15 Dec 2020

BMS ep. 168: Bob Responds to Dave Ramsey Calling IBC a “Scam”

Bob Murphy Show, Infinite Banking Concept 9 Comments

If this one interests you, definitely use the YouTube version, because (near the end) I walk through an Excel file to make some of my points. (Video below.) But here’s the audio version with all of the relevant links, too.

9 Responses to “BMS ep. 168: Bob Responds to Dave Ramsey Calling IBC a “Scam””

  1. guest says:

    I’m in the middle of this video and I just listened to that clip of Dave Ramsey that didn’t age very well at all.

    I’ve been wanting a clip like that (of Dave Ramsey) for some time now, but for other reasons. That was awesome!

    For comparison with Dave Ramsey’s views on the economy and the stock market, I recommend these:

    Peter Schiff was Right (2006-2007 Edition)

    Peter Schiff repeatedly predicted the 2008 crash on Larry Kudlow’s show

    (Larry Kudlow is Trump’s economic adviser.)

    Herman Cain vs. Ron Paul On Predicting The Economic Collapse.mp

    (Herman Cain had been considered by Trump to be the Chairman of the Federal Reserve.)

    Aside: I do remember hearing Dave Ramsey, after the crash, give people advice to the effect that the housing market is volatile (someone had some cash he could either invest or buy a house to flip).

    • guest says:

      I saw in the YouTube comments that someone suggested Bob use an Excel feature called Solver.

      True. When you’re trying to figure out what number to plug in to reach $500,000, you don’t have to tinker with the numbers because Solver will do that for you instantly.

      (Yes, Excel is actually doing some trial and error work, if you read about what it’s doing, but for most situations it’s instant.)

      Pro tip: Check out a guy called Bill “Mr. Excel” Jelen.

    • guest says:

      After watching most of this video, I no longer think that IBC is likely some kind of scam or Ponzi scheme.

      I think it could probably benefit from a better name, now that I think I know what’s actually going on; and also I think that it relies overly much on Lefties not eventually being able to see that people are making money that they want to tax because “common good” nonsense.

      The name should be changed to something like Infinite Broker Concept, as it essentially has very little to do with either banking or life insurance, except that life insurancer is what the broker is risking to get your money so he can invest it for you.

      In theory IBC is great because the government isn’t taxing your investments (which is what this really is). I’m all for that. Zero taxes; Liberty breathes through those tax “loop holes”.

      But unless we stop using fiat (and digital) money, the government will simply print the Cantillon Effect of being able to enforce the closure of such loop holes.

      “Be your own banker” sounds like a Ponzi scheme.

      • random person says:

        I wrote a longish comment and it seems to have disappeared.

        However, to write a shorter version, I would suggest reading “A world history of tax rebellions an encyclopedia of tax rebels, revolts, and riots from antiquity to the present” by David F.Burg.

        Also, there are some books by Jules Marchal that talk specifically about a kind of tax used against populations who did not use fiat currency, or at least, did not use the same fiat currency as the conquering regime, at least prior to being forced to. The mechanism discussed by Jules Marchal to tax these populations and force them onto fiat currency is something called a head tax. So, the way it worked, at least early on, was the conquering regime declared that everyone had to pay a certain amount of money just for being alive. But since the people didn’t have the money, because they didn’t use that type of money, tax collectors would give them a choice between signing a contract and prison. The contract would be a contract agreeing (under duress) to some sort of forced labor, often involving a quota, and the quota would often be enforced by the chicotte, which is a type of whip. Anyway, the employer of the forced labor would then (in theory at least) pay them enough that they could afford the head tax. And the prison was also forced labor. So it was basically, like, would you like forced labor A or forced labor B.

        During the early years, this caused much torture and famine. As time progressed, it became less lethal, at least, as employers were afraid they would run out of forced laborers if they kept working them to death. I think that was only one reason, but the reports of extreme brutality lessened over time. Also, towards the later decades, there seems to have been an increase in wages, so that a number of people were earning more than the head tax. At some point, those earning about above certain income threshold were exempted from the head tax, but subjected to an income tax instead. However, since the head tax was not repealed until Independence time (and then only temporarily, since the first Prime Minister was assassinated after less than a year in office), I believe it merely evolved into a less brutal / obvious form a forced labor.

        At some point, there was a very exciting revolt against the head tax (as well as certain rapes committed by the tax collectors / forced labor recruiters), which unfortunately ended in a massacre, since the conquering regime had machine guns and the rebels were fighting with bows and arrows.

        • random person says:

          Head taxes also inspired revolt in feudal Japan. The following is from “A world history of tax rebellions: An encyclopedia of tax rebels, revolts, and riots from antiquity to the present” by David F.Burg.

          1811–1812 Takeda Rising (Japan), a peasant revolt against excessive taxes in the district of Bungo. The rising began in late 1811 in the fief centered near Takeda, which had recently fallen under the control of an exceptionally harsh official named Yokoyama Jinnosuke, who had been placed in charge of the various offices of the district. In the fall of 1811 the local peasants appealed for a decrease in their taxes, and Yokoyama responded by doubling the level of taxation. In November “over 2,000 men, armed with guns and swords, rose up in insurrection,” says Hugh Borton, and marched toward Takeda to present their demands. Of their twelve demands, four concerned suspension of taxes on rice, wheat, grass and reeds, and newly opened land; a fifth sought abandonment of constructing a dam because the project involved a corvée levy; others demanded that Yokoyama, as the supervisor of finances, and one of his accomplices be surrendered to the rebels. The fief’s leaders attempted to appease the rebels by passing new laws that addressed their demands, but circulation of these demands inspired peasants in other district fiefs to stage risings. The insurrection spread and extended into 1812.

          Among the demands these rebels presented were suspension of a sales tax and collection of the bean taxes, and exemption from a special New Year’s tax and taxes on water wheels, blacksmiths, and dyers. These rebels pressed their demands by wrecking the house of a village censor before marching to Takeda. Since the elder minister there who received their requests had no recourse but suicide, the peasants, not wanting to be responsible for his death, bowed with respect and withdrew. The elder minister subsequently announced that a representative was being sent to the capital at Edo (Tokyo) to inquire about reforms in the laws, but that local officials “‘shall diligently collect the agricultural taxes.’” The Takeda rising reached its end in March 1812 with punishment of the rebel leaders by brandings, whippings, and banishment—others were imprisoned. But at least some of the peasants’ demands were fulfilled; Yokoyama was reduced to commoner status and imprisoned in Takeda, and his wife was banished from Edo. Other officials, including the elder minister, were placed under house arrest and punished.

          Furthermore, the Takeda peasants’ “victory” inspired about 10,000 in Usuki to rebel, burning shops and robbing graves to highlight their demands, including abolition of a head tax. The elder minister of Usuki promised to suspend the laws that had created the tax and other conditions the peasants opposed. Nevertheless, the rebels’ leader paid with his head, and many others ended up in prison. Another and even larger rising struck Nobeoka when 67,000 peasants, pressing demands similar to those of the Takeda rising, destroyed the homes of local officials. These various risings inspired ten others in the same region of Japan, but these were smaller and easily suppressed, with the rebels receiving death sentences, whippings, banishment, branding, or imprisonment. “The Bungo uprisings,” Borton concludes, “show the precarious situation of the various fiefs concerned if it were necessary to levy so many special taxes on everything from the population itself to waterwheels. In spite of penalties and punishments, the people were successful on the whole in challenging the right of the authorities to continue to tax and oppress them.” Thus the risings revealed that the peasants finally began to enjoy some success against having to shoulder the entire tax burden that financed the still essentially feudal social and political systems.

  2. Tel says:

    I’m with you on this one Bob, the argument Dave Ramsey is putting forward, that an investment can only ever get back the money that you put in is completely ridiculous.

    If Ramsey had said he thinks that the life insurance companies tend to invest in the wrong kind of things, that would at lest make sense … although we can argue all day about what makes a good investment. Saying “Oh no it’s impossible to ever get a return” makes him sound like a bozo.

    My only complaint about the episode is that it was a little bit long winded. You are correct, you just explained it verbosely. Personal taste … others might benefit from the long and detailed examples.

    • LP says:

      That’s something which has always puzzled me about RPM… He’s such a hardcore anarchist that he won’t accept his salary directly from government funding, but he advocates an investment strategy which mostly relies on municipal government bonds (that’s what most whole-life life insurance uses for semi-liquid assets).

  3. guest says:

    Turns out there was a mini-documentary / record of Dave Ramsey vs. Peter Schiff made by our very own Jimmy Morrison (of “The Bubble Films”):

    Dave Ramsey Was Wrong; Peter Schiff Was Right

    It’s great listening to Dave call Peter Schiff a kook and uneducated, and listening to Dave’s absolute confidence in the government’s ability to manage the economy. The payoff is that much greater.

    If anyone can find the archive of this show on Dave’s own site, that could come in handy.

    • guest says:

      Here’s something more recent”

      Dave Ramsey Agrees With Peter Schiff !

      Dave agrees with Peter, but right after he basically calls him a broken clock for always predicting doom.

      Look, it’s easy to predict toom when the fundamentals have been unsound for so long – it’s just a matter of time.

      Remember that even Ron Paul said he was surprised that the housing bubble lasted so long – but eventually he was proven right.

      There are economic laws that do not allow money-printing to cause prosperity; How long the money-printers are able to keep doing so depends on how many more suckers they can draw into the scheme – they had to lie to other countries about the FRN being as good as gold to keep it going.

      And now they want a global digital currency to make sure you can’t buy anything without that currency. That’s failure, if you have to point a gun at people to get them to accept your currency.

      And since there are no aliens to trade with, the same economic destructiveness that lead to the adoption of fiat money in the first place (to escape the discipline naturally imposed by the market under sound money) will lead to mass murders by governments trying to hold onto control of money, because there’s no one else but the world to pass the losses on to.

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