My plan to fix the economy:

[rudeguy]

I don't understand why this has to be so complicated.

1. Flat tax. No more deductions and write offs and magically accounting. When you earn pay, its taxed at 15%. If you sell stocks, its taxed at 15%. Everyone pays their way.

2. Every business also has a flat tax. Here is where we fix the most: a business would be any company that pays at least one employee a wage. No more tax free BS. Charities are awesome! I say a charity has volunteers and not employees.

3. Congress must pass a balanced budget with dedicated money to pay down our debt every year. If Congress does not do this, they are sequestered until it is done.

4. Congress and the President's pay are what the median income for a family in the US is.

5. All government contracts will go to American owned and operated companies whenever possible. Defense, infrastructure, telecommunications, every single contract.

6. This IRS is gone. Since there are no more deductions, write offs and cheats, the treasury department will have a very small, heavily audited department to handle filings. Since there will be no more returns, filings will be 100% automated.



So that's it.

 

[fskimospy]

First thoughts would be that a 15% flat tax and a balanced budget are mutually exclusive without a radical overhaul of many other things.

Second, a balanced budget right now would be extraordinarily bad economics.

The rest seem like mostly window dressing. This plan is a recipe for an economic catastrophe.

 

[Matt1970]

Sounds better that Pizza guy's 9 9 9

 

[sMiLeYz]

To fix the economy you gotta understand how it works...

3. Congress must pass a balanced budget with dedicated money to pay down our debt every year. If Congress does not do this, they are sequestered until it is done.

Read this...

http://pragcap.com/the-biggest-myths-in-economics

There is no such thing as a debt problem.

And as eskimospy already said, the flax tax is a laughably bad way to fix the tax system.


I love how there is no mention of anything to do with the 7% unemployment either, since that is the core problem of the economy in the first place...

 

[brandonb]

I'd agree with you Rudeguy. However, I'd change income tax over to sales tax.

People don't like the rich because they have big expensive things. So when they buy that $5million house. It's taxed. When they buy that boat. It's taxed. When they buy those stocks, it's taxed. If they save. Why tax them? If they give. Why tax them? If they start a business and pay out wages. Why tax them?

Taxing sales seems much more fair to me than taxing income. Those who make little spend little. So taxes are fair for the poor. Those who are rich and don't go on a spending spree, are taxed little. If they have the same quality of life as the poor, why should they pay more? Fair for them too. Those who live the glamorous life or who invest a lot are taxed a lot. Since they are large consumers, they are taxed heavily.

I'd rather have a 10% state sales tax and a 10% federal sales tax, and eliminate all other forms of taxes.

 

[thraashman]

Number 5 isn't a bad idea. The rest are. But then that's because I understand how taxes and economics work for the most part. Flat taxes are a bad idea because they vastly favor the rich. Flat sales taxes are a bad idea because they even more vastly favor the rich and deter consumerism.

 

[bradly1101]

I don't understand why this has to be so complicated.

1. Flat tax. No more deductions and write offs and magically accounting. When you earn pay, its taxed at 15%. If you sell stocks, its taxed at 15%. Everyone pays their way.

2. Every business also has a flat tax. Here is where we fix the most: a business would be any company that pays at least one employee a wage. No more tax free BS. Charities are awesome! I say a charity has volunteers and not employees.

3. Congress must pass a balanced budget with dedicated money to pay down our debt every year. If Congress does not do this, they are sequestered until it is done.

4. Congress and the President's pay are what the median income for a family in the US is.

5. All government contracts will go to American owned and operated companies whenever possible. Defense, infrastructure, telecommunications, every single contract.

6. This IRS is gone. Since there are no more deductions, write offs and cheats, the treasury department will have a very small, heavily audited department to handle filings. Since there will be no more returns, filings will be 100% automated.



So that's it.

Back at the end of the Clinton administration there was a budget surplus. I'm no economist, but if we could return to those policies I think we'd be better off. That rising tide brought a lot of boats with it; there was more confidence then, bringing confidence in business up along with sales and employment. Conservative monetary policies almost brought down the economy. Why go further in that direction?

 

[schmuckley]

15% Yikes!

 

[nehalem256]

3. Congress must pass a balanced budget with dedicated money to pay down our debt every year. If Congress does not do this, they are sequestered until it is done.
.

I am thinking that cutting spending/raising taxes by ~$600B+ over the next year might not be the optimal way to fix the economy.

 

[Matt1970]

Back at the end of the Clinton administration there was a budget surplus. I'm no economist, but if we could return to those policies I think we'd be better off. That rising tide brought a lot of boats with it; there was more confidence then, bringing confidence in business up along with sales and employment. Conservative monetary policies almost brought down the economy. Why go further in that direction?

The "surplus" was a result of a the .com tech bubble AND it was bullshit to begin with since we were just raiding the Social Security fund. You wouldn't consider your own household budget balanced if you were borrowing money to pay for groceries. Shortly after the bubble burst revenue fell below expenditures well before Bush put anything into law. We didn't see one of those "surpluses" till 1998 when the tax hikes occurred in 1993.

 

[bradly1101]

We didn't see one of those "surpluses" till 1998 when the tax hikes occurred in 1993.

At the time I don't think anyone thought that they'd get us there instantly.

 

[berzerker60]

I'd agree with you Rudeguy. However, I'd change income tax over to sales tax.

People don't like the rich because they have big expensive things. So when they buy that $5million house. It's taxed. When they buy that boat. It's taxed. When they buy those stocks, it's taxed. If they save. Why tax them? If they give. Why tax them? If they start a business and pay out wages. Why tax them?

Taxing sales seems much more fair to me than taxing income. Those who make little spend little. So taxes are fair for the poor. Those who are rich and don't go on a spending spree, are taxed little. If they have the same quality of life as the poor, why should they pay more? Fair for them too. Those who live the glamorous life or who invest a lot are taxed a lot. Since they are large consumers, they are taxed heavily.

I'd rather have a 10% state sales tax and a 10% federal sales tax, and eliminate all other forms of taxes.

Because rich people aren't the only ones paying the sales tax, and poor people being taxes on food and diapers is a serious burden whereas a rich person only having $10 million of income instead of $11 million doesn't make any meaningful difference to his lifestyle. Also, if you have high sales taxes, you're discouraging spending, which is to say suppressing economic demand, which is the exact opposite of what our economy needs right now. 1% of the country already own ungodly amounts of money that they don't spend on jet skis and yachts (much less 'create jobs'), they sit on the money. We need money in the hands of more people who go out and buy things.


So I'm not just critiquing without offering anything to replace it (aka the Republican model), here's the outline of what I would do if I were somehow temporary dictator of America, Cincinnatus style:
-Huge spending on America's roads, ports, internet infrastructure, airports, and traditional and high-speed rail network. Huge spending on rebuilding schools and community buildings that are X years old / in need or rebuilding. Update our electrical network to 21st century standards. Goals are to create lots of unskilled and semi-skilled jobs while dramatically updating our infrastructure to save/make up lots of money down the road.
-Huge spending on science/technology - this has been gutted in recent years to our serious disadvantage.
-Reform immigration system to allow unlimited visas for skilled workers who cannot be found domestically, so we stop kicking out the brilliant minds our universities draw into the country and who want to create companies/jobs here. I'd also prefer a path to citizenship, but that's less explicitly an economic issue, so could compromise here.
-Move to single-payer health care with insurance just for additional coverage. Goal is to make workers healthier and more productive, while keeping down medical costs.
-Return to 1950s tax brackets and rates. Goal is higher revenue to limit the costs of #1. Also combats income inequality.
-Capital gains are now the same as any other income, same goals.
-Possible option: Replace welfare, food stamps, and similar programs by simply having a guaranteed minimum income that every American citizen gets.
-Down the road (maybe set a clear benchmark - when the economy is back to pre-Recession levels + 1-2% grown per year since then, for example) set into stone cuts to defense and everything else.

 

[AViking]

1. Generate jobs

2. Make benefits mandatory

3. Fix our healthcare system

4. Fix our education system so that people are not borrowing huge sums of money for idiotic educations. There has to be a link between jobs and education.

5. Credit card debt needs to be reigned in. People paying 15% or more in interest will be poor and that is not good for our economy, only the banks.

6. The housing bubble needs to pop. We need to stop artificially inflating real estate prices and postponing the inevitable. No more bank intervention.

7. QE needs to be watched carefully. It's great for those who are investing in the stock market but since most don't do it I doubt it's great for the economy. Just give me fair warning so I can pull my money out of the markets.

8. Tax loopholes should be looked at. It's too easy to have a bunch of satellite companies and a rotating tax schedule that helps keep taxes at zero or damn close.

9. Social security needs a massive overhaul. The amount paid out is ridiculously small. Americans need to understand that they are getting boned on retirement benefits. They need to start demanding pension plans and/or funding their own. Social security will leave you poor.

10. Americans need to save money. Our economy will not be in good shape if only the rich have money to spend. Compound interest should not be foreign to anyone.

 

[glenn1]

To fix the economy you gotta understand how it works...



Read this...

http://pragcap.com/the-biggest-myths-in-economics

There is no such thing as a debt problem.

And as eskimospy already said, the flax tax is a laughably bad way to fix the tax system.


I love how there is no mention of anything to do with the 7% unemployment either, since that is the core problem of the economy in the first place...

Most of the points in your link are gross simplifications or very misleading. For example, #1 "The government prints money" is a pendantic point that they don't operate the printing press. Plus their suggestion that "most of the money in our monetary system exists because banks created it through the loan creation process" is an almost comically gross oversimplification ignoring Fed Open Market Operations, bank reserve limits, discount rates, credit creation in the Derivatives, money-equivalent assets in the Securities markets like money markets and commerical paper, and other factors.

And your statement that "there is no such thing as a debt problem" is a political viewpoint, not an empirical fact. Ditto for your statement about unemployment being the "core problem."

 

[rudeguy]

1. Generate jobs

get a job

2. Make benefits mandatory

see #1

3. Fix our healthcare system

see #2

4. Fix our education system so that people are not borrowing huge sums of money for idiotic educations. There has to be a link between jobs and education.

stop paying for BS degrees and pay for training

5. Credit card debt needs to be reigned in. People paying 15% or more in interest will be poor and that is not good for our economy, only the banks.

stop spending money you don't have

6. The housing bubble needs to pop. We need to stop artificially inflating real estate prices and postponing the inevitable. No more bank intervention.

stop buying things you can't afford

7. QE needs to be watched carefully. It's great for those who are investing in the stock market but since most don't do it I doubt it's great for the economy. Just give me fair warning so I can pull my money out of the markets.

quit printing money we don't have

8. Tax loopholes should be looked at. It's too easy to have a bunch of satellite companies and a rotating tax schedule that helps keep taxes at zero or damn close.

flat tax fixes that

9. Social security needs a massive overhaul. The amount paid out is ridiculously small. Americans need to understand that they are getting boned on retirement benefits. They need to start demanding pension plans and/or funding their own. Social security will leave you poor.

I can save on my own. Don't need to pay the government to do it for me

10. Americans need to save money. Our economy will not be in good shape if only the rich have money to spend. Compound interest should not be foreign to anyone.

how can we save money if the government is taking it all?

The answer is not the government. The problem is the government and the people who think that it is an answer.

 

[fskimospy]

The answer is not the government. The problem is the government and the people who think that it is an answer.

Panel 2 seems salient:

 

[Matt1970]

At the time I don't think anyone thought that they'd get us there instantly.

Tax hikes don't take 4-5 years to bring in revenue.

 

[Matt1970]

4. Fix our education system so that people are not borrowing huge sums of money for idiotic educations. There has to be a link between jobs and education.

5. Credit card debt needs to be reigned in. People paying 15% or more in interest will be poor and that is not good for our economy, only the banks.

10. Americans need to save money. Our economy will not be in good shape if only the rich have money to spend. Compound interest should not be foreign to anyone.

Save us from ourselves.......

 

[rudeguy]

Panel 2 seems salient:

no...not really

But then again when have any of your posts made sense?

 

[nehalem256]

1. Generate jobs

Why has no one thought of this before?!?!?

 

[Doppel]

Flat tax is a non starter. It would be nothing short of a sportfucking for the lower and middle class. This is mathematically sacrosanct. To keep tax revenues where they are with a flat tax requires massively more money taken from the lower and middle, which currently pay nowhere near their "fair share" on a percentage basis.

 

[AViking]

Yes it should be VERY clear that we need to save ourselves from ourselves. When you have businesses selling shit to people that is worthless (tech bubble) or telling them they can afford houses that they can't (housing bubble) or telling them that they can be anything they want to be (student loan bubble) or mailing them 50 credit cards a year and giving them thousands and thousands of dollars in credit they can't afford (credit card bubble) then we should fix these problems.

How many of you are prepared for retirement? Say you want to pull out $75,000 a year at the age of 65 and you live to be 88 years old. Do you know how much money you need to pull that off? Assume you're maxing out Social security.

I know I'm good and I know that most Americans are totally screwed.

 

[bradly1101]

Just give me fair warning so I can pull my money out of the markets.

We should be so lucky!

I heartily agree with everything you said (and well said), except a little on SS.

SS is all that many people have for income; it's a safety net for those times (millions of them) when success didn't go as planned. Saving themselves is not always possible, and they may become permanently disabled early in their career before having saved enough. And the market can be so volatile, unlike SS.

It seems like when SS was created, an assumption of an ever greater number of well paying jobs would be available. With the aging of the population, all the outsourcing, and all the McJobs something needs fixing.

I'm no expert and don't have an answer, except to ask those who have plenty if they wouldn't mind kindly pitching in more, and if you are rich, does it also make sense to get SS? That could save a lot there.

I believe our economic model of infinite growth only works when well paying jobs are tracking with a steady population growth. It's too bad the planet is already overpopulated. There just aren't enough jobs to keep everyone thriving.

 

[Matt1970]

Yes it should be VERY clear that we need to save ourselves from ourselves. When you have businesses selling shit to people that is worthless (tech bubble) or telling them they can afford houses that they can't (housing bubble) or telling them that they can be anything they want to be (student loan bubble) or mailing them 50 credit cards a year and giving them thousands and thousands of dollars in credit they can't afford (credit card bubble) then we should fix these problems.

How many of you are prepared for retirement? Say you want to pull out $75,000 a year at the age of 65 and you live to be 88 years old. Do you know how much money you need to pull that off? Assume you're maxing out Social security.

I know I'm good and I know that most Americans are totally screwed.

People making $30,000/year buying a house that is worth $500,000 and people racking up $250,000 in student loans for a career that pays $35,000/year is government's problem? At what point to people actually have to start talking responsibility for their own lives?

 

[Gunslinger08]

Spending would have to be drastically cut to live off of a 15% flat tax. GDP in 2012 was a little over $16T. 15% of that is $2.4T. Actual expenditures for 2012 were $3.538T. How are you going to cut spending by 1/3? Shutting down the IRS isn't going to help much - their budget is less than $15B. You're going to have to make pretty major cuts. Medicare/Medicaid and SS are roughly 43% of the budget. Debt service (interest) is 7%. That's 50% that is almost impossible to cut, politically. So your 1/3 of total budget cuts have to come from 50% of the budget. You have to cut $1.2T from about $1.77T that is spent on defense and everything else the government does. I just don't think that's realistic.