How Did Americans Become Poor?

Column by Glen Allport.

Exclusive to STR

"If you can understand why a bathtub empties when the drain is opened, you can understand why Americans are now as poor as church mice."
 
 
Not long ago, we Americans were rich; now we are poor. How did that happen?
 
Actually, Americans are worse than "poor" – Americans are staggeringly indebted, in debt beyond anything that can ever be repaid (other than with worthless, hyperinflated dollars) and thus with a negative per-capita real net worth. Yet we are still borrowing trillions of dollars every year; by itself, the projected federal deficit for next year is over $1 trillion, for the fifth year in a row (Bush's last year and all four of Obama's). And the federal government's off-the-books debt (mostly, unfunded liabilities for Medicare and other programs) is $60 trillion to $202 trillion, depending on how you count and whose numbers you believe.
 
Really: How did the linked disasters of mass poverty, staggering and rapidly growing debt, and imposition of a police state befall the wealthy, can-do population of the strongest, wealthiest, and most visibly free nation the world has ever known?
 
The answers – as explained in the short document below, provided by an anonymous source – are simple. Indeed, if those in the corporatist media were talking honestly about the reasons for our downfall, nearly everyone would understand the situation. This isn't brain surgery: If you can understand why a bathtub empties when the drain is opened, you can understand why Americans are now as poor as church mice and why tyranny has replaced freedom in this country.
 
Of course, our wealth hasn't entirely disappeared; most has simply been transferred from the people who created the wealth to a smaller group that benefits financially, in one way or another, from the use of government coercion against the rest of us. Below, a short Lesson Plan Summary in how to do exactly that, leaked, as mentioned, by an anonymous source.
 
– 1 –
Transferring the People's Wealth to the Elite
 
[Author of this excerpt is unknown]
 
First, arrange to take trillions of dollars away from those who create the nation's wealth, and to do so year after year. Only a government can do this, so that's the tool you have to work with. In our example for this lesson – the United States – the federal government was used to create the two major elements of the plan; both were put in place, ready to drain the wealth from an unsuspecting public, in 1913.
 
The first item was a nationwide income tax. The U.S. Constitution forbade such a thing, so a constitutional amendment was called for. The Sixteenth Amendment was ratified February 3, 1913. You'll want an income tax at a minimum, so plan accordingly.
 
Next, add a central bank and fiat currency, because to take ALL the wealth from a productive society, you need more than just an income tax and a raft of other taxes: You need to counterfeit that society's money on a massive scale, printing up trillions of (in our case) dollars to fund those Important Plans that citizens would otherwise be too cheap and too selfish to pay for. Eventually the nation's currency will become worthless (ditto the incomes and savings of the people), but that's a small price to pay for transferring the nation's wealth to the Elite, who clearly deserve and know best how to use this wealth. In our example, the U.S. constitution (still!) requires each state to use only gold or silver as legal tender – can't very well counterfeit that! – but an end-run around this requirement needed only to have the Federal Reserve begin operation while gold and silver were still circulating as legal money in the United States. When monetary inflation finally made the situation untenable, our man Franklin "Internment Camp" Roosevelt made possession of more than $100 in gold coin illegal, confiscated the rest, and devalued the dollar from $20 per ounce of gold to $35/oz, overnight. The rubes never knew what hit them! Later, the silver was removed from lesser coinage. Somehow, the American people forgot to protest all this.
 
Next, spend the stolen loot primarily on war and on hunting down, prosecuting, and imprisoning peaceful people for drug use (or sale) and for other non-crimes that have been criminalized by Congress or by the stroke of a regulator's pen. This brings both a standing army (and the trillions of dollars it spends equipping and running itself; an excellent way for the Elite to pad their coffers) and an expanding, ever-tightening web of regulations, laws, secret policemen, prisons, and related actions and institutions ripe for corruption – still more opportunity for those with capital and political connections.
 
Don't forget to spend trillions of the people's dollars on a coercive Ponzi-scheme retirement plan that is itself then looted by Congress to pad the General Fund (until the incoming Social Security taxes fall below the outgo, as happened recently; then the Ponzi scheme becomes a drain on the General Fund – not a good omen for Baby Boomers and those who follow). You'll need clever schemes like this if you want to get every last scrap of wealth out of a country.
 
Spend more trillions of the people's money on "poverty programs" that have by now, in our example, kept several generations poverty-stricken and dependent upon hand-outs from the State, while as a side-effect reducing the level of honest charity due to heavier tax-loads and to the perception that "government is taking care of the problem." Of the several benefits this provides to the Elite, the most important may be that – as Roman emperors knew so well – providing bread and circuses to the masses means you can count on the support of those receiving the bread and enjoying the circuses. The popular libertarian (i.e., terrorist) adage on the subject is "He who steals from Peter to pay Paul, can always count on the support of Paul."
 
But don't stop there! Get the government involved in controlling everything from major industries to personal behavior (of course, "controlling" would be bad PR, so be sure to call it "regulating"). How does this work for the all-important Elite? Just ask those of us in Big Pharma, Big Agriculture, Big Medicine, Big Oil, Big Banking, or any other regulated industry where prices keep going up, quality and safety keep going down, and no matter how horrifying or illegal the behavior of those involved, the money keeps pouring in – while the rubes keep getting poorer. Bonus: You get to watch the rubes clamoring for "more regulation" to solve the problem! (Try not to laugh at this – at least not in public).
 
What about after you've looted the entire nation and taken all its actual wealth? Even at this point, there are still trillions of dollars to be taken from the rubes; don't leave this money on the table! Simply have the bankrupt government borrow trillions of dollars year after year (YOU won't be paying it back, of course!) to keep the main scams going, and get the central bank to print up so many trillions of new dollars (much of this can be handed directly to bankers and other members of the Elite) that people lose count, go numb, and turn back to their televisions rather than think about what's actually happening. A perfect example: The Federal Reserve recently created and loaned about $16 trillion in near-zero-interest, "probably won't ever get repaid" money to its pals at big banks and corporations worldwide – more than the annual GDP for the entire United States! The citizen-rubes of the U.S. didn't HAVE that money (to loan or to do anything else with), and they sure won't be benefitting from the loans, but guess whose retirement funds and savings accounts and paychecks are worth less and less every day because the Elite keep printing up those trillions of shiny new dollars (OK, mostly electronic account dollar-entries)?
 
– 2 –
But . . . Won't the People be Angry?
 
Of course they will! Who wants to lose their nice suburban split-level home and have to spend the rest of their lives in a tent city or living out of their car? Who wants to trade a high-paying career (with benefits!) for panhandling on a corner near the local Wal-Mart?
 
No one, that's who. So when you're planning to siphon off ALL the wealth from a nation, you'd better also plan to protect yourself from prosecution and from retribution from your victims. Fortunately, with a little planning and finesse, you can get your victims to pay for THIS along with everything else.
 
How? One word: "Terrorism."
 
Before we get to that, note that you'll already have the courts on your side, and of course you'll literally OWN the major media so THEY'LL be working for you. And you naturally would have long ago arranged to control the major universities as well as the "public" schools, so the rubes (and even their parents) will have been getting a steady dose of pro-Elite propaganda from childhood on. But all the propaganda in the world won't completely insulate you from the angry Mob (and don't kid yourself: At bottom, that's what those "citizens" are) when the Big Wealth Transfer is nearly complete and it's time to move on to the next stage.
 
You could simply hire more private security, but then YOU would be the one paying for it and besides: Private security might not be enough. Given what you've done to an entire nation by this point, in fact, private security would almost certainly be inadequate.
 
The answer lies in that Standing Army created earlier and in those bloated internal police forces, domestic spy agencies, and other arms of government surveillance and control. Insist that terrorists are everywhere (with a little help from the FBI, your media should be able to sell this to the entire country), trying to kill the helpless citizens that you (or your proxy the government) claim to be protecting and In Charge Of.
 
Presto! You've got both justification and, with a little work by Congress, a legal framework for whatever you want to do to the Mob in order to protect yourself from them. Strip-search little old ladies at the airport? Sure! Have the NSA and hundreds of other federal agencies, and organizations, not to mention almost 2,000 private companies, spy on every phone call and email? Go ahead: Who's going to stop you? And don't forget to build and staff dozens of internment camps to put troublemakers into when the crap really hits the fan. Not that the government has the resources to house, feed, and care for millions of detained Americans in such camps for long, but . . . you'll think of SOMETHING to do about the problem. After which, you won't need so many "security" goons. And for that, again, you'll think of something.
 
That's it: You're done! When you've reached this point, you are finished with the Big Wealth Transfer part of the program. To continue this lesson plan, please purchase our Moving Control to the Global Level package.

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Glen Allport's picture
Columns on STR: 105

Glen Allport co-authored The User's Guide to OS/2 from Compute! Books and is the author of The Paradise Paradigm: On Creating a World of Compassion, Freedom, and Prosperity.