Get PJ Media on your Apple

Ed Driscoll

The EU Crosses the Rubicon; How Far Behind Is the US?

March 18th, 2013 - 8:00 am

“Isn’t it a strange thing that in every period of social unrest men have the notion that they can pass a law and suspend the operation of economic law?”

— Calvin Coolidge, as quoted in Amity Shlaes’ new biography.

If you ever wanted to destroy America from within, Dr. Ben Carson has assembled a handy four-point plan to accomplish just that, which he discussed at CPAC this past weekend:

Dr. Ben Carson’s address to CPAC 2013 included his thoughts about how, if he were an enemy of America, he would set about destroying her.  His plan had four points:

1. Create division among the people.

2. Encourage a culture of ridicule for basic moral principles.

3. Undermine the nation’s financial stability with crushing government debt.

4. Weaken the morale and funding of the military.

“It appears, coincidentally, that those are the very things happening right now,” Carson noted ruefully, although he went on to say it would be a mistake to pin this entirely on Barack Obama, or any other individual.

Immediately after the 2012 election, a number of conservatives decided it was time to essentially “Let It Burn,” as Ace would say. You want to go full Cloward-Piven? Be careful what you wish for, lefties. In a November 15th post, blogger Nice Deb rounded up the tenor of the immediate post-election attitude on the right.

Of course, if you ignore the mounting debt and declining opportunities, life in the midst of a socialist nation winding down* or even one tearing itself apart can be exceedingly agreeable from certain vantage points, until the Reich hits the fan. As Mark Steyn wrote in 2011’s After America: Get Ready for Armageddon, “In some ways, the most pleasant place to live is a colossus in gradual decline”:

Great powers aren’t Sudan or the Congo, where you’re sliding from the Dump category to the Even Crummier Dump category. Genteel decline from the heights can be eminently civilized, especially to those of a leftish bent. Francophile Americans passing through bucolic Provençal villages with their charmingly state-regulated charcuteries and gnarled old peasants wholly subsidized by the European Union’s Common Agricultural Policy can be forgiven for wondering if global hegemony is all it’s cracked up to be. Okay, the empire busted up, but the capital still has magnificent architecture, handsome palaces, treasure houses of great art, a world-class orchestra, fabulous restaurants, stylish women…. You still have the opera house, but it’s easier to get a parking space. Who wouldn’t enjoy such “decline”? To be sure, everything new—or, anyway, everything new that works—is invented and made elsewhere. But still: you benefit from all the cultural inheritance of greatness without being troubled by any of its tedious responsibilities. Much of Europe feels like that: a sidewalk café, chestnuts in blossom, have another coffee and a pastry, and watch the world go by. Life is good, work is undemanding, vacation’s coming up, war has been abolished. Somewhere beyond the horizon is a seething Muslim ghetto of 50 percent youth unemployment, whence the men swagger forth at sundown to torch the Renaults and Citroëns of the infidels. But not in your arrondissement. And not even on the Friday afternoon drive to your country place. What’s to worry about?

Heh, indeed. Much more after the page break.

At the start of the year, econo-blogger Aaron Clarey (aka “Captain Capitalism“) wrote Enjoy the Decline: Accepting and Living with the Death of the United States. Before providing numerous ways to find some pleasure in the midst of Weimar USA (which Dr. Helen and Kathy Shaidle have each discussed elsewhere at PJM), Clarey laid out some of the economic reasons why the US was likely hosed, including this:

Normally when we think of a wealth tax we think of property taxes, estate taxes or car registration fees.   But there is a nice conglomeration of wealth nobody has dared to think would be taxable.     And not just taxable, but easily stolen as well.

Your retirement plans.

Estimates vary, but there is roughly $ 18 trillion invested in the various IRA, 401k and 403b retirement plans.   This also says nothing about the trillions more invested in regular ole brokerage accounts earmarked for retirement.   Even though it doesn’t come close to closing the $ 60 trillion gap, such a large and liquid pot of gold is irresistible to our progressively socialist politicians looking for perpetual re-election.   Here we enter “conspiracy theory territory” where only “crazy right-wingers” imply such things as scare tactics to discredit the lovable and well-intending socialists.   The only problem is it’s happened before and quite recently as well.

In 2008 Argentina stole the private pensions of its workers, nationalizing those funds to deal with their own debt problems.   Bolivia did the same in 2010, as did Hungary.   And Bulgaria did their own scaled-down version of confiscating people’s private pensions in 2011.   Of course, those are just no-name South American countries and backwater Eastern European countries.   That can’t happen here in America!   Why, we’re Americans!   We have rights!

Unfortunately, the Democrats took note of what Argentina did in 2008 and have since bantered around ideas of rescinding the tax benefits of those programs, even outright nationalizing them.   There was hope with the Republican backlash of 2010 that such outright theft would be made impossible, but with the 2012 election decidedly going left, socialist politicians’ chops have been re-whetted for a piece of your IRA pie.   Ultimately, however, the real risk is not so much the political desires of socialist politicians, but that the economic situation is so dire it will essentially force the decision to confiscate people’s retirement accounts.   That is the true risk of promising ourselves everything.

Which brings us to Paul Rahe in Ricochet yesterday. Rahe spots the EU crossing the Rubicon:

This weekend, the government of Greek Cyprus — under pressure from the European Union — negotiated a bailout that had as one of its provisions an assessment on the capital of those with deposits in the banks on Cyprus. Those with under 100,000 Euros in their accounts are slated to receive a 6.6% haircut while those with more than 100,000 Euros in their accounts will be docked 9.9%.

Whether the government can secure the approval of the Cypriot legislature for this unprecedented move remains unclear. There is talk of lowering the tax on deposits under 100,000 Euros to 3% and of raising the tax on larger deposits to 12.5%. But while the difference no doubt matters to ordinary Cypriots, whose savings are modest, and to the Russian oligarchs who have parked huge sums in the Cypriot banks, when viewed from a larger perspective, it matters not one whit. Indeed, at this point, it does not even matter whether the Cypriot government backs off from this plan altogether.

Banks are fiduciary institutions. The rely on trust; and, if there is a breach of trust, they are cooked. Individuals deposit money in banks instead of stuffing it in their mattresses because they believe that it will be safe there. Once they realize or even suspect that the money they put in the bank is anything but safe, they will take what is left of their money and run — and the bank will collapse. And Cyprus is not Las Vegas. What happens in Cyprus cannot possibly stay in Cyprus.

The Greeks will draw their own conclusions, as will the Spanish and the Italians and perhaps even the Irish and the French. No one who lives in a country that is in financial trouble and that may need emergency help from the European Union will entrust his loose change to a bank in his own country. The Euros is his mattress will retain their full value; those which he entrusts to the bank may, at least in part, be confiscated. All of this ought to be a boon to the Swiss.

It would be hard to imagine what one could do to turn an ongoing crisis into a total catastrophe that would be more effective than the terms imposed by the European Union on Cyprus. That such a move is in contemplation is an indication of the degree to which the authorities in Brussels and Nicosia are in the grips of desperation.

“If I lived in Europe I’d have cleaned out my bank accounts and canceled direct deposit before I sat down to write this post,” Moe Lane adds. “Because there’s nothing quite as precedent-setting as a one-time, last-ditch emergency measure.”

Which brings to mind the question: can it happen here? Considering that for a century, the goal of “Progressivism” has been to transform America into Europe, it’s only a matter of time before any horror story in the EU replicates itself in some capacity in the US.

Update: But of course: “American libs support Cyprus-style wealth confiscation scheme, while bailout roils world markets.” Or to put it another way, “If you like your money, You can keep some of it, maybe.”

I added the image I created for Tom Blumer’s piece for PJM titled, “Obama: Our Out-of-Control Debt Is ‘Sustainable’ for the Next Decade.”  Somehow it seems equally apropos here, right down to the Chamberlain-esque umbrella.

* Or a socialist state that’s winding down; the weather and dining in Northern California was remarkably pleasant this weekend.

Comments are closed.

Top Rated Comments   
It will probably come in through the back door. The excuse will be that due to the extreme volatility of private investments a certain percentage of IRA investments must consist of government bonds which Uncle Sam will be glad to sell us. They'll replace real assets with their IOU's just like they've done to Social Security. Then they can say that they haven't taken anything--they've just done us all a favor.

That's my guess.
1 year ago
1 year ago Link To Comment
This is nothing new here - The Fed has been busy for many years now stealing our money - and in plain sight - its called qualitative easing - or as I like to call it - easing my money into their pockets.

A can of beans went up another $.06 last month - but I'm assured by the Federal Government that it wasn't inflation...

RIIIGHT! How stupid do they think we are?

Why the hell is it that the low information voters can't understand these simple concepts?
1 year ago
1 year ago Link To Comment
As we lurch further and further to the left, we find out that there's no such thing as a free lurch.
1 year ago
1 year ago Link To Comment
All Comments   (20)
All Comments   (20)
Sort: Newest Oldest Top Rated
“The final stage is marked by the forced exchange
of privately held securities for government issued
bonds.”
Paraphrase from Heinlein’s “Future History” Chart,
which has turned out to be scarily accurate…
1 year ago
1 year ago Link To Comment
Italy is already jumping on the bandwagon, calling for a 15% "tax" (THEFT) from all bank accounts.
The article is on the MarketDailyNews website, referencing an article on the German Handelsblatt website (which can be translated w/ Google).

Quote: Joerg Kraemer, chief economist of the German Commerzbank, has called for private savings accounts in Italy to be similarly plundered. “A tax rate of 15 percent on financial assets would probably be enough to push the Italian government debt to below the critical level of 100 percent of gross domestic product,” he told Handelsblatt.
1 year ago
1 year ago Link To Comment
"Of course, if you ignore the mounting debt and declining opportunities, life in the midst of a socialist nation winding down* or even one tearing itself apart can be exceedingly agreeable from certain vantage points, until the Reich hits the fan."

And so it was in the late Roman Empire in northern Italy. But then came the Goths and the Vandals and after them the Huns and finally the Lombards. Out of the ruins emerged the Venetian Republic but it took a long, long time.
1 year ago
1 year ago Link To Comment
Back in the 50s my parents bought an Encyclopedia. It illustrated the Sack
of Rome with a painting of a Roman Matron and her teenager daughter seeking sanctuary in the Temple of Vesta, menaced by a Vandal standing
in the doorway, sword drawn.

Nowadays the youngsters would have to Google the term 'Encyclopedia',
and would respond to a video update of the painting by saying 'Pass the Popcorn !'
1 year ago
1 year ago Link To Comment
looks like the mayans weren't wrong so much as misunderstood. we are spirraling down into the abyss, according to plan and right on schedule. don't feel sorry for the people in the e.u. they were almost 100% bonkers over our affirmative action african usurper. remember?

btw, people had better make up their minds now as to whether they will fight or not. when you don't stand up with the best of us and help defend our families and our country from these obvious despots, what kind of treatment will you expect from these real patriots when what is left of the scum try to flee for safer shores where they have stashed billion$? and do you really believe there won't be fighting when it all comes crashing down? if so, you haven't been reading the internet much of late.

as a side bar, the banghazi emails from hitlery have been hacked. yet, nowhere (yet) can you read what they say. total censorship is here. yes, i believe there will be payment demanded when the truth comes out. kypd
1 year ago
1 year ago Link To Comment
I don't know what you people are smiling about. Not only can it happened here. It has happened here.

In 1933, Saint Roosevelt confiscated gold coins and bullion of American citizens. In return they were given $20.33 of paper money for each ounce of gold.

If they wanted to buy gold after that (which was illegal) they would have to pay $35 for each ounce of gold. Nice markup huh?

Holders of billions of dollars of US bonds that promised 49.19 oz of pure gold per $1000 of face value received paper money instead. Which somebody (foreign banks) could use 35 of to buy an ounce of gold. So the bonds were transmuted from the right to receive gold coins to a possibility of buying 28.6 oz of gold, if you were a foreigner. A 40% haircut.

10% seems downright civilized by way of contrast.

Surely, you say, the American people would not put up with such a theft. And certainly, the Supreme Court would find it it unconstitutional. Think again, white man. The people were as meek as little lambs. And Scotus swallowed it and said is there any thing else I can do for you sir?

Of course the Democrat peg boys who teach our children claim that this outrage was a an act of far sighted statesmanship.

No it wasn't. It was theft pure and simple, and that crime is the corrupt foundation of the Peoples Democratic Republic of the United States.

http://www.youtube.com/watch?v=svdrAHn_LGo
1 year ago
1 year ago Link To Comment
It will probably come in through the back door. The excuse will be that due to the extreme volatility of private investments a certain percentage of IRA investments must consist of government bonds which Uncle Sam will be glad to sell us. They'll replace real assets with their IOU's just like they've done to Social Security. Then they can say that they haven't taken anything--they've just done us all a favor.

That's my guess.
1 year ago
1 year ago Link To Comment
Never put your money in one place or in a single currency. Find stable currencies to convert some of your dollars into. Also, buy some Bitcoins as well. Make sure you know how to secure them though.
1 year ago
1 year ago Link To Comment
This is nothing new here - The Fed has been busy for many years now stealing our money - and in plain sight - its called qualitative easing - or as I like to call it - easing my money into their pockets.

A can of beans went up another $.06 last month - but I'm assured by the Federal Government that it wasn't inflation...

RIIIGHT! How stupid do they think we are?

Why the hell is it that the low information voters can't understand these simple concepts?
1 year ago
1 year ago Link To Comment
Now if I could just figure out how to diversify my 401(k) to an off-shore account, I'd be happier...
1 year ago
1 year ago Link To Comment
Because "low information voter" is a euphemism for "genetically inferior stupid voter". They are really stupid, they lack brainpower to understand what inflation is. But alas, they are allowed to vote.

Better to convert a large portion of your cash into ammunition. If the unelected bureaucrats want to confiscate your wealth, then give it to them... bullets first.
1 year ago
1 year ago Link To Comment
How is it that those on all of the welfares are more stupid than those who saved so hard only to end up with nothing? Same difference.
1 year ago
1 year ago Link To Comment
I call this the 7.62 x 51mm NATO retirement plan where the retiree generously gives up his hard earned savings to the tyrants... at 2650 feet per second. The alternative is the 5.56 x 45mm NATO retirement plan.
1 year ago
1 year ago Link To Comment
I would prefer a choice between paying taxes owed on my retirement plans and giving back my future social security benefits.

My broker believes that going after retirement plans would start the shooting. Given what I see here and what my millineal relatives are saying, I don't believe people will fight...
1 year ago
1 year ago Link To Comment
As we lurch further and further to the left, we find out that there's no such thing as a free lurch.
1 year ago
1 year ago Link To Comment
Heh.
1 year ago
1 year ago Link To Comment
1 2 Next View All