May 2010 - Posts


This isn't 1943, , but since December of 2001 the U.S. government has once again started selling war bonds. Of course the Government isn't pushing the sale of war bonds since the government isn't as concerned with inflation and high taxation as it was in the 40's. but after watching some of the propaganda of that era I was compelled to write, albeit on a auxiliary topic. I watched on youtube and promoting the purchase of war bonds. there is also a video here encouraging people to save enough to pay their income tax, in those days the government wasn't so bold as to take your money before you even got it in your pocket. But back to war bonds, for those of you who are of my generation, here is how it works. you would buy a war bond, which had a fixed term, and when the term was up you could cash in your bond for money plus a 1 or 2 % interest. It amounts to lending the government money to fight a war, and then being paid back interest. As you can see from the videos, and if you like you can look at the old newspaper ads and perhaps find radio advertisements too, that the purchase of war bonds was proposed as being patriotic. This is what I will contend with. And I find it nothing short of absurd. In the first place, it should be noted that fighting a non defensive war is not patriotic, but is entirely unpatriotic and a detriment to the Country and ones countrymen, however beneficial for the government it might be. "War is" after all, "the health of the state." It is first giving license to the government to expand its powers, to draft men and force them to kill and be killed, and to force one's fellow citizens to pay for it. Beyond this there is the Bastiat Principle of the Unseen. By fighting an unnecessary war resources are diverted from what the consumers would purchase, new cars, capital goods, clothing and all sorts of other useful commodities and services, to the building of ships and planes and tanks. this means that the price of valuable goods must go up, Thus war has an impoverishing effect besides the direct death and destruction that come attached with it. Of course needless to say that the government attempted to rectify this by instituting price and wage controls. which in turn led to shortages. The shortage of labor caused by wage controls compelled employers to offer medical insurance since it was against the law to offer more in the way of monetary renumeration, and now we see where this has led 70 years later, where the consumer is disconnected from the provider by the imposition of an employer middleman. So the buying of war bonds is unpatriotic because it supports a war, but again because it is a loan. a loan that will be repaid with interest. and where does that money come from? taxes of course. The men at the helm of government assume that tax increases to the level needed will cause them to be voted out of office. So they instead sell bonds which will earn a profit for the bond holder. They use that money to finance their war and wait until the bonds mature to raise taxes. This is one of of the examples of the inferiority of democracy. A King who will be at the helm of government for the rest of his life, and then his son, does not gain anything by such a maneuver. he would be in power when the bonds mature anyway, so he can raise the tax now, or wait and raise the tax even higher to cover the interest later. with a democracy politicians can pass bond initiatives that wont mature until they have moved on thus they won't be around to handle the problem but instead pass it on to the next guy. Lastly let us assume that we were invaded. take the case of South Carolina and the other states who, after declaring their independence were invaded by the United States Army. Here is a case of a just and defensive war. A people seek to be free and establish their own government, of their own accord, and a foreign power uses force to prevent them from doing so. Even in this case, how would it constitute patriotism to buy a Confederate war bond? It is not the love of one's country to buy a war bond, even if the war is fought with the aim of repelling a foreign invader. It seems to me that such a person who would buy a bond in such a situation is seeking to profit from an attack on his own country, for if the United States government, or the soldiers of the United States had not assaulted the independence of the people of Virginia, there would be no situation in which it would be necessary for war bonds to be sold. If the man were truly patriotic he would give money to the army, or at least lend the funds interest free. Better than both he might organize a voluntary and unpaid militia to snipe invaders, or donate money to such a group, thereby bypassing the coercive nature of government taxation altogether. As an afterthought on democracy, I find that this might be why bonds pass more frequently than taxes in local government. Who knows what will happen in 5 or 10 years. A family with a child will be willing to vote for a bond to pay for government education, so as to benefit their child, but in 5 or ten years when a tax must be raised to pay the bond holders, the family may have moved, and thereby have skipped out on having to pay the costs.