Agree. But this is why having a D win in 2028 would be a Bad Thing because the totalitarian logic to, "The rich are leaving," is, "Well, we won't *let* them!" And trying that on a national level would really suck. (The step after that is confiscation and punishment).
"count on the crisis in coming years where states and cities start threatening BK and demanding the feds to bail them out."
This has already been done, not just a coming attraction. Several of the aforementioned states were already in deep budget holes, structural, threatening BK pre-2020. When scamdemic came along and they opened up their money hydrant to shower subsidies on the masses for all the wealth they had stolen from them, the jobs they lost, business that failed (we made you lose ten, here's two back for your troubles), etc those budget holes became Vredefort crater-size.
And when Biden was (s)elected he + Congress, including the GOP, bailed out those same exact aforementioned states. The fact that they're continuing to spend, digging themselves back down to Vredefort craters informs that without consequences behaviors will not, will NEVER change. There's no doubt in my mind that not only will they seek, but they will get fed bailout money. Again. Eventually. Administrations change. They can Bank on it. Hence, rinse, repeat. They have zero reason to change course.
Reduce spending. Deport all illegal aliens. Drastically reduce welfare Medicaid food stamp eligibility. Should be only for the truly poor and needy. Everyone else, get a damn job
Medicare should be ended. Use the money to help those currently on Medicare to buy private hospitalization plans. Auto insurance doesn’t pay for oil changes tires batteries, etc. health insurance shouldn’t pay for routine care. That’s welfare not insurance. If a private market were allowed there would be companies fighting for the business just like auto and home owners and every other type of insurance.
“…. we have a massive spending problem in this country and there is just no way to pay for leviathan’s 35% of GDP….”
The situation In Europe is even worse, with tax rates as % of GDP hovering between 30%. and 45%, and the highest rate of just personal income tax in Denmark for example approaching 62.5%.
What is terrifying is that even at these astronomical rates of tax Governments are still struggling to meet their policy obligations, and are continually looking for new and creative ways to more squeeze tax revenue out of the economy.
The problem is compounded, in the UK for example, by having a Socialist Government implementing unrealistic policies which relyi on a shrinking productive work force to support an exponentially increasing Socialist policy driven welfare bill.
To overcome the projected shortfall, and to avoid increasing an already destructive Government borrowing interest bill the UK (and other European Governments) are looking with interest at the Netherlands which is planning to implement what you would probably describe as “Wealth Tax” but in reality is much more insidious.
The article seems to attach the notion of a “Wealth Tax” in the US to a romanticised mobile group of high asset individuals who have the flexibility to liquidate assets, up sticks, and relocate geographically at the drop of a hat.
The ‘Wealth Tax’ envisaged in the Netherlands is a tax on UNREALISED assets, assets which you just happen to own but may have no intention of selling. If you are unfortunae enough not to have the resources to pay the tax levied, you might have to sell the asset which, on a broad societal basis, is likely to drive down valuations.
Let’s be clear: in most cases this is just another attempt at income redistribution, and will never stop until Governments realise that they have reached a point where they have to curb and reduce spending. Otherwise, once implemented, the percentage rate of this ‘Wealth Tax’ will gradually creep up and the threshold whereby tax is due will continue to fall to increase the tax net.
As has been shown historically, any Society where the population loses the incentive to be productive because it loses the fruits of its efforts will ultimately collapse from the inside.
"What is terrifying is that even at these astronomical rates of tax Governments are still struggling to meet their policy obligations..."
The main reason for this is spending a lot of the taxes on the wrong things. Here are some examples from Sweden i SEK (divide by ten for USD):
UN contribution (2025): 29 000 000 000:-
EU fee (2025): 41 000 000 000:-
Foreign aid (2025): 19 500 000 000:-
Ukraine War-support, tot. value (from 2022 to present): 128 000 000 000:-
As a comparison, the cost total for the Swedish justice system (inc. total costs of police, courts, prisons, et c) for 2026 is budgeted as 95 000 000 000:-.
That's the main reason why some nations here struggle to meet obligations: the money is spent wrong, and the system itself is bloated and increasingly incompetent and burdened with inefficiency and loss of focus (endless meetings about DEI-stuff f.e.).
I spoke with a relative in Denmark about their high taxes. He works in IT networking and charges equivalent €300 per hr. He figured the taxes work due to the overall high standard of living and a functioning society and infrastructure. If you've ever been to Denmark you can see this in action. Something breaks, it gets fixed pronto.
Here in the middle of the country (Kansas) in the middle class, the big tax revolt is over property taxes. An average home has gone from $150K to $300K or $350K in the last 10 years (I'm talking existing stock, not new homes), and the property taxes have scaled up with those values. A lot of us are now looking at $4000 in annual property taxes, and while you guys on the coasts are probably thinking "That sounds good!" it's a hardship for people that were paying $2000 a decade ago and haven't seen their incomes rise proportionately.
(I'm sure people in other areas of the country are facing similar issues.)
People in higher end housing have seen rising valuations and tax assessments as well, but they have the option of downsizing. Average people don't really have that option, unless downsizing means moving in with relatives or becoming homeless.
So the local governments take all the extra revenue, and often use it for bloat. At the Republican governor candidates' debate in January, the very first issue debated was property taxes.
I want to also emphasize the regressive nature of sales taxes. In Kansas they are about 9%, and food is taxed only slightly less, at about 7%. Every gallon of gasoline has about 50 cents in taxes on it, which is an EXTREMELY regressive tax.
Ermahgerd! Have I got a big bit of history comment for you!
The real estate market has not been performing like a normal, free market performs. It has been impervious to market forces, artificial factors are operating in the equation. When markets defy the law of supply and demand they are not by definition free markets; they are manipulated markets.
I remember the Savings & Loan crash in the late 1980's. Neil Bush, Silverado, etc. being one of the bad guys (Jeb caught up in the scandal, too, how quickly people forget that whole family are criminals) when a glut of foreclosed homes hit the market all at once and home prices cratered. S&L’s were the primary lenders for housing before they collapsed. A change made by Congress on valuation of real estate assets caused the collapse, it wrought havoc in their books. Not to say they weren’t needed. The previous valuation rules that the Neil Bush's exploited were a house of cards, but the rules change crashed them down. What resulted was banks holding illiquid property, real estate prices collapsed as the market functioned to clear excess supply to generate demand. Widespread foreclosure sales below what had been the previous market.
Which impacted every single affiliated industry that was commission-based, like realtors and lenders, title services, etc. And...local governments, property values they tax a mill-percentage of. They had spent every mill-levy penny on providing more and more constituent services, payoffs, the pot of gold from housing bubbles doled out like candy by politicians buying votes to get reelected playing Santa Claus. The lowered values forced them into difficult budget cuts, they became the Grinch. No politician likes taking away what they had given, not a good reelection strategy. Politicians don't like doing things that will lose them votes.
And when the S&L's collapsed and home prices cratered too many local governments were forced to make painful budget cuts. And politicians lost their jobs. It doesn't take politicians long to learn from episodes like that. They decided to abandoned free markets, to eliminate the risk of the boom-bust cycle of real estate. So the next major housing correction as the era of "irrational exuberance" came to an end in the late 1990's they did the whole foreclosure thing differently. Banks were encouraged to hold vacant properties on their books with government incentives and public policies. The market was artificially interfered with, manipulated. Instead of the correction that an overpriced housing market should've come about prices remained relatively stable, the commissions and tax revenues remained stable as vacant foreclosed properties were slowly put up for sale to avoid a glut that would drive down home prices.
Then came the Bush 45 administration (more Bush’s!!) policy that was to push for full home ownership. It goosed demand with relaxed loan standards, a loose money policy was embraced. Lending to anyone with a pulse, even many without one. Creditworthiness not an issue, especially in minority neighborhoods. D's jumped on board with concerns about bank "red lines" they said kept minorities from enjoying home ownership. Criteria for loans went away. WaMu, Countrywide and other lenders shoveled loans out the door, encouraged fraud in applications, taught borrowers how to fudge, no background checks were run.
Now, banks aren't in the business of property investing and management. So as that housing cycle played out in the 2000's they decided to bundle their shaky loans, got their subprime loans rated AAA by S&P and Moody’s. Sold bundles to large investment banks, REIT’s. That turned out to be junk when the economic cycle dipped, loans defaulted towards the end of the Bush 45 administration. The Countrywide/WaMu-led explosion in easy home loans had raised housing prices, produced more commissions, more property tax revenues, but the tab was due. And the “Too Big To Fail” crisis was upon us. You know, the one that prompted John McCain to “suspend his presidential campaign.” The largest banks, all the bad actors, all the bad rating services, all of it were held harmless. They were bailed out! They shifted all of the losses onto the taxpayers. Not a free market system when there’s ZERO risk for bad, manipulative, illegal business practices and innocent, rule-abiding people get stuck with the tab.
With McCain suspending his campaign a few weeks before the 2008 election when Obama came in his "pen" came to the rescue. Foreclosures were halted. Borrowers who had overpaid in bidding wars for overpriced homes (Metrolist/MLS understated inventory), overborrowed were allowed to stay in their homes. Contracts were rewritten, contract law was tossed on its head, especially for the auto manufacturers who became a part of the economic downdraft story. Lower priority unsecured creditors (union pensions) were elevated over higher priority, secured creditors. Who also got stuck with that tab.
Compounding the housing market was the market interference of the listing and inventory reporting services. Services that many rely upon to keep markets honest weren't honest brokers of information. The Metrolist's/MLS’s were habitually understating inventory. Nearly every realtor pays to subscribe to listing services for quick and convenient access to available property and comps data. A funny thing began to happen with them around the same time as the mortgage easy lending scandal. Inventories would consistently be understated. Less housing inventory is less supply. The supply-demand equation was skewed, based on false information, prices went up accordingly with more demand and less (stated) inventory than there really was. See, some state auditors began to notice the pattern. Services like Metrolist/MLS's had a series of "corrections" to inventory they'd fess up to every year or so after being audited. They blamed flawed math formulas in their software, or data entry errors, all sorts of excuses for the “corrections.” That consistently resulted in understated inventory. “Corrections” never resulted in overstated inventory that would result in lower home prices, no, no, no. It was a one-way street.
Between the S&P's and Moody's rating services that overrated real estate portfolio ratings and the consistently underreported by Metrolist/MLS inventory it all worked to keep housing prices high, immune from free market correction. Too many industries and government itself benefited from consistently rising home prices. Price corrections were deemed too painful for industry pros, lenders and governments alike. Realtor and lender commissions that are price based. Government revenues necessary to dole out political favors and constituent services are housing price dependent. And, honestly, for homeowners not looking to move or downsize as well, homes being their largest part of their retirement portfolio.
And so NONE of the services that should’ve/would’ve been a corrective check worked properly. And nobody or service who should’ve been responsible was ever punished for it. Because to do so would mean the return of risk of lower tax revenues that Santa Claus politicians rely on. Enforcement, consequences risked turning them into Grinch’s. Who don’t get reelected.
Everyone around the housing industry, long-term homeowners and the governments that relied on it for their bloated budgets had no incentive to address the scandal, a market completely divorced from the fundamentals of supply and demand. The biggest losers being first-time home buyers, priced out of the market for starter homes, that normal and ordinary boom-bust cycles had always corrected and leveled off at the proper supply-demand price. And those looking to move up into larger homes out of starter homes became locked in. As many are today. Higher home values are essentially locked in, a one-way market, no downside risk. Not a free market.
Here we are today. Entering the "you will own nothing and be happy" Blackrock’s, Vanguard’s and other mega-multinational corporate investors era. Who have no intention of flooding the market with resales of foreclosed inventories or homes sold by desperate people downsizing before they are foreclosed on. Because Larry Fink (a communist, who benefits from crony capitalism) & Co are the designated landlord's in nations that have private property rights, i.e., non-communist nation's. You will own nothing. But you’ll still be able to rent!! Or live in your parent’s basement.
These mega-multinational corporate investors are working with governments to make sure their investments have no downside risk, lock in the value. And local governments and special districts are cool with it, don't look to them to do anything about overpriced homes, manipulated markets that keep them priced artificially high. They don't want to make painful budget cuts and become Grinch's.
There still are some corrections by sellers who don't have staying power but not enough to make governments and investors sweat. Had home prices been subjected to a free market there would've been many corrections these past several decades. Instead any corrections are small and short-lived. Prices go up, up, up. Only. There's not the same level of upward mobility in housing. More and more homeowners are stuck. And you have what you have in Kansas. And every other state in the nation, red or blue no matter.
I know about quite a bit of that, but some is new.
I was watching in horror as the 2008 housing bubble unfolded. One of the biggest factors were mortgage backed securities. The almost total lack of regulations allowed lenders to give loans to people with stated income and nothing down. A bunch of those loans would then be turned into a mortgage backed security and 95% of the tranches would be considered as safe as US treasuries. And there was no political will to jail anybody.
One bit I didn't know until recently was that the US government sold those foreclosed properties in such large lots that only large corporations could bid on them. I wonder whose lobbying money set up that rule?
Btw, when I transferred into university in my junior year, business school, I began with the intention of completing their actuarial science degree program. Took a few RMI classes - Risk, Management and Insurance - that first semester...during which they announced they were closing the program down. Few weeks later announced it would be restarted in the Liberal Arts college the following Fall semester. I wasn't about to suspend my studies and transfer out of business school, so I changed my major to Finance. Had friends who made the transfer, some I'm still in touch with. They went on to become Chief Actuaries at major insurance companies. But that wasn't to be my path. Probably wouldn't have been happy doing that anyways. Heck, I've barely used my Finance degree for anything I ended up doing. Helped me read financial reports, understand legislative fiscal notes, some of the decision data and points CFO's use in guiding corporate policies and aspirations. That's about all it was useful for besides networking.
Kinda that. Obviously sanitized, agendas and intententions took full use of artistic license.
Also interesting to note that "Nudge" co-author Richard Thaler had a cameo in it. Thaler's Nudge co-author Cass Sunstein an Obama administration leader in Behavioral Science coercion and manipulation practices established under his leadership. While he ran OIRA, "the cockpit of government" coordinating all federal agencies with state and local government counterparts, along with international government counterparts..
That whole every level of government on the same exact page across the nation at the same exact time during scamdemic. Couldn't have been done so instantly and seamlessly without Sunstein. Whose wife also happens to be Color Revolution pro Samantha Powers. Thaler connected to all of that. And in the movie about the housing and banking crisis. Funny coincidences like that, huh?
> It has been impervious to market forces, artificial factors are operating in the equation.
Quite a few of them.
> It goosed demand with relaxed loan standards, a loose money policy was embraced. Lending to anyone with a pulse, even many without one. Creditworthiness not an issue, especially in minority neighborhoods. D's jumped on board with concerns about bank "red lines" they said kept minorities from enjoying home ownership. Criteria for loans went away.
And in recent years, the FHA has been underwriting loan risk for mortgages to illegal aliens. That helps drive up home prices, and keep them there, when an illegal alien is being subsidized with tax dollars to outbid American citizens. I bought a house about a year ago. I figure this nonsense with the FHA, and the impact it had on housing prices, probably raised the price of the property I bought by $100k. Or, to put it another way, by 25%. I don't regret buying it, but obviously I'd be better off if I had gotten it for $300k instead of $400k.
The lack of anything approaching sufficient quantities of new construction aren't helping anything. Likewise, the building code regulations that mandate expensive materials, when vastly cheaper ones -- with far better environmental impact, and energy efficiency, mind you, which is something that "They" say they want -- are available, but locked out of the market. I'm talking things like aircrete, bindered rammed earth, adobe, and so forth. "Take the dirt that's on site, mix it with a small amount of specialized dirt that's been brought in to get it to the proper mix of aggregate, clay, sand, and loam, run it through a mixer with water to the right consistency with some added fibers for stability, pack it into forms and let them dry in the sun" is a hell of a lot more economic in places that don't have forests, compared to trucking in a bunch of dimensional lumber from somewhere that does. Not that I have anything against logging or truck drivers, but it's a heck of a lot more expensive to get a bunch of lumber shipped to New Mexico from Oregon or Washington than it is to ... use dirt that's already here, combined with some *other* dirt that came from 300 miles away at most.
Sure, it's labor intensive, and you probably still want some lumber for use on the roof and whatnot, but those adobe walls have *amazing* thermal regulation values.
Sorry, bit of a tangential hobby horse of mine, these days...
7% on food! wow. even here in high-tax CA, food is not taxed. i think if it was, there would be an instant revolt. as of 8/2025 the statewide median single family dwelling sold was $899k . . . and was $300k to $500k even in the lowest-priced inland counties. the AI boom is increasing prices in tech areas as i write. as for property taxes, i refer to them as rent to the state.
I (thank God!) do not know much about California’s taxation regime, but I’m pretty sure that grocers are heavily taxed (real estate, business income, fuel surcharges, and [I’m sure] others I haven’t imagined).
Next year 5,000 bucks for an average size lot with an average size house in a 8000 pop town well out in the country in northern Illinois from Chicago. Absolutely a nothing special town. Roads are crap and sidewalks crumbling. I walk in the road because they are marginally less crumbling than the sidewalks. This year two streets get parts of them repaved. Big whoop. 60% Hispanic but some have disappeared in the last 2 years. No pickup trucks are waving giant Mexican flags anymore as they roar through town anyway. Republicans have run the county for 150 years.
Imagine if the schools stopped being talent feeding streams for pro sports. Anybody here want to run estimates of how much localities could save in property taxes if every non-urban HS didn't have vistas large and small of multiple playing fields?
Etc. etc. Would Congress be so corrupt if everyone at home didn't have pork barrel dreams to be fulfilled?
After we throw out all the grifting immigrants perhaps we can restrain the Friday Night Lights dads, too.
He’ll, DOGE couldn’t even identify obvious situations of fraud without the opposition party having a demagogic meltdown. You can’t fix this, not in any sane way at least because you're dealing with over-emotional children for the most part whether they be donkeys or pachyderms.
Violent solutions are not always "insane..." Often, in such calamitous, criminal, fraudulent and insane Gordian knotage... it is necessary and inevitable. Accept that and prepare to do your worst.
"Anyone who clings to the historically untrue-and thoroughly immoral-doctrine that, 'violence never settles anything' I would advise to conjure the ghosts of Napoleon Bonaparte and the Duke of Wellington and let them debate it. The ghost of Hitler could referee, and the jury might well be the Dodo, the Great Auk and the Passenger Pigeon. Violence, naked force, has settled more issues in history than has any other factor, and the contrary opinion is wishful thinking at its worst. Breeds that forget this basic truth have always paid for it with their lives and freedom."
I'm not too sure voting matters out here in the People's Socialist Rebulic of California, but I always vote no on every initiative and try to find the craziest anti-tax person in every race. It never works, but I like to pretend I am making a difference.
The blame game is counter productive. Entrepreneurs were unreasonably deprived of their earnings during the scamdemic, while the big box companies, such as Walmart and Costco thrived, in spite of the pernicious 'lockdowns'
I suspect the amount is most of that 30T. And unfortunately we all are already paying for it and continue to do so because every dollar borrowed by gov is a dollar of currency dilution.
In the old days, small school districts, particularly rural ones, had baseball fields not on school grounds, but had people set up teams - kids through higher grades where even after school was done there were adult leagues that would last for years. It was often land donated by a farmer, or a community that would buy and set up the fields. I also saw tennis and basketball courts in parks that the schools would also use. I saw the same thing, only Soccer fields, on Bonaire, Aruba and Curaçao Netherlands Antillies. All used as weekend family pass times with picnics. No school taxes needed.
Sports isn’t why school systems are black holes for money. They were solvent *and* had sports in the 1950s and prior. It’s the DEI make-work jobs, the administrators being paid lavishly for overseeing failure, and the money laundering to the DNC.
It’s way higher than 26%. Becuz many things are taxes, disguised as something else.
The airport fee on a ticket. The xxx fee on the electric bill. The excise tax on fuel. The $1 the hair salon adds on for license fee. The auto registration. There is a list floating around with 50 similar items.
It’s 40%. Not 26%. And it’s higher than that in high tax states.
Add to this taxathon that would have made King Rehoboam reconsider his foolishness is that there is a tsunami of fraud which outright steals tax revenues for friends of politicians and bureaucrats who then provide legal cover for fraudsters to keep stealing. People already have low expectations of government functioning and, along with blatant judicial behaviors, this will mean we become an horizontal and veritable zero trust society.
Now factor in inflation (the hidden tax). Connected to spending money that they don't have, but altering the value of what people already have ... a form of asset/wealth tax on top of income taxes.
“el quinto real" -- I'm going to write that on the memo line of my next quarterly check to the IRS.
RE: "Please don't leave, we need your taxes" cartoon. Pretty sure the fleeing billionaires are not actually wheeling their own luggage onto their G-IV's.
On a serious note, one looming fiscal cliff that many deep blue states will soon be facing is their pubic sector employee's massive golden retirement packages. In CA, under the last days of Governor Gray Davis and the NASDAQ at 27K, the powerful unions negotiated an obscene boosting of their retirement benefits including lifetime healthcare and guaranteed defined pensions. Their rationale being that since the market was producing record profits, and CALPERS pensions were invested in the stock market, they were therefore entitled to a guaranteed piece of it. And, of course, the market was never expected to crash.
It's has, several times since. And there's no way to fund those legally obligated payouts.
My small state pension for working at a city library is the only one in my state fully or almost fully funded. The rest, like my husbands teachers pension, is scary underfunded.
Blue states have huge liabilities for their generous public pensions. They’re headed for a bust, but pensions are guaranteed by the federal government….
I have no idea if there’s a way out. My solution would be to pay for public pension defaults with a new tax on all public employees, but I have no idea if that would be legal.
Actually it looks like most of our money ends up in government pockets.
Way over simplified but none the less for example: I'm paid a dollar, government gets 20% income tax leaving me 80 cents. I give a guy 80 cents for groceries he pays 20% tax leaving him 64 cents. He pays a mechanic 64 cents who, after taxes ends up with 51 cents. By time what left of the buck has changed hands five times, only 33 cents is left in circulation.
Anecdotal but again none the less: Some years back I bought a pack of Camels in Russia's Wild Wild East for what was in American money was 14 cents. At the same time back here in Alaska I was paying around $2.50 (Not germane but over $15 a pack now, sin tax and inflation make governments go 'round.) a pack.
rather doubt RJ Reynolds was selling their product for a loss in Russia so if they could ship halfway around the world from Winston Salem and make a profit at fourteen cents a pack, either they where getting rich well beyond anybody's wildest dreams of avarice here in the U.S. or the government's share of everything is far greater than we think.
Add in the fractional reserve monetary system where banks lend and re-lend a large percentage, and then re-lend a large percentage of that, and so on, and so on, the same dollar dozens of times fractionally, banks taking their cut of each re-loaned dollar, the bankers and government have their win-win, while consumers and earners lose-lose.
And for those who want to challenge this by saying that the bank is re-lending those dollars to those creating jobs, innovating, growing the overall wealth of humanity, there's definitely truth in that. My degree is in Finance, and between monetary theory and experience I know the truth contained in counter arguments. But that truth ignores the fact that today's banking system is no longer accessible to innovators, risk-takers, unless they have proven ability to pay it back. No longer will banks take risks, of any kind. Not even your local banker (if you can even find one, endangered species that they are) will take a chance to lend to the promising, but unproven borrower with a great idea trying to innovate, create jobs. You must already have money to borrow it. Horatio Algiers stories are myths, perhaps they always were, but even moreso today.
Unless, maybe, you're an illegal or preferred minority, to whom lending money is really a subsidy they don't expect to be repaid, and they're okay to write those dollars off.
The fractional reserve system theory of the exponential bank dollar I was taught isn't what's being practiced today. It's just the wealthy getting wealthier. As big government grows bigger through cascading taxation of the same dollar.
Agree. But this is why having a D win in 2028 would be a Bad Thing because the totalitarian logic to, "The rich are leaving," is, "Well, we won't *let* them!" And trying that on a national level would really suck. (The step after that is confiscation and punishment).
"count on the crisis in coming years where states and cities start threatening BK and demanding the feds to bail them out."
This has already been done, not just a coming attraction. Several of the aforementioned states were already in deep budget holes, structural, threatening BK pre-2020. When scamdemic came along and they opened up their money hydrant to shower subsidies on the masses for all the wealth they had stolen from them, the jobs they lost, business that failed (we made you lose ten, here's two back for your troubles), etc those budget holes became Vredefort crater-size.
And when Biden was (s)elected he + Congress, including the GOP, bailed out those same exact aforementioned states. The fact that they're continuing to spend, digging themselves back down to Vredefort craters informs that without consequences behaviors will not, will NEVER change. There's no doubt in my mind that not only will they seek, but they will get fed bailout money. Again. Eventually. Administrations change. They can Bank on it. Hence, rinse, repeat. They have zero reason to change course.
Reduce spending. Deport all illegal aliens. Drastically reduce welfare Medicaid food stamp eligibility. Should be only for the truly poor and needy. Everyone else, get a damn job
Cut Medicare too.
Medicare should be ended. Use the money to help those currently on Medicare to buy private hospitalization plans. Auto insurance doesn’t pay for oil changes tires batteries, etc. health insurance shouldn’t pay for routine care. That’s welfare not insurance. If a private market were allowed there would be companies fighting for the business just like auto and home owners and every other type of insurance.
“…. we have a massive spending problem in this country and there is just no way to pay for leviathan’s 35% of GDP….”
The situation In Europe is even worse, with tax rates as % of GDP hovering between 30%. and 45%, and the highest rate of just personal income tax in Denmark for example approaching 62.5%.
What is terrifying is that even at these astronomical rates of tax Governments are still struggling to meet their policy obligations, and are continually looking for new and creative ways to more squeeze tax revenue out of the economy.
The problem is compounded, in the UK for example, by having a Socialist Government implementing unrealistic policies which relyi on a shrinking productive work force to support an exponentially increasing Socialist policy driven welfare bill.
To overcome the projected shortfall, and to avoid increasing an already destructive Government borrowing interest bill the UK (and other European Governments) are looking with interest at the Netherlands which is planning to implement what you would probably describe as “Wealth Tax” but in reality is much more insidious.
The article seems to attach the notion of a “Wealth Tax” in the US to a romanticised mobile group of high asset individuals who have the flexibility to liquidate assets, up sticks, and relocate geographically at the drop of a hat.
The ‘Wealth Tax’ envisaged in the Netherlands is a tax on UNREALISED assets, assets which you just happen to own but may have no intention of selling. If you are unfortunae enough not to have the resources to pay the tax levied, you might have to sell the asset which, on a broad societal basis, is likely to drive down valuations.
Let’s be clear: in most cases this is just another attempt at income redistribution, and will never stop until Governments realise that they have reached a point where they have to curb and reduce spending. Otherwise, once implemented, the percentage rate of this ‘Wealth Tax’ will gradually creep up and the threshold whereby tax is due will continue to fall to increase the tax net.
As has been shown historically, any Society where the population loses the incentive to be productive because it loses the fruits of its efforts will ultimately collapse from the inside.
Watch this space.
"What is terrifying is that even at these astronomical rates of tax Governments are still struggling to meet their policy obligations..."
The main reason for this is spending a lot of the taxes on the wrong things. Here are some examples from Sweden i SEK (divide by ten for USD):
UN contribution (2025): 29 000 000 000:-
EU fee (2025): 41 000 000 000:-
Foreign aid (2025): 19 500 000 000:-
Ukraine War-support, tot. value (from 2022 to present): 128 000 000 000:-
As a comparison, the cost total for the Swedish justice system (inc. total costs of police, courts, prisons, et c) for 2026 is budgeted as 95 000 000 000:-.
That's the main reason why some nations here struggle to meet obligations: the money is spent wrong, and the system itself is bloated and increasingly incompetent and burdened with inefficiency and loss of focus (endless meetings about DEI-stuff f.e.).
I spoke with a relative in Denmark about their high taxes. He works in IT networking and charges equivalent €300 per hr. He figured the taxes work due to the overall high standard of living and a functioning society and infrastructure. If you've ever been to Denmark you can see this in action. Something breaks, it gets fixed pronto.
Here in the middle of the country (Kansas) in the middle class, the big tax revolt is over property taxes. An average home has gone from $150K to $300K or $350K in the last 10 years (I'm talking existing stock, not new homes), and the property taxes have scaled up with those values. A lot of us are now looking at $4000 in annual property taxes, and while you guys on the coasts are probably thinking "That sounds good!" it's a hardship for people that were paying $2000 a decade ago and haven't seen their incomes rise proportionately.
(I'm sure people in other areas of the country are facing similar issues.)
People in higher end housing have seen rising valuations and tax assessments as well, but they have the option of downsizing. Average people don't really have that option, unless downsizing means moving in with relatives or becoming homeless.
So the local governments take all the extra revenue, and often use it for bloat. At the Republican governor candidates' debate in January, the very first issue debated was property taxes.
I want to also emphasize the regressive nature of sales taxes. In Kansas they are about 9%, and food is taxed only slightly less, at about 7%. Every gallon of gasoline has about 50 cents in taxes on it, which is an EXTREMELY regressive tax.
Ermahgerd! Have I got a big bit of history comment for you!
The real estate market has not been performing like a normal, free market performs. It has been impervious to market forces, artificial factors are operating in the equation. When markets defy the law of supply and demand they are not by definition free markets; they are manipulated markets.
I remember the Savings & Loan crash in the late 1980's. Neil Bush, Silverado, etc. being one of the bad guys (Jeb caught up in the scandal, too, how quickly people forget that whole family are criminals) when a glut of foreclosed homes hit the market all at once and home prices cratered. S&L’s were the primary lenders for housing before they collapsed. A change made by Congress on valuation of real estate assets caused the collapse, it wrought havoc in their books. Not to say they weren’t needed. The previous valuation rules that the Neil Bush's exploited were a house of cards, but the rules change crashed them down. What resulted was banks holding illiquid property, real estate prices collapsed as the market functioned to clear excess supply to generate demand. Widespread foreclosure sales below what had been the previous market.
Which impacted every single affiliated industry that was commission-based, like realtors and lenders, title services, etc. And...local governments, property values they tax a mill-percentage of. They had spent every mill-levy penny on providing more and more constituent services, payoffs, the pot of gold from housing bubbles doled out like candy by politicians buying votes to get reelected playing Santa Claus. The lowered values forced them into difficult budget cuts, they became the Grinch. No politician likes taking away what they had given, not a good reelection strategy. Politicians don't like doing things that will lose them votes.
And when the S&L's collapsed and home prices cratered too many local governments were forced to make painful budget cuts. And politicians lost their jobs. It doesn't take politicians long to learn from episodes like that. They decided to abandoned free markets, to eliminate the risk of the boom-bust cycle of real estate. So the next major housing correction as the era of "irrational exuberance" came to an end in the late 1990's they did the whole foreclosure thing differently. Banks were encouraged to hold vacant properties on their books with government incentives and public policies. The market was artificially interfered with, manipulated. Instead of the correction that an overpriced housing market should've come about prices remained relatively stable, the commissions and tax revenues remained stable as vacant foreclosed properties were slowly put up for sale to avoid a glut that would drive down home prices.
Then came the Bush 45 administration (more Bush’s!!) policy that was to push for full home ownership. It goosed demand with relaxed loan standards, a loose money policy was embraced. Lending to anyone with a pulse, even many without one. Creditworthiness not an issue, especially in minority neighborhoods. D's jumped on board with concerns about bank "red lines" they said kept minorities from enjoying home ownership. Criteria for loans went away. WaMu, Countrywide and other lenders shoveled loans out the door, encouraged fraud in applications, taught borrowers how to fudge, no background checks were run.
Now, banks aren't in the business of property investing and management. So as that housing cycle played out in the 2000's they decided to bundle their shaky loans, got their subprime loans rated AAA by S&P and Moody’s. Sold bundles to large investment banks, REIT’s. That turned out to be junk when the economic cycle dipped, loans defaulted towards the end of the Bush 45 administration. The Countrywide/WaMu-led explosion in easy home loans had raised housing prices, produced more commissions, more property tax revenues, but the tab was due. And the “Too Big To Fail” crisis was upon us. You know, the one that prompted John McCain to “suspend his presidential campaign.” The largest banks, all the bad actors, all the bad rating services, all of it were held harmless. They were bailed out! They shifted all of the losses onto the taxpayers. Not a free market system when there’s ZERO risk for bad, manipulative, illegal business practices and innocent, rule-abiding people get stuck with the tab.
With McCain suspending his campaign a few weeks before the 2008 election when Obama came in his "pen" came to the rescue. Foreclosures were halted. Borrowers who had overpaid in bidding wars for overpriced homes (Metrolist/MLS understated inventory), overborrowed were allowed to stay in their homes. Contracts were rewritten, contract law was tossed on its head, especially for the auto manufacturers who became a part of the economic downdraft story. Lower priority unsecured creditors (union pensions) were elevated over higher priority, secured creditors. Who also got stuck with that tab.
Compounding the housing market was the market interference of the listing and inventory reporting services. Services that many rely upon to keep markets honest weren't honest brokers of information. The Metrolist's/MLS’s were habitually understating inventory. Nearly every realtor pays to subscribe to listing services for quick and convenient access to available property and comps data. A funny thing began to happen with them around the same time as the mortgage easy lending scandal. Inventories would consistently be understated. Less housing inventory is less supply. The supply-demand equation was skewed, based on false information, prices went up accordingly with more demand and less (stated) inventory than there really was. See, some state auditors began to notice the pattern. Services like Metrolist/MLS's had a series of "corrections" to inventory they'd fess up to every year or so after being audited. They blamed flawed math formulas in their software, or data entry errors, all sorts of excuses for the “corrections.” That consistently resulted in understated inventory. “Corrections” never resulted in overstated inventory that would result in lower home prices, no, no, no. It was a one-way street.
Between the S&P's and Moody's rating services that overrated real estate portfolio ratings and the consistently underreported by Metrolist/MLS inventory it all worked to keep housing prices high, immune from free market correction. Too many industries and government itself benefited from consistently rising home prices. Price corrections were deemed too painful for industry pros, lenders and governments alike. Realtor and lender commissions that are price based. Government revenues necessary to dole out political favors and constituent services are housing price dependent. And, honestly, for homeowners not looking to move or downsize as well, homes being their largest part of their retirement portfolio.
And so NONE of the services that should’ve/would’ve been a corrective check worked properly. And nobody or service who should’ve been responsible was ever punished for it. Because to do so would mean the return of risk of lower tax revenues that Santa Claus politicians rely on. Enforcement, consequences risked turning them into Grinch’s. Who don’t get reelected.
Everyone around the housing industry, long-term homeowners and the governments that relied on it for their bloated budgets had no incentive to address the scandal, a market completely divorced from the fundamentals of supply and demand. The biggest losers being first-time home buyers, priced out of the market for starter homes, that normal and ordinary boom-bust cycles had always corrected and leveled off at the proper supply-demand price. And those looking to move up into larger homes out of starter homes became locked in. As many are today. Higher home values are essentially locked in, a one-way market, no downside risk. Not a free market.
Here we are today. Entering the "you will own nothing and be happy" Blackrock’s, Vanguard’s and other mega-multinational corporate investors era. Who have no intention of flooding the market with resales of foreclosed inventories or homes sold by desperate people downsizing before they are foreclosed on. Because Larry Fink (a communist, who benefits from crony capitalism) & Co are the designated landlord's in nations that have private property rights, i.e., non-communist nation's. You will own nothing. But you’ll still be able to rent!! Or live in your parent’s basement.
These mega-multinational corporate investors are working with governments to make sure their investments have no downside risk, lock in the value. And local governments and special districts are cool with it, don't look to them to do anything about overpriced homes, manipulated markets that keep them priced artificially high. They don't want to make painful budget cuts and become Grinch's.
There still are some corrections by sellers who don't have staying power but not enough to make governments and investors sweat. Had home prices been subjected to a free market there would've been many corrections these past several decades. Instead any corrections are small and short-lived. Prices go up, up, up. Only. There's not the same level of upward mobility in housing. More and more homeowners are stuck. And you have what you have in Kansas. And every other state in the nation, red or blue no matter.
I know about quite a bit of that, but some is new.
I was watching in horror as the 2008 housing bubble unfolded. One of the biggest factors were mortgage backed securities. The almost total lack of regulations allowed lenders to give loans to people with stated income and nothing down. A bunch of those loans would then be turned into a mortgage backed security and 95% of the tranches would be considered as safe as US treasuries. And there was no political will to jail anybody.
One bit I didn't know until recently was that the US government sold those foreclosed properties in such large lots that only large corporations could bid on them. I wonder whose lobbying money set up that rule?
Btw, when I transferred into university in my junior year, business school, I began with the intention of completing their actuarial science degree program. Took a few RMI classes - Risk, Management and Insurance - that first semester...during which they announced they were closing the program down. Few weeks later announced it would be restarted in the Liberal Arts college the following Fall semester. I wasn't about to suspend my studies and transfer out of business school, so I changed my major to Finance. Had friends who made the transfer, some I'm still in touch with. They went on to become Chief Actuaries at major insurance companies. But that wasn't to be my path. Probably wouldn't have been happy doing that anyways. Heck, I've barely used my Finance degree for anything I ended up doing. Helped me read financial reports, understand legislative fiscal notes, some of the decision data and points CFO's use in guiding corporate policies and aspirations. That's about all it was useful for besides networking.
What was the movie, "The Big Short"?
Kinda that. Obviously sanitized, agendas and intententions took full use of artistic license.
Also interesting to note that "Nudge" co-author Richard Thaler had a cameo in it. Thaler's Nudge co-author Cass Sunstein an Obama administration leader in Behavioral Science coercion and manipulation practices established under his leadership. While he ran OIRA, "the cockpit of government" coordinating all federal agencies with state and local government counterparts, along with international government counterparts..
That whole every level of government on the same exact page across the nation at the same exact time during scamdemic. Couldn't have been done so instantly and seamlessly without Sunstein. Whose wife also happens to be Color Revolution pro Samantha Powers. Thaler connected to all of that. And in the movie about the housing and banking crisis. Funny coincidences like that, huh?
> It has been impervious to market forces, artificial factors are operating in the equation.
Quite a few of them.
> It goosed demand with relaxed loan standards, a loose money policy was embraced. Lending to anyone with a pulse, even many without one. Creditworthiness not an issue, especially in minority neighborhoods. D's jumped on board with concerns about bank "red lines" they said kept minorities from enjoying home ownership. Criteria for loans went away.
And in recent years, the FHA has been underwriting loan risk for mortgages to illegal aliens. That helps drive up home prices, and keep them there, when an illegal alien is being subsidized with tax dollars to outbid American citizens. I bought a house about a year ago. I figure this nonsense with the FHA, and the impact it had on housing prices, probably raised the price of the property I bought by $100k. Or, to put it another way, by 25%. I don't regret buying it, but obviously I'd be better off if I had gotten it for $300k instead of $400k.
The lack of anything approaching sufficient quantities of new construction aren't helping anything. Likewise, the building code regulations that mandate expensive materials, when vastly cheaper ones -- with far better environmental impact, and energy efficiency, mind you, which is something that "They" say they want -- are available, but locked out of the market. I'm talking things like aircrete, bindered rammed earth, adobe, and so forth. "Take the dirt that's on site, mix it with a small amount of specialized dirt that's been brought in to get it to the proper mix of aggregate, clay, sand, and loam, run it through a mixer with water to the right consistency with some added fibers for stability, pack it into forms and let them dry in the sun" is a hell of a lot more economic in places that don't have forests, compared to trucking in a bunch of dimensional lumber from somewhere that does. Not that I have anything against logging or truck drivers, but it's a heck of a lot more expensive to get a bunch of lumber shipped to New Mexico from Oregon or Washington than it is to ... use dirt that's already here, combined with some *other* dirt that came from 300 miles away at most.
Sure, it's labor intensive, and you probably still want some lumber for use on the roof and whatnot, but those adobe walls have *amazing* thermal regulation values.
Sorry, bit of a tangential hobby horse of mine, these days...
I learned some of this over the years, you filled in some of the blanks.
If you had money to invest, where would you put it?
Short term and long term portfolio. Short term liquidity. Long term inflation hedge. Bulk of my portfolio in hard, inflation-proof assets.
7% on food! wow. even here in high-tax CA, food is not taxed. i think if it was, there would be an instant revolt. as of 8/2025 the statewide median single family dwelling sold was $899k . . . and was $300k to $500k even in the lowest-priced inland counties. the AI boom is increasing prices in tech areas as i write. as for property taxes, i refer to them as rent to the state.
I (thank God!) do not know much about California’s taxation regime, but I’m pretty sure that grocers are heavily taxed (real estate, business income, fuel surcharges, and [I’m sure] others I haven’t imagined).
Next year 5,000 bucks for an average size lot with an average size house in a 8000 pop town well out in the country in northern Illinois from Chicago. Absolutely a nothing special town. Roads are crap and sidewalks crumbling. I walk in the road because they are marginally less crumbling than the sidewalks. This year two streets get parts of them repaved. Big whoop. 60% Hispanic but some have disappeared in the last 2 years. No pickup trucks are waving giant Mexican flags anymore as they roar through town anyway. Republicans have run the county for 150 years.
Unfortunately we are all to blame here.
Imagine if the schools stopped being talent feeding streams for pro sports. Anybody here want to run estimates of how much localities could save in property taxes if every non-urban HS didn't have vistas large and small of multiple playing fields?
Etc. etc. Would Congress be so corrupt if everyone at home didn't have pork barrel dreams to be fulfilled?
After we throw out all the grifting immigrants perhaps we can restrain the Friday Night Lights dads, too.
Sorry, but I don’t feel like I’m to blame.
In fact the whole Idea of my government being over $30,000,000,000,000 is sort of surreal.
Who is this money owed to? Who is responsible for this, other than the Democrat & Republican parties?
What do we have to show for our $30,000,000,000,000.00 expenditure?
How much of this was massive grift? . . political corruption? . . Somali fraud? . . bureaucratic waste? . . Medicaid abuse? . . Covid scams? . . NGO money-laundering? . . self-enrichment? . . Russian mafia schemes?
Why should I pick up the tab for government malfeasance?
He’ll, DOGE couldn’t even identify obvious situations of fraud without the opposition party having a demagogic meltdown. You can’t fix this, not in any sane way at least because you're dealing with over-emotional children for the most part whether they be donkeys or pachyderms.
"You can’t fix this, not in any sane way..."
Violent solutions are not always "insane..." Often, in such calamitous, criminal, fraudulent and insane Gordian knotage... it is necessary and inevitable. Accept that and prepare to do your worst.
"Anyone who clings to the historically untrue-and thoroughly immoral-doctrine that, 'violence never settles anything' I would advise to conjure the ghosts of Napoleon Bonaparte and the Duke of Wellington and let them debate it. The ghost of Hitler could referee, and the jury might well be the Dodo, the Great Auk and the Passenger Pigeon. Violence, naked force, has settled more issues in history than has any other factor, and the contrary opinion is wishful thinking at its worst. Breeds that forget this basic truth have always paid for it with their lives and freedom."
Robert A. Heinlein
I’d say at minimum at least $15,000,000,000,000.00 of it was waste, fraud, and abuse.
We've all voted for these guys all our adult lives.
Maybe you did.
Either you voted, or declined to vote, all or some of your adult life.
I'm not too sure voting matters out here in the People's Socialist Rebulic of California, but I always vote no on every initiative and try to find the craziest anti-tax person in every race. It never works, but I like to pretend I am making a difference.
What gets me a little surly are the old Reaganites rhapsodizing over the guy whose amnesty was the door to hell turning CA blue.
The blame game is counter productive. Entrepreneurs were unreasonably deprived of their earnings during the scamdemic, while the big box companies, such as Walmart and Costco thrived, in spite of the pernicious 'lockdowns'
I suspect the amount is most of that 30T. And unfortunately we all are already paying for it and continue to do so because every dollar borrowed by gov is a dollar of currency dilution.
That's your solution...get rid of sports in schools....? C'mon man. How about billions in left wing driven fraud?
Read what I wrote slowly, carefully and with an attempt to understand it.
In the old days, small school districts, particularly rural ones, had baseball fields not on school grounds, but had people set up teams - kids through higher grades where even after school was done there were adult leagues that would last for years. It was often land donated by a farmer, or a community that would buy and set up the fields. I also saw tennis and basketball courts in parks that the schools would also use. I saw the same thing, only Soccer fields, on Bonaire, Aruba and Curaçao Netherlands Antillies. All used as weekend family pass times with picnics. No school taxes needed.
Exactly.
But for many decades now the sense of communities providing for themselves what the communities deem to be valuable has been extincted.
Sports isn’t why school systems are black holes for money. They were solvent *and* had sports in the 1950s and prior. It’s the DEI make-work jobs, the administrators being paid lavishly for overseeing failure, and the money laundering to the DNC.
It would be helpful to read my comment with an understanding of intent.
Stats with cats! Thank you for this article EGM.
It’s way higher than 26%. Becuz many things are taxes, disguised as something else.
The airport fee on a ticket. The xxx fee on the electric bill. The excise tax on fuel. The $1 the hair salon adds on for license fee. The auto registration. There is a list floating around with 50 similar items.
It’s 40%. Not 26%. And it’s higher than that in high tax states.
Add to this taxathon that would have made King Rehoboam reconsider his foolishness is that there is a tsunami of fraud which outright steals tax revenues for friends of politicians and bureaucrats who then provide legal cover for fraudsters to keep stealing. People already have low expectations of government functioning and, along with blatant judicial behaviors, this will mean we become an horizontal and veritable zero trust society.
Now factor in inflation (the hidden tax). Connected to spending money that they don't have, but altering the value of what people already have ... a form of asset/wealth tax on top of income taxes.
I get your point but I beg to differ. Inflation isn’t a hidden tax, inflation is legalized government theft.
Semantics. There's really no difference except they don't have to vote on inflation like they do an IRS tax table.
It's a way government takes from your liquid savings by diluting the currency.
Politicians will vote to spend money that doesn't exist to keep their 'phony balony' jobs. Great write-up as usual!
Right! "I didn't get a harumph from that guy." - Blazing Saddles
Prudent states will resize their budgets to be inelastic to the 1%.
I wonder what percent are prudent.
Will be interesting to know
Or will they engage in a race to the bottom? Think of the advertising slogans.
"Come back please. We'll match Florida" - New York State
If only!
“el quinto real" -- I'm going to write that on the memo line of my next quarterly check to the IRS.
RE: "Please don't leave, we need your taxes" cartoon. Pretty sure the fleeing billionaires are not actually wheeling their own luggage onto their G-IV's.
On a serious note, one looming fiscal cliff that many deep blue states will soon be facing is their pubic sector employee's massive golden retirement packages. In CA, under the last days of Governor Gray Davis and the NASDAQ at 27K, the powerful unions negotiated an obscene boosting of their retirement benefits including lifetime healthcare and guaranteed defined pensions. Their rationale being that since the market was producing record profits, and CALPERS pensions were invested in the stock market, they were therefore entitled to a guaranteed piece of it. And, of course, the market was never expected to crash.
It's has, several times since. And there's no way to fund those legally obligated payouts.
Oops.
Add looming unfunded public sector pension liabilities to the mix for good measure.
My small state pension for working at a city library is the only one in my state fully or almost fully funded. The rest, like my husbands teachers pension, is scary underfunded.
Blue states have huge liabilities for their generous public pensions. They’re headed for a bust, but pensions are guaranteed by the federal government….
I wonder if the pensions are invested in China if our government sees that as an way out for them.
I have no idea if there’s a way out. My solution would be to pay for public pension defaults with a new tax on all public employees, but I have no idea if that would be legal.
Actually it looks like most of our money ends up in government pockets.
Way over simplified but none the less for example: I'm paid a dollar, government gets 20% income tax leaving me 80 cents. I give a guy 80 cents for groceries he pays 20% tax leaving him 64 cents. He pays a mechanic 64 cents who, after taxes ends up with 51 cents. By time what left of the buck has changed hands five times, only 33 cents is left in circulation.
Anecdotal but again none the less: Some years back I bought a pack of Camels in Russia's Wild Wild East for what was in American money was 14 cents. At the same time back here in Alaska I was paying around $2.50 (Not germane but over $15 a pack now, sin tax and inflation make governments go 'round.) a pack.
rather doubt RJ Reynolds was selling their product for a loss in Russia so if they could ship halfway around the world from Winston Salem and make a profit at fourteen cents a pack, either they where getting rich well beyond anybody's wildest dreams of avarice here in the U.S. or the government's share of everything is far greater than we think.
You are correct that the same dollar gets taxed at several stages.
W.R.T. the Camels: they may have been generics with a fake "Camel" wrapper.
Add in the fractional reserve monetary system where banks lend and re-lend a large percentage, and then re-lend a large percentage of that, and so on, and so on, the same dollar dozens of times fractionally, banks taking their cut of each re-loaned dollar, the bankers and government have their win-win, while consumers and earners lose-lose.
And for those who want to challenge this by saying that the bank is re-lending those dollars to those creating jobs, innovating, growing the overall wealth of humanity, there's definitely truth in that. My degree is in Finance, and between monetary theory and experience I know the truth contained in counter arguments. But that truth ignores the fact that today's banking system is no longer accessible to innovators, risk-takers, unless they have proven ability to pay it back. No longer will banks take risks, of any kind. Not even your local banker (if you can even find one, endangered species that they are) will take a chance to lend to the promising, but unproven borrower with a great idea trying to innovate, create jobs. You must already have money to borrow it. Horatio Algiers stories are myths, perhaps they always were, but even moreso today.
Unless, maybe, you're an illegal or preferred minority, to whom lending money is really a subsidy they don't expect to be repaid, and they're okay to write those dollars off.
The fractional reserve system theory of the exponential bank dollar I was taught isn't what's being practiced today. It's just the wealthy getting wealthier. As big government grows bigger through cascading taxation of the same dollar.
You’re being too generous. Fractional reserve banking is not re-lending a large fraction, it is re-lending a large multiple!