No generation has proven itself as selfish, greedy and stupid as a whole than the baby-boomers. Their entitled behinds have given birth to the anti-tax movement that starved education and government. Their greed has run up bubbles multiple times. Their inability to think straight and fight for what their parents bequeathed them has given us the corrupt congress and executive branch. This is, of course, complicated by the fact that we have our first black president. The boomers were the last generation that were raised with pervasive racism. Obama’s opposition is fueled by that. If you pay attention, Obama’s real faults are never mentioned except by a few, like Matt Taibbi at Rolling Stone.
We are in trouble and barely treading water in the beginning of a depression period that is primarily driven by age demographics. There are just more people not working and not contributing to the real economy. More and more people will need to draw down their retirement savings.
But there is a cure. The cure is the exact opposite of what most are gunning for. No party is advocating strenuously for what will make things turn around.
The cures are several:
1. Massive tax increases on the top tier. This entails taxing at rates above 70% for at least 10 years and slowly declining to the world’s top tier tax rate median of around 50%.
2. Closing tax loopholes on the top earners. Except for long term capital gains (10 years or more in an investment) there should be no tax breaks – period. None. To those to whom much is given, much is expected.
3. Get rid of almost all taxation of corporate perquisites, provided that those perquisites are reasonably related to the business.
4. Major spend massively on a huge national project, not just resurfacing roads. The top two government spending programs in the USA that created the highest amount of money for every dollar spent are:
A. The interstate highway system, estimated at 13X. (i.e. for ever $1 spent, $13 dollars returned)
B. The space program – Apollo, followed by the space shuttle at over 8X.
Most science research spending returns around 3X. Military spending returns around 1X.
5. Establish a new type of bank (with similarity to the old pre-deregulation investment bank) called a venture bank. This will allow any venture capitalist or angel investor to act as a bank and treat their investments as bank loans, and have access to the Fed discount window.
Do those 5 things. A core piece is to define a goal of either establishing orbital solar power satellites or a self-sustaining colony on Mars, something equally big. Run it like Apollo as a go-for broke set of projects and you will see:
- – Employment, particularly tech employment skyrocket, and most importantly for the young.
- – Deficits go away.
- – With the incentive to rape corporations by maximizing payments to top executives mostly gone, the incentive becomes for those executives to develop the corporations to maximize their status and power. So corporations will grow and prosper. About half of jobs are with big corporations. As the ranks of big corporate jobs swell, small businesses also grow in number.
- – Please note that neo-classical economics, which we purport to follow, requires perfect redistribution of income or the model systems break. (This note is for the rabid anti-taxers who are sure to arrive. Flatly, you are all wrong, completely and utterly wrong.)