Killing Us Softly

Killing Us Softly

In the Land of Rainbows and Unicorns there is a moral and political philosophy called The Social Contract that posits an individual will surrender some of their freedoms to the state provided the state is committed to protecting the individual’s remaining rights.

In moral and political philosophy, the social contract or political contract is a theory or model, originating during the Age of Enlightenment, that typically addresses the questions of the origin of society and the legitimacy of the authority of the state over the individual.

Social contract arguments typically posit that individuals have consented, either explicitly or tacitly, to surrender some of their freedoms and submit to the authority of the ruler or magistrate (or to the decision of a majority), in exchange for protection of their remaining rights.

In the Land of Rainbows and Unicorns this Social Contract between the individual and the state is a symbiotic relationship that benefits both parties so that society can flourish.

Symbiosis is close and often long-term interaction between two different biological species.

In 1877, Albert Bernhard Frank used the word symbiosis (which previously had been used to depict people living together in community) to describe the mutualistic relationship in lichens.

In 1879, the German mycologist Heinrich Anton de Bary defined it as “the living together of unlike organisms.”

The definition of symbiosis has varied among scientists.

Some symbiotic relationships are obligate, meaning that both symbionts entirely depend on each other for survival.

Probably the best known example of a Social Contract is the United States Constitution.

We The People

The United States Constitution is the supreme law of the United States of America.

The Constitution, originally comprising seven articles, delineates the national frame of government.

Its first three articles entrench the doctrine of the separation of powers, whereby the federal government is divided into three branches:
the legislative, consisting of the bicameral Congress;
the executive, consisting of the President; and
the judicial, consisting of the Supreme Court and other federal courts.

Articles Four, Five and Six entrench concepts of federalism, describing the rights and responsibilities of state governments and of the states in relationship to the federal government.

Article Seven establishes the procedure subsequently used by the thirteen States to ratify it.

Since the Constitution came into force in 1789, it has been amended twenty-seven times.

However, the United States of America is most definitely not the Land of Rainbows and Unicorns because it’s original Social Contract has been slowly eviscerated [during the last 226 years] by a never ending torrent of statutes, decrees and judgements that are handed down by the three branches of government to the long suffering populace.

This is a chronological, but still incomplete, list of United States federal legislation. Congress has enacted approximately 200–600 statutes during each of its 112 biennial terms, so that more than 20,000 statutes have been enacted since 1789.

Over the last several decades, the number of bills passed by Congress has declined:
In 1948, Congress passed 906 bills.
In 2006, it passed only 482.

At the same time, the total number of pages of legislation has gone up from slightly more than 2,000 pages in 1948 to more than 7,000 pages in 2006.

(The average bill length increased over the same period from 2.5 pages to 15.2 pages.)

Paper Weight – The health care bill is more than 1,000 pages. Is that a lot?
Slate – Christopher Beam – 20 Aug 2009

Whilst slowly eviscerating the original Social Contract the government of the United States has become swollen and bloated [beyond recognition] in its attempts to implement and control the [roughly] 20,000 statutes it has enacted over the last 226 years.

Legislative definitions of a federal agency are varied, and even contradictory, and the official United States Government Manual offers no definition.

While the Administrative Procedure Act definition of “agency” applies to most executive branch agencies, Congress may define an agency however it chooses in enabling legislation, and subsequent litigation, often involving the Freedom of Information Act and the Government in the Sunshine Act, further cloud attempts to enumerate a list of agencies.

The status of these agencies is an open question, however, as Judge Brett Kavanaugh noted in a brief concurrence in SoundExchange, Inc. v. Librarian of Congress.

Federal Net Outlays

This problem of bloated Big Government is common in most developed nations.

UK Government Spending

UK Government spending – real and as % of GDP – Tejvan Pettinger – 2 December 2014

Big government is primarily defined by its size, measured by the number of employees or budget, either in absolute terms or relative to the overall national economy.

The size of government can also be reckoned by the number of “spheres of involvement”.

The concept can also be defined by the perceived role of government in society, the quality of services (that is, the impact of government effort), and the degree of democracy and societal representation.

The growth of Big Government has been facilitated by governments extracting a painfully broad swathe of taxes, duties and fees from their captive economies.

Income tax, Capital gains tax, Corporate tax, Social security contributions, Taxes on payroll or workforce, Property tax, Inheritance tax, Expatriation tax, Transfer tax, Wealth (net worth) tax, Value added tax (Goods and Services Tax), Sales taxes, Excises, Tariffs, License fees, Tolls, User fees, Ruling fees…

The Tax Collector

The voracious appetites of Big Governments for money and control is so enormous that most governments wilfully supplement their extortionate tax revenues with borrowed money.

UK Budget
Office for Budget Responsibility: Economic and fiscal outlook – December 2014

Click to access December_2014_EFO-web513.pdf

The other has been the scarcely mentioned elephant in the room, which supposedly prompted the Chancellor’s bid to save £4 billion a year in the first place – the fact that, for all his efforts, Mr Osborne is still having to borrow nearly £80 billion a year to cover the rising cost of Government spending, driving up ever further a national debt that has almost tripled in seven years to a staggering £1.52 trillion.

BBC: don’t mention the deficit
The Telegraph – Christopher Booker – Oct 2015

Thus, over many years, the slow evisceration of the Social Contract [via legislation and taxes] changes the symbiotic relationship into a parasitical relationship.

In biology/ecology, parasitism is a non-mutual symbiotic relationship between species, where one species, the parasite, benefits at the expense of the other, the host.


Unsurprisingly, most of the economies of the developed world have become increasingly moribund [aka stagnation] as excessive legislation and taxation slowly stifles innovation and enterprise.

Economic stagnation or economic immobilism, often called simply stagnation or immobilism, is a prolonged period of slow economic growth (traditionally measured in terms of the GDP growth), usually accompanied by high unemployment.

Under some definitions, “slow” means significantly slower than potential growth as estimated by macroeconomists.

Under other definitions, growth less than 2–3% per year is a sign of stagnation.

Since the 1970s many governments have tries to revitalise their host economic by reducing their Top Marginal Tax Rates.

Unfortunately, these tax reductions have not revived their moribund economies.

Tax Rates
Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities
Thomas Piketty, Emmanuel Saez, Stefanie Stantcheva
National Bureau of Economic Research – Working Paper Series – November 2011

Click to access paper_78.pdf

Instead, these tax reductions have [in the main] simply enriched the crony capitalists [who have a close working relationship with the government] whilst the governments have cranked up enormous mountains of debt and undermined the very foundations of their economies by imposing “near-zero rate” [or “negative”] interest rates to maintain their [otherwise] unsustainable debts.

US Gross Federal Debt

Crony capitalism is a term describing an economy in which success in business depends on close relationships between business people and government officials.

It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, or other forms of state interventionism.

A so-called “zero interest rate policy” is a very low – near-zero – central bank target interest rate.

At this zero lower bound the central bank faces difficulties with conventional monetary policy, because it is generally believed that market interest rates cannot realistically be pushed down into negative territory.

During the European debt crisis, government bonds of some countries (Switzerland, Denmark, Germany, Finland, the Netherlands and Austria) have been sold at negative yields.

In the natural world parasites are usually intelligent enough to know that killing their host is not in their own best interests.

Unlike predators, parasites typically do not kill their host, are generally much smaller than their host, and will often live in or on their host for an extended period.

Unfortunately, governments [and most politicians] in the developed world are far more devious because they ensure their survival by slowly eviscerating the Social Contract to the point where all the rights of the individual are abrogated [abolished] by the [totalitarian] government.

Totalitarianism (or totalitarian rule) is a political system where the state recognizes no limits to its authority and strives to regulate every aspect of public and private life wherever feasible.

Totalitarian regimes stay in political power through an all-encompassing propaganda campaign, which is disseminated through the state-controlled mass media, a single party that is often marked by political repression, personality cultism, control over the economy, regulation and restriction of speech, mass surveillance, and widespread use of terror.

In Europe this totalitarian [supranational] government is usually called the Troika.

The term troika has been widely used in Greece and Cyprus, Ireland, Portugal and Spain to refer to the presence of the European Commission, European Central Bank, and International Monetary Fund in these countries since 2010 and the financial measures that these institutions have taken.

However, whether the Troika can establish a viable economic host that supports their parasitic style of government depends upon the results of their Greek Experiment.

As the Great Recession that began in the U.S. in 2007–2009 spread to Europe, the flow of funds lent from the European core countries (e.g., Germany, France, and Italy) to the peripheral countries such as Greece began to dry up.

Reports in 2009 of Greek fiscal mismanagement and deception increased borrowing costs; the combination meant Greece could no longer borrow to finance its trade and budget deficits.

A country facing a “sudden stop” in private investment and a high debt load typically allows its currency to depreciate (i.e., inflation) to encourage investment and to pay back the debt in cheaper currency, but this is not an option while Greece remains on the Euro.

Instead, to become more competitive, Greek wages fell nearly 20% from mid-2010 to 2014, a form of deflation. This resulted in a significant reduction in income and GDP, resulting in a severe recession and a significant rise in the debt-to-GDP ratio.

Unemployment has risen to nearly 25%, from below 10% in 2003.


Either way, the future looks gloomy.

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3 Responses to Killing Us Softly

  1. malagabay says:

    Greek update from Zero Hedge.

    As a reference point, there is a little over €210 billion in total Greek loans, both performing and non-performing, currently and about €120 billion in deposits.
    There is also about €90 billion in Emergency Liquidity Assistance from the ECB.

    The total amount of bad loans (those which have remained unserviced for at least 90 days) has reached 100 billion euros, and the BoG data show that 70 percent of the loans that have entered payment programs remain nonperforming.

    This is a major problem for the Greek Banks but even more so for The ECB as there is not much it can do to ‘control’ NPLs and given provisions for bad loans are a mere EUR40bn – there is a big hole here that no one is accounting for.

  2. malagabay says:

    Four Things the State is Not | Tom Woods

  3. Patrick Donnelly says:

    The state exists to manage the mob and protect property. The owners decided that it was an issue that could be devolved to a managerial class. It often has to be reset.

    Setting up a “patsy” to take the blame for the banking debt cycle is also necessary. “Set a thief to catch a thief”.

    Why worry about something that will correct itself, albeit with “injustice” for some? Perhaps

    Want something? Proximity!

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