There stands a fast-growing Crisis in America which this Post might outline, if providing no Solution. I possess a Solution, though Conservatives will scream it is another Case of Big Brotherism that will bring down the economy. This again requires federal law, and will be cursed to the lowest depths of Hell. The federal act would force federal, State, and Local Tax agencies to collect all initial Tax revenues–just like there were no tax remissions except for Personal Deductions and Child Dependent Deductions. It is not to discount all tax remissions by wide sweep; simply a plan to generate necessary tax revenues without as much bite to Taxpayers. The genus of the law states all Cash revenue must be collected, but tax remissions would be repaid in Municipal Bonds, State Bonds, or forms of Treasuries. All can potentially be converted to Cash through Market structure after receipt of tax remissions, while federal, State, and Local authorities could exhibit some control over the Interest rates paid on the bonds. It is simply telling One and All of said Taxpayers that they must take a Stake in the welfare of the State, in order to avoid the tax censure of the State. It might actually led to less outsize Tax filings filled with excess information to acquire too little.
I pity my Readers now that I refer them to this Post; just remember that sometimes these things need be used. I bring in this information to express that Tax Cuts past this Point have an actual Stimulus factor of around 5%; meaning that we accomplish about $1.05 of economic growth for every $1 spent in Tax Cuts. People will need a translation of what I am saying because I do, so I will give one to them and possibly myself. The Recovery will stop when the federal government stops Spending, whether than Spending is by outright Stimulus or Tax Cut. Understand that We will lose some portion of that $1.05 after the Spending stops; the most likely figure lost is about $.95 of every $1 currently spent. It has the horrid aspect of potentially extending to $1.20 of Recovery reduction per federal dollar currently spent at this time.
Now I have to find my way back to my original argument. Municipal Spending goes into local Wage payments and Infrastructure construction. These two elements get the most Cash to the Street–raising the Consumption and Consumer Demand higher than any other form of Stimulus. It also possesses the longest retention periods of any Stimulus. It also represents the greatest increase in economic growth potential. Issuance of Bonds instead of payment in Cash for tax remissions ensures the greatest activity in the financial markets to generate Investment funds as these bonds must be traded to raise any Cash. Local, State, and federal authorities have the greatest chance under this system to stabilize their Interest rate structure on their debt. Every economic incentive would back my proposition, with the greatest degree of financial stabilization. I will now listen to economists tear apart my argument. lgl