Former Budget Director during part of the Reagan years, David Stockman, told Bloomberg television that the United States is likely to go into technical default on its debt
Bottom line, he knows that the current spending trends can not continue, relative to current income. Unfortunately, he is adamant that tax increases must occur to solve the debt crisis, rather than spending cuts.
Here's the video clip. Whenever he says, "taxes have to be raised", think "spending has to be cut" and you will get the way to shrink government and solve the financial crisis at the same time.
One alarming note, Stockman states that the debt crisis may not be solved until a catastrophic financial event occurs. He doesn't state it outright but he clearly implies that a catastrophic event will result in a more pliable public that will be less likely to oppose tax hikes. I can't help but think this is also the view of the global elite. Will we soon witness a financial 9-11 that will make the masses more amenable to tax hikes?
Actually the call from the left and the right will be to tax the crap out of the top 5% and leave everyone else alone. When things go bad in America, many otherwise honest people will begin to think like thieves if the alternatives is for them to have more of their property confiscated.
ReplyDeleteThe near rich and upper middle class folks are going to get slammed the hardest. These people don't protect their assets and live a lifestyle that uses most of what they make. The time is now to protect your assets otherwise I have no doubt that as the government's at all levels get desperate they will confiscate as much as they can by turning the public against these groups and blaming them for all the things the government has caused. They already have the idiotic regressives believing a person making $250k is the same as a billionare. Notice that the regressives don't even call Obama on his lying when he says its time to tax millionaires and billionaires and then proposes a tax on low thousandaires. I know regressives are typically not good with understanding money or financial related things, but this is a pretty simple lie on Obama's part to comprehend.
I don't see this ending well. My bet is we will see some kind of FDR fascist like leadership emerge from the left or the right.
This is unbelievable! It makes me want to vomit. Doesn't he know that raising taxes will not necessarily result in more revenue? These guys don't want to solve the crisis. As Lenin said, "the worse it gets, the better it gets."
ReplyDeleteTomorrow morning I'm taking another dose of precious metal therapy. That is, I'm trading in more of my Federal Reserve notes for silver and gold. Then I'm going to my local bank and buying even MORE nickels. There!
While Stockman is correct in implicating both parties for their advocating of default (at least in practice), I do not think that his policy recommendations are any sort of realizable fix. Increased taxes have a downward effect upon capitalization and production, thus produce negative pressure on annualized flows of government revenues. Sure, increased liquidity can result in increases in nominal terms, but that still does not solve the problem of resource scarcity or malinvestment that would result from such policy.
ReplyDeleteAs is the case with most supply-side economic hacks, they only look at small portions of the overall capital structure, they never see it as an integrated structure, with prices serving as real indicators in the coordination of such. They only look at it from the State's perspective, never do they understand that the public sector must necessarily depend upon the productivity of the private sector. Their focus is always upon the health of the State.
Though it is a "wild idea" in the minds of most economists, I would suggest that we cut the expenditures of the State (all levels) in half, and see what the emergent order of the economy produces. Sure, I would ideally like to see even greater cuts, but let's start small (yes, I consider that a small cut).
Contemporary economists are always looking at the economy through the wrong lens; the budget, policy, taxes, the State, etc. They never look at the economy as it is; humans exchanging their scarce produce for mutual benefit. In this respect, David Stockman is no different than any other that denies the purpose of the economy; he only sees it from one side.
Flat tax of 10% and that's it. Better yet, no taxes. Impose user fees.
ReplyDeleteEnd of off-shore havens, money-laundering..
Demise of overfed tax lawyers and accountants.
End of DOJ raids and power hungry Att-Gens.
Empire folds, military downsizes, able-bodied moochers go home and work, truly indigent/sick taken in by families, thrift returns, return of real family values, end of the reign of glitterati.
Productive people rise to the top.
Republic revives.
There.
Financial crisis over.