Friday, April 17, 2009
Analyzing new stuff
I will take this weblog in a more analytical direction henceforth, by analyzing, with respect to the principles and axioms presented earlier, programs and policies which are planned or just beginning. I would be very interested to know what current government program or proposal you would like to see dissected in this way. Please write me a comment to that effect. In any event, I will also continue to make my own selections.
Thursday, April 16, 2009
The international scene in 2025
We don’t go to war much these days because use of Cost-Benefit Analyses continues to bring home, before we invade anyone, the high cost of doing so. We are now less easily provoked and we interfere less in the affairs of other countries. Since we no longer build up the armies of friendly dictators, there is a little less persecution of the helpless in the world. With the new immigration-friendly policy, our country has grown larger and stronger. And we now treat foreign nations with respect by honoring the principles that will lead them to economic efficiency just as those principles have guided us; in other words, we now invest in people rather than in governments.
We have eliminated tariffs and we do not fear competition in world trade. This is because we invest overseas, by buying land and building businesses, and also by staking entrepreneurs in other countries instead of their governments. These approaches have helped to reduce illegal immigration. While poverty and disease have not been wiped out, we now see pockets of economic strength among citizens of the poorest countries; these are the people who will carry their societies to prosperity.
Our decriminalization of narcotics and our withdrawal from the drug war has drained much of the life from international drug dealers and cartels. This has helped to stabilize Mexico and allowed our two countries to focus on building a human-friendly border. When bandits, pirates, terrorists, or rogue states harass American citizens or otherwise threaten American interests, the relentless pursuit of justice follows, accompanied at times by swift, violent reprisals. These bold actions, which have replaced endless negotiations, invasions, and expensive experiments in nation-building, have had the effects of raising costs to adversaries and reducing risks to American citizens.
We have eliminated tariffs and we do not fear competition in world trade. This is because we invest overseas, by buying land and building businesses, and also by staking entrepreneurs in other countries instead of their governments. These approaches have helped to reduce illegal immigration. While poverty and disease have not been wiped out, we now see pockets of economic strength among citizens of the poorest countries; these are the people who will carry their societies to prosperity.
Our decriminalization of narcotics and our withdrawal from the drug war has drained much of the life from international drug dealers and cartels. This has helped to stabilize Mexico and allowed our two countries to focus on building a human-friendly border. When bandits, pirates, terrorists, or rogue states harass American citizens or otherwise threaten American interests, the relentless pursuit of justice follows, accompanied at times by swift, violent reprisals. These bold actions, which have replaced endless negotiations, invasions, and expensive experiments in nation-building, have had the effects of raising costs to adversaries and reducing risks to American citizens.
Wednesday, April 15, 2009
Federal taxes and local schools in 2025
Calculating taxes is now easy. At the end of the year I simply add my wages, interest income, and capital gains, subtract the zero-tax number, and multiply by the flat tax rate. If the number is negative, the government owes me money; if it is positive, I owe them. In most cases, the calculation is so easy that with-holding generally puts me within a few hundred dollars of the correct amount. In any event, I can choose to adjust my debt or credit balance through a temporary change in with-holding. Privately owned businesses still have records to keep, but reinvestment in the business, consistent with the Life-Savings philosophy, is not taxed.
Our children are better educated now. Eliminating the Federal Department of Education has meant more money going straight to where it is needed most, to our schools. Imagine, back in 2009 we looted our cities of over $50 Billion to fund that department, about $1 Billion per state. Well-educated children will keep our country’s future bright.
Our children are better educated now. Eliminating the Federal Department of Education has meant more money going straight to where it is needed most, to our schools. Imagine, back in 2009 we looted our cities of over $50 Billion to fund that department, about $1 Billion per state. Well-educated children will keep our country’s future bright.
Monday, April 13, 2009
Homelessness in 2025
One issue that no longer plagues cities is homelessness, which is now illegal; let me explain. When we adopted the (flat and) negative income tax, we made it possible to finance more comprehensive accommodations for the homeless, something started on a significant scale in San Francisco at the turn of the century. It was not possible for an individual city to take responsibility for the homeless on its own without becoming a magnet for other homeless people. Therefore, it was decided to distinguish between those who could and could not shelter themselves. Those who cannot shelter themselves now must enter into a government-regulated, privately-operated dormitory. Such dormitories, which operate at a profit but must meet government standards to continue to operate, have opened across the country. Residents pay their room and board by signing over their negative-tax payments to the dormitory.
While at the dormitory, residents undergo examinations to determine what barriers they face, if any, to joining the work force and gaining the ability to house, feed, and clothe themselves. Those who have substance-abuse problems must join rehabilitation programs; all who can benefit receive job counseling and education. Since there is no longer a minimum wage, many formerly homeless have been able to begin working at very low wages and at relatively low risk to employers; money thus earned decreases the amount they receive from the negative income tax but raises their total income. Once capable of making the transition, working residents are transitioned to mainstream rental housing. Of course many can not do this, but they were homeless in the first place because they had serious problems.
While at the dormitory, residents undergo examinations to determine what barriers they face, if any, to joining the work force and gaining the ability to house, feed, and clothe themselves. Those who have substance-abuse problems must join rehabilitation programs; all who can benefit receive job counseling and education. Since there is no longer a minimum wage, many formerly homeless have been able to begin working at very low wages and at relatively low risk to employers; money thus earned decreases the amount they receive from the negative income tax but raises their total income. Once capable of making the transition, working residents are transitioned to mainstream rental housing. Of course many can not do this, but they were homeless in the first place because they had serious problems.
Saturday, April 11, 2009
More about 2025
In 2025, crime rates are low, partly because when people choose to injure themselves by abusing drugs, we no longer call that a crime. Spending for prisons is also less and the profit from drug sales is way down, meaning that selling (formerly illegal) drugs is a much less attractive business area. Fortunately, for people who want to find real jobs, removal of the minimum wage has allowed just about anyone to find a legal job and enter the work force young. The on-the-job training they receive now launches them into legitimate careers by teaching them behaviors that can only be learned from real jobs. Studies show that most move up the pay scale relatively quickly because if their present employers don’t offer them raises, there are other businesses looking for eager young workers with experience who will. Our kids are getting hooked on drugs a lot less for a couple of reasons: first, there are fewer sellers since the money is no longer in it and since law enforcement now focuses on sales to minors; second, since it is no longer illegal, drug abuse is no longer cool, just stupid; and third, they don’t have time for drugs now since they’re working.
Another crime that is now under control is so-called identity theft. Use of Real ID cards and strict security measures surrounding card use and access to financial accounts, most importantly Life-Savings Accounts, have reduced the ability of criminals to conceal their own identities and to steal electronically.
Almost all US citizens can now reach financial independence and provide for their own retirements. However, some citizens, through lack of foresight, poor planning, or misfortune beyond their control, are unable to provide for themselves and do not have family members willing to help. In these cases, since the Federal Government now takes much less of your money, state and local governments are able to raise the funds needed to provide welfare much closer to home and to the real problems. Unlike Social Security, which helped everyone regardless of need; targeted aid is far less costly.
Another crime that is now under control is so-called identity theft. Use of Real ID cards and strict security measures surrounding card use and access to financial accounts, most importantly Life-Savings Accounts, have reduced the ability of criminals to conceal their own identities and to steal electronically.
Almost all US citizens can now reach financial independence and provide for their own retirements. However, some citizens, through lack of foresight, poor planning, or misfortune beyond their control, are unable to provide for themselves and do not have family members willing to help. In these cases, since the Federal Government now takes much less of your money, state and local governments are able to raise the funds needed to provide welfare much closer to home and to the real problems. Unlike Social Security, which helped everyone regardless of need; targeted aid is far less costly.
Tuesday, April 7, 2009
More about 2025
In 2025, with the transition out of Social Security and Medicare well under way, we are almost past the government protection racket. We now have Life Savings Accounts which allow us to invest before-tax income in a variety of assets and equities. Those include stocks and bonds, money-market, bond and stock funds, precious metals, art treasures, and real estate. The introduction of diversity has met three goals: first, it allows us to spread our investment risk across assets whose values do not normally move in concert; second, it lets us to keep some of our assets close at hand for immediate use; and third, it enables us to invest our own money to increase our equity in what is most important to us. The purposes for which we use our Life Savings are as varied as our lives. They include education (ours and our children’s), home purchase (encouraging home ownership through equity, rather than debt), health insurance, starting a new business, and retirement. This is not necessarily restrictive. In an emergency, we can borrow from our Life Savings with the option of restoring the funds later (to avoid the taxes). The government also benefits since government bonds are eligible to be held in Life Savings Accounts.
Contribution to a Life Savings Account is not mandatory but it is advisable. Most people leave their money in the accounts knowing that their tax rates will be lower following retirement. Education has played a crucial role in this matter; we have learned the importance of saving, the power of compound interest, the value of equity in a home or a business, and the importance of starting early and staying the course. And, we have reassured ourselves how much more efficient it is to use our own money in our own best interest. In 2025, we no longer hear about a government safety net, which was nothing more than a one-size-fits-all government solution to help everyone, whether they needed it or not. In 2009, that so-called safety net was so far down that it was already on the ground.
to be continued...
Contribution to a Life Savings Account is not mandatory but it is advisable. Most people leave their money in the accounts knowing that their tax rates will be lower following retirement. Education has played a crucial role in this matter; we have learned the importance of saving, the power of compound interest, the value of equity in a home or a business, and the importance of starting early and staying the course. And, we have reassured ourselves how much more efficient it is to use our own money in our own best interest. In 2025, we no longer hear about a government safety net, which was nothing more than a one-size-fits-all government solution to help everyone, whether they needed it or not. In 2009, that so-called safety net was so far down that it was already on the ground.
to be continued...
Monday, April 6, 2009
Chapter 12: On the home front in 2025
Suppose that a miracle happens, that Americans everywhere embrace the goals, strategies and actions implied by an equity-based economy. What kind of a country would this be in 2025? We all understand that natural disasters, famine, plagues, and conflicts will have an influence on our lives. We also understand that other countries, as they learn more about democracy and freedom, can become strong competitors. However, a strong USA will be able to take all in stride if the miracle really does happen.
With the federal government claiming a smaller percentage of private sector money, private-sector job growth is strong and sustainable. The work force is now more responsive to the demands of the market and to customers than to government regulations and entitlements. A flat tax allows you to make business and personal-investment decisions based on fundamental economic principles rather than on avoiding taxes; your various equities continue to grow. Elimination of the corporate income tax has encouraged market-oriented business planning and investment in research and development.
Removal of the minimum wage has enabled you to hire whom you want at a mutually-agreeable wage based on value to your company. The elimination of government monopolies and subsidies in the areas of health care and retirement allows you to pay your employees more and allows them to keep more of what they earn. It allows them to purchase the health insurance that is right for them and then to change jobs freely without the fear of losing their insurance. A few older people, the last of the privileged from the 20th century, still receive Social Security and Medicare payments from the taxes of working people. Most in this age group have converted to Life-Savings Accounts, having cashed in their government promises in these areas early. In addition, many of them are still working since a strengthened medical community has had a rejuvenating effect on all of us; the average 65-year old is still young and vigorous.
The great debate on Social Security is over. This battle of wits, between unarmed opponents, featured two themes: private retirement accounts; and saving Social Security. Experts (including elected representatives) against private accounts told us that “stocks were risky” (a credit crisis, created in part by an overheated and overwhelmed mortgage market, has proven that stocks, of even the best companies, are indeed risky); their implied corollary was that your government stood ready to handle your money for you and to protect you from nasty, risky stocks. Fortunately, well-informed voters decided that they could trust themselves with their own money; the “pyramid scheme” that was Social Security was put out of its misery.
Most people under the age of 40 wanted to end Social Security; many older people did not.
Transitioning out of Social Security turned out to be a budgeting matter, much like individuals getting out from under massive credit-card debt. First, we cut up the credit cards; then we decided how to pay off the current debt. The Social-Security debt amounted to all the money we pay retired folks who stayed in the system plus the money we paid back to those who left. The second part was challenging because those paybacks amounted to a balloon payment. Making this payment required the federal government to assume a long-term indebtedness (not unlike Social Security itself). The servicing of this debt plus the payments to retirees still in the system will, for about 20 more years, be a part of the federal budget; yes, it does take time to climb out of deep indebtedness. Today, there are two major differences: first, the money is raised through the general tax fund – the rate on the new flat tax was calculated to take this into account – and the tax flows from every dollar earned (and reported), rather than just the first $87,900 of individual income as it did in 2009; second, the pain we are going through now will end Social Security and take that monkey off the backs of the young.
to be continued...
With the federal government claiming a smaller percentage of private sector money, private-sector job growth is strong and sustainable. The work force is now more responsive to the demands of the market and to customers than to government regulations and entitlements. A flat tax allows you to make business and personal-investment decisions based on fundamental economic principles rather than on avoiding taxes; your various equities continue to grow. Elimination of the corporate income tax has encouraged market-oriented business planning and investment in research and development.
Removal of the minimum wage has enabled you to hire whom you want at a mutually-agreeable wage based on value to your company. The elimination of government monopolies and subsidies in the areas of health care and retirement allows you to pay your employees more and allows them to keep more of what they earn. It allows them to purchase the health insurance that is right for them and then to change jobs freely without the fear of losing their insurance. A few older people, the last of the privileged from the 20th century, still receive Social Security and Medicare payments from the taxes of working people. Most in this age group have converted to Life-Savings Accounts, having cashed in their government promises in these areas early. In addition, many of them are still working since a strengthened medical community has had a rejuvenating effect on all of us; the average 65-year old is still young and vigorous.
The great debate on Social Security is over. This battle of wits, between unarmed opponents, featured two themes: private retirement accounts; and saving Social Security. Experts (including elected representatives) against private accounts told us that “stocks were risky” (a credit crisis, created in part by an overheated and overwhelmed mortgage market, has proven that stocks, of even the best companies, are indeed risky); their implied corollary was that your government stood ready to handle your money for you and to protect you from nasty, risky stocks. Fortunately, well-informed voters decided that they could trust themselves with their own money; the “pyramid scheme” that was Social Security was put out of its misery.
Most people under the age of 40 wanted to end Social Security; many older people did not.
Transitioning out of Social Security turned out to be a budgeting matter, much like individuals getting out from under massive credit-card debt. First, we cut up the credit cards; then we decided how to pay off the current debt. The Social-Security debt amounted to all the money we pay retired folks who stayed in the system plus the money we paid back to those who left. The second part was challenging because those paybacks amounted to a balloon payment. Making this payment required the federal government to assume a long-term indebtedness (not unlike Social Security itself). The servicing of this debt plus the payments to retirees still in the system will, for about 20 more years, be a part of the federal budget; yes, it does take time to climb out of deep indebtedness. Today, there are two major differences: first, the money is raised through the general tax fund – the rate on the new flat tax was calculated to take this into account – and the tax flows from every dollar earned (and reported), rather than just the first $87,900 of individual income as it did in 2009; second, the pain we are going through now will end Social Security and take that monkey off the backs of the young.
to be continued...
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