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●The more federal budgets are cut and taxes increased, the weaker an economy becomes.
●Austerity is the government’s method for widening the gap between rich and poor, which ultimately leads to civil disorder.
●Until the 99% understand the need for federal deficits, the upper 1% will rule.
●To survive long term, a monetarily non-sovereign government must have a positive balance of payments.
●Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
●The penalty for ignorance is slavery.
●Everything in economics devolves to motive.
According Seeking Alpha:
Steven Hansen is an international business and industrial consultant specializing in turning around troubled business units; consults to governments to optimize process flows; and provides economic indicator analysis based on unadjusted data and process limitations.
I understand “turning around troubled business units,” because that is what I did for more than 30 years. But I must confess to total ignorance about the rest. Perhaps someone can enlighten me.
Anyway, I sent Mr. Hansen a copy of the “Nine Steps to Prosperity” which you can read at the bottom of every recent post on this blog. This is what he sent back:
good evening Rodger,
please post this as a comment. privately, i agree with many (most) of the ideas.
1) i would eliminate taxing income on the middle class – which includes fica. taxes remain on income above a certain level (say $100,000 [*or 250,000 or whatever] per family unit). tax all expenditures (including investments) – with the taxes refunded for people whose earnings were under $100,000*.
I assume he means eliminate taxing on the middle and lower classes, with which I agree. I disagree with taxing investments for four reasons:
*It would impact middle income people who have investments, especially the elderly, who live on investments
*It would make U.S. investments less attractive here and abroad.
*It would reduce the money supply and therefore be recessionary
*The federal government, being Monetarily Sovereign has no need for tax money
2) free medical for everyone. doctors would be educated for free and must work the first 10 years in a government run clinic or hospital. a private system remains for those who want it. the form this takes is not important as long as it is NOT done in the way they did obamacare where middle men (insurance industry) scrapes profits, and tort laws are not suppressed.
I agree with free, full coverage Medicare, Parts A, B and D for every man, woman, and child, plus free education for all (not just doctors). I have serious doubts about making all doctors work 10 years in a government-run clinic. A bit too much government control for my taste.
3) a reverse income tax is a problem for me as i picture how it it is a disincentive for some people (i have relatives …).
The “disincentive” myth — the complaint right wingers use to disparage all social funding — unemployment insurance, free food, free housing, etc. He knows his relatives better than I do, but most people would rather work for $100 than not work for $50.
4) i believe education should be free – but the system is currently failing to properly educate. the system must be changed first. we do not need people graduating without the skills they need in the marketplace to find a job. we are not graduating enough people with technical ability (like electricians, mechanics, carpenters …)
We agree on free education, but waiting for the system to change “first,” is the perfect way never to change the system. The future of America does not focus on electricians, mechanics and carpenters. I think we need more scientific researchers and practitioners.
5) salary to go to school – not sure this is necessary generally.
It’s necessary in families where bright kids can’t go to college because their family needs them to work and bring in money — of which there may be millions. Who knows how many Einsteins, Watsons, Cricks, and Paulings never fulfilled their potential, because their families needed their income? Who knows what advances in our lives would have been possible?
6) eliminate corporate income tax – and replace it with a vat. you cannot have free trade agreements, tax your industry – and expect your domestic corporations to survive or to be as profitable as they could be.
I agree with eliminating the corporate tax. There is no economic benefit for America by taxing corporations. But the VAT is one of the most regressive taxes ever invented — and totally unnecessary. The federal government neither needs nor uses tax dollars. Those dollars are destroyed upon receipt, and no longer exist in the money supply.
7) repeat – no income tax for the middle class.
Agreed. Or for the lower class, either.
8) in general i agree with the concept that the government must invest – and has been failing miserably. i think the nations power grid would have been a good place to start. however, i am beginning to fear the government because our system have become corrupted by the inability to change the constitution, having no sunset laws – and a court system which has hijacked the constitution with rose colored glasses which they change daily.
We all fear the government. I especially fear the U.S. Supreme Court, as corrupt a group as exists anywhere in the government. But we need government investment in order to grow.
9) this is the 21st century. bank deposits should not be allowed to remain in the bank – but are swept into the central bank. this eliminates the fdic, and the need to privatize banks (as they have no depositors money anyway). banks become middle men who sell their loans off to investors.
I think he agrees with my #9.
In total, I’d like to thank Mr. Hansen for his well-considered comments. It’s been a pleasure “talking” with him, and I hope we can continue the “conversation.”
Rodger Malcolm Mitchell
Nine Steps to Prosperity:
1. Eliminate FICA (Click here)
2. Federally funded Medicare — parts A, B & D plus long term nursing care — for everyone (Click here)
3. Send every American citizen an annual check for $5,000 or give every state $5,000 per capita (Click here) Or institute a reverse income tax.
4. Free education (including post-grad) for everyone. Click here
5. Salary for attending school (Click here)
6. Eliminate corporate taxes (Click here)
7. Increase the standard income tax deduction annually
8. Increase federal spending on the myriad initiatives that benefit America’s 99% (Click here)
9. Federal ownership of all banks (Click here)
10 Steps to Economic Misery: (Click here:)
1. Maintain or increase the FICA tax..
2. Spread the myth Social Security, Medicare and the U.S. government are insolvent.
3. Cut federal employment in the military, post office, other federal agencies.
4. Broaden the income tax base so more lower income people will pay.
5. Cut financial assistance to the states.
6. Spread the myth federal taxes pay for federal spending.
7. Allow banks to trade for their own accounts; save them when their investments go sour.
8. Never prosecute any banker for criminal activity.
9. Nominate arch conservatives to the Supreme Court.
10. Reduce the federal deficit and debt
No nation can tax itself into prosperity, nor grow without money growth. Monetary Sovereignty: Cutting federal deficits to grow the economy is like applying leeches to cure anemia.
Two key equations in economics:
1. Federal Deficits – Net Imports = Net Private Savings
2. Gross Domestic Product = Federal Spending + Private Investment and Consumption – Net Imports
THE RECESSION CLOCK
As the federal deficit growth lines drop, we approach recession, which will be cured only when the lines rise. Federal deficit growth is absolutely, positively necessary for economic growth. Period.