Big Head Press

L. Neil Smith's
Number 504, February 1, 2009

"Their dream is the impossible one, as
they must Control 300 million Americans"

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The Unnecessary Depression
by L. Neil Smith

Attribute to The Libertarian Enterprise

It's been a long time, but I'm headed out to the high plains this morning, where the sun shines brightly, the wind blows free, the air is clearer, and I can think—at least it feels that way—a little better.

I am, both by nature and profession, a problem solver, so it's been a particularly frustrating couple of years for me. I knew, for example, that there was no need—and absolutely no excuse—to suffer through all of the nonsense we all did over the price of gasoline.

Not only is petroleum the second most abundant liquid on the planet...

Not only are many of the oldest oil fields—the ones that all the "experts" are willing to stand in line to claim are depleted—beginning to fill again from the bottom, with geologically younger crude...

Not only is petroleum not a byproduct of biological organisms—as everybody once believed to be the case—but of an unimaginably vaster and more ubiquitous and ongoing underground geochemical process...

Not only are there sufficient untapped petroleum reserves within the United States to free Americans from buying foreign oil (if that's actually a problem—personally, I kind of like the idea of trade) forever...

But it turns out that the stuff can be manufactured several times more cheaply than even the current relatively low per-barrel price.

So why in the name of John D. Rockefeller was everbody shelling out better than three bucks a gallon for gasoline a mere six months ago? Hold onto that question a few minutes while we consider another crisis.

Politicians and their disgusting, fawning, sycophantic pilot fish—the media—want us all to believe that economic ups and downs are a natural phenomenon, similar to earthquakes, meteor strikes, or the weather.

The simple fact that nobody ever mentions is that the economy itself is an artifact, a human invention, and while natural events do affect it in various ways—floods, drought, storms, and so on—most of whatever happens within it is as man-made as the computer I'm using to write this. Human beings shape the economy through all of their acivities. They find, make, buy, and sell innumerable goods and services. Unfortunately if they have political power, along with the evil will to use it, they can distort an economy in ways that conceal, destroy, steal, and force other folks to accept their products and practices, that have changed little since the walls of Babylon were erected

That's what happened with the price of gasoline.

We've already discussed the way that the administration of Jimmy Carter (who worked in inflation the way artists work in watercolors) forced lenders—businesses that, like everything else in a truly free country, would have been immune to such an abuse of power—to offer mortgages to individuals who, by any reasonable market test were unable to pay them off. This, in effect, created money out of thin air—call it "fiat credit"—in a process only differing from actual counterfeiting because no printing press was involved. Clinton's administration piled this fraud higher and deeper until the "housing bubble"—an enormous market based solely on imaginary wealth—was created.

All that's required for a bubble to burst is a number of lenders who can't get their money back and can't sell the houses they've had to repossess. Companies the lenders owe money to don't get paid, and have to lay people off or go bankrupt. More disasters follow in a horrifying cascade of unpaid bills, fired workers, and rapidly dying businesses.

Who says there's no such thing as "trickle down"?

And all of it was completely unnecessary and entirely manmade by politicos, a few mercantilist pals who knew all along that their buds in government would save them from any bad loans they made. Don't forget their toadies in the media, the pilot fish. A better comparison is the remora. While a pilot fish swims on its own, eating scraps, a remora attaches itself with a sucker disk and feeds on its host's feces.

But okay, here we are now. What is government doing? What should be done to repair the economy and get civilization moving forward again?

Government is doing the exact opposite of what really needs to be done. George Bush and Barack Obama have pumped trillions more in counterfeit currency and credit into an economy already deathly ill from such treatment. If it goes on, we stand to suffer hyperinflation (all inflation consists of, no matter what they told you in Economics 101, is government generation of phony money) followed by another, very possibly terminal depression. Before it's over, the country—if not the whole world—will be locked down under brutal military rule, and our species likely will never again know freedom, progress, or prosperity.

What needs to be done, instead?

It depends on how far you're willing to take it.

A real economy based on real wealth must be allowed to rebuild itself. Those participating in it must be able to do so with a degree of confidence that everything they've built, or will build in the future, won't be destroyed again by political barbarians and their hangers-on.

The place to begin is with an absolute tax amnesty, under which all past due taxes of any kind are considered paid in full, without penalty. This alone might be sufficient to slow the slide into the abyss, but we are looking for more, something that will reset the scale of events, swamping out the current mess with real wealth and productivity that will make the present downturn look microscopic by comparison.

Corporate and capital gains taxes must be abolished immediately and permanently, if the country is to rebuild its capital reserves. It always infuriates me to hear Americans criticized for not savng money. Remove the outrageous penalties for doing so, and record savings will commence. Those (like me) who are unfond of corporations should know that no corporation ever really pays taxes—their customers do—and that they'll be put in their proper place when we outlaw limited liability.

The next step must be a year-long tax holiday, during whch nobody is required to pay any taxes of any kind. Given a breather like this, the economy would likely return to full health, albeit on a temporary basis.

To make the cure permanent, we must eliminate taxes altogether. Taxes are a barbaric remnant of ancient times in which early farmers, tied to the land, no longer able to roam freely, unable to fight back with awkward agricultural tools the way they once could with hunting implements, became victims, first, of itinerant plunderers, then of bandits settling down beside them to become the governments we know today.

It's time to find another basis for society. What does it teach kids to learn civilization is based on theft? The news that serious minds all over are working on the problem, could create a boom by itself.

As an interim measure, a two-tier system must be put in place as quickly as possible, under which two classes of goods and services would be completely tax exempt. To begin with, nothing connected at any level—production, movement, sales, possession, or consumption—with the five basic necessities of life would be taxable. Those five basic necessities are food, clothing, shelter, transporation, and self-defense.

Second (only in this essay, certainly not in reality), no object or activity protected by the Bill of Rights should be taxable. Just as churches and religion are exempt to some degree, so newspapers should be, along with magazines, books, those who produce them, computers and the Internet, programmers, web designers, bloggers, anything and anyone connected with free expression. The 11% tax that the National Rifle Association imposed on guns and ammunition must be repealed, and, in the spirit of the Third Amendment prohibition on quartering government personnel on private property, all property taxes must be eliminated.

The same policy must be followed with the rest of the Bill of Rights.

All real libertarians are dedicated to the eventual elimination of all taxes. That's one way you can tell them from the fakes. If anyone asks what government will run on, tell them it's not our problem. If they can create a "government" that doesn't initiate force and steal from us, that doesn't break things and kill people in the enforcement of the will of parasites, that doesn't subsist by beating individuals up and killing them, they're welcome to try. Just leave us out of it altogether.

Our Founding Fathers, for the most part (the same guys who forgot to put a penalty clause in the Bill of Rights), viewed government as a "necessary evil". They were as wrong as they could be. After 10,000 years of government looting and abuse, 233 of them right here on our doorsteps, all of us know, deep in our heart of hearts, that it's evil.

Whoever says it's necessary must be evil themselves, stupid, or insane.

Four-time Prometheus Award-winner L. Neil Smith has been called one of the world's foremost authorities on the ethics of self-defense. He is the author of 25 books, including The American Zone, Forge of the Elders, Pallas, The Probability Broach, Hope (with Aaron Zelman), and his collected articles and speeches, Lever Action, all of which may be purchased through his website "The Webley Page" at

Ceres, an exciting sequel to Neil's 1993 Ngu family novel Pallas was recently completed and is presently looking for a literary home.

Neil is presently working on Ares, the middle volume of the epic Ngu Family Cycle, and on Roswell, Texas, with Rex F. "Baloo" May.

The stunning 185-page full-color graphic-novelized version of The Probability Broach, which features the art of Scott Bieser and was published by BigHead Press has recently won a Special Prometheus Award. It may be had through the publisher, or at


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