• My pleasure.

    It was probably apparent to Galileo that much time would past, for the “leaders of men” to see the logic that he brought forth to their understanding; especially when their reasoning had already proven, to have failed them. What will be, will be, we are all but men of conscious, that sometimes fails us; nothing more can be asked.

    Logic is absolute, even if reason fails because of mans limited understanding; my hope is that time exist for understanding before dire results emerge or that my reasoning is flawed in such away, that consequences are negligible.

    Have a nice day ya.

    February 16, 2010 at 11:45 a.m.

  • John
    We still have that US Constitution … Art. 1 section 8…. The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

    Congress will still have to pass a national sales tax and agree to the stipulations you wrote about.
    I am not saying your idea is bad but it may or may not be practical in this political environment and we still have that Supreme Court…Perhaps I am missing something here.

    Thanks for the input.

    February 16, 2010 at 11:31 a.m.

  • Mike your comment reaffirms my position:

    “John wants to privatize everything but defense but that would lead to more cronyism, corporatism or even worse, plutocracy. We still need watchdogs like the SEC, EPA, IRS, FDA, and others because we cannot trust the petrochemical, coal, oil industries and Wall Street to police themselves.”

    The very thing, that you assume would happen on a state level, is what has happened on a federal level. Whenever you have the policy makers, regulating themselves, this is the result. I assumed that you understood my position, without being clearer, the fault is mine and I apologize.

    While your base assumption of what I’ve said is true, it is incomplete. A standard fix percentage of all national sales tax revenue, should be applied to regulation; especially in the areas of analysis, definition, monitoring, enforcement, and reassessment for the public good.

    Applying all fines and penalties into “debt” reduction, and later into a innovative commerce development fund only to be accessed every 20 years; should negate corruption of the enforcement system. In other wards, The” federal bureaucracy” should be reduced to regulation, not implementation of policy. While we maybe one country, due to our size and divergent economic-sociological conditions, it’s only practical to address needs and development in a more specialized manner. This is the only logical way, whether we do it or not.

    Regulation does not require as much effort as “creation and implementation”, nor is creating and implementing policy on a national level truly effective; too many holes are created in such a dynamic contrasting economic-sociological country. While regulation is more effective on a national level, if isolated from potential corrupting organizational structure.

    February 16, 2010 at 10:47 a.m.

  • Entitlements like Social Security and Medicare are about 8% of GDP. When you add in Medicaid and the other healthcare programs it is about 14% of GDP.

    Total mandatory spending plus interest on the debt is about 16% GDP. All of these costs are rising at twice the current rate of inflation.

    GDP consists of disposable income, taxes, and savings retained by businesses. Almost all of GDP is disposalable income and taxes paid to the government.

    We have been getting a free ride on the taxes because we are borrowing money and leaving it to future generations (who have little to say about it) to pay it back.

    BTW the deficit in 2011 will be $1.3 trillion - at this rate it won't be long till we hit the end of the chain. The total debt will be $15.1 trillion dollars in 2011. Seventy percent of this will be debt owed to the public and 30% will be owed to the trust funds - the government is not legally required to pay the money owed to the trust funds, fortunately?

    The unknown factor is what will happen to interest rates? With the amount of debt we have the only thing we can do is sit back and "enjoy" the ride.

    A "crisis" will develop where income taxes will have to be increased and a value added tax will "have to be imposed." Unfortunately this will reduce GDP and tax revenues and probably accelerate the bus going over the cliff.

    February 15, 2010 at 2:53 p.m.

  • Mike you have a very strong knowledge in economic theory. My macro-economic education background is too limited. Will you contact me so we can discuss your understanding over coffee? Perhaps you will point in directions so that I can be more knowledgable. You may contact me at or 572-0024. Thanks, I look forward to visiting with you or anyone who will share their knowledge and experience with me.

    February 15, 2010 at 10:15 a.m.

  • Dale
    I don't think you will find an argument against relying on market solutions whenever possible but I have to go back to that candidate running on a platform of privatizing Medicare, Medicaid, Social Security, and the VA. He /she might get a 10% approval rating. Entitlements are 5% of GDP. The other large expenditure is defense spending. Homeland Security is probably the largest government entity we have. Do you want to privatize Homeland Security? Reducing the size and scope of the federal government is a pretty good sound bite (been used forever) but unless you put some numbers behind the what and where, it remains a boilerplate statement. I know one of the Conservative goals is to replace the autonomous civil service to government –by-contract ,(reason the GOP is holding up nominees)is something Ronald Reagan started by breaking up the air traffic control union and 30 years of making the federal government the villain.

    We have a stagnant economy because we don't manufacture anything anymore; former Fed Chairman Volker told Fareed Zakaria we import most of our steel from Asia where shipping cost is about the same as American labor cost. Why is that?

    A large federal government and spending ranks up there but we cannot just ignore financial reform, gridlock, influence of lobbyist’s money, truth, compromise and finding ways to grow our economy.

    February 15, 2010 at 9:58 a.m.

  • Mike,
    I can not see any scenario where we can afford a federal government as large as it is now. We have allowed the federal government to expand its services to an unsustainable scope. In automobile manufacturer terms it is a General Motors. Both entities have operated in continual deficits. It produces redundant products which costs more than its competitors could produce the same.

    Shortly, I predict foreign investors will discontinue financing our deficit spending. When that happens monetary devaluation must occur and the Fed begins printing ever increasing money supplies. At that point, federal services will be forced to curtail. It won't be pretty. Stagnant economy like Japan 2001, hyperinflation like Argentina. AS services are discontinued, essential services will be acquired by local and state agencies, if at all.

    February 15, 2010 at 1:01 a.m.

  • It is being reported today that the president of Goldman Sachs, went to Athens, Greece to pitch complex financial products to help them defer their debt. It was these Goldman deals that allowed Greece to continue deficit spending, like a consumer with a second mortgage. The European Union is looking at ways to rescue Greece to avoid contasion. This has the potential to be like the crisis that was precipitated by the failure of complex credit derivatives here in the US that caused the financial crisis last year. I will try to blog this later. Once again the lack of transparency in credit derivatives may be the culprit for a financial crisis.

    February 14, 2010 at 8:24 a.m.

  • While there is legislation in the works to reform Wall Street, there are about five lobbyists for every congressman pulling the other way. The recent Supreme Court ruling just adds more fuel to the fire. Reinstating and Glass-Steagall would go a long way but our Fed chairman is against that. The 111th Congress is not known for its guts.

    I hear you, we all complain about “Too big to fail" but we don't insist our legislators do something about it.

    February 13, 2010 at 12:25 p.m.

  • Yeah, it's those greedy bankers:

    February 13, 2010 at 12:15 p.m.

  • While everyone debates what we should do to get out of the financial mess we are in now, there is little attention being given to the fact that nothing has been done to prevent a repeat of the financial collapse that cauased the current economic mess. The failure to mandate that credit derivatives be traded in a transparent market continues to loom as a threat to our economy. Without reform in the banking rules we are risk to have another financial collapse and there will be no safety net this time.

    February 13, 2010 at 11:57 a.m.

  • Dale

    You are describing the situation as it stands today but that's not what I was implying in using the Jeffrey Sachs opinions.

    The examples do not include removing constitutional power from the Internal Revenue( 16th amendment ,Title 27 that gives the government the right to levy power) but merely to collect what it needs for defense, entitlements, and interest on the debt and send back the rest. Like I said, if Congress needed to collect extra money for health clean energy or education it would be up to the local and state localities to come up with a plan they can afford and the federal government would send the leftover tax revenues to the states for distribution.

    John wants to privatize everything but defense but that would lead to more cronyism, corporatism or even worse, plutocracy. We still need watchdogs like the SEC, EPA, IRS, FDA, and others because we cannot trust the petrochemical, coal, oil industries and Wall Street to police themselves.

    I don't know what will happen, but when we hear projections like total federal spending of $45.8 trillion against taxes and receipts of $37.3 trillion in the years from 2011 to 2020, we know that we need a complete overhaul not just an oil change like reducing pork. As the economist, Robert L. Samuelson, said "we can no longer just tinker.”

    February 13, 2010 at 11:44 a.m.

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    February 13, 2010 at 11:33 a.m.

  • John and Mike
    I really like your blog stream, we are having a logical discussion. Mike you proposed that the federal would send money down. What the federal does (i.e. community block grant program or even the gasoline tax)is bring money from the local level, take it to the national, remove its cut (as a middle man) and return 85% or less back to the states. If we remove this middle man (the fed)don't we eliminate an entire bureaucracy and return full power to the people? John said, let the local levels place priority of service to be provided.

    Let us work through this scenario. Victoria has a total of $1000 which could be sent to the federal government. If the federal government said we will give you back without "a haircut" $100. Victoria can choose to spend the $100 on its own priorities. The question is: would Victoria's priorities be different from a fellow in Washington? Thanks for you thought.

    February 13, 2010 at 1:49 a.m.

  • Privatization of all government services except the military, allowing states to decide what services to receive and administer their own funding procurement. This would eliminate nearly all of the national bureaucracy, creating smaller state bureaucracies as a whole, and reduce cost through applying open market competition. States could submit collaborative bids, in instances of cost effectiveness and agreed upon terms of equitable compensation. Competition would create efficiencies and reduce the administrative burden. Citizen referendums could be submitted by representatives as to what is decided and what company implements the task. This would streamline and shrink the size of government, while making it more effective; in conjunction with a “national sales tax“ replacing other tax revenues. Primarily because, a national sales tax would put the fiscal aptitude of government in direct correlation with that of it’s overall citizenry. If the people make more, they spend more, and the government has more to spend; simple logic. This is something of the understanding that future candidates will require, in order to meet the needs of our country adequately, and from this point further. Failing to understand the logic behind this line of reasoning, beckons further alienation of true understanding, surrounding the changes that are at the root of our failure. We have distanced ourselves from truth, to embrace self-perception, so much that we have become inefficient and illogical in our reasoning.

    February 12, 2010 at 12:15 p.m.

  • John

    Jeffrey Sachs covered your last paragraph by calling it “fiscal subsidiary” it is a doctrine that calls for problems to be solved at the lowest government level feasible; which means that more federal revenue would be transferred to the local states, cities, and towns leaving less for programs directed from Washington. That would relieve the localities from mandates they cannot afford.i.e. Suppose Congress came together and decided that we need to collect more money for health care, education, and clean energy. The increased taxes would be collected by the federal government then transferred to the state government for distribution. If Texas wants to continue being in last place when it comes to providing healthcare for their citizens, they should be allowed to do that. It would be up to the citizens of Texas to vote for candidates that suits their needs. Both parties could agree that upgrades in infrastructure would be a state issue financed by tolls or other means.

    I seriously doubt we will change our ways but we are the point where we all agree that “status quo” can no longer be taken for granted.

    February 12, 2010 at 11:18 a.m.

  • Party ideology aside, money talks. What is needed then is a candidate that learns, understands, and articulates integrated micro economic macro systems or IMEMS.

    There is no one silver bullet, all plans and programs thus far, have be reactionary, for short-term analysis. Meaning, they were never intended to be permanent or long standing; simply to create a new independent “open ended” environment before the existing closed system collapsed on itself. The danger, is once the inevitable collapse of the old system is negated, personalities and intellectually limited leadership are predisposed to return to the status quo out of fear of uncertainty or confidence.

    The legislation of the previous year, that dealt with the “collapse of our economic system” were like micro economic stem cells. For all intended purposes, “our economic system collapsed plain and simple”. While reversing to an earlier state will put off the inevitable, “it will not eliminate the end result”. Returning to business as usually condemns, with all certainty, our children and grandchildren to a failed state. Primarily, because it institutionalized the perception of them taking on the same position; with less opportunity for change.

    Blind arrogance, illogical belief in ones superiority, a predisposition to diverting fault and consequence; are but a few symptoms of the viral insanity that infects our national leaders. Perhaps the “Great Recession”, illustrates the need now more than any other time, for states rights and a great reduction in Federal influence over the lives of citizens.

    Considering this, it is not one right candidate we should be asking for, but an army of them.

    February 12, 2010 at 10:53 a.m.

  • Dale ,
    While everyone can agree that we need to quit spending, we also know local and state budgets have to be balanced. It’s a lot easier to rein in spending at those levels. At the local level I want a candidate that talks about growth.

    A candidate running on a platform of cutting Social Security and Medicare will be vilified, much like the one that says “We might have to increase taxes.”It’s easy to say we need to cut spending, it’s the “where” part that becomes difficult. We have a senator holding up 3 appointments because he wants defense projects to go to his home state. We had the Louisiana Purchase and the Cornhusker deal hold up a major piece of legislation. That is just what was what was made public. Spending is just one component, lobbyist influence, gridlock, and kicking the can down the road are others.

    We need representatives that can influence or compromise with their colleagues’, not one with a consistent,” no” answer. We can send a programmed laptop to do that. That’s where it starts.

    February 12, 2010 at 10:05 a.m.

  • Democrat vs Republican. R vs D. Local, State, National. I quote a local politican, "They are spending like a bunch of drunken sailors." Like it or not, every level of government is guilty. It is easier to print money, borrow money and put off the tough decisions than it is to make the tough decision. In reality, our country is nearly broke and it is our own (the citizens) fault. We have not stopped the spending. We have not said, No More!

    February 12, 2010 at 8:52 a.m.