Inflation/Deflation

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In 1971 Dick Nixon began the "War on Drugs". Part of this policy involved the Asset forfeiture and confiscation of large amounts of cash found on persons pulled over for traffic violations or raids on suspected drug suppliers homes or lairs.
At that time, $10,000 was considered to be drug money, and was seized without any proof of illicit sales or purchases of drugs. The going excuse was nobody (proles anyway) should be carrying around that kind of cash, unless they were involved in the commerce of illegal contraband.
But in 1971, $10k was a lot of money, considering in that year the Federal minimum wage was $1.60 an hour, or $3200 a year based on a 2000 hour year.
This sort of made a crazy kind of sense. In 1971.
The problem is.... that amount has never changed. It has never been adjusted for inflation. In todays dollars it amounts to over $70,000.
Today, for the top 10% anyway, that could be a monthly mortgage payment factoring in taxes, insurance (impound account), and mortgage payment combined (think mini- mansions).
Many times I have withdrawn $2000 from my bank account and driven it across the street to my mortgage servicer to make the payment before it was overdue. Been caught more than once writing and mailing a check days before due only to have them sit on it till it was past due, just to run up late fees.
Today, just withdrawing $3000 can flag your account and in Lane Co. Oregon, $5-6-7,000 can be enough to trigger a forfeiture and confiscation. And a lengthy and costly court battle to reclaim it.
The point I'm trying to make here is that because of inflation that original $10k threshold should have been adjusted up.
So do we call this a form of deflation?
This ruse can be identified in the annual COLA (cost of living adjustment) for Social Security too.
How?
Consider getting three COLAs in the last 3 years, which is supposed to keep you up with actual inflation (arguably), but instead pushes you up into the next tax bracket, from 12 to 22%.
And the next raise will probably push me up into the 24% bracket.
My income is actually deflating. It's subtle but it's there.
Over time, these policies whittle away at all of our incomes.
So, am I crazy, nitpicking, or can any of you see the unfairness in this?
The floor is open.

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On civil asset forfeiture AKA theft under color of law...

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earthling1's picture

@Blue Republic
In an interview, the Lane County Sherrif was asked what the department used the confiscated money for, and without a hint of shame, replied that they bought a new margaritas machine for the lunchroom.
Thanks for the post.

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After six years, still getting robo-calls from Marriot Hotels.
They're like herpes.

From prison, John Ehrlichman explains the motives behind Nixon’s war on drugs….

At the time, I [Dan Baum for Harper's Magazine] was writing a book about the politics of drug prohibition. I started to ask Ehrlichman a series of earnest, wonky questions that he impatiently waved away. "You want to know what this was really all about?" he asked with the bluntness of a man who, after public disgrace and a stretch in federal prison, had little left to protect. "The Nixon campaign in 1968, and the Nixon White House after that, had two enemies: the antiwar left and black people. You understand what I'm saying? We knew we couldn't make it illegal to be either against the war or black, but by getting the public to associate the hippies with marijuana and blacks with heroin, and then criminalizing both heavily, we could disrupt those communities. We could arrest their leaders, raid their homes, break up their meetings, and vilify them night after night on the evening news. Did we know we were lying about the drugs? Of course we did."

….and it continues to this day.

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“We have a very small window in which we need to make a fundamental shift away from capitalism.” Kshama Sawant

earthling1's picture

@ovals49
was a real piece of work. But he was responsible for Nixon's topple from power.
Nixon claimed he wasn't a crook, but why did he have so many working for him?
Thanks for that bit of info.

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After six years, still getting robo-calls from Marriot Hotels.
They're like herpes.

Lookout's picture

My thought is do away with that absurd law, and the drug laws too while we're at it.

Better start a cash stash at home in case the US pulls a Canada style freeze on accounts of those who question the narrative. We've kept one for years.
https://moneypantry.com/best-places-to-hide-money/
Take out a hundred or so every week or month and build a stash in case the economy crashes and crumbles, because it is probably just a matter of time.

Thanks for the OT and heads up on crazy illegal limits on cash.

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“Until justice rolls down like water and righteousness like a mighty stream.”

earthling1's picture

@Lookout
they raid or search your house and find that cash, they can seize it too.
Keep each withdrawal in a separate envelope, dated and with the amount enclosed and keep the bank receipt separately stored.
Every once in awhile spread out the envelopes and take a photo of them.
Makes it easier to prove to a judge that it is saved money over a period of time and not drug revenues.
It is definitely stupid to keep large amounts of money in a bank, because they don't pay any interest on it, ok, maybe .25%.
A quarter of one percent, big woo.
Thanks for the post.

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After six years, still getting robo-calls from Marriot Hotels.
They're like herpes.

@earthling1 I know people who fill coffins with cash or gold, bury it in their back yard, put up a marker calling it their dog's grave.
America is so great. We can deposit huge sums of cash in back accounts, but can't personally possess it.
Why don't they explain it to us that our cash is only ours if we do the right thing with it. Why don't they explain that earning and keeping cash in your personal possession is a crime?

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for going cashless was tax evasion. That policy change hurt family farmers, mostly.
A client from years ago had his truck taken by a guy he knew and whom he feared. He didn't report it stolen, just hoped the guy would return it. The borrower used the vehicle for an armed robbery. The vehicle was confiscated, and the wrecker service that stored it sold it to a buyer several states away. The case was just not worth pursuing, since it added more problems for the thief, who was out on bond, capable of harming my client. The wrecker service owner was (and still is) a county commissioner. Bye bye, truck.
The money from most forfeitures in Texas goes this way: A large percentage to the county sheriff; the rest to the district attorney. The district attorney gives it to his assistant prosecutors. The prosecutors have ($) incentive to take people's assets.

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thinking Nixon couldn't declare that it was illegal to be against a war or have dark skin. Biden sure showed him!

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On to Biden since 1973

People always think inflation adds to costs. It doesn't. It multiplies cost. If something cost $x more than you have after inflation it doesn't just cost $x+1 more than you have, it cost $2x or 3x more than you have while you only have $x+1 more to pay with.
But the effect is the same in reverse. Something costs. $x more than you have. Deflate it enough and it'll cost enough to afford.
It's not the income, it's the prices. That's why the 70's inflation lasted so long - the rich benefited from it, it inflated their surplus incomes,

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On to Biden since 1973

earthling1's picture

@doh1304
Is just a deceptive way to hide the creation of more money to put into circulation.
The more money in circulation, the less valuable the dollar becomes.
Prices are not going up, the dollar is going down.
IMHO.

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After six years, still getting robo-calls from Marriot Hotels.
They're like herpes.

QMS's picture

@earthling1

It becomes clearer as time goes on that the value of the dollar is going down.
The next phase of our econ mobsters is to devalue to the point of zero worth.
This is when the great cash rape comes into play. Dollar = 0, e-credits is all
that is left. Then the black market wars will rage in earnest. Greedy bastids.

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earthling1's picture

@QMS
back in 1964, a silver quarter (90% silver) would buy a gallon of gas.
Up until recently, that same 1964 quarter would buy......a gallon of gas.
With gas at over $5 a gallon I would expect silver to go up very soon.
Gold is hovering around $1850 an oz right now. In 1964 it was $35.
Rocket science is not needed here.

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After six years, still getting robo-calls from Marriot Hotels.
They're like herpes.

@earthling1
that $35/oz gold price was fixed and people couldn't buy/sell gold for investment purposes. When Nixon Co. took the US off the gold standard, the price quickly increased.

Minimum wage:gas price is the ratio I use. In 1967 the minimum wage was $1.40 and gas was approximately $0.32/gallon. During a "gas war" that year it dropped down to $0.20/gallon.

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@doh1304 .
the rich do not circulate money, they horde it, though they have to display it to some extent.

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On to Biden since 1973

enhydra lutris's picture

a measure of the extreme but unadmitted corruption at all levels in this country. Also evidence of the universal criminality of our police, since all benefit.

be well and have a good one

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That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

earthling1's picture

@enhydra lutris
"We lie, we cheat, we steal."
Doesn't get any clearer or in your face than that.
Try to have a good day.

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After six years, still getting robo-calls from Marriot Hotels.
They're like herpes.