Wednesday, January 27, 2010

It is Time to get Nasty

We wasted more time talking about the Banking crisis than any subject deserves, but here is a commentary which changes the context of the argument. I am afraid, though, that it will affect little as family spread their deposits through different family members; it will, of course, help the spread of Income, especially with the removal of Inheritance taxation. Everyone knows that the next Step will be centralization of those deposits, so that control of the funds do not extend past one family member, where We are exactly back to the Start position; all such families actually gaining greater security by extension of the insured levels.

I dislike this type of argument, as it assumes that a limitation of Government Expenditures can never be attained. James Galbraith makes a smart economic debate, even though he automatically discounts a withdrawal of funds, from both the Private sector by taxation, or reduction of Government expense. I find no real proof from my own observation that current Stimulus policies imposes greater economic performance, than would a ‘let the chips fall where they may’ abdication of Government economy policy tools. I prefer a 12% drop in the CPI to any economy stimulus, and know that stimulus certainly cancels any movement towards that drop. We need to get away from issuance of Tax Credits and cheap Cash before We can get to a massive White Sale. I would like to witness some form of actual Business losses before more erosion of taxable Income base. I suggest there should be actual Production below Cost prior to any reduction in taxation. Government expenditures could be reduced by a automatic reduction in payment for all Government contracts—including social Welfare payments–exactly equal to the percentage reduction in the Producer Price Index; notice I left both the CPI and PPI unchained as far as future growth at every level.

The standard argument for paying business to hire new employees is fairly discussed here; and I find it equally ridiculous. Why pay Concerns a bonus for making other people less miserable, when a simple tax imposition does far more to promote new Hires. Simply pass a tax which says all Income savings coming from a Wage Expense reduction will be taxed at a rate of 40%. It simply states that if business wants to make money by screwing their fellow citizens, then the Government wants a huge slice. It is simply determined by subtracting current Wage Costs from the previous year labor Costs, and taxing any amount left over. I do not mind alleged claims of confiscatory policies, and such taxation would be quite legal with its uniformity. Simplicity of Demand is the key, while one remembers to unsheathe that sword. lgl

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