Because that is the message we get from such regulations and they do not bring about a stable nor just society, but just the opposite.

4) A standard deduction for medical expenses.  This, in various formulations, is currently in the modern tax code and became embedded in it during WWII as part of the enticement to get retirees, the unfit and those who were marginal in the workforce to join in the industrial war effort.  Women, midgets, the blind, those stricken with polio, the elderly... all of these people had to be enticed to work and the one easy way to do that was via what had been for decades, an executive 'perk': health care 'insurance'.  Prior to the war effort the idea of having health care 'insurance' was limited to the very upper class of society.  Why?  Because it is uneconomical to provide it, save as an enticement to a high experience, highly capable executive as part of a package of goodies to get them to work for a company.  To put it bluntly, that sort of coverage is too expensive to afford.  In fact companies couldn't afford it for their workers prior to WWII.  Luckily the crisis of necessary wartime production meant that businesses lobbied Congress to get a tax write-off put into the tax code so that a percentage of the cost wouldn't be taxed, which was about 40% if memory serves.  Why is this uneconomical?  And is it moral to have this in the tax code at all?

Health 'insurance' isn't real insurance where you are betting you will get sick and the insurance company is betting you won't.  The expansion to regular health visits, check-ups, tests, hospitalization and all of that has many features that are recurring on an annual basis, and often more frequently.  Covering medications also has a recurring and regular cost to it, and this is not a feature of any other type of 'insurance'.   Prior to this write-off individuals could get true insurance for forms of catastrophic care, accidental death and dismemberment, and even such things as investing in long-term care while young by having a stable family.  Thus this form of 'insurance' must have a high premium to it, because it is covering so many expenses for so many people that there is an overhead cost to it that is far beyond any other insurance around.  Instead of a secretary and a couple of actuarial people, these companies must employ a raft of experts, forms processors and other individuals that has grown larger over time.  Further they have taken on negotiating with hospitals, physicians and groups of same for reduced prices for the insurance members.  What used to be something that you paid directly and negotiated with the physician or hospital now had an intermediary involved, and whenever you get a middle-man, you get the cost of the middle-man as part of the system.  Without a write-off businesses could never afford that additional overhead cost for their workforce.  Period.  It costs too much.

When insurance companies put the screws on providers, by promising volume to make up for lower cost, any shortfall is passed on to other customers.  All well and good until you get to the Johnson Administration and the start of Medicare and Medicaid.  When the US federal government starts to tell what it will pay for procedures, and they are not the going market rates but below them, then the cost differential must be made up by physicians and hospitals to stay in business.  That is cost shifted to other patients, which means that insurance companies both inside and outside the M&Ms see the cost of care rising, which they must pass along via higher premiums only a portion of which can get a write-off.  Your cost of care rises.  The federal government only exacerbated a pre-existing problem that it caused in the first place, and neither Democrats nor Republicans removed the uneconomical tax write-off after WWII.  The very vocal minority that told of the problems of the 'Great Society' medical programs proved not only prescient but having too limited a vision of the actual rate of increase of costs involved.

Why is overhead cost important?

Overhead cost is a burden to whatever the transaction is that is going on: stores have square footage, personnel, record keeping, liability insurance, lighting, heating, janitorial work all of which are just part of overhead cost.  Insurance companies have this, as well, so that when a transaction takes place the cost of their negotiations is added into the fray, as well as the cost of making sure that charges passing through the system are not fraudulent: it is their money they are handing out, dues and such are only payments to them to do this job.  Thus whatever the actual cost of an item is, it must have the burden of overhead added on to it and medical care is no different from any other transactional service be it getting served dinner at a restaurant or purchasing a computer from an online store.  To put it simply, the cost of the system is increased with middle-men and their burden added to the system as a whole and YOU pay for it either directly or via cost shifting to others.  As with all other transactional systems, the fewer intermediaries that there are, the lower the end-user cost will be in the aggregate and often for each individual summed up for their entire usage of the system in their lives.

Today the system is so rigged, so encrusted with tax changes, with so many kick-backs at the federal and State level, with so many cronies and lobbyists seeking line items in the budget for themselves that NO ONE knows the true cost of medical care in America save that without all of this burdened overhead it would cost FAR LESS than it does now.  Coming from the federal government and seeing industrial and governmental non-productive time and generic overhead cost burdening that delta could be as small as 15% and as high as 65%: what you pay, overall, for all medical treatment and medications in your lifetime could drop by 15% to 65% overall, in aggregate without trying to make the damned system 'fair' to treat 'special cases' with high cost and even higher overhead differently from everyone else.  That delta is picked up by this thing known as 'charity' run by religious institutions, citizens dedicated to the cause of helping others, and special interest charities dedicated to single diseases and their medical costs.  By depending on insurance and government this charitable system is on the rocks and slowly being eroded away in its entirety as it doesn't have the lobbyists or the capability to write-off as much as larger institutions because they lack the scale to do so.  Once they are gone the lowest cost anchor of the system will go with it and the costs that had been merely way too expensive will go to impossible to pay because there is no way for charity to compete in a crony system dedicated to undercutting charity to the benefit of the cronies and politicians.

That is not only immoral it is reprehensible.  Yet you sustain it via tax write-offs for yourself in the tax code.

And all in search of the objective: lower taxes.

5) That bottom line is what we are all seeking via this system, and yet we achieve it in the very worst of all possible ways.  The income tax was promised as never going beyond 7% and that only for the fat cats, yet in 7 years its highest rate was 70%.  One of the interesting drivers for the tax code, beyond 'soaking the rich' was in the quest to get the US federal government another source of revenue beyond its main one: liquor taxes.  The hard drinking US had problems, which first brought about individual organizations seeking to reform drunkards (like the Washington Society) so that the familial problems of drinking could be alleviated by reforming those who drank too much liquor.  Yet most of the US government's income was on liquor and it sustained the Nation up to the Progressive era.  Temperance, sobriety and using government to enforce these things was a Progressive agenda item, backed by powerful lobbying organizations like the Anti-Saloon League.  Getting dry counties and dry States was not enough as people could go elsewhere to bring drink back home.  The idea was that if the US Constitution represented the moral fabric of the Nation, then amending the Constitution would change the people to a more sober and moral people.  Yet the only way to do this was to find an alternate revenue stream as liquor was very much the life-blood of government.  Thus the income tax, warned against and written against in the Constitution, had to be put into place before the political power of the Temperance Movement could come into play.  With an alternative revenue stream, Prohibition quickly passed and proved that human nature is stronger than the US Constitution.

We are left with the artifacts of a directly elected Senate system and an income tax system, both prohibited by the original Constitution of the Framers.  That system had everyone being assessed equally for the cost of the US government and then apportioning that to the States for getting the revenue.  The States figured out how to get the revenue: sales taxes, property taxes, direct levies, bake sales, it was left up to the more local to figure this out, not the National system.  That is both a moral system and a 'fair' system in that it adapts to local situations as dictated by the people at a much easier level to control.  Everyone gets a stake in the system.

Today the idea is to avoid taxes, have the rich pay the way of the poor and do everything in one's power to pay as little as possible to a government that must stand for all of the people.  Instead of passing the burden to States, we now have the problems of the States at the federal level and we are left with only the people as the means to address the ills of this system.  The failure of our government, our businesses and ourselves via human nature have now put us into a desperate situation.  To gain earthly goods we have accepted pay-offs to avoid questioning the moral cost of them.  For the pursuit of having someone else pay, we now pay in the dearest coin of all: our own self worth.

When Gov. Romney puts forward the morality test in spending, it must be something that is far beyond spending because spending requires a source of that revenue, and that can only be taken from the people of the Nation or borrowed from others.  We put ourselves and our future in the hands of others when we do that, and it matters not if it is other Nations or 'the rich': you dance to the tune of the piper and when you pay nothing you are obligated to dance to their tune.  It isn't immoral to hand our children and grandchildren our debt, it is immoral of us to incur it in the first place and shows our own lack of self worth and valuation to accept that cheating pays, that avoidance of paying taxes pays, and that instead of expecting all citizens to take up our common burden, we seek to shift it only in one direction: ever upwards to others.  To be a free people we must all pay our way, even the destitute as I am sure that we, as moral people, will form charities to help them pay for some small citizen so they can learn the value of being a citizen.  That is also an obligation to actually be productive, of course, and to care for not just oneself but one's fellow man.  If we do not expect it of ourselves, the non-rich but not destitute, either, then how can we expect it either of the rich or the destitute?

Once morality of government in its size, scope, power and cost are all brought into question, the very tax code we have then comes in for scrutiny.  In my fictional one for people of moderate means I get something between 10 and 17% as a net tax rate.  If we shear out the immorality of the system, get a flat tax of a given amount, and then say 'we must live within that', then we are on the path of being moral and righteous in our actions because we sustain ourselves and our society by swearing to pick up the burden for those who fare less well and to pay our own way to sustain us all.  No matter how much you may like the special treatment, the kick-backs, the pay-offs... they get you the cronyism, the complexity and the resulting immorality of treating people differently when we are all citizens and created equal.  To claim ownership of yourself you must be able to deny government the right to control you via economics and its own petite tyranny, which soon grows fat and becomes a true tyrant in its own right.  The tyrant of the bureaucrat.  The tyrant of the rules.  The tyrant of the cronies who seek to escape scrutiny by buying off government to get paid-off by you.

I am sure Gov. Romney hasn't gotten down this far in his thinking.  But that he has taken a step in this direction is not just unexpected but refreshing.  Because once you start to question the morality of borrowing and expecting your children to pay it off for you, then you must begin to question the taxation and just what it is you are seeking from it in the long run.  A Nation of free men must be able to admit the burden they bring, carry their own and help others less able and to do so openly, honestly, and not via subterfuge of collection via the shopkeeper or the ease of the transaction stealthily burdened by the politicians in the back room.  Force it into the open, force it to be discussed, and then come to an agreement in common and cement that baby down and make it toxic for any power hungry ideologue to even think of touching it.  You don't win your freedom and keep it by paying stealth taxes, but by putting the tax man out in front of all to see and saying: do your damn job and stop trying to steal us blind behind our backs.  For what they rob is far dearer than mere coin, and far harder to win back once lost.

Other roads

From 07 DEC 2009 Rasmussen Reports:

Running under the Tea Party brand may be better in congressional races than being a Republican.

In a three-way Generic Ballot test, the latest Rasmussen Reports national telephone survey finds Democrats attracting 36% of the vote. The Tea Party candidate picks up 23%, and Republicans finish third at 18%. Another 22% are undecided.

Among voters not affiliated with either major party, the Tea Party comes out on top. Thirty-three percent (33%) prefer the Tea Party candidate, and 30% are undecided. Twenty-five percent (25%) would vote for a Democrat, and just 12% prefer the GOP.

Among Republican voters, 39% say they’d vote for the GOP candidate, but 33% favor the Tea Party option.

For this survey, the respondents were asked to assume that the Tea Party movement organized as a new political party. In practical terms, it is unlikely that a true third-party option would perform as well as the polling data indicates. The rules of the election process—written by Republicans and Democrats--provide substantial advantages for the two established major parties. The more conventional route in the United States is for a potential third-party force to overtake one of the existing parties.

From The Jacksonian Party : The Third Party Outlines

In either of these, a successful inclusion of disaffected Republican and Democratic individuals would yield a Republican Party below its current standings (now 32-33% dropping to 26-27%) and a Democratic Party changed either slightly or greatly depending on disaffection levels (now 35% approx. dropping to 32% to 23%)

Thus in a Robust Scenario of 50% disaffected the new political atmosphere would be:

3rd Party - 34-44%

Democratic Party - 23-32%

Republican Party - 26-27%

On the Lean Scenario of 10% disaffected for a new political party, the atmosphere would be:

Democratic Party - 23-32%

Republican Party - 26-27%

3rd Party - 14-24%

That last is telling as it is almost EXACTLY what Ross Perot did: peel off parts from the existing two parties and have almost NO outreach to the politically disaffected.  His Reform Party didn't last because of party brand loyalty and lack of vigor inside the party, due to it having a hierarchical structure with Ross Perotism as its nebulous basis.

Both of these scenarios place 'independents' in their role of following overall voting proportions, as is currently the case.  Independents don't vote as a group, currently, and more closely follow overall party affiliation on a proportional basis, so that would continue to be the case with a 3rd Party.  Independents would be attracted just as equally in that direction as the overall percentage of the population is.  No one can craft an 'independent' based platform without trying to address the already existing 'leanings' of independents.

In my previous analysis the idea is to move to those who don't vote as the beginning of a new party.  If you are to have a party you must bring in voters from that non-voting plurality (nearly 49%) and get them to vote not only during Presidential election years, but the Congressional elections every two years.  Depending on the percentage of people that can be brought in the voting dynamics change.  The two scenarios I gave are the Robust one (getting 50% of non-voters to vote) and the Lean one (only 10% of non-voters come in to vote).   Also noted is that 'Independents' tend to break out along party lines as there are only two parties, and that when a third party is introduced 'Independents' will then break in a tripartite fashion.  What comes out of this is that when non-voters or 'Independents' move to a new standard, they have the effect of changing the 'Independent' voting ratio.  Thus two factors are at play when Tea Parties are considered:

First - Changing the voting proportion.  With the current set-up the voter pool is roughly three parts of equal size: Democrats, Republicans and Independents.  That means a minor change between the two parties changes the Independent's affiliation, so that a mere 35 to 34 margin of D:R can lead to the 51:49 era or the 'Red/Blue' divide of States along party lines.  When affiliation with three parties is considered (D:R:T) and you go to 35:34:20 you are at 89% of voting leaving just 11% to be split so you get 39:38:23, which would mean that 'Red/Blue' America vanishes.  With a third choice and Independents falling out proportionately, an era of 'bi-partisanship' ends: a third party that kept to a small government platform and did NOT compromise, while a minority, would demonstrate that the other two parties were either in collusion (i.e. 'bi-partisanship' against the third party) or unwilling to compromise THEIR power structure so as to reduce government (via the number of agencies, regulations, personnel, legal coverage, etc.).  A small, hard-line party that is able to garner 20% of the vote becomes a palpable threat to the 'two party system'.  At just above Ross Perot's best showing, 15%, a distributed third party WITHOUT a party structure but WITH shared goals and ideals has an impact on the two party system even if they never form an actual party but can whittle away at districts that tend to get progressive representatives when the district is not progressive.  The lesson of NY-23 is clear: you can go from nowhere to 45% of the vote in one month by doing this and forcing the two parties to show their actual affiliation against the plurality principles of the district.  The trendline had been set and the deadline beat it.

Second - Changing the voting pool size.  This also changes proportion but in a subtler way: by bringing in those who have been disenchanted with their franchise as they can't get people who represent them.  An influx of the disenchanted by any degree changes the proportions along the Robust/Lean options I presented earlier.  House districts that are 'safe' with a 53:46 margin see that leading trend drop with even a 15% influx to 46:40:14.  When you go from a straight percent to having to renormalize to a higher amount, in this case moving from 100 to 115, the previous percentages shift to accommodate the new normal.  In this case there needs to be NO adjustment to the prior incumbent parties, just new people walking in forming a third party and contesting the previous staid elections.  By increasing the pool of voters and having them committed to a third party or alternative voting arrangement, what had once been 'safe' seats become, at an instant, plurality seats only.  Mentally this is so because a majority win (53:46) seems much more robust than the plurality case (46:40).  Yet that very change is a POSITIVE feedback to the third party members in that THEY did this, they entered into the fray and changed the cozy arrangement that had been set up between the two parties for 'safe' districts.  While 46% is still a 'win' it is not a 'safe' win and indicates weakness in the two larger pluralities that can be exploited by a lean and hungry third party.  By entering the system you change its behavior, a well known fact of quantum mechanics but also true of any other system that has a new independent variable added.  This is one of the most powerful of messages that can be sent to a voter: you do have an impact on things.

After Rasmussen Reports examines the break-outs of how existing party members view Tea Parties, there is a striking paragraph that bears examination:

Forty-one percent (41%) of all voters nationwide say Republicans and Democrats are so much alike that a new party is needed to represent the American people. Republicans are evenly divided on this question, while Democrats overwhelmingly disagree. However, among those not affiliated with either major party, 60% agree that a new party is needed, and only 25% disagree. Men are far more likely than women to believe a new party is needed.

That 60% Independents is an astounding figure as it would have to encompass all of those who split for the current two parties in elections, and yet when given this question on the need for a new party, 2/3 of Independents agree with the proposition.  If broken down into equal thirds for the voting population between D:R:I (and they are not but it is a rough approximation), then 60% of 1/3 is nearly 20% of the entire voting population that favors a third party.  The remaining 21% must come from the other 2/3 and as the D is indicated as substantially lower a proposed breakout of 5:16:20 then looks proportionately right.  This is via first route analysis of changing proportions within a set sized voting population, which is not the case in America as it has been a declining turnout by proportion, even with adding on 8 million citizens of voting age every 4 years.

Continuing on first route analysis, the 5% that derives from the Democratic party, which is given an equal third, becomes 15-16% of the entire party voting base.  This falls a bit above my projected faction of 'Blue Dogs' and PUMAs, but not unreasonably so given ANY moderate disaffection within the Democratic Party.  These were the hard to convince Democrats during the Presidential election that either held their noses and voted or did not vote.  This segment is populated by Fiscally Conservative 'Blue Dogs' (Midwestern States south of the Great Lakes) and the followers of Hillary Clinton who had a strong showing throughout the old party base zones in Appalachia, and even such places as Texas.  This level of dissatisfaction points to problems in the Democratic Party that can properly be characterized as Big City vs Small Town and Rural.  This represents the Old Jacksonians who are still staying with the party up to 2008, and are the final stalwarts of that traditional power base for the Democratic Party.  I agree with Walter Russell Mead's analysis that the majority of Jacksonians (the New Jacksonians or Crab Grass Jacksonians) have generally drifted from the Democratic Party between the mid-1960's to present.  This old line of government not endangering the common working man, leaving him be and not interfering with his life may be the last of their kind and they have stayed by their beliefs even as all the 'good' programs by the Democratic Party (Federal Reserve, SSN, Medicare, FHA, Fannie, Freddie, CRA, etc.) have turned out to put the picnic far too close to the outhouse so that now the picnic gets ants and flies.  A move to support a third party would be an attempt to fumigate the outhouse and move the picnic a good, far way away from it while the toxins die down.  When the corruption of our government services puts the common working man at risk from political cronies, the time to do something may well be coming, leaving the Progressives and others Social Liberals to have the party which will no longer be able to claim any conservative basis.

For the Republican party that 16% they contribute is worrying as it is nearly 48-49% of the entire party which jibes with the 70% favorability for Tea Parties seen intra-party.  My previous analysis of the Republican Party examined its main breakouts via internals and that amount of favorability is also shocking when you consider that the 70% of the party members are favorable to a Tea Party and 48-49% would support the formation of a third party, that is over 70% of the disaffected willing to support a Third Party formation.  Within the factions inside the Republican Party one would suspect the LEAST favorable are the MilCons/NeoCons as a third party would disrupt the Nation's ability to get a consensus via majority on the stance of the Nation for self-defense.  With that said, if there is Jacksonian support for a Tea Party system arrangement (formal or informal) then that flips as Jacksonians are anything BUT anti-military or anti-defense.  Yet even with that this would not be a huge draw for MilCons.  FiCons or Fiscal Conservatives make up a large section of the party and, thusly, are the most dissatisfied with the free-spending going on by Republicans during the 1990's and up to 2004.  The overwhelming bulk of support is probably from this section within the Republican Party as they have had the most promises to them since 1980 and the least amount delivered.  Being fiscally conservative does NOT mean running progressive budgets with huge outlays, but actually cutting spending and the size of the government for that to happen.  Third in the mix are the SoCons or Social Conservatives.  Within SoCons there is a strong break between the Religious and the Traditionalists, and that is the break between Social Progressivism residing with the Religious SoCons and the older system of Traditional government hewing to the Founders and their emplacement of a Westphalian system.  Here a break between the SoCons would seem to be the breaking point of the party: is this a Religiously Conservative party willing to put forward government in a nurturing role or a Traditionally Conservative Westphalian party that understands the deep reasons we recognize the ability of individuals to do good without the interference of government?

That is a stark view of what the existing two parties could look like if a third party or Tea Party stands up, formally or informally.  As this is the Lean Scenario, it leaves a huge aftermath behind it, even with being just that.

The Democratic Party, cut off from any conservative base (social or fiscal) becomes isolated and more progressive, liberal and trenchant trying to hang on to old popularity but seeing its voting base become almost entirely urban.  That is the party of Big City Machines and Machine Politics writ large: it is a party that makes the current level of corruption and political pay-offs seem minor in comparison.  Because of that the party becomes more insular, less able to handle outside concepts and less competitive outside of those urban enclaves.  The party that started with the Gentleman Farmer and Rural Jeffersonian will have transformed itself completely into Big City Machines unable to support the ventures of the common man or farmer for anything.  Yet for all of that it can STILL garner between 23-32% of the vote Nation-wide, although its support in rural and even some suburban areas will fall to barely discernable.

The Republican Party becomes a Religiously Conservative but Governmentally Progressive party with many MilCons left due to the National nature of the party.  Fiscal Conservatives would only be a voice where Traditionalists and FiCons can work together to support the proposition that the most religiously accommodating government is one that has NO SAY in religion and does not dictate morals to the country.  Even governing from the old idea of fiscal conservatism, that of managing the growth of government, would wither inside the party.  Still that base of Christian Conservatives, MilCons/NeoCons and FiCon remainder places the party at a firm 26-27% core that will only see decline if the morality of the party suffers ANY.  If members feel they have to leave due to current marital or sexual problems, that becomes the 'litmus test' for candidates so that the party can retain its hold on the electorate.  This will get some rural and suburban backing, but shows an overall retreat of the party from Urban settings save for social works.  Government would be an expansive affair looking towards some common defense but be willing to replace the Church and individual good works with the power of the State.  The party of Free Soil becomes the party of Societal Statism dictating to the people from the State.

A formal or informal Tea Party is a different beast, although it hews to the old 'No Taxation Without Representation', small government, fiscal conservatism and both New and Old Jacksonians.  This is a party of liberty, freedom from government, defending the Nation, and allowing the individual the greatest free play of rights possible while ensuring that government does not destroy the economy.  It is a party of trenchant anti-Statism backed up by the personal liberty to say 'NO'.  At 14-24% it does NOT have to present great new things for government to do, in fact it need only keep on saying that the government does far too much, costs too much, creates too many divisions in society, taxes the hell out of us, and can't even chase down a bunch of overseas terrorists with the greatest military machine on the planet.  This is not a party of 2-year olds, but a measured and reasoned response to the excesses of the 20th century and the unwillingness to continue them.  Because it has Traditionalists and 'Blue Dogs' affiliated with it, there is a much stronger showing in the margins of Cities than Republicans have.  It is a party that contests against the Republicans in Small Towns and rural settings, and against the Democrats in the Suburbs.  Core concepts of less government, lower taxation, more liberty for the common man and railing against the stench of crony politics in both parties means this is not a 'reform' party to either of the two existing parties and is, indeed, a response to them.  It is a party where 'affirmative action' is budget cuts and repealing of government power so that individuals can act affirmatively without running afoul of overgrown regulations and taxation.  It is a party of devout Federalism and returning usurped power at the Federal level back to the States and local governments and getting the National government the hell out of the way.  There is no social program that is so good it can't be cut, no support for big business that can't be sheared and no support for the poor that is not better done locally via giving full tax breaks for charitable donations and letting the people decide how best to tend the poor, sick and elderly.  It is not the party of 'No' although it would end up saying that a lot.  It is a party of sound fundamentals that run contrary to Statism at all levels, just as its followers support it at all levels to do that.

And if a third party can bring IN any of the current disaffected, their power is magnified by doing so.  The existing two parties have had four decades to stem that tide and have not succeeded.  Getting the current voting disaffected is not enough: any third party must reach out to the self-disenfranchised and give them a positive reason TO vote.  Republicans and Democrats have failed miserably at that, and any third party that can get any success will crack the two party system wide open.  Unlike Ross Perot and John Anderson the current social movement of Tea Parties is not fixated on a star figure, but on getting things done.  That is so vexing to the current media and political elites that they cannot deal with that fact.  The political elites, as seen in Rasmussen Reports, are in denial as their salad days would come to a harsh end if there is a third party:

Among the Political Class, not a single respondent picked the Tea Party candidate.

It is they who lose if there is a third party as it is a repudiation of their elite status.

It couldn't happen to a nicer bunch of people.