A0ns trong Econom ics

the Poor
for the !
Benef it of the Rich

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Copyright Ma~tin A. A~mstrong All Rights Re~erved September 9th 2009

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 A C KN O IHLE PGE MEN TS

I would like .to thank the many peopl e ~ho have . g

been writi ng from a.roun d the world , Xt is encou ragin
to know tha t there are so many peopl e who are inter ested
a l .thank s for
i n uncov ering the . truth . I have al so speci s aroun d
so many provi ding valua ble insig ht into trend
, Sovie t Repub lics, South Afric a ,
the world from China ve
and India . I belie ve we ~an su~vi
Braz il, Aus tral ian, to; list;e n.
the folly o f 9ov.ernmen ts' even if they refus , .and t hat e
The key is under standing the natur e .. of e vents
al l ows us to corre ctly make t he d~cisionto be on t~e
oppos ite side.
I would like to also thank all my old frien d and
forme r cli~nts for t h eir suppo rt. and to know ve t hat t hey
have conti nued to ga ther i nformati on that ser s .us all
in times of crisi s.
we are stand ing on the preci pice o<f a new era iis n
globa l - s ocial -eco l)omic s. Bow we enter thi s new age
of c ritic al i mpor. tance . Government i s i ncapa ble t o doing
a nythi ng for a ny refor m o f its own a buse. of power is not
up for negot iati on. W e mus t weath er the stor m, and t o do
so we need to under s tarid i ts natur e. Jus t as t he 1930s
Great riepression set in mo tio~ profo und chang es that were
even manif est in gcopq l:i'.tic al confr ontat ioris, we have now
r eache d such ' a cross roads . A debt crisi s ha s its ten tacles
deepl y embed ded in t o -.eve r y secto r right into gover mnen t.
tion from a mete stock m a r ket crash tha t
This is the di stinc usly still
never alter s the e conomy l ong- t erm. We are serio
ove x:- l evera ged. and some banks are.' st. i,U tryin g Tha to be hedge
f unds a nd have to specu late to ma ke a profi t. t is a key
varni ng sign that t he worso. is yet t o come

. :.
Co1111Uents, Suggestio ns & Quest :ions

Plea se mail to:

Ma r tin A. Arms trong ' .
FCI Fort Dix Camp , #1 25 18-05 0
PO Box 2000 \
Fort Dix, NJ. 0864 0

Ai:JES b:ODg'E\ 1 0 Ill j CS@G1a.il. CQ!

t o individ uals Dt QOVe!"IVllerrtS atound th~

Jhis ~ ~y be rotwaroed aJ& yr:IJ lik4 wit.'1out diaTQ!!
t CO$t becaus e of tha ctitica l f ads
1lf0t'ld. It is P't'Ollidsd as a Pub.Uc ~c:e .:r t this tire itd.thov
s of th~ ays~eiris are in faet copyr ighted .
that, ,,,e no.tr -:"111ced ~conomically. Tt-.e eont ents and design
~ In History will be rel.ease d
At a rutu~2 r!aU!, a N?ld edition of ~he 'l9SO U,a G.uat.s st 8ull
- The Geoief; ,y of Tim!<- It is vital tr.at
and a ne>1 book' will S001 b!l J>..i>ll~ on t,'ls ...xlel il:salf
that any natien can d~ctate to ths &.':ltld
'212 do not farget t."l il:i is a 11~rld e:of"lr.imy
al"'ld the arroga nce
tha'n if or.!!! nation were l:o pour a~
i~ just insani ty. E'1eTy naticn 0f'f~ets all ot.her1 f'IO differ
eit
solutia r.s ar~ na-v!.?T i~olated even~s.
it; toxic westa i,;lt.'l the .;x:ean: Everyt:hing 4: int.s=l. .irkad and
Soaking the Poor
What
for the. Marx
Benefit of Got
the RiCb~_- ,
Right!

by: Martin A, A:r:mstmnq

Fomer <llai.J:man of -P:rin::etcn Eo:n:111i.cs Interoaticoal, Ltd.
am the Foarrlation FOr The smly Of Cycles

ANY people assume. t:bat because I am against Marxism, that thi s means
I advocate soaking the po::a: for the benefit of the rich. To really
understand the truth of trends, if you are unwilling to examine the
propaganda without .persooal bi as , you will never see the ligh t of day.
This argument between the rich vs the 'poor, has been so distorted
and used to further other goals hidden beneath the surface, we get a
lot of heated arguments with m substance. Unfortunately, if you will
not examine the facts, then you are all owing those who wil_l manipulate the real ciore
of. the people, get away with everythiilg.
Let us examine what has really ten '!he majority of taxes collected are
place under Marxism. Putting Russia and always fran the working cl ass because they
China aside, let us look at the Western ronstitute the majority . About 70% of all
nations who adopted Mand.sm 1JOOer the l abel federal taxes are paid by the average man
of "Socialism" or "Progressive Movements" and this i s even higher in the states where
post 1883 . they rely upon property taxes. If we took
the richest people in society and t urn them
By raising taxes oo the "rich" what we. upside dc1.m and shake every d ime out of them,
really get is corruption. This creates the . what will happen is we will not even just
lobbies that f eed the political.. process a.pd for one year balance the budget. 'nle list
keeps derooc:racy in check for it ci:eate.8 a of the richest people. are mostly foreign
perpetual .ruling political oligarchy . TJ:l6 and m longer American, and they are only
"rich" have the optioo to nove their wealth billionaires whereas we are into the trillion
offshore. The a verage person cannot rove dollar deficits now.
his l abor o ffshore Without IiJysically hopp-
ic;J oo a plane or boat . 1he "rich" can (1 ) there is oot enough "rich" to pay
hoai:t1 their capital and refuse to l end or for what the politicians promise..
to engage in a:mnerce of any kind, whil e
the average man cannot hoard his labor . . So (2) it furthers politi cal . corruption
there i s a substantial difference between and defeats the very essence of
what a democracy was suppose to do.
capital ao3 laJ::or.

1
 Let us l ook at the inheritance taxes,
'.Die idea was that we would take tbe excess
cash left behind to one' s children. Today,
the rate of taxes are about 50%. The net
effect is the precise opposite of what the
politicians pretend they are doing .
The number of independent farmers has
dropped by nearly 85% since 1940. ltllat has
really taken place i s that the iooc:rne tax
was first sold as a way to make those damn
" rich" pay. So upon i ts introductio n, anly
the r ich plld anything. In 1935 .FDR passed
the Social Security Act and the "Soak the
Rich" wealth Tax Act . In 1942 the "Victory
Tax" was introduced to take profits of those
who benefited frcm war. Roosevelt enacted a
wage aod pdce oontrol to s tem inflation in
By World war II, the payroll tax was ncM put
in plaoe and the average working man was ncM
taxes on income and forced contributio ns to
Social Security.
Nevertheles s, why has taxation had the
opposite effect? Because of inheritance tax
extended dcfJ.111 to the average family, farms
that were in the hands of a family for mariy
geoarations became taxes na,, and we.re of
course appraised with rising values . The
oe.xt generation had no such cash to pay the
tax, aod thus began to sell farml and to pay
the goverme.nt demands . lifter several decades
of this trend, the average farmer was forced
to sell off land, and that land was 001.lght
by the new corporate farming operations. The
claim that ioheritanoes taxes ~IOuld take the
excess funds from spoil rich kids, had the
opposite effect of driving the average ll\3Il
fron his property.
The very same trmd i s taking pl ace !ICM
dus to rising state property tax.es . Retired
people whose hQme is paid-off, find the tax
rates continue to rise . Their savings over
their entire life , have C10t kept up with the
thirst for taxes . Re t.ired people are being
forced from their homes and to mi<}l:"ate to
pl.aces like Florida because they can no long-
er afford to live in the ho:ne that they had
raised their f amily.
-- wtrat-s tak:i:ng place is a clevershe ll --- Wiien-:r-:was-Ir;iiti5t:raria-aw::iiig tfie--kte--
game. I debated Steve E'ol:bes who s upported
the Flat 'l'ax dur.i.og his bid for President
and farmer G::lvernar: Jim Florio of New J ersey
who was driven out of offioe over tax hikes.
'l'he debate took place at Prillceton University
--- --- --..... - ---- - - --- -~-r--- -----
I sat between the Republican and the Demxrat
and argued for the retail sales tax. I pointed
out that we "19re borrowing IrC11ey from the
average working man and not having the simple
decency to pay him/her interest oo their own
llCIOey. The payroll tax was forcing workers
to pay m:iney, and then they all celebrated
their refunds at the end of the year.
I saneooe said please let ma hold your
money and at the end of each year I will
pranise to hand it back to you. Is this a
gocx'I deal with no interest? That is what the
government does with a shell game and When
they are done with the average nan, he thanks
them far giving back II.bat was his all the time .
American lalxlr is the JroSt suppressed.
The Inocme Tax is oo worldwide .income. I also
testified before the House Ways & Means Corrun-
i ttee in 1997. I was asked why most of the
big contracts in China were going to construc -
tion conpanies of other nations . I explained
that only the US and J apan taxes worldwide
incane. ~tly, an American oompany
bidding on the same project in China, is in
fact 33% nore expensive. ~lhere Germans ci:>uld
bid en the project, they could also export
their own citizens lal:x:lr who we.re tax free.
Ameicicans cannot take their labor offshore
tax free. They are still taxed on what they
make overseas. This is my the OS is os::M
after SWitzerland .
Taxes on worldwide incorne further !lakes
the average man uncompetiti ve and prevents
him frcm e:xportinq his labor whereas capital
can re-inoorp:x ate in another nation. 'lhis
whole idea of taxi.n g the rich to benefit the
i;oor, just doesn' t seem to really work at all.
Iat:emal RevenJe Olllect:icXls 2002
Corporation s . 211,437,773 ,000
Individuals .. 1 ,037,733,90 8,000
E'Jnplyment Tax. . 688,077,238 ,000
Estate/Gift s 27, 241,5.15,000
Excise Tax .. . 52,136,835,0 00
Total ...$2, 016,627,269 ,000
Source: Internal Revenue Service Data Book 200.(
1980s, there was a political election going
oo and the debate over a "Luxury Tax" where
the s l Q9an was they were going to tax those
"rich" bastards who enjoyed their "French
Wines, Fur Coats, Farraris." The truth was I
 had only seen 2 such cars since they were
alread y were taxed 100% and were twice the
price in the US or Europe. Austral ian wins
was better than nnst French or of equal
qualit y and any busine ss diner r. ever went
to always s erved Austral ian, never French .
And the cli.rrate was warm I never saw a fur
coat outsid e of Mel.bouroo. But what was
hidden behind all those cheers was the fact
that every electro nic produc t was now to be
also conside red to be a l uxury.
What is sold as "soakin g the rich" has
always ocme back to expl oit the average man
and reduce his living standar d. What he has
to pay for picking up his trash and to send
his childre n to school , is far more than if
he had the right to buy those servi ces from
a compet itive system .
'.!'hose who want to think that being
agains t Marxism i s scmehc:M f or the rich to
exploi t the p:x;>r, had bet ter read ttie fine
print of what i s being sol d by the politic -
i ans. Have you noticed that Paul Volker who
CJCM advi ses Obama, was also there under
Reagan? Has anyone noticed that there i s no
invest igation of Goldman Sachs, J.P. Mo;rgan ,
of AIG'? Doesn' t anyone fiod it strange that
we have ex-Goldman Sachs head Mr. Rubin who
ran the Treasu ry llOder Clitlton , and then we.
had Paulso n urrler Bush? Is there any real
distinc tion between Republ icans and the
Democra ts behind the curtain? You will find
the same player s, playing both sides, aod
it is their mooey that is pouring into the
politic al machin e - not the averag e man.
l am f innly agains t Marxis n, mt due
to trying to help the r i ch, but becaus e it
i s an excuse f or corrup tion. I certain ly
believ e in "free markets " but that does not
include in that definit ion the manipu lation
of the market s to the gain of partic ular
banks. That is oot a ''free market" and the
collapse of 1ong-T&m Capita l Marke ts in ' 98
and the m:>rtgage backed pools in '07, were
schemes built upon not free markets , rut on
the presum ption that the polit icians will
llEke sure they suffer no loss. Riggin g the
markets and bribing officia ls is not the
- - ''Free -Market " i~ea~- It naybe -the dark-s ide--
of Ad<ira Smith' s Invisibl e Hand, yet this in
no way diminis hes what he discove red. If
we lis tened to him, he also warned that it
was goverilfl!'>..nt who was the bigges t spend-
thrift in society .
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- - --
If we truly had the type of governm ent
that the Founde r of the United States trj,ed
to create out of their wisdom of leaking at
history objecti vely, then there would be no
political class . The average man would be i n
the Senate or House and for one brief texm.
Perhaps at best the Senate might be a rrore
profess iorial class with 6 year tei:ms. But the
House was to be 2 year terms and Congre ss had
only met for a few weeks a year at first.
If we had rxi iocxrne tax as we once did,
then the "rich" t.OUld not be moved in their
own s elf-in terest to get contro l of the very
government. If the represe ntatives were real
people with only one term and superv ised the
bureau crat;s, then the.re ~d be far less
coo:upt ion .in government .
The downside of the ''welfar e stat e " has
been to undermine the llmeric an family . Where
for centur ies, the childre n took care of the
parents , to:lay, they walk away and assume it
is the state's job. The borrl.s that once had
cement ed the f amily structu re, -were broken .
In Japan, wa saw severa l genera tions sti l l
living togethe r in the s ame house . As we have
capita lism explod ing in China) the governm ent
p::ilicy to limit familie s to 1 Ichild, has cane
back to create new problem s. The so=ial net
of the family broke. Elderly couples are now
off ering their hemes to woman who will move
in wi th them and take care of them, and they
will inherit their proper ty. People ooce had
larger famil ies as a safety net f = retire -
ment.
Nothin g that takes place 1.s ever one-
sided - 'Ihere are ripple effect s that move
through the econan y in ways oft en never onoe
oonsi dered. In New Zealand duri ng the 1980s,
interes t rat es soared to 25% aC1d the country
was onthe brink of .bankru ptcy. When I 11.ou.ld
travel their f rom Austra lia, the joke was
all you had to do was pat a Kiwi Girl on the
head and her legs would spread . While crude,
this was a .reflect ion llp:)Cl a welfare program
where i f the girl became pregna nt and did mt
k00\11 who the father was, then the state would
pay f or everything r ight down to provid ing a
heme. They errled up with the larges t number
o f ..VOIJJMpert1aps--in-we sterrrct Vi:liza ticxrwt 11;r -
had no idea of who the father of their childre n
was. Of course , they lied to ge t the f ree home
and when the social worker came, the f ather
jumped out the l:ack window . That t oo was
self-in terest .
 Of oourse we have to have a social duty
since the very purpose of a:xninq together
ill a c iV).lization., is to share a collective
benefit fran the interaction . 'ltlat does not
justify tyranny. However, there are basic
f undamental services that must be provided
or there is ro purpose to society.
( 1 l the right to freedcm of religion
(2 ) the right to be free from any
discriminat ion whatsoever due to
raoe, creed, or social status
( 3 J the right to equal justice
(4 ) the r i ght to education that is
the very essence of econcxnic
progress
(5) the r ight not to starve or be
~n out on the street
(6) the right to healthcare
(7) the right to settle an dispute
between individuals and the
right to access the courts , and
that illclooes the right to
counsel to prevent oppression
by one individual over a nother
(8) the r ight to remain f ree from
government fines and fees.
(9 ) the r i ght to remain free f rcni any
goverment prosecution except for
crimes against the s tate directly
( 10) theright to be free f rcrn any
direct taxation of income, gifts,
inheritance , or anything that
necessi tates reporting any personal
information to the state
These ten f undamental rights nnst have a retail store , the lll!lI'k-up was :usually
no idea have all existed throughout time.
You will recall the Biblical story of K:iJ'lg in legal business . They were street sellers
Sol = who lis t ened over the dispute be-
tweefl two wanen over whose child survived.
The ~ of the king historicall y was to
preside 0<.1er pri vate disputes. 'ltlere was These are not the people who manufacture or
no oourt fees. This was a right of all such
citizens. 'I'here should be court appointed
oounsel for all, and thi.s will en.sure that
~thy ~y.. C'a!Toutspend...,:n:tl.tizerr- - --p:issb:l: iiti'es s--vital; Ifthe ..schools
to have their way in taking l and or sC111e
other right. It is the hi s torical right to
def end , and that must be on equal terms.
'!'his will prevent oppression and i t has a
long history of success.
- -- -..- --- ..
-- - -~
The right to freedan of religion i s
also the right to be f ree f r om having to
subscribe to any religion at all. That
means there i s a mandatory right to remain
f ree fran any law that is imposed because
o f one group' s rel i gious beliefs . If you
cannot live in a s tate where no one may
outlaw abortion, then leave . I personall y
do not believe in abortion. But I have no
right to f orce that view upon another. What
would hapP"..n if Mormans or I s lam became the
"s tate" religion. It could then me made a
felony if a man had just one wife, or if
wanen walked the s treet uno:ivered. Freedom
of r eligion means the freedcrn o f others to
disac;ree.
'l11e r ight to equal just for all is so
.f\.nJamental to liberty, if ao}'OCle dared to
disagree, they should be exiled and live in
a society that supports their belief.
The r ight to education is our future.
When I was in New York, I uet first hand
countless blacks fran Harlan. MOst never
graduated s chool. '.me drug dealers were
actually natural s alesmen. They had no real
exposure to a real business, and grew up
seeing the drug dealers with their fancy car
and l ots of 'WOlllen. That became the i dol. I
met a couple of old I talian M:lb boys in
their late 70s. 'they too desci bed the same
th.ing where tlle Mob took care of the people
and began = unterfeitin g fcod stamps long
before Prohibition . They to:i saw the people
respect them and that became their idol.
""' When I discussed the drug business, I
was shocked to f ind pa:iple going to j ail far
10 years to make even l ess than $1 ,000 . The
margin was so na:rrrM, I expl ained that in
double. They had no idea what rould be made
who the government f ills the prisons with
and nothing changes becaus e there is aoother
uneducated kid to be hired to replace them.
even import the drugs. The Feds look up
the street s ellers by the thousands that
changes oothing. Education to show the real
-cannot
teach real world facts, them change them. I f
wa ignore this ullderclass, when their aum-
be.rs multiply a!XJ they begir. to starve, they
will beoome a llr:lb and society will be put at
risk .
lj ---- --- ....-..- ......
 There must be a fundame11tal right to
life once l:::or.'1, where no person should be
allowed to starve. '!here must also be a
flllrlam ental right to have a place to live.
If we canoot. provide these rights as a
people , then we cannot be very human.
Instead of unemployed, the j obs in the
state should be provide d. Hence, there is
no hand-o ut to people who just do not like
to work, but there should be use of the jobs
at the state rather than premisi ng all sorts
of pension s they will never pay to people
who would otherw ise be in the private sector .
This would also help keep the cost of the
state down dram:i.ti cally.
The right to healthc are has to be a
fundamental right. That does not preven t
private doctors and those who wish to have
supplem ental medica l service s , but we have
t o provide a basic health service . ~ I
was start.i.o g in busine ss, I gave employees
f ull benefi ts for them and their entire
f amily. As cost kept getting higher and
higher , such policie s were over $20,000
per year, per employe e. What once was a
cheap benefit , ooosumed everyth ing. That
i s why I have strasse d tart reform that
neithe r side will addres s.
The right t o be free from any f ine by
the state is a check and balance agains t the
abuse of their power. Cburrtl ess small towns
hire cops and d:lrect their. judges to find
everyone guilty of scmet:hing and impose the
highes t f ines. This is i:evenue , not law
enforcement. If the state could only order
public service with no mnetar y benefi t, you
will find far less corrup ticrl. Iosurna ce
cr.mpanies will only then raise their rates
and you may lose your license effect ing any
job, all because the real goal is revenue
not policin g the streets .
Even in Athans , private dispute s were
private . The only right a s tate had tc ever
prosec ute a individ ual, was for crinles only
aga:ins t the state or the gods, such as was
done to Socrates . The mudar of a person was
prosecuted by his f amily, not the state . !t
.....was...af ter...Magna. carta.. that..restricte d .the _ _ ..Pf._.thi s
king's ability to imp:)Se fines for anythin :J
to raise money, that it was the English King
who change d the law. He claimed that any
private disput e l'lCM "distur bed his peace"
and thus he had standin g as a E==tY to 111'.1vl
prosec ute private disput es .
cinOe the king clail11ed standin g to n"'7
prosecute anyone for private disput es, he
quickly imposed new penalt ies. EVery felony
l::ecame death because it allowed the king .to
ooofi.s cat e your proP"..rty. If you had a wife
and childre n, well so be it. '.lbay were just
thtown out on the street . This is where he
engaged in torture . If he o::iuld conpel you
to confes s, then there was m need to prove
anyth.Uig, and he ~ . So many died under the
rack to ~ their familie s. 'It>day, the US
still o::mpels people to plead by threate ning
their family with prosec uticn, or by than
=ercha rging you so than you face life. If
:you plead, you get a far lessor sentenc e and
it becomes the Prison er Dilemma. ~e plea
rate is nrJ<il 98.5%.
The freedcrn f rcin any direct taxatio n
is fundamental to liberty . The state need not
know if you found a dime in a parking lot.
'lhe "rich" will keep their savings onshor e
and that will reduoe intere st rates even
for the poor. Indire ct taxatio n result s in
everyone paying regardl ess whethe r you are
a visito r, citizen , or alien.
What Marx Got Right
Al l we have to do is look at Hong .Kong.
'Ihe Briti sh fol~ the ancient . system of
l ong lease. 'lben rented the land for 100 years.
'Ibis system was a throw tack to the mediava l
times arid indeed it was the symbol of how
wealth was pr;eucnt.d fran transfe rring fran
one generat ion to the next. This i s where
the tenns "landlo:c:d" ocrne from and "free
hold" meaning that the l an::t could be OOl.lght.
'l\lis was the "rich" prevent ing the pcor
frcxn ever getting rich so to speak. It i s
why so nan.y came to .Americ a to becane land
C111oe.rs.
HOwever, Mane's assumption that taking
everyo ne's toys away and giving them to the
state failed . People are people , and just
because they run the state, does not make than
sai.nl:s in the least.
What we are facing is still the collapse
.Narxis :t ..stat:.i:...i:>f ..s~..iali~m .~.As. .Y..i--
fact implcrl ing because those in power have
abused their positio n, premis e things they
never funded, and spend far more than had
they confisc ated all the wealth of the rich
in any event. If the system was honest , we
might have produc ed a differe nt result .
5
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