The Choices Worth Having

No sooner did I post the entry that the "packaging" of the stimulus package might matter, then I turned to my New Yorker of January 26 (I'm a little behind on my reading) and discovered that James Surowieki, who has a column called "The Financial Page," had already made the identical point in print. My apologies to James, and I urge you to have a look at his piece (p.25) because it has information in it that mine does not.

I am a "systems" and "process" guy. Quite honestly, I do not know, as a citizen, whether conservative policies and principles bring about prosperity or doom, and I do not know whether progressive policies and principles bring about prosperity or doom.

This is primarily because it is difficult to establish an unquestioned cause and effect relationship, to any degree of certainty, between implementation of policies and their effect.

What can be said with some degree of assurance is that sometimes you win and sometimes you lose, or in other words, things are serendipitous in nature. Whichever party is in power when things are going well will take credit therefore, and probably stay in power. The opposite result flows from when times are bad.

One reason that Republicans occasionally behave like Democrats and vice-versa is because no one really knows, with any degree of certainty, what works, just that X occurred while Y was in control. It also explains why politicians are constantly talking out of both sides of their mouths, and have revisionist memories when it comes to explaining things. There primary goal is to stay in office and not have to really work for a living. (Just kidding.)

We should also consider the fact that no party has things go their way during the entirety of its reign. If the causal relationship were so strong, we'd see more consistency.

Now that being said, I've often said, let's change our Constitution and laws so that we vote for a party and its policies and principles. Which ever party wins, their chosen leaders get to stay in for a longer period of time, let's say 20 years, and they also win Congress, in its entirety. Allow them to implement their policies and principles, and let us really see whether there is a true cause and effect relationship.

(Part of the reason we do not have much accountability these days is because it is all smoke and mirrors. No really seems to be able to tell us, with any clarity, what is going on. This name calling and finger pointing across the aisle is ridiculous. It tells me that no one really knows what’s going on.)

At the end of the 20 year period, if the party in control has not been successful according to some enumerated goals, established before taking control, the other party automatically takes over.

Under the current system, we will simply argue ad infinitum about what works, with no clear consensus. Although there is some value to consistency and low turn over, there is also some value to fresh new blood, new ideas, and the check presented by a challenging entity.

It's worth some discussion.

For homeowners: Cut the interest rate on all mortgage loans by 50 basis points and extend the payment schedule by three to five years. Convert all variable rate loans to fixed, at prevailing rates, and extend the payment schedule by six to ten years. No fees, points or charges tolerated.

More for homeowners: Provide a pre-paid $5,000 debit card to all free and clear homeowners. The cards are worth double for Ford or GM car purchases, and expire valueless if not used for retail purchases within 60 days of issue.

For retirees: Eliminate all income taxation, at all levels, on any formalized retirement income program. Eliminate all income taxation on one half of all non-retirement plan investment income received by retirees. Provide totally free health care coverage.

For Social Security tax payers below age 35: Reduce mandated contributions to 3% of salary, but allow for additional voluntary contributions. Redirect all contributions to personally owned but "untouchable until age 60" SSRIA contracts with private insurance and annuity companies. Participants would be permanently assigned to qualified providors.

These fixed-income-investments-only contracts would be non-commisionable, management fee only, and benefit identical at all providors. Trustees responsible for directing the investments of SSRIA funds would have strict QDI (Quality, Diversification, & Income) guidelines, with a focus on all kinds of government securities--- federal, state, and local.

For Social Security tax payers from ages 35 to 55: Reduce mandated contributions as above and redirect to SSRIAs. Deposit one half of each person's total existing Social Security deposit account to the SSRIAs.

For Social Security recipients and taxpayers above age 55: Annuitize the income benefit over the next ten years using SSRIAs, starting with the youngest recipients.

For income tax payers: Over a five-year period, replace the Internal Revenue Code with a 10% tax on all income above $40,000 per year. During the same time frame, bring all state and local income taxes to a total of no more than 5%.

There are no tax deductions, but those earning less than $40,000 per year would be exempt from sales taxes.

For governments: Over the same five-year period, institute a 12% Federal Sales Tax on all goods and services consumed or used by individuals. Do the same at the state and local level with a combined cap of 6%. Decrease (thru attrition) the number of federal, state, and local government employees by 30%.

As surpluses develop, sales taxes on food, shelter, clothing, healthcare, and education would be cut or eliminated.

For the financial sector: Abandon mark-to-market accounting rules with regard to mortgage-backed securities until such time as all multi-level mortgage products can be unwound and restructured. Consider a permanent ban of all market value assessment of income purpose, and other illiquid, securities.

More for the financial sector: Unravel all multi-level derivatives, control blatant and damaging speculation, and protect shareholders from abuse by corporate executives. Adopt a global SIBORAP code, one that is created by securities investors.

For health care and insurance cost control: Reform the tort law system with an eye to restricting awards at reasonable numbers and to subject all law suits to non-peer, economic-impact, review before allowing them to move forward. All costs of extortionary and frivolous lawsuits must be borne by plaintiff attorneys.

For corporations: Eliminate all income taxes, fees, and nuisance charges at all levels in exchange for an audited requirement of: more jobs, higher non-management compensation, reduced product prices, or increased health care benefits.

Also for corporations: Eliminate matching contributions for Social Security over the next five years, starting with the age 35 participants and working higher. Note that all such contributions would have been reduced to 3% already.

For the self employed: Eliminate matching contributions for Social Security immediately, and refund all such contributions made over the past ten years to any business still in operation.

For heirs: Repeal the confiscatory death and gift taxes at all government levels and return all the stolen monies to the estates involved for immediate distribution--- also retroactive 10 years.

For investors: All investment income would be treated equally (at flat tax rates), except municipal bond interest would continue to be tax free--- but at all jurisdictional levels. All public corporations reporting profits would be required to disburse at least 25% of their profits to shareholders.

For education: The federal government would support and subsidize (even construct if necessary) fifty, non-sectarian, non-political, four-year, non-research, colleges or universities.

A total enrollment of between 100,000 and 150,000 students, with 75% tuition coverage, and some form of qualified pool lottery selection system. Management, administration, student selection, and professional staffing would be provided by the private sector.

For everyone: bring back usury laws with respect to credit card debt.

Chances are good that this revised package will reduce taxes, increase disposable incomes, grow the economy, eliminate the Social Security mess, increase tax revenues, reduce all budget deficits, provide better health care, reduce insurance costs, encourage home ownership, and reduce the size of government.

Hmmmm. Maybe the next President.

Steve Selengut
http://www.kiawahgolfinvestmentseminars.com
Professional Investment Management from 1979
Author of: "The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read", and "A Millionaire's Secret Investment Strategy"

In the relative short term, The Obama/Geithner policies will begin to create the additional fissures to ensure the collapse of the US economic system.Unfortunately,eloquent speech is not equal to 'economic solution'.

A simple understanding of things, is that 'Free trade, with NO regulation, and NO protection' will NEVER consider market disparities..a little 'sleight of hand' of capitalistic greed.

Sir/Madam
I have no real way to reach the President or anyone at that level, but perhaps you guys do.
'Stimulus' has a 'cost' factor that US cannot support.

· Principle One – How do we build the modern electricity grid?
· Principle Two – How do we reduce our reliance on foreign oil?

I can address both aspects.

While you watch the Senate cement a US calamity, understand that leaders are not very good at 'listening' but major disaster does tend to improve the hearing of people. If you cannot see what's coming, even with the 'stimulus' plan that actually has zero regenerative component for the economy, then you'll surely see things more clearly by 2010.
You can sit back, and watch leaders take catastrophic steps which ironically, some believe to be correct...If you look carefully, you may understand that NO amount of liquidity can fix the expanding problems. Realistically..have you seen world leaders produce 'one' real solution yet?

For a start, the senate cannot identify 'mass and rising unemployment' as the root cause, and generally, if you cannot assess a root cause, you can never fix a problem. They identify it as 'housing correction'and 'credit squeeze' , and media swallows that. They call simple 'liabilities', 'toxic assets', and these are the spins.

If I were to say the entire US senate is actually guilty of 'being asleep at the switch' that would be an understatement, but everyone is really good at bickering, fingerpointing and laying blame.

You might find the content of my note unimportant, but ..perhaps read it, and keep it in mind. You might remember it sometime in the near future. Its not a note of doom..merely a fact of consequence. As like many other times, it will not be because US was not told, but because US government, does not 'listen'.

NEW Concept- World FIRST: The generation of unlimited , daily, clean electricity into the national power grid, in volumes that with implementation, will outstrip the combined power yields of wind and solar energy - Concept currently UNKNOWN as alternate energy source.

In the light of the energy problems being experienced across the globe, I would like to be afforded an opportunity to present a solution to lacking energy policy, under the framework
of a direct governmental agreement. I respectfully request such an arrangement due to the urgency of the global meltdown, avoiding the normal protocols of patents.

I would appreciate the opportunity to tender the concept, to be verified by any governmental team of engineers, planners, architects and scientists to directly present their verified findings to the relevant senate committee.

If interested in the proposal, I can more clearly outline the potential for massive job creation, financial stimulation and stabilization of the stock markets, and all related industry, and markets and ultimately the methodology that can be applied to achieving better energy security, helping wean economies from high oil dependance.

Consideration of this proposal may lead you to conclude that less can be invested in wind/solar/biofuels, and still have a more positive energy yield. You might also consider the impacts of substantially lowered carbon emissions and the related effects on climate change that can be more directly addressed.

As you see the nations of the globe deteriorate, in spite of every stimulus effort I would urge you to understand that liquidity, in this instance, can fix nothing.

Thank you for any consideration.

Yours Sincerely.

If you have the time,read the following carefully:

http://sites.google.com/site/newenergyworldfirst/