Compounding the Problem

When you think about it, it makes a lot of sense.

We all know about the miracle of compound interest and how money can grow (at least it used to) when the interest is returned to the principal and the next period’s interest is calculated on the larger amount.

But this “miracle” also works in reverse.

For the purpose of this example, let’s say that on the day before Woodrow Wilson took office in 1913, we still had 100% of the liberty that we had the day after the Constitution was ratified. Now, let’s also say that, on average, we have lost about 10% of our freedoms over each individual 10 year period as government has grown – I know that there is an ebb and flow and that the FDR, Johnson, Clinton and Obama years blew it out, but let’s just assume and agree that it is 10%.

This is where the issue with compounding (or really reverse compounding) comes into plat because at the end of every decade, you start with 10% less than you began with – 100*.90 = 90, 90*.90=81 and so on, with each calculation eroding away liberty like a ticking time bomb – 73, 66, 59, 53, 48, 43, 39, 35 – and when you reach 2013, you only have 31% of the liberty that we had the day before Woodrow Wilson took office in 1913.

Now I know that this is not totally accurate because liberty cannot be calculated in a single number. Liberty is, to some degree, a subjective concept – but I think the overall concept is sound and if we consider the sheer amount of laws that are created and enacted every year, I believe that we can certainly see that when government deviates from the clear limitations of the Constitution, we stand to lose a lot over time without realizing it.

It also illustrates why we have to support people and movements that are holding the line against the statists, the statolatrists and the collectivists. This is what John Adams understood when he wrote to his wife Abigail that:

“But a Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever.”

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5 thoughts on “Compounding the Problem

  1. Utah,
    Your opine is a good place to start the conversation.

    The rate at which liberty is lost is also an exponential function. As time passes, the rate of the loss increases at an increasing rate.

    When “the People” abide by one illegal intrusion, the leviathan expands the same tactics in other areas of our life. From the NSA throughout all of government.

    America is experiencing massive limitations on choices with Obama’s multifarious regulatory edicts from Obamacare to IRS abuses to war on energy usage.

    This explains why corporations and the “wealthy” are leaving America. A single dump truck of sand cannot hold back a tidal wave.

    • I would say it was a Geometric Function which descibed our loss of freedoms up til about Bill clinton……It started to turn then and was held in check somewhat with the midterms and Gingrich.

      Under Bush and now Obama it veered into an Exponential Function and both the rate and scope of Constitutional loss have increased.

  2. Tallies pretty well with what some American Indian sages are meant to say/have said (somehow they had their life spans shortened by some white guys who wrote and ranted about liberties) – the more money, the less liberty. The press once was a herald of liberty but it depends what you print. Printing money does the opposite.

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