Tuesday, September 23, 2008

How to bail out the economy

#1 - Eliminate corporate income taxes:

The elimination of corporate income taxes would be the single largest boost to the US economy. Corporate taxes are a burden on the consumer and the employee. Every tax that a corporation has to pay is an expense that eats into the earnings of its shareholders. If no corporate taxes of any kind were levied, then those savings are passed on to consumers and also given to employees in the form of higher wages.

Also, if the US were to become the No Corporate Tax nation, nearly every single company in the world would want to relocate to the US because of the zero tax cost. That means high paying, high skill jobs for millions of people. These are the jobs that have been outsourced to India.

#2 - Eliminate wasteful government spending:

The government does not create value. It can take value created by others, usually business owners, through the form of taxes and redistribute it. Most government spending is wasteful. Every dollar taken by the government is a dollar that you or a business could spend on investment or consumption. The money supply is mostly a zero sum game. Money in your pocket and not in the government's is a good thing and if you do not believe that, then please send your spare change to the IRS voluntarily.

#3 - End the wars in Iraq and Afghanistan, and redeploy all overseas troops:

We are not good at rebuilding countries without having them hate us. We are good at destroying countries. It is much easier to destroy than create: Enthalpy. Disorder is the natural state of things. It takes a lot of effort (MONEY) to rebuild countries. That is effort (MONEY) from your taxes. This is $1 Trillion saved

#4 = Revise immigration laws to allow more skilled, educated people to the US

What would happen to the housing market if suddenly a million people with the ability to earn high incomes came to the US? If you guessed it would rebound, you are probably right. The strength of the housing market is determined by the income of people of a country. So a couple making $70,000 combined could afford a $210,000 house. A couple making $150,000 combined could afford a $450,000 house. The equation is simple: More income = higher housing prices

#5 Eliminate the income tax and the Federal Reserve System:

The implications of an income tax are huge if you haven't thought about it. If the government has the right to a third of your income, then they own a third of your productive capacity. People in government talk about an ownership society. Well that is because they own you. Is this a moral and just system? I think not.

But let's think about the Federal Reserve system. The Fed is a central bank. It makes money by loaning money to the treasury. Every bank needs some type of collateral or earning capacity to cover the debt payments. This is where the income tax comes in.

February 3, 1913 the sixteenth amendment is ratified, making it constitutionally legal to tax income. December 23, 1913 the Federal Reserve Act is passed establishing the US central bank.

With these two amendments the Federal Reserve has the security of the earning capacity of the entire population through taxation by the government. The government now has the ability to live beyond its means and run perpetual deficits.

Nearly 100 years later the taxpayers are tapped out. The government will try to inflate the economy through massive borrowing. It may work temporarily, but we will get to the point of no return. Too much living beyond our means through the drug called easy credit will end painfully. We can recover, but we need to work to push legislators to work for US, not the corporate looters. The fight is on to save our economy and our country.

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