Dear Friends:- Individuals are generally overleveraged to the extent that they work to pay off interest and amortization, with very little for essential expenditure and none for savings;
- Institutions have encouraged this by their irresponsible practices and policies, and the terms "earning it" or "saving up for it" have become quaint anachronisms amongst the populace, which is largely obessessed with FICO scores and borrowing -- all of which have been fueling incredible inflation in virtually every commodity, from housing to automobiles, because of the availability of too much money from lenders;
- Free Enterprise does not exist in the United States, where barriers to change are immutable, and incentives to conformity and indolence are systemically inculcated. Innovation is hindered, and a "follow the crowd" mindset has predominated a culture once fecund with inventiveness and entrepreneurship;
- The theoretical "Middle Class", the buffer and bedrock of any civilization is disappearing;
- The United States government, through its arms and agencies, seeks short-term "politically expedient" fixes by "bailing out" failing institutions (banks, investment banking houses, insurance companies and large employers) with money which it must either print or borrow, fueling inflation, increasing the National Debt, incentivizing begging, borrowing and stealing instead of earning, innovating and private-sector problem-solving.
The United States is in a severe domestic depression, and this will likely steepen over these next few years. The world, to a lesser extent, is experiencing a deepening financial crisis as well, largely due to our example. Our country has spent incredible sums on prosecuting wars, financing "reconstruction," and spreading democracy -- and it seems that all of the funds have come from the domestic treasury and have "left the system" through the use of overseas banking, contractors and other parties outside of the scope of the domestic economy.
In brief, we are an impoverished nation, living on borrowings, and on borrowed time. Our wealth may be counted on unsupported paper...paper which is inexchangeable for buying necessities. The more that our political superstructure subsidizes inefficiency and misbehavior, the deeper the pit becomes. The problem is compounded when we insist on issuing these funds without any promise, in return, for a change in the conduct that has led a great nation to the eve of reckoning of its own mortality.
The money must ultimetely go to consumers, and not to the parties who have consistently, without contrition or compunction, exploited them. The benefits must be rewards for jobs creation, innovation, efficiency -- for problem-solving instead of problem creation.
Author Patrick Kennedy has written an article about a proposed series of actions which he would see the United States undertake in order to recover from its current crisis. I agree with Pat on many of his points, and I disagree on several of them, as well. But what is most important is that Mr. Kennedy, as a concerned citizen, thought about the problem and actually set about tp the colossal undertaking of proposing a blueprint for its solution. I respect innovation and intelligence, as I respect the courage to confront the truth and to take direct action without untenable, inefficient compromise. The article follows for your information and enjoyment.
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SOLVING THE UNDERLYING CAUSES OF OUR FINANCIAL DISASTER, by Patrick Kennedy
NOTES & SUGGESTIONS (Written on 7/6/2006 )
http://blog.360.yahoo.com/blog-HCis9sc6fqgYzJzE_UTQSloMDpctRPTVwhE0sJ742ms-?cq=1&p=6
I am not an economist, politician or an expert on war, taxes or law and it is doubtful that any reader would fully agree with all of the recovery concepts expressed in this memo. If you are interested enough to read it, you probably have an opinion – this is mine. I am aware that such things as welfare, unemployment benefits, Medicare, grants, loans, social security etc. exist; I am concerned with their administration, funding and future.
Terror is an ominous word; used daily by the media to alert us to potential danger from terrorists. Seldom is the word used by commentators or writers to describe the horror most often experienced by thousands of US citizens during their lifetime. Terror is also an appropriate word to describe;
· The mind set of a father or mother who has just lost their job to “out sourcing” and is faced with explaining to their family, why he or she cannot support them.
· The feeling that consumes you at the moment you realize that you are walking away from a house that you have loved, knowing that you have lost it and will never be going “home” again.
· The helplessness, when a family member is involved in a tragic accident or is seriously ill with no insurance or reserve and is confronted with the nightmare of substandard medical treatment or bankruptcy.
· Being too old to be hired, knowing that the social security you have paid for and counted on for 40+ years is delayed and may even be cut.
· Facing a monthly choice between food and medicine.
· A parent with a child or other family member hopelessly hooked on illegal drugs. These terrors have not been adequately addressed.
We are an industrious and resilient people, we are enthusiastic and optimistic and believe that all is never lost; that we can turn the tide and work our way through any government or self made dilemma. These assets have carried us far but, we do make mistakes – we savor and covet our right to make them and.... we all make them! We have always garnered the courage to forebear in the face of them and the will; to rise again and again in spite of them but now, we really need some legislative leadership.
We must strive to find leadership with the courage and sense of humanity to; ignore the lobbyists for deceitful agendas, the manipulating special interests with self serving issues, the colleagues who don’t share their passion for better American solutions and to fight for us – not for them!
It is easy, for the oracles of our society, who have not experienced these terrors, to say that all citizens should save more, work harder, get a better education and plan better. All of this is true and we should. But, it is equally as easy for us to say that our government is a large beneficiary of our labors and that the equity that we invest in it should help to support, in every way possible, its contributors and all of its citizens. This is also true and it doesn’t.
We are involved in a conflict testing our strength of arms and technology against an enemy that fights on will alone - at least that is what they think. They believe that; with every suicide bomber and attack against any free society - we lose our will to fight. They keenly observe that; each sadistic violent murder becomes tomorrows high profile story, each story solicits new protestors and each new protest convinces more Americans that we cannot win or that the price in American lives is too high or even that the war is costing too much money. We cannot allow this to be true.
Whether it is right or wrong to be in a conflict for the freedom of the Iraqi’s, it is definitely wrong to protest this war while it is being fought; protesters fuel our enemy’s endurance and their determination to continue to kill our soldiers. The time for objecting has past; it expired when our elected legislators voted (right or wrong – misinformed or not) to declare this war. This is a time for Americans to show their “iron”. A politician could never voice this opinion – he would be accused of violating our freedom of speech but, I can as, I am obviously not a politician.
Every sane person in the world wants the war to end and their troops to come home now, whether they believe in liberating Iraq – or not! However, we are now committed to the extent that, if we yield to the will of these assassins, hundreds of thousands of people, who now believe in us, will systematically be murdered and no one will ever trust us again. We will have delivered them into the hands of our enemies. We must stay the course, until they are capable of militarily supporting their new democracy. Despite what these terrorists think, our most feared weapon is not our strength of arms or technology; it is (as it has always been) the American will to win and prevail. These murderer’s do not need a cheerleading squad, if we let them win in Iraq they will be blowing themselves up in our cities! They proved their willingness to do this on 9/11, before we ever put a soldier in the field.
Americans all support the elimination of the evil dictators and zealots that call for American blood, who slay the innocent and repress their people’s thinking with self serving “religious” misinterpretations - all free people do. No one wants to go to war, particularly those who fight it and I personally, do not support the idea of allowing this particular war to be a catastrophic financial disaster because; it does not need to be!
Implementing the creation of any new tax, duty, tariff or law is difficult and sometimes dangerous as tax revenue must be used as intended however; desperate times call for desperate measures. There is no doubt that all of the subject matter here has been discussed (some is in place in half measures) but dismissed by CYA cautious advisors as politically not acceptable. It is easy to blame someone/everyone else for our current predicament; that exercise only empowers bitter people who are unable or unwilling to resolve difficult problems. In this spirit, I have some suggestions and observations:
This war has exacted American lives and an economic burden that our youngest and most valuable citizens will be required to endure long after we have departed. I suggest that we manage the financing of this war as a benevolent debt and not just as an act of charity.
· That we allow the Iraqis to produce their oil but insist that they execute an exclusive call on oil, for export or sale, to all nations who gave the lives of their soldiers and the funds to carry on (proportionately with the numbers of troops sent and the funds expended) in perpetuity.
· That we increase the combat benefits to our soldiers & their families by 5 times.
· That we assist them with every “oil producing” technology available.
· I suggest that we pay the Iraqi’s 50% of posted prices and use the difference to reduce the debt. This then, would give the US and its true allies a financial interest as well as a humanitarian interest in preserving their democracy.
Note: The critics will say that the US started the war to gain a foothold in a Middle Eastern oil state. Terrorists started this “war” and an ignorant, self serving, murdering dictator who sought WMD’s to exterminate any glimmer of freedom, precipitated it. We were doomed, by his arrogance, to fight him eventually – as with Hitler, better there than here and better now than later. Those that will protest this logical step (strangely), criticize and seem to be hardened against anything that generates revenue for nationalistic programs however, this is necessary. The people who love this country will not feel ashamed if we are informed that we are not giving the lives of our young and expending our financial freedom solely for holistic reasons – even if it is politically incorrect. I am not ashamed of the fact that, for whatever reason, there is another free nation in the world; though it cost us dearly.
Install a US import tax on all foreign crude oil, exempting the first $25.00/barrel and taxing 20% of any amount over $25.00/barrel. Use the proceeds to:
· Finance/subsidize alternative energy technology.
· Discourage foreign price gouging. I understand that they can produce and deliver crude oil to any destination at a cost of less than $6.00/barrel (they will soon realize that by charging over $25.00/barrel, they are financing their, alternative energy, competition).
· Balance the trade deficit.
Install a “special” windfall profit tax on domestic crude oil, exempting the first $45.00/barrel and taxing 20% on any amount over $45.00/barrel.
Use the proceeds to:
· Create funds to subsidize exploration, production and refiners, if oil falls below $20.00/Barrel (preventing the loss of continuous investment in exploration).
· Stabilize US production revenues at a profitable but, manageable level.
· Allow the economy and manufacturing to anticipate the upper level of energy and shipping costs.
. Install a “parity” tax on all imported goods and services arriving from any; non-democratic country, any country owing the US money and/or any country that violates international human rights laws as defined by us. Use the average of the 3 lowest priced US manufacturers, of like goods or services, as the marker.
*Important: Mexican goods or services should be exempt from this tax. This will;
· Decrease the exporting of US jobs.
· Regenerate the US manufacturing base with livable wages.
· Alleviate the trade deficit.
· “Possibly” reinstate and fund the social security system via new tax $ stimulation.
· Create an investment and manufacturing climate in Mexico that would induce their laborers to stay home and/or return to better opportunities than they have as illegal aliens in the US.
Install a 1% tax on each share of publicly traded stock that is sold to or by US entities with a 4% “provisional” tax on all pharmaceutical company and publicly traded pharmacy retailer stocks. The provision would exempt pharmaceutical companies that supply drugs to seniors or persons living below the US income poverty level at their cost, never market their drugs with more than a 200% markup and that did not sell medicines to (or in) foreign countries for less than they sell them to US retailers or citizens.
· This will not severely impact investors or R & D companies and it should only affect those wealthy enough to deal in stocks.
· With billions of stocks trading hands monthly, it may finance a workable, national health and livable senior drug plan.
· A national health plan, funded in this manner, would bring many corporations (auto manufactures, for example) back to the US - as supplying their workers with health care benefits has forced them into opening foreign plants.
· Forty million Americans, without health insurance, will be eternally grateful.
Replace our current income tax system with the Fair Tax Act (H.R. 25, S. 25) which has been languishing in the "in-box" of the House Ways and Means Committee since at least 1996. Exempt personal homes under $200,000 and all fuel and energy sources that are of non-fossil origin. This would;
· Eliminate the corporate income tax, and the huge cost of dealing with the income tax system that is passed on to the end consumer by every company that has a role in the making, marketing, distributing or retailing of everything we purchase. This (hidden) federal sales tax is paid by every consumer on top of all the other taxes we pay, and amounts to 15%-to-30% of the cost of every consumer product. It is paid by every person who buys things, whether they pay with Food Stamps or the proceeds of their trust fund.
· Cause the millions of tourists and illegal aliens who pay no taxes now, to pay their fair share of the cost of operating our government.
· Each year, according to the U.S. Customs Service, 60 million people enter the United States on more than 675,000 commercial and private flights. Another 6 million come by sea and 370 million by land. In addition, 116 million vehicles cross the land borders with Canada and Mexico . More than 90,000 merchant and passenger ships dock at U.S. ports. Another 157,000 smaller vessels visit our many coastal towns; none of these visitors pay US income tax.
· Allow every working American to keep his/her entire paycheck. Imagine what that alone will do for the economy!
· Make all American-made goods 15-30% cheaper on foreign markets.
· Eliminate the IRS, the single greatest disincentive to enterprise in this country.
· Promote bio-diesel (positively impacting farming and agriculture), all alternative fuel vehicles and solar/wind energy for electricity etc.
· Repatriate hundreds of millions of dollars that are lost monthly because drug dealers and others involved in illegal activities avoid paying any taxes (If they were taxed as they spent the money, the tax payers would get something out of it).
· Reclaim billions of dollars that are parked offshore (and are leaving) in accounts that are non-taxable; virtually billions would return and..... be taxable.
· The people who have money and are spending it; pay more tax and the people with little money; pay less tax. This sounds fair to me. The “hundreds” of good reasons to change the current (intentionally complex) tax system, far outweigh the “special interests” illogical rationale to keep it.
Install a “serenity” tax of 4% on, personal use, fossil fuel vehicles retailing for over $50,000. Distribute the funds to disenfranchised community tax treasuries to pay;
· Heads of households with disabilities that keep them unemployed.
· The property taxes on behalf of the senior citizens with homes valued at less than $100,000 and incomes below the poverty level. These folks do not deserve to lose a home that they have labored to own for 20+ years to a tax collector!
· This would also encourage clean burning, alternative fuel vehicle use. It may even encourage manufacturers to lower the cost of gasoline and diesel engine vehicles.
Redefine the “War on Drugs” by removing the profit to criminals. Illegal drug use costs the nation approximately $110 billion annually (not including the cost of loss of life, hospitalization, the prosecution/imprisonment of criminals and the US dollars that are lost to foreign criminals). We are a religiously orientated country and no religion advocates the use of these debilitating and dangerous substances however, no religious doctrine would advocate the costs in loss of life, human suffering or in crime either. These national disasters are and will remain a fact of our lives for as long as our government does not change our drug laws! We are perpetuating this travesty; we are creating a favorable climate for criminals and the purveyors of death by not decriminalizing drug use. Even a worse result of this failed policy, is the impact on our schools and children. I suggest the following as an alternative:
· Have all types of drugs evaluated and select only those drugs that do the least amount of physical and mental harm – primarily being natural substances.
· Tax and sell all of the chosen drugs through liquor stores subject to all local, state and federal ordinances, including legal definitions of minor’s laws and warnings.
· (This is the part that really gets interesting) Establish a non-punitive Random Student Drug Testing (RSDT) program in every school. Check all of the student population for drugs and alcohol weekly. If the use of these substances is found, include the findings on the student’s report card. Students who fail the drug/alcohol testing and/or are failing should be required to attend special “instructional” classes to get them back on track If there is no violation, issue a monthly, federally funded check of $300.00 to the parent(s) for each drug and alcohol free student who maintains passing grades!. This creates an incentive and rewards; the parents for monitoring their children and the children who do want an education and who refuse to use drugs or alcohol. This would be the ultimate “stimulus” package.
· Decriminalizing the use of “illegal” drugs would save the US 110,000,000,000 annually; there are about 30,500,000 students (including college) of the age that are susceptible therefore, we could pay the parents $300.00/month for keeping their children on track. This would also offset the amount of expense that is necessary to maintain a student in school through college, thus helping single parents and/or struggling families.
· There are many moral and religious reasons, for all parents to forbid their children to use drugs or alcohol. The truth is that many parents just cannot or will not! This “financial” incentive not only encourages them to try harder (they will) but, rewards the parents who are successful.
· Stop treating individuals that are “hooked” on drugs as criminals so they will not be forced to hook others or turn to burglary, prostitution, robbery, or embezzlement etc. in order to support their habit (resolving 80% of all existing crime). They would not be imprisoned (which would clear 75% of our future prison inmates), but rather could, without recrimination, seek legitimate medical attention with no reprisals.
· This alone will save the tax payers Billions of dollars. By decriminalizing drugs we remove the profit from the criminals, we will remove their incentive to hold our citizens hostage to their terror. Short of destroying all sources of grown drugs (We have the technology, see the novel “To Slay a Demon”), there is no other resolution that I can envision, to end the most costly war ever waged and worse terror ever imagined; the “War on Drugs”.
We, the concerned citizens of the United States, need to elect legislators who have the courage to tell us exactly what must be done; in the face of every other interest (political or otherwise) – no matter how much we like it or don’t like it– no matter what it might cost them in “ratings” or political equity and then... DO IT. Cut through the unconscionable government tangle that we have all created and/or allowed to exist and re-establish our path to financial dignity and to nationalistic pride. We need to go down in history as the generation that;
· Gave democracy a foothold in a Middle Eastern oil producing nation, without adding to the national debt.
· Did something about our dependency on foreign oil.
· Saved our county’s manufacturers.
· Resolved our illegal alien problem.
· Saved social security.
· Gave us a real national health care program.
· Saved hundreds of thousands of homes for hardship families and seniors.
· Helped to save our environment.
· Ended the IRS nightmare.
· Worked to pay off our national debt.
· Saved hundreds of thousands of lives and trillions of dollars by decriminalizing and thereby ending the War on Drugs.
· Ended our everyday terror.
P. Kennedy, a concerned citizen.
Best Regards,
Patrick Kennedy
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I am an ardent internationalist, a old-fashioned constitutionalist, and a skeptic who has worked closely enough with our government to understand just what lengths certain political aspirants ro privateers will go to in order to either get us involved in a war, or to steal our civil and constitutionally guaranteed rights (including, but not limited to lying, aiding and abetting supposed "enemies," scapegoating, malicious prosecution, abuse of "executive privilege," classifying (i.e., hiding) critical records as "secret" in the protection of the "National Interest," extortion and, of course, murder), and I do not share Mr. Kennedy's view of who actually started (or permitted) the 9/11 tragedy, or of the mechanism by which oil prices are established. But I think he gives noble recertification to the notion of "Freedom Of Speech," as well as to the idea of the virtue of trying to solve problems instead of glancing around the Capitol to find somebody to blame.
Mr. Kennedy, it seems, is worthy of the gift of democracy. If more of us cared to be as forthright and constructive as he has chosen to be, we could hoist ourselves out of the fiscal and spiritual famine that has come over this once-blessed country. Democracy, as I view it inlight of Patrick's passionate arnd coherent article, requires constant analysis and mionitoring. It requires vigilance. It needs positive inducements for decent behavior than excessive regulation and capriciously applied laws and standards.
Thank you, Pat.
Faithfully,
Douglas Castle
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