Government as an Insurable Hazard

Flying Eagle

Government is a powerful financial predator manipulated by political forces unfriendly to your position.  However, if you have moderate wealth you can treat government intrusiveness into your family and business life as an insurable hazard, like a hurricane, flood or fire.  The phrase is used by Charles Murray in his book By the People – Rebuilding Liberty Without Permission (2015).  Murray is famous for co-authoring the controversial book The Bell Curve (1994).  That book was controversial for stating (and empirically proving) the obvious fact that some people are really smart, some people are really stupid and most of us are somewhere in between — and yes, race and who your parents are make a big difference.

Economic position is generally fixed across generations.  The children of the poor will likely be poor; children of the rich will likely be rich.  The more government tries to change that, the worse they make it (see Murray’s Law from his book Losing Ground: American Social Policy 1950-1980 (1989).  This is war; neither side plays nice and government is an armament used by both sides (you are sandwiched between the plutocrats and the poor, whose interests are advanced by politicians).  It’s important to have enough resources to insure against damage from the war (in the form of heavy taxes, Obamacare mandates, regulatory fees, probate costs and other expenses and market downturns caused by bad, misguided laws that government imposes).

Fortunately, the probability and magnitude of an unexpected financial attack from government are low enough that you can defend against it with proper insurance, estate planning and enough assets to self-insure against the threat. For example, a living trust is a lifetime insurance policy against a probate Court seizing control of your assets after death or disability.  A well-funded savings account ensures that you’ll have enough money to pay for rising insurance premiums or other unexpected costs.

It’s critical to control enough wealth and to have the appropriate insurance and legal documents to guarantee your well-being on the economic battlefield.  The poor are dependent on government and must rely on whatever politicians can manage to confiscate from the wealthy for redistribution.  Lock enough weapons away in your estate planning War Chest to fend off the marauding action of those other two tribes.  Stay moderately wealthy, aware and secure; at a safe distance from the battlefront of this ongoing, worsening economic war.

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