Can the Underground Economy Take Down the NWO, its Banksters & Thieving Governments?

Wolf Richter who runs the website Testosteronepit.com had a fascinating article about how the Italians are wealthier than the Germans.

A “Politically Explosive” Secret: Italians Are Over Twice As Wealthy As Germans

Germany’s federal government only had a minuscule deficit in 2012. But high taxes and the citizens’ greater willingness to pay them—though cheating is a national sport—have over the years extracted a lot of wealth from the people and transferred it to the government. In Italy, people have been more adept at hanging on to their wealth.... 

It could stir up a firestorm in Germany. It’s not just jealousy. Strung-out German taxpayers would have to be bamboozled into bailing out the mountain of Italian government debt that the Italians, whose median wealth is twice that of Germans, refused to pay for. It won’t sit well. Not at all.

While it's true that the Germans have born the financial brunt when it comes to bailing their southern European EU neighbors, there's a much bigger question here.  Why are the Italians financially better off than the Germans?  Germany is indeed the powerhouse economy of Europe as well as one of its more financially solvent nations.  Conversely, Italy and the Italian economy are boiling to death in its cauldron of unsustainable debt.

What is absolutely certain is that high tax nations tend to spawn underground economies, especially in bad economic times when the folks perceive that government no longer offers them any value.  The proliferation of underground economies translates to cash and/or barter economies that are beyond the tax collectors reach.  Folks who make the decision to just opt out of the system typically refuse to pay taxes to thieving governments and they also tend to opt out of the traceable electronic banking system.

While the growth of underground economic activity does vary from nation to nation and region to region, they are getting noticed.  ChiefExecutive.net wrote about the rise of the underground economy in high tax California and also discussed other underground economies.

What California’s Growing Underground Economy Says About Sacramento

The underground or “black economy” generally refers to transactions that go unreported to evade taxation. Most people associate this with the illegal drug or sex industries but when government policies seek to reach further into private activities it often has the effect of driving activities that are normally above ground such as repair, services, and construction into cash or barter transactions.

Countries such as the U.S., Switzerland and Japan historically have had relatively small, nonreporting and/or illegal sectors, a typical estimate falling between 8 percent and 13 percent of GDP. Most European countries with higher taxes and regulation report underground economies of at least 20 percent of GDP with countries such as Italy and Greece having at least 30 percent of all economic activity going unreported.

Economic studies have shown that when people believe the taxes they are required to pay are reasonable and the political leaders tend to spend their tax dollars wisely, tax compliance rises, and when the reverse is true more economic activity is driven underground. California is showing signs that it is beginning to share one more characteristic with countries such as Greece and Italy: Its black economy is on the rise.

Last December, the LA Times reported that Sacramento officials are increasingly agitated by employers who pay their workers cash under the table to avoid payroll taxes, workers’ compensation insurance and other government mandates. This is in addition to smuggled cigarettes and counterfeit apparel. Officials believe that these underground activities are costing California about $7 billion annually in lost tax revenue.

It's been reported that that up to 50% of all Greek economic output is underground and the Italian underground economy is 2nd only to Greece, all of which means that the Italian underground economy is substantial and probably growing.

If the Italians are wealthier than the Germans, it's because they are keep their money earned in the underground economy.  The underground economy is a very good thing because it represents a phenomena that is literally terrorizing big spending governments by depriving them of revenues and the power to plunder.  USA Today has reported on the underground economy.

Tax evaders in Greece, Spain and Italy better beware

In Greece, tax officials fly helicopters over residential areas to spot swimming pools of the alleged poor. In Italy, inspectors raid elite ski resorts to catch the down-and-out in their Ferraris. In Spain, taxmen snoop about homes rented to sun-seeking vacationers — then visit the owners who neglected to report the income.

Evading taxes is almost a national pastime in European nations such as Greece, Spain and Italy, and for years their governments largely looked the other way.....

Greece, Spain, Italy, Portugal and other countries are raising taxes and clamping down on those who have found creative ways not to pay them. Many people admit they cheat, but the wealthy say they are being unfairly singled out to cover for government overspending — and people in the middle class, who have seen their household incomes crumble, are bitter about losing even more to taxes.

Governments are so desperate for money because they've over-spent, over-taxed and over-borrowed that they are attempting to frame the crisis in the context of class warfare since they no longer have the cash, tax revenues or debt proceeds to fund entitlements that were never affordable anyway.  That's precisely what the French socialists led by Francois Hollande did and they promptly raised taxes on the rich to 75%.  Well, the rich as well as businesses started fleeing France in droves, a situation that only made the dire economic situation even worse.

The delusion that taxing the rich will solve all problems is just that - a delusion.  The famous French actor Gérard Depardieu  who moved to tax friendlier Belgium was already paying 85% of everything he earned to the French government and that was before the Hollande 75% tax increase, here.

“I was born in 1948,” he wrote, “I started working aged 14, as a printer, as a warehouseman, then as an actor, and I’ve always paid my taxes.” Over 45 years, Depardieu said, he had paid 145 million euros in tax, and to this day employs 80 people. Last year he paid taxes amounting to 85 per cent of his income. “I am neither worthy of pity nor admirable, but I shall not be called 'pathetic’,” he concluded, saying that he was sending back his French passport.

The 'tax the rich' strategy is a fraudulent con and many of the tax absconders are just ordinary working stiffs attempting to survive and feed their families in an economy that has gone very bad for them.  Reuters detailed the plight of one working man, here.

Working informally, he pockets about 2,000 euros a month. His wife, a domestic helper, also works unofficially, earning 400 euros a month when she isn't busy taking care of their four- and six-year old children.

Sitting across from him at the cafe, his friend Marco flashes a conspiratorial smile when asked which side of the law he falls on.

He did want to be on the right side, he says with a sigh, but realised the economics were against him.

When taxation becomes so punitive that working class folks don't have enough left over to eat and provide necessities for their families after paying their taxes, there is zero incentive to continue to participate in the system of systematic plunder.  The rich who who are plundered at the rate that French actor Depardieu was plundered by the French government (85%) have the resources to pack up and move to tax friendlier abodes.

Governments do indeed understand capital flight and the underground economy, and they are prepared to declare war on ordinary folks who are just trying to make it in a world gone mad because survival in the NWO is verboten without government permission.  What is the government's weapon?  CASH - governments are restricting the use of cash with the goal of creating a 100% cashless, traceable and electronic fiat currency system.

The International War on Cash

The relentless war against cash payments waged by governments worldwide has perhaps gone furthest in Scandinavia. The ostensible reason given by our rulers for suppressing cash is to keep society safe from terrorists, tax evaders, money launderers, drug cartels and sundry other villains, real or imagined. But the actual aim of the recent flood of laws rendering cash transactions less convenient or limiting or even prohibiting them is to force the public at large to make payments through the financial system in order to prop up the unstable fractional-reserve banks and, more importantly, to expand the ability of governments to spy on and keep track of their citizens’ most private financial dealings.

Many nations have already passed laws that severely restrict cash transactions and the ultimate goal is clear - abolish cash as legal tender.  However, most nations still have legal tender laws so at best all governments can do presently is to restrict the use of cash in certainly transactions.

There can be no question that cash is king in the underground economy and, quite frankly, it's the only method of survival for the multitudes caught up in a nasty economy with nowhere to go.

It's probably also true that the underground economy is the only free market economy left on the planet.  As underground free market economies based on voluntarism proliferate they will indeed start to replace the statist planned economy in a most significant way.   Governments and bureaucrats determined to maintain their power and control will resort to anything, including murder and military dictatorship, to keep folks from engaging in voluntary commerce.

The Government Will Never End the Fed but the Fed is Destined to Die Anyway

Although the Republican controlled House of Representatives recently passed Audit the Fed, HR 459, Audit the Fed will never pass nor will the Fed ever be abolished legislatively. Republicans really do support the Federal Reserve because it funds their wars and empire. Furthermore, all the Republican YEA's to Audit the Fed were nothing more than an act of political expediency because Republicans in Congress absolutely do understand that Audit the Fed stands no chance of ever getting out of the Senate where it only has 30 co-sponsors and could never survive a presidential veto.

The Federal Reserve is the mother's milk of empire, tyranny and statism.  Big government and central banks exist for no purpose except to massive concentrate wealth and power.  Moreover, it's absolutely true that the phrase "99% vs the 1%" is indeed a valid premise even if it was hatched by socialists on the left.  What the progressive left fails to grasp is that it was liberal progressive Democrats who delivered unto us the Federal Reserve that was empowered to transfer wealth from the 99% to the 1%.

In many way, the progressive left considers itself intellectually superior to liberty because, control freaks that they are, they believe that there isn't anything they can't control or shouldn't control, given their totalitarian mindsets. . Hence, they have an enormous propensity to align themselves with big corporatist and big bankster money, the very same folks they claim to abhor as the blood suckers of humanity.  It's a situation of where progressive police state ideology butts heads with the real power - the power of big statist money.  In the end, it's always about power and never liberty or even the the prosperity of the people.   The first victims of most Marxists revolutions are typically the bourgeois, the middle class, and the backbone of any flourishing and prosperous society.  Marxist revolutions are never about revolts against capitalism but always about joining with the powerful to share totalitarian power.

Communist party officials always had the finest homes and the finest foods. They always exempted themselves from breadlines as the hoards of lowly humanity, the proletariat they claim to love, waited in line for hours to buy a loaf of moldy and stale bread.  The commie officials always had the best of everything from caviar to imported French wines.  From Stalinists and Marxists to the limousine liberals of the west, these folks thoroughly enjoy their rockstar status, power and money.

But alas, the progressives are in deep trouble as their beloved banksters and 1 percenters are now teetering on the brink of collapse as the human carnage piles up.  The debt fueled power of banksters and progressives is now imploding.  From Greece to Spain to Portugal to Italy, we are witnessing the final days of the marriage of banksters and progressives.  In fact, they've plunged into a black hole from which there is no escape.

With minor exceptions, nearly all western nations are indebted on a scale that is unsustainable.  Individual citizens are also massively indebted and will default on their debts.  The fiat banksters will suffer loan losses that will wipe out their capital.  It started in 2008 and while the Federal Reserve intervened and pumped some $16 trillion into the financial system, here, it was the equivalent of putting a band aid on a massive and oozing cancerous tumor for the sole purpose of hiding the tumor but not its deadly effects.

How will this mess shakeout?  It will shakeout the same way it's shaking our in Greece and Spain, namely, folks will devise new paradigms of survival that will include barter and underground economies. More importantly, they will just opt out of the system to the extent that they can to escape the government tax collectors.  Folks will seek financial safety in hard currency and they will withdraw their money from the banks.

As The Euro Tumbles, Spaniards Look To Gold

The euro exodus from Greece and Spain

Wary depositors are hauling billions of euros our of Greek and Spanish banks, reflecting the nervous mood of the people.

Wary depositors have been hauling billions of Euros out of Greek and Spanish banks over the past few weeks. Since 2009, Greek depositors have withdrawn $4 million a month from that nation’s banks, while Spanish bank customers pulled 31 billion euros from Spanish banks in April alone.

More than any election result, bank runs reflect the mood of the people.

Folks fear 2 things. They fear a currency collapse (devaluation and  hyper-inflation), something that is always triggered by the massive printing of currency. But they also fear the government seizure of what money they do have.

One of the benefits of modern technology and the computer age, at least from the perspective of the government, is that governments now have the ability to track your entire life - from auto-deposit payroll checks to what goes in your savings account and to what you buy with debit/cards. Government know where your money is all times because they have an electronic trail and road map. But the government's power to track, tax and plunder becomes a whole lot more limited in an underground economy that may utilize various methods to transact business, including cash, plain old bartering, local currency or even a cyber currency like Bitcoin.

Moreover, hard currency like gold and silver will also come into play as a newly emerging default currency. The modern system of government taxation and banking requires trust in the system but when trust and confidence evaporates on a significant scale, folks will always flee to safe havens that protect wealth from devaluation and confiscation. At this point, government revenue collection machines and fiat banks are in deep trouble. Government revenues shrink and folks withdraw their money from the banks, something that denies the government the ability to track their life and every financial transaction.

It's wise to use cash to purchase what you need and bills can be paid with money orders. Even folks with auto-deposit paychecks are withdrawing their money from their bank accounts. It's very important to conduct one's financial life, to the extent that one can, beyond the snooping electronic eyes of the government and its agent-in-chief, the banks. Even more importantly, it's imperative to keep a low profile and live below the governments radar - never attract attention or discuss your business with anybody.

In many ways, the government and its fiat banks have sown the seeds of their own destruction by spending way too much money, taxing folks to the point of outright expropriation and doing it all with fiat money.  In the process, government and banksters have literally destroyed the one thing that sustained them - the wealth producing capabilities of a thriving economy.

Most folks never wanted to opt out of the system. They were forced out by government policies that destroyed their jobs, livelihoods and their prosperity. In fact, most folks were quite content and very willing to tolerate the corrupt system so long as as the system was working for them. But whether one is in Greece (where an estimated 30-50% of all economic activity is now underground), Spain or the US, the system is no longer working for the growing millions who got shafted and are now suffering.

To be sure, these folks will seek vengeance on the government that caused them so much misery and their willingness to ever trust the government and its banksters again will be about zilch. A paradigm shift from 'government is great and government is god' to 'screw the corrupt government' will unfold slowly but it will ultimately be massive. Furthermore, the beast known as the government monster will be starved in the process as revenues dry up.

Starving the beast is a two-step dance that includes opting out of the banking system and figuring out how to make and trade your stuff and skills through voluntary associations. Granted, it's a challenge but many folks are embracing the challenge as they dive headfirst into survivalist mode. Going forward, there will be a proliferation of small rural voluntary communities with good soil and a reliable water source. Skills will become critical (carpenter, plumber, mechanic and other trades) but the services of doctors and geeks will also be in demand. Hot commodities will be basic food, fuel and medicine.

Many Americans have already embarked on a journey that they never anticipated but was forced upon them without their consent.

Benefits of the 1099 Economy, the Underground Economy and the Future of Freedom

According to Forbes, the 1099 economy is booming.

One of the biggest obstacles facing government is its ability to collect taxes. So long as folks are employed as employees, the government easily got its share of plunder right off the top via the federal withholding tax and the Social Security tax, along with other taxes including state taxes. Enforcement of tax collections was never really much a problem for government so long as most folks were employees. The government didn't need an army of tax collectors; employers functioned as the primary tax collectors for the government.

But with the economy tanking and necessity being the mother of invention, folks are now forced to discover new paradigms of survival. Many companies are resorting to contract labor to avoid the legacy costs of health insurance and retirement plans. They hire independent contractors and issue a 1099 instead of a W-2. Folks who earn 1099 income are required to file tax returns, they are required to pay quarterly taxes and they are considered self-employed. They are effectively small business owners who also avail themselves of legal tax deductions.

1099 income is a whole lot harder for governments to trace and enforcement becomes a huge problem for the government. Precisely because 1099 tax revenues don't consistently and reliably flow to the government in a timely manner, the government is at a disadvantage because it no longer has employers functioning as efficient and immediate tax collectors.

The economic calamity has also spawned a massive distrust of the government. Folks are simply fed with with paying taxes. When government is perceived a corrupt to the core and no longer offers value to taxpayers, taxpayers will seek ways to just opt out of the system. And thus, the underground economy is born.

There can be no question that America is in uncharted territory but whatever happens will also translate into an opportunity to shed the shackles of slavery, fiat money and corrupt government. The one thing that America needs most - peace, liberty and prosperity - will never flow from the government or government power, which is precisely why the beast must be starved.

Benefits of the 1099 Economy, the Underground Economy and the Future of Freedom

According to Forbes, the 1099 economy is booming.

The Rise of The 1099 Economy: More Americans Are Becoming Their Own Bosses

One of the biggest obstacles facing government is its ability to collect taxes.  So long as folks are employed as employees, the government easily got its share of plunder right off the top via the federal withholding tax and the Social Security tax, along with other taxes including state taxes.  Enforcement of tax collections was never really much a problem for government so long as most folks were employees.  The government didn't need an army of tax collectors; employers functioned as the primary tax collectors for the government.

But with the economy tanking and necessity being the mother of invention, folks are now forced to discover new paradigms of survival.  Many companies are resorting to contract labor to avoid the legacy costs of health insurance and retirement plans.  They hire independent contractors and issue a 1099 instead of a W-2.  Folks who earn 1099 income are required to file tax returns, they are required to pay quarterly taxes and they are considered self-employed.  They are effectively small business owners who also avail themselves of legal tax deductions.

1099 income is a whole lot harder for governments to trace and enforcement becomes a huge problem for the government.  Precisely because 1099 tax revenues don't consistently and reliably flow to the government in a timely manner, the government is at a disadvantage because it no longer has employers functioning as efficient and immediate tax collectors.

The economic calamity has also spawned a massive distrust of the government.  Folks are simply fed with with paying taxes.  When government is perceived a corrupt to the core and no longer offers value to taxpayers, taxpayers will seek ways to just opt out of the system.  And thus, the underground economy is born.

The underground economy is even more difficult than the 1099 economy for the government to track.  In fact, underground economies are largely based on untraceable cash transactions and outright bartering among private individuals - anything to avoid the tax collectors reach.

In Greece, the government is perceived as so worthless and hopelessly corrupt that it's estimated that as much as 50% of Greek economic output is underground and beyond the tax collectors thieving hands.  The Greeks substantially opted out of paying taxes long ago and they have a very long history of just not paying taxes to support an insanely thieving government.  The Italians are also notorious for tax avoidance.

As the global economy continues to implode, governments will continue to panic as tax revenues plummet and folks simply disappear and are no longer under the government's surveillance and monetary radar.  Realistically, many more folks will strive to be minimally attached to the system.  Folks are figuring out that W-2 income and debit/credit card transactions are all traceable electronic transactions.  Even those who collect W-2 paychecks that are automatically deposited into bank accounts as required by their employers are resorting to immediately cleaning out the bank accounts and withdrawing their cash.  Such folks then proceed to pay their bills and living expenses with cash and/or money orders.

While electronic banking and the age of plastic has been very convenient, it's also how the government tracks you and your every purchase and financial transaction.  To deprive the government of its ability to snoop will really drive the government nuts and render it even more powerless.

Of course, powerless government is most assuredly the End Game of all liberty lovers.  You kill government by depriving it of tax revenues.  A thriving and growing underground economy is definitely something that every government goon fears most.  Making it happen is asserting our liberty and natural rights.