Thursday, May 19, 2011

Gold Standard, really?

I know that I haven't blogged in quite some time, but life gets in the way sometimes. I am hearing a lot of rumblings about our economic future and lots of stuff about how we can fix this and that to prevent the pending economic collapse of America. The first thing we need to do is grow up and start thinking and acting like adults with brains in our heads. You can't get there from here by only cutting some spending and letting other things go. We need across the board cuts to start and deep to the bone cuts on things we can. We should be looking at how and where every single dollar of our tax money is spent and force those spending it to explain why. We should be having Congressional hearings everyday until every single dollar is accounted for and justified. The fact that we can't account for $100 Billion from last year is complete BS and the fact that the Pentagon says there is no way to audit them also is BS.
I want to hold the government accountable for every one of my dollars they spend and then we should shine the light of day on why they are spending it. This is just the first step of many to put us back on the road of fiscal responsibility, but it is one that must happen. An across the board cut of 10% per year until the budget is balanced and the national debt is being serviced is not unreasonable especially since we are so far in the hole that any principle service on the national debt would be an improvement over running it up. We then take our new found knowledge of where our money is going and put each department to a vote by bring its appropriation bill to the floor. It would prove very interesting to see how the voters feels about there money being thrown down the toilet, so some pompous ass can pull in large six figures and tell us how much we need him/her department to make our lives better. I am betting that this alone would cut our budget the needed forty percent. We do this every year and we might just be able to cut enough to start paying off our debt.
With all that said, we need to reform the tax code to make it extremely simple and easy to understand with zero loopholes and special benefits. We need every American to pay something in taxes because if it is your money being flushed down the toilet you care a hell of a lot more than if it is some "rich" person's money. We need to slash corporate income tax to less than 15% and eventually all the way to zero. This is crazy talk, but if you want jobs then you make is a nice place to do business by allowing companies the ability to make some money by lowering their costs. Taxes are a cost to companies, which they pass on to their customer in the form of higher prices. These higher prices make it difficult to compete in a global market where you can lower your costs by using super cheap labor and going to countries with low corporate taxes. Canada our neighbor to the North has figured this out and has lowered their corporation income tax to 15%, even with socialized medicine, so why can't we at least match them or do them one better with 10%. Our economy runs on money and that takes jobs, so lets make America a job creator vice a job destroyer.
Now back to the individual tax thing, we need to set up a system where everyone pays and for now I am willing to concede a progressive system to get the damn thing passed, but with a top rate of 25%. We need to close every good deal and make paying taxes painful, so that everyone is pissed about having to hand their hard earned dollars over to the greedy politicians. This would immediately change how people feel about Washington and they would sure and the hell make better choices in the voting booth. Paying taxes should piss people off and they should care what their government is doing with their money. There should be no free rides in America. If you are poor you should only have to pay a minimum sustainment tax of 1-5%, you can debate the level. As you go up the scale then you add 5% to each bracket until you reach the top level of 25%. You can of course make it 5%, 15%, and 25% with no deductions period. I prefer 5%, 10%, 15%, 20%, and 25%, so you can adjust the levels with the economy.
The final piece of the puzzle is capping the government at 15% of GDP until the national debt is retired and 18% of GDP with zero deficit spending. That is 40% less than what we are spending today, but it would prevent us from adding to the debt. Revenue has historically been about 18% of GDP, until the Joker took over and ran it up to 25% of GDP. That isn't to say that the wunderkind of the previous years hadn't been busting out 20% of GDP with the same 18% of GDP as revenue. Regardless of what anyone tells you, we don't have a revenue problem, we have a spending problem. So to fix this mess we need to seriously cut spending!!!
Now that I have said my piece here is how things are really going to happen over the next few years, we will get less than 2% cuts in spending to bring us down to 23% of GDP and we will get taxes hikes of at least 2% of GDP and that mostly from anyone making more than 75K a year. This will still leave us 3% in deficit which will keep piling onto the national debt to the point no one will believe that we will pay it back, so interest rates will start to soar. We will get hyper-inflation and our economy will crash down around our ears, the rest of the world will suffer as well. There will be much rejoicing on the left for capitalism will have failed us and only socialism (Red China) can save us. We will pass austerity measures and cut our budgets to the bone and Granny is going to lose about half her government promised benefits because the well is dry. It ain't going to be pretty, but it is a matter of pay me now or pay me much more later. We still think that we can nibble around the edges and everything is going to be okay, but that just isn't true and unless we get serious about cutting there is zero hope in avoiding a crash and depression that is sure to follow. There will be no war to pull us out of our third world decay and since we are no longer hardy pioneer stock, we will just starve to death in streets since everything will be taken by the banks. We have to change our ways or there is no future for us or our children because we didn't want to grow up and face the truth.
I guess I had a lot to say. That happens when you store up. I have no doubt that the gang of six, er five, will come to some lame compromise that doesn't nearly address the issue and applies a single band aid to a sucking chest wound. We need serious surgery and it make take losing a limb or two to save the rest of us, but it has to be done or we die. Playtime is over and the time for smoke and mirrors is done. How's that $100 billion in spending cuts feeling right about now, can hardly feel it at all huh? If you think you are going to see trillions, then I have some nice ocean front property here in Arizona to sell you.

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