The above in bold I can surely agree with and to me tariffs are a MUST. They never should have opened the NAFTA floodgates without some restrictions or controls…unless what we’re seeing WAS the plan.?.?
I always thought/understood that a weak currency was good for EXPORTING. Considering we import to a great extent, shouldn’t we be worrying about how weak our currency has gotten? ESPECIALLY given our dependency on importing foreign oil!
Now I’m not totally out of the loop with the petro game. I do understand petrodollar recycling and the inflationary effect that comes with forcing all oil to be transacted in USD. Inflation is caused by printing money but also from an increased money velocity or the speed in turns a currency sees. Many don’t understand or even know of money velocity and think inflation is all about printing money. HRMMMM
If it replaced income tax for manufacturers it would be more attractive. Speaking of that, why do I pay almost 30% for income created by employing lots of people and traders pay 15% for making a simple phone call? Double you tee eff?
I benefit from it from my side trading income (tiny by comparison) but the cheaper cap gains rate is such crap to me…it favors paper income over “earned” income. Main beneficiaries are widows and idiot sons, and executives that pay less tax by being paid in stock. If anything, money that you work for should be taxed less than cap gains, not more. Another carve-out for the 1% by the people they hand-picked for Congress.
Have you read Dying of Money?
There is talk of a 35% inheritance tax which would break down any fortune to 27% of it’s starting value within 2 generations (assuming loopholes were closed of course). I have mixed feelings because some worked to save up their fortunes but the greater good drives my inclination to agree with this concept.
There is also talk of a national dividend that takes place of the current entitlement programs. The key benefit there would be eliminating the overhead and administrative bloat currently involved. In addition, the dividend is meant to be provide a meager lifestyle, anything above and beyond must be earned. This would make leeching less profitable and no longer would you have the poor sporting more disposable income than the average working class.
It’s maybe somewhat idealistic but there are some GREAT concepts in there IMO.
I had heard of Dying of Money but never got my hands on a copy. A quick search led me to an ebook of it, since the ones still in circulation are a couple hundred bucks now. (Ironic for a book about hyperinflation)
Will read at work since this is a slow week. http://esocap.com/uploads/files/Dying%20of%20Money.pdf
Yeah…I should have linked though there are tons floating around in .pdf format. Sorry.
It’s written in fairly centered and free thinking context, albeit leaning towards some socialism for the greater good. I’m interested to hear your thoughts on it. I should re-read it since it’s so slow at work this week. zzzzzzz
Good article on Reuters about how Canada went from a downgraded currency and the worst economy in the G8 (other than Italy) in 1994 to the darling of all word economic models less than 18 years later.
“Everyone wants to know how we did it,” said political economist Brian Lee Crowley, head of the Ottawa-based thinktank Macdonald-Laurier Institute, who has examined the lessons of the 1990s.
But to win its budget wars, Canada first had to realize how dire its situation was and then dramatically shrink the size of government rather than just limit the pace of spending growth…
At one 1994 cabinet meeting, Martin announced a spending freeze. A minister put forward a project that needed funding but Chretien cut him off, reminding him of Martin’s freeze.
A second minister raised his hand to ask for funding, and a testy Chretien told the cabinet that the next minister to ask for new money would see his whole budget cut by 20 percent.
Chretien’s scrappiness, which was one result of his upbringing in a working class family in rural Quebec, had already earned him the nickname of “Dr. No” when he was finance minister in the 1970s…
The ratio of spending cuts to tax hikes was seven-to-one. Asked why, Chretien said simply: “There was more need on one side than the other.”
Canadian ministers were told how much they had to cut and then told to come back with a plan on how to do it. Cuts ranged from five percent to 65 percent of departmental budgets and included controversial cuts in transfers that help provinces pay for health and education, decisions that lengthened medical waiting lists for years to come.
In the end, program spending (everything except interest payments on the debt) fell by about 12 percent, or C$14 billion, between 1994-95 and 1998-99. The percentage fall was substantially more after adjusting for inflation.
The gloomy Canadian reaction to the 1994 budget changed to applause in 1995. “People came up to me to say, ‘You guys got it,’” DeVries said.
The deficit disappeared by 1997 and the debt-to-GDP ratio began a rapid decline - it is now at about 34 percent.
Bing…how much do you imagine being the global reserve currency changes things for the USD though? Go-mint is surely too big here but is it maybe not really possible to enact that type of cut? Most would have cuts and almost assured deflation denounced as impossible in the US economy. I’m not so sure of that myself though. 8/
Go-mint is my abbreviation for government. You know, considering the way seem to mint the shit of out the dollar.
I hate to admit it, but I agree with the 2nd part of your post. Sucks but it is what it is.
Maybe I should move to Canada? Considering the proximity to the US I dunno why I haven’t really looked into it more honestly.
Deflation would be great to me because I’m a saver, I’m liquid and have near no debt.
Deflation to the majority (including the government) would be catastrophic as they aren’t liquid and don’t own anything besides debt.
Deflation would make it harder to pay back debt because there would be fewer dollars floating around. Unfortunately debt is a fixed value and doesn’t adjust based on spending power, so it wouldn’t matter that the currency’s spending power goes up in deflation.
I only see hyper inflation or deflation as the next eventual step. Debt + interest = required inflation or growth and we aren’t going to see growth IMO. Debt is an exponential problem thanks to interest. Deflation is highly unlikely, which sucks for me or others that live within their means. I guess what I’m saying is things won’t go on as they have been, they can’t really. We cannot have a jobless recovery and the “stimulus” didn’t do as may have been intended in that arena.
