In this thread I hope to discuss possible solutions to the problem. I shall personally not engage in a discussion about the ineptness of Congress . I will instead put forth a small plan for fixing this problem.

For many years I have bean studying economics; what I believe, is that are many myths perpetuated by many people that are beholden to a particular group or another. This has muddied the water considerably and now here is my proposal.

First all income regardless of how it is acquired should be required to contribute a certain amount to the Social Security / Medicare program, for the sake of argument I think that the rate should be 5% for any income above the current cut off rate. The current maximum income that is required to contribute is $106,800.

This will in effect bring the rate that the very top is paying, in line with that, which is paid by the middle class.

Second we should substantially raise the highest tax rate, which is collected by the wealthiest. We should than give strong incentives to that group to reduce that rate by investments in America, not in foreign economies. It’s not that we need to punish the rich or even try to redistribute wealth which is problematic. In that, even if all the richest’s wealth was redistributed, it would have virtually no effect on the dept. No the dept will only be reduced by growing the economy.

It’s not the money they would be paying in taxes, it’s the money they would invest in order to avoid paying those higher rates, that would increase the size of the economy.

Another non tax related condition is starting to show, and that is the devalued dollar, in spite of all that has been said about this, it will actually help us in the long run. First our dept as a percentage of the GDP will decline; secondly it will make American goods more competitive in the world economy.

In the short term it will have the effect of making energy and imports go up in cost, but eventually this will encourage domestic energy production and will make American oil exploration and services companies more competitive around the globe.

And last we should do away with all tax incentives to dismantle American industry and ship the facilities overseas.

These are some of my thoughts, I welcome your input but I would ask that unlike our leaders, we will take an open minded view of these problems. After all, as has been made all too obvious lately; we must do something, because our government is not going to do it without our guidance.

Good luck because with the country actually run by the rich it isn't likely to happen.

I do agree that the US tax regime is a big part of the problem.

They should also look at why two percent of the population is in jail. Got be be something fundamentally wrong there.

As we see it's harder to offer a solution than to simply criticize. The purpose of this thread is to share ideas.

You all are pretty smart, you build databases, that is one of the most mentally challenging careers. So if we're not up to it.

Who else will be?

I can't speak for the American deficit, as I do not know enough about it or the policies that have driven it... however we are facing a similar issue in the UK, and out Government has adopted a very stringent round of Austerity measures...As a result of these measures GDP is stagnant, Consumer Spending is stagnant and in some quarters in decline... the recession is taking a lot longer to claw ourselves out of, and confidence in the Government and the economy is low...

So in my opinion, it will be extremely tough for any government to bring their country out of the red and into the black without upsetting somebody along the way... But I agree in one principal, the majority of the Rich people played a major contribution to getting us into this mess, it is only fair that they should be the minority who feel the most pain from the recovery...

In Australia we put it off the pain for a while with a lot of government debt (though tiny by world standards) but retail is stagnating here now. People are nervous.

We have nearly all upgraded our TVs for digital. Our PCs and phones are good enough. Nobody trusts real estate as investment so building is depressed. Real estate is not moving. Most have decided to sit it out becuase they can't afford to sell or have already cut and run. Our current cars have four wheels that still go round.

Everyone is cutting costs and saving for a rainy day to keep the mortgage alive.

We are lucky because we have the world's biggest mine so we have reserves to regenerate wealth. When demand is up it also sitmulates our economy with both the need for expensive equipment and high wages.

However we are totally at the mercy of the demand for minerals and it is refelected in our currency. Demand goes up so does our dollar. Demand falls ditto.

It is hard to come up with a solution to a problem rooted in irresponsible lending across the planet for the past decade or more. Fortunately our prudential systems here are more prudent than most so losses on defaults have been relatively small. But there come a point where market forces push the prices too low and the faeces impinge upon the fan.

For many years I have bean studying economics; what I believe, is that are many myths perpetuated by many people that are beholden to a particular group or another. This has muddied the water considerably and now here is my proposal.On significant problem with economics is that it comes in many "flavors", each of which is bastardized by the politicians to make political points. For example, the Republicans claim to want government out of private enterprise yet they also demand that government become involved in "incentivizing" business. In terms of solving the debt crises, the politician's need to speak truthfully and implement economic policies in a transparent manner. Hell will probably freeze over first.

Second we should substantially raise the highest tax rate, which is collected by the wealthiest. We should than give strong incentives to that group to reduce that rate by investments in America, not in foreign economies. It’s not that we need to punish the rich or even try to redistribute wealth which is problematic. In that, even if all the richest’s wealth was redistributed, it would have virtually no effect on the dept. No the dept will only be reduced by growing the economy.

You raise several issues.
1. There is NO such thing as a fair tax. Any tax imposed will hurt in varying degrees. For example, a flat tax will hurt the poor more than the rich. I've come to the conclusion that we simply need to get over the concept of having a fair tax.

2. Taxes are only one form of government revenue. Furthermore, taxation does not have to be based on income. I am tending towards eliminating the income tax in favor of a consumption (sales) tax. Many people would argue that a consumption tax will hurt the poor, which is understandable. But it would also eliminate a gazillion pages of tax regulations and having to spend hours filing a tax return.

3. Taxes can be broken down into three broad categories.
3a. Obtaining revenue to run the government. This is the fundamental purpose of taxation. Taxes in this category are a valid cost-of-business. Businesses need to get over objecting to paying taxes necessary to run the government.
3b. Transference of wealth - This is a big stumbling block to balancing the budget. Tax the rich to lower the tax burden of the poor, even to the point of providing free services; such as food stamps to the poor.
3c. Implementing policy to change behavior. In this case undesirable products, such as tobacco are taxed at a higher rate to discourage consummation. In other cases tax credits are given to encourage people to buy a green car.

Balancing the budget would require isolating the revenues/expenses for each of these categories. What is troublesome with the transference of wealth category is that we have an increasingly large bureaucracy that collects revenues from the States, does some abracadabra, and then gives it back to the States. This is highly wasteful. What is troublesome with implementing policy to change behavior is that it reeks of a planned economy. Ironically, I don't have an issue with implementing such policies.

And last we should do away with all tax incentives to dismantle American industry and ship the facilities overseas. All tax incentives should be done away with. Don't forget that tax incentives decrease tax revenues which means that other have to pick-up the tab through higher taxes. (A concept that the Republicans do not seem to understand.) Of course, doing away with tax incentives would be inconsistent with my belief that tax policy can be used to guide change. So I will have to work on that a bit.

Another non tax related condition is starting to show, and that is the devalued dollar, in spite of all that has been said about this, it will actually help us in the long run. First our dept as a percentage of the GDP will decline; secondly it will make American goods more competitive in the world economy. Devaluing the dollar is needed to spur economic growth. Actually, what we want is the other economies to achieve our standard of living so that they will buy our products. Unfortunately, devaluing the dollar is one of those inconvenient truths that the politicians will never never acknowledge.

1. Add two percent sales tax to purchases.
2. Add five to ten cents tax to a gallon of gasoline.
3. Control costs of Medicare and Medicaid through some austerity measures.
4. Control the flow of illegals coming to this country.
5. Get away from "class warfare".
6. Vote for a new and capable leader in 2012 election.

1. Add two percent sales tax to purchases.
2. Add five to ten cents tax to a gallon of gasoline.
3. Control costs of Medicare and Medicaid through some austerity measures.


That means hurt the poor, hurt the poor, hurt the poor.


4. Control the flow of illegals coming to this country.


Excellent idea, but how? I'd suggest heavy fines on any companies found to be hiring illegals.


5. Get away from "class warfare".


Class warfare occurs due to huge differences in the quality of life between rich people and poor people. If the playing field was truly level, then there would be no need for class warfare, but we are not even close to there yet. If education was free and healthcare was free, than you could truly say that anyone can make something of themself if they apply themself.


6. Vote for a new and capable leader in 2012 election.

Another excellent idea. Let me know when you find a capable leader :p

Second we should substantially raise the highest tax rate, which is collected by the wealthiest.I forgot in my prior response to speak of the relative value of money. That is $1 in the hands of a poor person is worth more than $1 in the hands of a rich person. The poor person needs that $1 to pay for groceries, whereas the rich person may use that $1 in an inefficient manner to buy something frivolous.

So if you believe in a progressive income tax, as a means of balancing the budget, this is one economic argument that you make.

----------------------------------------------------

Those on the political "right" however will contend that it is rich who somehow create wealth through entrepreneurial activities, so taxing them more would be a drag on the economy and lead to less government revenue.

I tend not to support the above viewpoint. The poor person has to spend his $1, which enters the economy. The rich person, however, may choose not do anything with his $1. In fact there is no obligation on the part of the rich to even do anything to improve the economy.

This is one reason, the stimulus programs and tax cuts have not improved the economy. There is a lack of consumer demand. The private sector sees no benefit in investing in job growth.

---------------------------------------------------

As for me, I am tending for a flat tax based on consumption as the general approach for balancing the budget. To trim costs, I would also suggest the elimination of federal government programs that collect money only to redistribute it. One example, the Department of Education. Along those lines - programs that guarantee loans such as housing programs and student loan programs should be eliminated.

That means hurt the poor, hurt the poor, hurt the poor.Quite true. But there is no such thing as a fair tax. No matter what tax system is employed one special interest group or another is going to claim that they are somehow being singled out for destruction. That is one reason our current tax system is a byzantine mess.

The issue to providing sufficient revenue to fund government operations. We need a relatively simple tax code that will achieve that objective.

Quite true. But there is no such thing as a fair tax. No matter what tax system is employed one special interest group or another is going to claim that they are somehow being singled out for destruction. That is one reason our current tax system is a byzantine mess.


Agreed, the question is, who should not be targeted for more burdens? Those who already have a lot of burdens seems the obvious answer.

I think if all taxes were removed, and instead a simple national sales tax of say 50% went into affect, with basic necessities not taxed at all, we'd see an improvement in tax collection as well as slash a lot of government.

So, your house payment on your primary residence, no taxes. Your groceries, no taxes. Your water bill, medical care (which should be free anyway), electricity, etc. All of what the average family/individual pays as a cost of living, no taxes.

Gifts, luxuries, services, etc. would be assessed the 50% tax rate.

What this would do is make it where affording the basics would be much easier, but purchasing wants and desires would be more expensive.

It would still be a progressive tax system, as the rich would purchase more non-essentials and thus pay more taxes than a middle class family would. It would also close a lot of loop holes in the current tax code.

Simple and straight-forward. Helps the poor & middle class, so Democrats would like it. Shrinks the size of government, so conservatives would like it.

In this context, watch for politicians' words.
1. Means-testing of Social security and Medicare benefits. This implies that those who have money need not be paid benefits. Politicians always want to look good with the common man (vote bank). They forget the fact that everyone contributed from their paychecks throughout their working years. If anyone wants to voluntarily decline benefits, that is fine.
2. Savings in the out years. Do not expect any savings now. The savings will come five or ten years from now. He or She hopes to be gone by that time.
3. Social Justice. This came from some churches (I do not want to mention names). The essence is that people get rich at the expense of others - Socialist thinking. For some reason, these churches do all their fund raising in capitalist countries for the benefit of poor countries. Then blame the donors for their arrogance. They teach that poverty is a virtue. I will not vote for any politician talking about social justice. They are more interested in wealth re-distribution, not wealth creation.

2. Savings in the out years. Do not expect any savings now. The savings will come five or ten years from now. He or She hopes to be gone by that time.Not only will they gone, but how can a current Congress or President obligate a future, as yet unknown, Congress or President to a particular course of action? They can't. For that reason, 10 year budget proposals are a farce.

Guys,

I had hoped to stimulate a conversation on remedies; absent of the failings of political theatre.

This conversation is typical of most that I hear. Politics, politics, politics; if all we can do is criticize and politicize, what possible hope do we have in our elected officials acting in a different manor?
I ask again, if you were faced with sitting on a board, tasked with leading the World away from the brink and back to prosperity, what would you do?
If we the intelligentsia cannot, then I strongly recommend that you learn how to farm and very soon.

If we the intelligentsia cannot, then I strongly recommend that you learn how to farm and very soon.


I already have a farm. :)

This winter I'm leaving Northern Virginia to build high yeild small farm in Texas.

We are going to grow food and energy.

This winter I'm leaving Northern Virginia to build high yeild small farm in Texas.

We are going to grow food and energy. (emphasis added)I predict a high potential for failure.:D Of course, spring may arrive by the time you actually get ready.

I had hoped to stimulate a conversation on remedies; absent of the failings of political theatre.

The solution to the debt/budget crises does depend on your political/social leanings. In particular, the US government has exceeded its Constitutional authority for collecting revenue and implementing spending programs.

Even I have a degree of sympathy for those who claim entitlement programs are not authorized by the Constitution. Particularly egresses has been the passage of Obama care which seems to require citizens to buy medical insurance. This seems to be blatantly illegal.

But back to the "game". You asked how the debt/budget crises can be resolved. Fundamentally, we need to bring revenue in line with expenses. Of course making that statement fails to divulge how that would be done.

On the revenue side, eliminate the income tax and have a consumption tax. Revenue can also be derived from leasing Federal lands, leasing the airways to the cellphone companies, sin taxes, import duties, and usage fees (airports, roads, parks).

On the expense side:

1. Reduce military spending to meet the mission of national defense. Eliminate NATO, eliminate the European missile shield, bring the troops home. etc. Stop building expensive equipment, that if destroyed would bankrupt this country. Military equipment needs to be cheap and expendable.

2. Eliminate Federal program that collect money only to re-distribute it. That would include Housing and Urban Development, Education, and the Department of Energy.

3. Eliminate Federal loan guarantee programs related to housing, student loans, and businesses.

4. Do not allow the reconstruction of structures destroyed by natural disasters that are in flood plains or other hazardous areas. Do not allow the construction of protective structures.

5. Federal programs such as the Environmental Protection Agency, Department of Commerce, Department of Agriculture, Department of the Interior need to be kept. Yes kept.

6. Eliminate the various "wars" we have and the agencies conducting these "wars". That would be the Department of Homeland Security, the Drug Enforcement Administration, and the emergence of an agency to combat so-called "theft" of intellectual property. Basically, get rid of the growing police state.

7. Concerning entitlements. If revenues, after all the other cuts, are insufficient they will have to be downsized to. To varying degrees, entitlement programs over time have been aggrandized, these programs may be ripe for re-examination to restore them to their original intent.

8. To the maximum extent possible all subsidies should be eliminated.

9. Eliminate to the maximum extent feasible, the ability of Congress to fund useless local projects. Congress is increasingly micromanaging everything. This adds to deficit.

The above are just suggestions that are not based on any analysis of revenue versus expenses. The above suggestions are also a quick overview and can be considered incomplete. But it is a start. Have at it.

On the revenue side, eliminate the income tax and have a consumption tax.



How exactly will that stimulate economic growth?

How exactly will that stimulate economic growth?The simple answer. NO, it will not stimulate economic growth. Taxes are meant to provide the government with revenue for operating the government. The government also uses the money, like any business, to buy goods and services. So the economy uses tax revenues.

The more complicated answer. A flat consumption based tax will be more efficient than the existing morass of a byzantine tax code. Attempting to comply with the tax code means hiring unnecessary experts in the form of lawyers, accounts, internal revenue agents, and other administrative people to manage the tax system and compute tax obligations.

Get rid of this unnecessary administrative burden and the money saved could be used for a nice vacation. It would also lower the overall cost of operating the government. Thereby making a contribution to balancing the budget.

The money saved by having a more efficient tax structure can be used to buy more products and services. However, I would be reluctant to state that it would actually stimulate the economy.

I did a quick search to cherry pick some quotes Favoring A Flat Tax (http://www.forbes.com/2009/03/09/flat-tax-plan-obama-opinions-columnists-taxes.html) by Richard A. Epstein.
On the private side, a flat tax reduces the distortions that otherwise arise when two individuals receive different after-tax returns on their labor or investment. The flat tax also eliminates private incentives to concoct wasteful schemes to shift their income onto the ledger of their poorer relatives.

On the public side, the flat tax limits political discretion by making it harder for the government to single out "the rich" for special treatment. It also crimps government spending by denying any group the luxury of supporting government expenditures entirely at someone else's expense.

Summary of Steve Forbes' Flat Tax Plan (http://www.pbs.org/newshour/bb/congress/forbes_flat_tax.html)
The flat tax would be simple. You could fill it out on a postcard. It would be honest. It would eliminate the principal source of political corruption in Washington. It would be fair. Millions of people would be off the federal income tax rolls.

There would be no tax on Social Security. No tax on pensions. No tax on personal savings. It would zero out capital gains taxes. It would set off a boom by letting people keep more of what they earn and by lowering barriers to risk taking.

...

Start by scrapping the tax code. Don't fiddle with it. Throw it out. Put as many IRS bureaucrats as possible into job retraining.

Replace it with a flat tax that is a tax cut -- a pro-growth, pro-family tax cut that lowers tax rates to 17 per cent across the board and expands exemptions for individuals and children so that a family of four would pay no taxes on the first $36,000 of income.

Seems that there is even a Wikipedia entry for Consumption tax (http://en.wikipedia.org/wiki/Consumption_tax). Pretty dry article, but a start. I need to review the whole concept in greater detail myself as I am not clearly distinguishing between the Flat fax and Consumption based tax.

The simple answer. NO, it will not stimulate economic growth. Taxes are meant to provide the government with revenue for operating the government. The government also uses the money, like any business, to buy goods and services. So the economy uses tax revenues.


I submit to you Sir, that the very reason for the Revolution that lead to the creation of the Constitution of the United States was fought for one reason.
To end the tyranny of the few; owning everything.

The conservative movement is so focused on “constitutional” rights that it fails to see where the real loss of liberty is occurring.
The people of the United States are encumbered with protecting the country from enemies both within and without.
And right now, the biggest threat to our National Security is economic collapse.

So I ask you, when is it justified to use the power of taxation to save the nation? In the next 2 or 3 years the economies around the globe stand on the brink of utter destruction. I heard one of the candidates in Iowa say that we need to do what we always do to fix this recession.

Really? There has only been one other one like it. The congress at the time forced a balanced budget on the people, and the economic crash lasted 12 years; until finally it was ended by a great global conflict (WWII).
People better wake up. As long as middle class people keep repeating what their betters are telling them, we will move inextricably towards the feudal systems. All proposals you hear from conservatives are designed to enrich the richest and enslave the rest.


By the way, a consumption tax will indeed NOT stimulate growth in the economy, it will have the exact opposite effect. It will encourage even more hording at the top. You know, the top of the "trickle down" economy.

Look to feudal Europe to get a better understanding of the effects of hoarding currency by the very top. Most of those countries’s wealth was in, land, war machines, and jewelry. And the people from the time of the fall of the Roman Empire, to the revolutions in America and Europe, lived under the boot of the feudal lord.

Why?

Because all of the money was hoarded at the top.
Conservative better wakeup.

The conservative movement is so focused on “constitutional” rights that it fails to see where the real loss of liberty is occurring.The political right is moving towards a police state in the name of "security".

Additionally, they are moving towards corporatism. That is using the power of the State to further corporate interests. One unfortunate growing outcome of this process has been the ability of Corporations to essentially make "law" and eliminate due process in the name of protecting so-called "intellectual property". I go into more detail here: "The Concept of "Sale" is Under Attack (http://srynas.blogspot.com/2010/09/concept-of-sale-is-under-attack.html)"

So I ask you, when is it justified to use the power of taxation to save the nation?Taxes are a necessary expense to operate the government. The problem is that our politicians are running a "bread and circuses" economy. They have not made the "tough" decisions of identifying the limits to government services and ensuring that we have sufficient revenue to cover those obligations.

For example, the Republicans loudly proclaim no tax increase yet they refuse to accept cuts to military spending. The Republicans claim to want to reduce "welfare" in the form of entitlements yet they are for increased deficit spending in the form of granting "welfare" to corporations using the euphemistic term "incentives".

By the way, a consumption tax will indeed NOT stimulate growth in the economy, it will have the exact opposite effect. It will encourage even more hording at the top. You know, the top of the "trickle down" economy. That's the answer I gave in my simple answer. But it will not have a negative impact on economic growth either. I view taxes as a cost of doing business, like salaries, advertising and rent. There are economic benefits derived from government programs.
The simple answer. NO, it will not stimulate economic growth.

It will encourage even more hording at the top. You know, the top of the "trickle down" economy. I would not call it "hoarding", but you are correct in the sense that the rich would not need to spend the money like the poor. They (the rich) can just sit on it and do nothing.

Now the premise of this thread is to explore how a balanced budget may be achieved. I have put forward using a consumption based tax and reducing government expenditure in the military and certain social service programs. How would you raise the revenue need to operate the government and to what degree should the government be involved in the economy and social services?

Guys,

I had hoped to stimulate a conversation on remedies; absent of the failings of political theatre.



The problem is that the very essence of how to fix something depends on what you think is wrong with it. To me, in order to fix this economy, we would need to raise taxes on the rich, reduce spending, eliminate large parts of the military machine, etc.

A relatively simple question such as: "What size should the government be" will get you a million different answers.

But in general, those who are for smaller government tend to believe in that the wealthiest Americans earned the right to be filthy rich, and we as a country have no right to try and take any of their money. If we want to be rich too, all we have to do is work really hard, and it won't be an issue (and they say that with a straight face).

Those who are for larger government tend to believe that there shouldn't be such a massive difference between the richest and the poorest of individuals. That society should provide for those less fortunate. That healthcare and education should be cheap (or free) and readily available for all.

So, while we can throw out solutions, our solutions are of course going to be different. And we'll have a hard time agreeing on anything as where we think the government should be is ultimately very different.

The problem is that the very essence of how to fix something depends on what you think is wrong with it. To me, in order to fix this economy, we would need to raise taxes on the rich, reduce spending, eliminate large parts of the military machine, etc.

A relatively simple question such as: "What size should the government be" will get you a million different answers.

But in general, those who are for smaller government tend to believe in that the wealthiest Americans earned the right to be filthy rich, and we as a country have no right to try and take any of their money. If we want to be rich too, all we have to do is work really hard, and it won't be an issue (and they say that with a straight face).

Those who are for larger government tend to believe that there shouldn't be such a massive difference between the richest and the poorest of individuals. That society should provide for those less fortunate. That healthcare and education should be cheap (or free) and readily available for all.

So, while we can throw out solutions, our solutions are of course going to be different. And we'll have a hard time agreeing on anything as where we think the government should be is ultimately very different.Good response.

The problem is that the very essence of how to fix something depends on what you think is wrong with it. To me, in order to fix this economy, we would need to raise taxes on the rich, reduce spending, eliminate large parts of the military machine, etc.

A relatively simple question such as: "What size should the government be" will get you a million different answers.

But in general, those who are for smaller government tend to believe in that the wealthiest Americans earned the right to be filthy rich, and we as a country have no right to try and take any of their money. If we want to be rich too, all we have to do is work really hard, and it won't be an issue (and they say that with a straight face).

Those who are for larger government tend to believe that there shouldn't be such a massive difference between the richest and the poorest of individuals. That society should provide for those less fortunate. That healthcare and education should be cheap (or free) and readily available for all.

So, while we can throw out solutions, our solutions are of course going to be different. And we'll have a hard time agreeing on anything as where we think the government should be is ultimately very different.

The use of “throw out solutions” creates a diminutive impression of the value of finding solutions.

It has been my experience that great leaders seldom lament the conditions of a situation, more often they look for and find solutions.

In this case, to follow your lead, on the varying degree that people look at the size of government . You will find that the vast majority are obviously much towards a balance then either the Socialist or the Tea Partiers.

That leave lots of room for solutions. No matter which ideology you follow the country will be broke if we continue down the path we are taking.

Ultimately the solution is simple, all currencies will float. But that will come a huge cost to most of us. Those that live in cities and were not raised on a farm or were not taught old wisdoms will most likely perish or at least suffer great hardship.

So we can continue to allow our ideologies to direct our behavior or we can start a movement that will speak directly to the problem of getting people back to work in wealth producing jobs.

Trade imbalances are the root cause of all of our problems. This is where we should insist that out politicians focus their time.

Politics and size of government are irrelevant.

Trade imbalances are the root cause of all of our problems. This is where we should insist that out politicians focus their time.Resolving the trade balance issue would be a must. The preferred solution would be to have the standard of living of our trading partners rise so that it would equal that of the United States. The politically unpalatable solution would be to devalue the dollar, which is what is happening anyway.

Politics and size of government are irrelevant.The size of government is very germaine. Essentially, the larger a government, society, or corporation becomes - the more rule bound they become to resolve management complexities. (The most effective decisions are those made by a relatively few decision makers. But that is an anathema in this country.)

The age of a government, society or corporation is also of significant concern. Governments, society and corporations (like people) move through life stages. When young they are relatively freewheeling. As they age they become increasingly obsessed with maintaining the status quo and protecting assets. Microsoft is a good corporate example of this aging process. The US is also exhibiting increasing symptoms of protectionism, indecision, increased security (police state), and loss of vision.

The use of “throw out solutions” creates a diminutive impression of the value of finding solutions.


I wouldn't say so. My intent was to point out that there is no silver bullet that will fix everything. So, the things we are and have suggested on this thread and on others have been suggested in the past. Some have been implemented on varying scales with varying amounts of success or failure.

Take the idea of trickle-down economics. Or the idea that tax cuts for the rich generate jobs. In my opinion, these two theories have been throughly debunked. There are others who have looked at the same evidence as I have, and drawn the conclusions that both work.

So, ultimately, why we can come up with solutions, little will actually happen unless you can gin up a large following of people who support you.


It has been my experience that great leaders seldom lament the conditions of a situation, more often they look for and find solutions.


I hate to sound so dramatic, but I think that is the past. I think all of the anger and fury that President Bush's presidency caused both domestic and foreign, turned the political landscape very brittle. The election of the first biracial president shattered that landscape. It is harder now to find compromise in the US congress that any other time in modern history.


You will find that the vast majority are obviously much towards a balance then either the Socialist or the Tea Partiers.


Agreed.


That leave lots of room for solutions.


Sure. But to be effective, they're going to need to be instituted on a wide-scale level, i.e. legislation. And passing legislation these days is an exercise in futility.


So we can continue to allow our ideologies to direct our behavior or we can start a movement that will speak directly to the problem of getting people back to work in wealth producing jobs.


Start a movement? You mean that if you just tell everyone how bad things are or will be, they'll come together as a country? That sounds like a movie, not reality.

Keep in mind that there are 10 million different groups out there, all pushing various agendas based on what they think is the correct solution. Find one (or more) that you agree with, and join them.


Politics and size of government are irrelevant.


I would disagree. I would say that politics are everything when it comes to finding solutions for a country's problems.

I would not agree with politics being the root cause, but certainly the tax code is.

Or rather, the broken tax code.

We're out of time; the end of our economy is upon us. I’m working on a thesis, I will present it by the end of this week.

In the mean time please continue to discuss this. I wish some of the conservatives would present their rational for decreased tax on the rich, and how they see reducing entitlements affects the country.

I think most of them have no clue how much our freedom has been eroded by the recreation of the feudal system.

But they will, oh so soon.

Look to Mexico; for a model of the future of The USA.

Take the idea of trickle-down economics. Or the idea that tax cuts for the rich generate jobs. In my opinion, these two theories have been throughly debunked. There are others who have looked at the same evidence as I have, and drawn the conclusions that both work.True.:)

Nevertheless these concepts retain a lot of traction and populist support because they sound good. Furthermore, much of the support obtained by politicians comes from the beneficiaries of these policies. Of course the politicians are here to "help".

The logical flaw in supply side (Voodoo) economics is that companies hire in response to demand, not in anticipation of demand. So giving "money" (in the form of incentives, tax credits, or whatever) to corporations will not cause the companies to hire more employees and trickle down the wealth.

The economic malaise that we are currently experience demonstrates both the failure of supply side economics and Keynesian stimulus. The Government is flooding the economy with money and interest rates are at record lows, yet the economy only sputters instead of blossoming.

I will advocate, that the economy is sputtering as an expression of the bad logic behind supply side economics. Essentially, we can only consume so much. One car is good, two may be even better; but three, four, five ?????:confused:

The Washington Post ran the article below that raises structural issues (such as an aging population) for why the economy is not taking-off. Regretfully, the article ends with the usual call to focus on growth despite the fact that the article is pointing to why growth is not occurring. I guess it is too politically unpalatable not to make those assertions even in the face of the evidence. America’s debt is not its biggest problem (http://www.washingtonpost.com/opinions/americas-debt-is-not-its-biggest-problem/2011/08/10/gIQAgYvE7I_story.html)

So when you stimulate purchases (such as cash-for-clunkers or incentive programs for housing) you do initially stimulate the economy. And the supply side crowd bullhorns their supposed success.

But guess what!! After the purchases are made people stop buying because there is no need to by that sixth car. In the case of home ownership, people found out that they could not afford the homes. The economy now crashes. Supply side economics may initially promote purchasing, but in the end it simply cannibalizes future sales. Of course the supply side crowd refuses to acknowledge that people stop consuming when their basic needs are met.

I think most of them have no clue how much our freedom has been eroded by the recreation of the feudal system.

But they will, oh so soon.

Look to Mexico; for a model of the future of The USA.

The feudal-style system, as you're describing, is exactly what some of them want. They truly believe that poor people are poor because they are lazy and do not want to work. They believe that middle class people are not rich because they do not want to work overtime.

They have convinced people that opportunities abound, and that when things don't go well it is actually because of all those "leaches" living off of government assistance.

A good example of this is unions. There are many people who are rabidly against unions. They believe that unions promote laziness, force everyone else to pay higher prices for goods and services, and protect incompetent workers.

The rich owners of companies who have to bargain with the unions have convinced many in the general public that it is all the fault of unions. The company wants to sell you a cheap car, but because of the union costs, they can't.

When it comes right down to it, though, most people who don't like unions are against them because they don't think they're fair. The individual that makes $20 for doing a job compared to a union worker that is making $25 for doing the same job is furious. Its not fair to them. Why should that union worker make $5 more? The union is holding the poor, innocent company owners hostage.

The people who promote this type of thinking are very good at getting these non-union workers worked up into a furor over this. They can shape the conversation this way instead of as "Why aren't the non-union workers making $25 as well?"


The logical flaw in supply side (Voodoo) economics is that companies hire in response to demand, not in anticipation of demand. So giving "money" (in the form of incentives, tax credits, or whatever) to corporations will not cause the companies to hire more employees and trickle down the wealth.


100% correct. It has been said time and time again. If you could get people to understand this one paragraph of yours, you could radically change the conversation of the economy, taxation, etc. But you won't, because those who have the most to gain from voodoo economics have far more money pumped in to convince everyone otherwise.

The logical flaw in supply side (Voodoo) economics is that companies hire in response to demand, not in anticipation of demand. So giving "money" (in the form of incentives, tax credits, or whatever) to corporations will not cause the companies to hire more employees and trickle down the wealth.

...

I will advocate, that the economy is sputtering as an expression of the bad logic behind supply side economics. Essentially, we can only consume so much. One car is good, two may be even better; but three, four, five ?????:confused:
...

So when you stimulate purchases (such as cash-for-clunkers or incentive programs for housing) you do initially stimulate the economy. And the supply side crowd bullhorns their supposed success.

But guess what!! After the purchases are made people stop buying because there is no need to by that sixth car. In the case of home ownership, people found out that they could not afford the homes. The economy now crashes. Supply side economics may initially promote purchasing, but in the end it simply cannibalizes future sales. Of course the supply side crowd refuses to acknowledge that people stop consuming when their basic needs are met.

This morning, CNBC had an interview with Stephen Roach who coincidentally reiterated what I have been saying. So I made a point of tracking down thie interview. The short synopsis "consumers got hammered in a crisis largely because they overspent, they borrowed more than they ever should've."

It is extremely unfortunate that the concept of over-stimulation has no traction. Obama's proposals to stimulate the economy are a non-solution and will ultimately fail.

Global Recession: Begins & Ends With U.S.? (http://video.cnbc.com/gallery/?video=3000039170#) The interview begins 50 seconds into the video.