Lessons for the U.S. Government: “The Space Shuttle and the Horse’s Rear End”

The U.S. has been a leader in the exploration of space. For that it is to be congratulated. Of course, the U.S. can no longer afford the program. It is in clear economic decline. Curious minds ask why? There is not any one reason, but there are some specific contributors to the problem. It may have to do with the size of the “Horse’s Rear End”.

I came across this interesting read:

The Space Shuttle and the Horse’s Rear End

Say friend, did you know that the US Standard railroad gauge (distance between the rails) is 4 feet, 8 1/2 inches.

That’s an exceedingly odd number. Why was that gauge used?

Because that’s the way they built them in England, and the US railroads were built by English expatriates.

I see, but why did the English build them like that?

Because the first railway lines were built by the same people who built the pre-railroad tramways, and that’s the gauge they used.

Well, why did they use that gauge in England?

Because the people who built the tramways used the same jigs and tools that they used for building wagons, which used that wheel spacing.

Okay! Why did their wagons use that odd wheel spacing?

Because, if they tried to use any other spacing the wagon wheels would break on some of the old, long distance roads. Because that’s the spacing of the old wheel ruts.

So who built these old rutted roads?

The first long distance roads in Europe were built by Imperial Rome for the benefit of their legions. The Roman roads have been used ever since.

And the ruts?

The original ruts, which everyone else had to match for fear of destroying their wagons, were first made by the wheels of Roman war chariots. Since the chariots were made for or by Imperial Rome they were all alike in the matter of wheel spacing.

Thus, we have the answer to the original question. The United States standard railroad gauge of 4 feet, 8 1/2 inches derives from the original specification for an Imperial Roman army war chariot.

And the motto of the story is Specifications and bureaucracies live forever.

So, the next time you are handed a specification and wonder what horse’s ass came up with it, you may be exactly right. Because the Imperial Roman chariots were made to be just wide enough to accommodate the back-ends of two war-horses.

So, just what does this have to do with the exploration of space?

Well, there’s an interesting extension of the story about railroad gauge and horses’ behinds. When we see a Space Shuttle sitting on the launch pad, there are two big booster rockets attached to the sides of the main fuel tank. These are the solid rocket boosters, or SRBs. The SRBs are made by Thiokol at a factory in Utah. The engineers who designed the SRBs might have preferred to make them a bit fatter, but the SRBs had to be shipped by train from the factory to the launch site.

The railroad from the factory runs through a tunnel in the mountains. The SRBs had to fit through that tunnel. The tunnel is slightly wider than a railroad track, and the railroad track is about as wide as two horses’ behinds.

So a major design feature of what is arguably the world’s most advanced transportation system was originally determined by the width of a horse’s ass.

Unbelievable! So the space program is largely based on the width of a horse’s ass. “And the motto of the story is Specifications and bureaucracies live forever.”

__________________________________________________________________________

What might this story have to do with some of the issues in the United States today?

Let’s try to answer that question as the U.S. is poised to launch “FATCA” – The Neutron Bomb of the Financial System”.

Q. What is FATCA?

A. Answer it is an attempt to force all non-U.S. banks to aid in the process of U.S. tax collection. It has been called the Trojan Horse of  the HIRE Act. It has also been called the Berlin Wall of the United States. FATCA will result in lots of capital leaving the United States.

Q. Why is it called the “neutron bomb of the financial system”?

A. It is a clear act of American Imperialism, which is designed to apply U.S. law outside of the United States?

Q. How to other countries feel about that?

A. The U.S. is making lots of enemies. It will mean that other people will want to avoid U.S. financial markets. In fact, the best investment in U.S. defense would be to repeal FATCA.

Q. Why does it matter if people avoid U.S. financial markets?

A. Lots of reasons. Including the fact that the U.S. owes lots of debt and depends on other people and foreign countries to buy its debt.

Q. Why does the U.S. owe so much debt?

A. Many reasons. But mainly because the U.S. government and its people spend too much money and invest too little. The U.S. is addicted to debt. In fact, Washington could learn a lot from a drug addict.

Q. Why is it necessary for other countries to buy U.S. debt?

A. Well the people in the U.S. don’t have the money to buy it. The U.S. is the worlds biggest debtor. It can only get this money by borrowing to pay its debt from foreign countries.

Q. What happens if the U.S. does not pay its debt?

A. The same thing that happens if people don’t pay their debts. They go bankrupt and they lose their assets.

Q. If FATCA is so bad then,  why we have FATCA?

A. It is attempt by the U.S. Government to ensure that U.S. citizens living or investing abroad pay taxes to the U.S.

Q. Why is it so important that U.S. citizens abroad pay all their taxes to the United States?

A. Well, the United States is in bad financial shape – it has all that debt. It needs all the revenue it can get.

Q. How else is the U.S. in bad financial trouble?

A.  It runs a huge trade deficit. The trade deficit means that the U.S. imports far more than it exports. The trade deficit erodes U.S. capital. The U.S. spends far more importing goods than it receives exporting goods. It is like living life on a credit card.

Q. Why does the U.S. import far more than it exports?

A. In the case of U.S. companies, they are forced to pay tax to both the country they do business in and to the United States. This is imposes extra costs on them that makes it harder for them to compete with foreign companies.  This double taxation makes it hard for U.S. companies to sell products. The companies of other countries only pay tax on the profits in the country where they make the profits. In fact, the U.S. has not had a trade surplus since 1976.

Q. Why can’t we just send U.S. citizens to live abroad and get them to work hard to sell U.S. products?

A. U.S. citizens living outside the United States are also required to pay taxes to the United States. This makes them too expensive for companies to hire. Also, U.S. citizen employees who have signing authority over employer’s foreign bank accounts have to report this to the U.S. It also imposes costs on them that makes it too expensive for them to live abroad.

Q. What are some of the extra costs imposed on U.S. citizens living abroad?

A. Well, they have to file many more forms including FBAR. They are penalized for owning normal investment vehicles like mutual funds. They costs of owing small corporations is high, etc. It is very difficult for U.S. citizens living abroad to find competent tax help. Tax help for U.S. tax returns is expensive – more than most people can afford. For many people, U.S. citizenship is too expensive. More and more U.S. citizens are renouncing their citizenship.

Q. But, why are U.S. citizens and corporations treated in this way?

A. It is because the U.S. uses a system of citizenship-based taxation.

Q. Why does the U.S. have citizenship-based taxation?

A. Nobody really knows. It has always been that way. Some historians think that it is a way to punish U.S. citizens for living outside the United States.

Q. But, don’t other countries use citizenship-base taxation?

A. No, only the United States.

Q. Is it common for U.S. citizens living abroad to owe tax to the United States?

A. Some do and some don’t. It depends. In countries that have tax treaties with the U.S., like Canada,  many people do not owe U.S. tax.

Q. But, wait a minute. Doesn’t it cost the U.S. government lots of money to force U.S. citizens abroad to pay tax?

A. You bet it does. It cost lots and lots.

Q. That’s dumb. Why doesn’t the U.S. just abolish citizenship-based taxation?

A. Nobody knows. Citizenship-based taxation hurts the U.S. economy.

Unbelievable! So FATCA, FBAR, the Trade Deficit, and the decline of the American Empire are largely based on citizenship-based taxation. “And the motto of the story is Specifications and bureaucracies live forever.”

Of course, the U.S. could repeal citizenship-based taxation. But, that solution is just too simple for the average mind.

Repeal FATCA – Stop Citizenship Based Taxation!

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