It's Great to be King

From the birth of our great country and through the first hundred years, the majority of our national legislators were in office for a few years or so and then went back home. They were not career politicians; they were public spirited hard-working citizens who did their jobs at home dutifully and also served their country part time. They preferred to have a relatively brief period in office, do what they could to help out, then leave. After a short stint for their country, they would then return to their businesses and families and get on with their lives.


Times have changed.

The Congressional Research Service (CRS) Report for Congress shows that of the 230 congressmen and senators that have served ("Served" being a term used loosely) our country for more than 30 years, only four did so before the turn of the 20th century. The list shows all of the congressmen and senators who were in office for three decades or more. The other 226 served - or should we say, "ruled" after 1900. Though they are not kings, most would admit that today they are far more royalty in class description than is a citizen. It is a pretty good life today; one might even describe it as a regal position.

The year 1900 is roughly the mid-point of our nation. From a statistical standpoint, one may have guessed that given the same relative circumstances there should have been as many 30-year veteran legislators before 1900 as afterwards. But no, not even close. Why the huge disproportion?

Why this clear delineation of statistics? Was the first decade of the 1900's time in which patriotism blossomed and congressmen and senators were just overwhelmed by patriotic duty that they felt an obligation to be in Washington virtually forever? Why would they be willing to give up their businesses and home life in favor of committing their entire working lives to congressional activity? What happened?

To be fair, this list does include a few who were serving at the turn of the century, and finished up in the first few decades. It is obvious though, that since 1900, we have far more congressman and senators willing to "serve" for lengthy periods after the year 1900 than we had before it, and it is increasing. More and more are approaching the 30 year mark as you read this.

What circumstances occurred then that made more of them seek re-election time and again, and again and then again? What was it that altered their thought process from temporary public servants into super-patriots willing to forgo their businesses and families for their fellow countrymen?

Was it Teddy Roosevelt? World War 1? Was it the banking crisis of 1907? The stifling of the honest media with the murder of a muckraker in 1911? (Who? – find out later) How did we get here? Maybe it was Woodrow Wilson.


National Budget

The national budget is controlled by congress. The actual size of the Federal government budget is not all that important. The size of the federal, state and local budgets relative to the size of the private capital markets is extremely significant. This is the size of government in comparison to the size of the public (or free) sector. The larger the government's share, the more oppressive it becomes, the less freedom its citizens enjoy, and the more power the rulers wield.

According to the government accounting office, federal spending in 1902 was 1.7 billion dollars. With the exception of Warren Buffett, Bill Gates and a few others, this is a staggering amount of money for most of us to comprehend, but for a government the size of the United States it was only 7% of the total Gross Domestic Product.

The Gross Domestic Product is the total value of all final goods and services produced in a particular economy; the dollar value of all goods and services produced within a country's borders in a given year. This means that in 1902, the government consumed 7% of that total. Simple math means that the citizens then controlled the other 93% of the economy. We citizens controlled 93% of the money, government 7%.

We had 24 billion dollars produced and consumed in some manner. The federal government accounted for 7% of it, and it seemed few clamored for more government programs at the time. States had little tax as well. If a citizen wanted something, he worked for it. If he got it, he also got to keep it – most of it anyway.

Until 1913, government spending never exceeded 8% of income. If we add in the states, maybe about 10%. It spent a low of 6-½% in 1907 and a high of 7.9% in 1911. They were pretty much under control about spending in relation to total earnings for the first 100 years or so at a rate not expected to exceed 8%. There are no figures - at least none we could find for periods spanning from 1800 - 1901, so we will have to guess that, with the exception of the Civil War, or other temporary blips, it likely was not more than the 7% we had in 1902. Probably it was even less. So from 1800 to 1913, spending rose from maybe 3 percent or so to about 8% (10% including state and local). That is over a hundred years, a pretty long time.

The other 90% or so of consumption and spending was left in the hands of the people to do with as they pleased, within the law. They bought whatever they wanted, hired workers, saved a little; all in all, they lived pretty well.

A hundred years ago, roughly 8 cents of every dollar we earned went to fund our government. Reasonable.


Fast Forward (getting even worse now)

GDP recently increased to roughly $15 trillion dollars, and government spending (federal state and local) increased to nearly $7 trillion, or a whopping 46% in 2011. Much of this is borrowed with the promise that our children will somehow pay it back. So now, rather than keep 90 cents of every dollar, we are allowed to keep only 54 cents, and that figure is rapidly approaching half, if it hasn’t already.

Now that nearly half of all consumption is absorbed by government means that those of us who pay taxes, those who fund this monster are forced into doing more. We work harder for less reward. Government has no means to produce income. Whenever they need money, whether it is for a new project or program, or want to hire more and more government workers they just simply take more from us one way or another.

We all know about federal tax and most of us live in states that tax us to some extent which was also not the case before 1913. Most states have both income taxes and sales taxes amounting to over 10% in a good number of cases. Roughly 4 to10% for state income taxes and 5% or more for sales taxes.

Don’t forget local real estate taxes or other property taxes, gasoline taxes and fees for government "services" most of which are primarily business or personal licensing requirements, more accurately described as professional extortion.

Mafia or IRS – What’s the difference?

The Mafia used to call this type of fee collection “protection money”. A big guy with a flattened crooked nose and a pistol bulge in his breast pocket would come into your store or shop, smile and say: “We’d hate to see a nice place like this burn down…” – so you paid the 10% or so to “protect” your establishment. The mob would take that money, give some to the police to leave them alone, some to the poor to make some friends and keep most of it for their organization and personal families. Everyone knew they were criminals, but many admired them and wanted to be their friends because they knew that to be their enemy was far worse. To cross the Godfather was not a wise career decision.

Today the Mafia leg-breaker has been replaced by the Internal Revenue Service. The IRS protection rates are a lot higher than those of organized crime, and they do far worse than just burn your place down if you don’t pay. This, they tell us is perfectly legal today. It is our patriotic duty to support government. They give some of the money to the poor who support their efforts, much of it goes to government regulators and workers and overhead, and the rest to their friends and relatives who become wealthy through government grants, contracts and jobs. It is much better to be a friend than an enemy of government. Not a whole lot of difference, except our current leg-breakers at the IRS cost much more.

What Happened?

Most of us don't know how we got here. At the turn of the 20th century the extremely wealthy robber barons, whose fortunes earned in just an hour could choke a tyrannosaurus rex were the architects of the economy under which we find ourselves mired today. To acquire all of the money, they had to manipulate us in ways which would transfer even more wealth and power to themselves. They couldn't rob us in broad daylight, as the various Mafia families or Irish mobs once did, so they found other methods, ways we would more readily accept, thought manipulation. They set out to change the way we perceived government and its relationship to ourselves and they succeeded. We have been mentally conditioned. It was no accident that we became less independent; it was a well-conceived business plan.

It wasn't enough that they had more money than 100 generations of heirs could possibly ever spend; the robber barons wanted it all and they wanted it forever.

The transfer of wealth from the individual to government was planned well. Some might charge that the following is just an elaborate conspiracy theory put forth by a disgruntled big-government-hater. Perhaps – but to suggest it was merely the natural evolution of a developing and maturing economy is far more naïve than to suggest that it was intentionally planned by sharp businessmen.

One of the liberal’s favorite sons, a spokesperson for huge government once said:

 “In politics, nothing happens by accident. If it happens, you can bet it was planned that way.”

- Franklin D. Roosevelt

Since the beginning of time it has always been great to be king. Now, it is pretty darn good to be a United States Congressman or Senator.

NEXT: Part 2: The BIrth of E.T (The EVIL TWINS - Federal Reserve and the Income Tax Law)