Thursday, September 17, 2015

I left the Internet - Now I am back -- probably for the worst

 Proposed Solutions for a country gone astray.

I am going to attempt to put together some simple ideas to help our country get back on the right track. I am really tired of "should be or shouldn't be" politics. Granted, there are details to the plans that I have not yet formulated - but I have promised myself that I will. 

Here are some ideas AND the basic plan on implementing each.

Part #1

 Curb competitive consumerism by curbing unrealistic corporate growth and individual acquisition of "stuff".

What does that mean?

It's simple. If a company only pays "X" dollars in wages to an employee without consideration of inflation ... that employee cannot sustain a constant upward-trending consumerism cycle. Yet, corporations are pushed by investors to show absurd profits on a quarterly basis OR their stock is devalued. This is not sustainable and it is or should be basic economic fact. Numbers do not lie. The answer is not "access to more credit". That is not sustainable either. An employee becomes indebted to a company and then their children inherit that debt when that person passes ... and then the cycle only deepens as time moves forward. Guess what? No one gets their money back in the future so this does not make any sense for either the consumer or the corporation. In the same fashion - a person cannot sustainably consume items at an accelerated pace. True need, storage space and earnings are realistic limiters to this behavior.

Big banks are corporations too … remember that.

From --
The Founding Fathers fought for liberty and justice. But they also fought for a sound economy and freedom from the tyranny of big banks:
“[It was] the poverty caused by the bad influence of the English bankers on the Parliament which has caused in the colonies hatred of the English and . . . the Revolutionary War.”
- Benjamin Franklin

“There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.”
- John Adams

“All the perplexities, confusion and distress in America arise, not from defects in their Constitution or Confederation, not from want of honor or virtue, so much as from the downright ignorance of the nature of coin, credit and circulation.”
- John Adams

“If the American people ever allow the banks to control issuance of their currency, first by inflation and then by deflation, the banks and corporations that grow up around them will deprive the people of all property until their children will wake up homeless on the continent their fathers occupied”.
— Thomas Jefferson

“I believe that banking institutions are more dangerous to our liberties than standing armies…The issuing power should be taken from the banks and restored to the Government, to whom it properly belongs.”
- Thomas Jefferson

“The Founding Fathers of this great land had no difficulty whatsoever understanding the agenda of bankers, and they frequently referred to them and their kind as, quote, ‘friends of paper money. They hated the Bank of England, in particular, and felt that even were we successful in winning our independence from England and King George, we could never truly be a nation of freemen, unless we had an honest money system. ”
-Peter Kershaw, author of the 1994 booklet “Economic Solutions”

Indeed, everyone knows that the American colonists revolted largely because of taxation without representation and related forms of oppression by the British. See this and this. But – according to Benjamin Franklin and others in the thick of the action – a little-known factor was actually the main reason for the revolution.

While many Americans assume that the Federal Reserve is a federal agency, the Fed itself admits that the 12 Federal Reserve banks are private.

How do you fix it then?

It really boils down to attitude. You are either with your neighbor or against them. If you are against them and you want, neigh expect, all their money to flow into your account AND you expect that to continue in perpetuum - you clearly do not have the right attitude. The attitude fix should be across the board ... resources should be acquired without the use of long term credit (long term debt) - no matter the entity. Credit is the worst economic idea to ever exist. Period. Companies use too much credit. They forecast things only to their advantage in shareholder reporting ... and usually the shareholders are leveraged so heavy that they have to show absurd profits just to pay their creditors. Even if an investor is NOT indebted, they still try and play a shell game to avoid taxes and fees by moving money around in such a fashion that it becomes a waste of those free and clear resources. Dear rich person ... your children's children might be extremely poor by the time your 'empire' trickles down to them because you have not instilled in them a sense of sustainability.

This attitude fix starts at the top. Everyone in the US knows that corporations run the country. Corporations have to take the lead in this attitude shift and it must be a mandate. If the corporations continue to take and take from the employee base -- there will eventually only be servants ... and then the resources the company relies on to exist will start dwindling. This dwindle will accelerate over time. The eventual collapse will be catastrophic in nature. Corporations need to work with government and the stock exchanges to adjust expectations from investors. A person that happens to have a million dollars should not just expect to receive accelerated gains on their money without contributing something over time. We have too many people in this situation that are too short sighted to see that they are creating the demise of the country due to their lust over the biggest yacht in the harbor. At the same time, the marketing for a corporation must shift to a more responsible message to that lower-level consumer that truly may not be ready to purchase their product NOW. They should encourage people to save up their money over time and when they need that good or service to remember their name.

The credit card industry aimed at the end-consumer needs to eventually go away. In the first phase, credit card companies need to be regulated to offer only realistic lines of credit to their customers and must only charge realistic interest rates on that credit. This regulated yet still wildly profitable mandate will allow three things to happen. 1) It gives the credit card entity enough time to move their operations to solely focus on business to business transactions. 2) It gives the credit card company the breathing room to know that their realistic loans will be collected upon. 3) It gets them accustomed to corporate earnings being a more sustainable 6-10 % per year rather than the absurd 22-30 % that they see now.

In regards to short term debt for startup businesses, there is a solution. With the understanding that our country was founded on the principles of capitalism and small business ... any new venture into business must have SIGNIFICANT real dollars behind their start up. Perhaps top the tune of 40% of the first year of operating costs. Otherwise, that business is starting out in a bind and will likely only be a drain on the resources around them as they collapse in to bankruptcy in year number two.

Wages and benefits to the employee. Wages and benefits are a hot topic. One thing that is certain is that a corporation ceases to operate without the use of that employee’s time and talent. Likewise, that employee does need that organization too. There is a vast chasm between the goals of the corporation and the personal goals of their employee base. It's okay to admit that. A corporation should not contractually employee a person for 40.0 hours per week and then expect 65+ hours per week in order for that employee to keep their job. Likewise, an employee should not expect to be paid wages for 40 hours and then only work 39 or less. Also, inflation is a real thing. Even in a more realistically controlled economic environment, the cost of living will probably increase due to the ebb and flow of supply and demand. You cannot freeze wages to the employee base --- especially in times of accelerated inflation. It does not make sense. It's about fairness and communication. Most employees do NOT go to work and decide that they are going to sabotage their employer. That said, I do believe that the corporate entity does seek to maximize shareholder earnings sometimes at the expense of their employee base. To whom are you loyal? That person who made a one-time investment and expects money for nothing ... or the person that is out their making the corporation survive? You can be loyal to both within reason - but it must be a realistic loyalty. If the shareholders do not understand this reality - the corporation should buy back their stock and sell it to another willing investor. If this attitude shifts, the author believes both productivity and worker satisfaction increases drastically.

What's the endgame for this reduction in greed and credit? What does it produce?

It produces balance. It returns the country to a balance that we've not seen since pre-Vietnam conflict. It might even return us to a balance never achieved. How? Because, like it or not, different people and different ideas are gradually being accepted into the fold. We can all agree that hate is a bad idea ... especially hate from a lack of understanding. Getting to a hate-free attitude within our country is essential. If we curb the consumerism a bit - we may see a decrease in the lack of understanding between socioeconomic classes. This is not a cry for Socialism - so shut that mess up right now. It is math folks - a set of balanced books helps everyone. Even hard-core capitalists understand that a cash-rich organization is just as bad as or worse than a cash-poor organization. Equality and equity are different things. Our country should strive for equitable relationships between entities.

Part #2

Implement the flat tax – like yesterday or now.

Talk all you want about how difficult this would be to implement … it is the only way to arrive at an equitable balance. In a 1996 study by Sheldon and Boyd found that there are many positive benefits of a flat tax. 

The problem is the findings also pointed to the fact that the richest of the rich would be paying in more taxes than they are now with the loophole structure in place. Now, those with the most money have the loudest voice in “current” America and these folks are hiding (sic lying) behind this line: “We oppose the flat tax claim that it would impose burdens on the poor, benefit the wealthy disproportionately and increase the federal deficit.  This line is opposite of the findings of this study.

·         Every income group would gain, with the greatest gain in percentage terms (7.6 percent) going to the lowest-income Americans; this result holds even though the Earned Income Tax Credit, which now benefits many low-income people, would be eliminated.
·         In percentage terms, the gains of the highest income group would be third highest among the six income groups.
·         The increased economic activity that would result from elimination of tax variations and from changes in incentives would be so great that government revenues would increase by 1.8 percentage points.

A flat tax would remove existing biases against saving and toward consumption, by removing investment returns from the tax base and by taxing capital and other production inputs at a uniform rate.  

So in making this tirade self-relational, one should easily recognize how the flat tax would help in implementing the changes proposed in Part One above.
Read this study synopsis for yourself at .

So how in the world do we put it in place?

First you have to get buy-in from big corporations. Their poor little feelings might be hurt at first when you yank away their loopholes, but in the end, they too will benefit from the flat tax. The government just needs to get rid of the IRS and the existing tax laws on a given date. I vote for January 1st 2018. This would give everyone time to get over the initial shock of having to use their brains beyond the next episode of America’s Got Talent.

In short, you just rip off the band aid. No more need for the IRS. No more need to complicated tax software that is borderline criminal anyway … and free up people and resources to do other more important works.

And for the staunch fiscal folks out there – here’s the major upside. In the loophole free tax model your precious profits are taxed only one time. Everybody in the model is taxed only one time. It just makes too much economic sense to get rid of the existing loophole structure.
My bet is that this hold on to the loophole structure stems from short-sighted demands from executives and shareholders within organization. There’s too much “now now now” thought in the investment circles. It used to be the opposite. Investors were the best at seeing and driving toward the future. Corporations have lost this ability to see the big picture also.  How is it that a lowly web site guy from the middle of Western Kentucky can see this but the “greatest economic minds in the world” cannot solve this riddle? I think I know that answer too … they are resigned to being part of the machine. They KNOW this is the right thing to do, but they feel trapped by the “daily whirring of the gears of unchange”.

Removing the bias against personal and corporate savings.

The flat tax REWARDS entities that save money and resources by taxing money one time … ever. As it stands now earnings are taxed at inception, taxed again when those monies saved earn a return and then for an individual taxed again when that person dies. How in the world does this make sense? Earnings gained at the beginnings of one’s career might literally be a debt to a person’s heirs. Think about that before you whine about the flat tax idea. Flat tax does not assume the ability to tax on interest earned with savings.

Rewarding good attitude and behavior with real rewards
In keeping with the theme presented in Part 1, Part 2 suggests that an attitude change can and will produce positive results. Any attitude toward an equitable tax situation that rewards savings goes hand in hand with the notions of sustainable consumerism. Responsible spending benefits every entity and guess what … it makes earnings statements much easier to predict than marketing-driven surges in earnings that are not sustainable. In the same token, a flat tax makes it easy to budget for governmental responsibilities like infrastructure and effective care and protection for our citizens.

Part #3

Speaking of Citizen Care : Let’s get rid of Welfare as it currently exists

It’s very simple. The Welfare system is full of loopholes that mirror our tax system. These loopholes allow the system abusers to not only earn while not contributing, it rewards them for having additional children. This is as bad as or worse than the current tax system.

Now, there needs to be a “care” program for citizens. This care system should simply be based on the person’s ability to contribute and their past / existing contributions to the overall economic infrastructure. This sounds much like the unemployment system.  In fact, there is evidence that the unemployment system is moving more toward “welfare” rather than input-based.  Having been laid off from a job I needed before, I can vouch for the unemployment system’s viability. The rules were different then … I only earned 4 months of unemployment benefits and at the end of that 4 months, I was on my own.

Just like our society as often shown on reality TV programs, those folks on welfare in America sometimes fall victim to the disease called “entitlement”. I have not put in as much hard labor as many people, but I have worked on a payroll job since I was 15 years old. That said, I would NEVER throw up my hands and declare “There, I worked, now pay me to be here and not work for the remainder of my life.”  Sadly, some people on welfare have never worked a day in their lives … and even more depressing … some welfare folks live more comfortably than those people working lower income jobs. These are anecdotes that are situation and choice dependent, so I will leave you to find your own evidence of the entitlement problem.

Now, tying all this back in to Part 1 and Part 2 … Part 3 would be well on its way to self-resolving and would only need a minor push to break the cycle. How? Well it’s actually pretty simple. In an equitable flat tax and responsibly spending country – the system would encourage the use of additional resources (i.e. employees) and the wages would be more reasonable due to the controlled and predictable economic swings during the ebb and flow of a sustainable model.  For example – a reasonable corporate entity is presented with the potential to make revenue, and it requires additional staff. The corporation attracts new employees with the offer of a good wage … and that good wage is only taxed one time … so for the previously unemployed person, the idea of a job makes much more sense.  The corporation benefits from having an additional satisfied employee and the employee sees immediate return on their time invested because their money stretches further …. AND they are no longer punished for saving money and people are no longer yelling at them on TV to buy things they cannot afford or do not need.

…. More to come.

I just realized how long this is already and that no one is going to read it anyway.