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Is there such a thing as simple economics?
"The real rulers in Washington are invisible, and exercise power from behind the scenes" (Supreme Court Justice Felix Frankfurter, 1952). The corruption costs the economy a whopping several trillion dollars per year. SimpleEconomics will reduce the cost of this corruption by at least 50%. If these Simple Economics are really as brilliant as they are presented here, you can expect them to be aggressively opposed by the special interests and the politicians they have bribed to work for them instead of for the whole population.
Not easy to change the current economic system
"It is fortunate for those in power that people do not think" (Adolf Hitler). There must be a monetary reward to get the millions of inactive non-thinking uninterested people to actively support Simple Economics. This is why such monetary reward is built right into SimpleEconomics to get the apathetic millions motivated. Once the slow moving masses are moving they will prove to be unstoppable. The opposing "evil" special interest forces are not to be underestimated because they own the media and have endless amounts of money to try to maintain the Status Quo that serves them so well. A warning from Niccolo Machiavelli (1469 to 1527 author of "The Prince"): "There is nothing more difficult to plan, more doubtful of success than the creation of a new system . . . for the initiator (of such new system) is the enemy of all who profit by the preservation of the current (Status Quo) old system".
The 80-20 Pareto rule applies to all new ideas
Why I started looking for simple solutions
Leonardo's proverb "Simplicity is the ultimate sophistication" persuaded me that simple ideas could be found to replace the current complicated incomprehensible humbug that passes for economics. It encouraged me to try to find simple solutions to the most costly and most damaging economic policies that keep the the current economy from becoming the most prosperous it can be.
I did some research on the causes of economic decline and how an economy deteriorates into recession and how it could be brought to an optimally functioning prosperous economy in as little as one to two years. I first identified the major destructive forces that block progress for a prosperous American economy:
1. Taxation by 30,000 taxing agencies in the United States that places a great administrative burden on taxpayers and it is very intrusive and restricts freedom to a great extent.
2. The Federal Reserve System, that was created in great secrecy in 1913 by a cabal of devious international bankers that currently are fleecing the economy of at least $3.5 trillion dollars per year.
3. An ever growing number of special interests that "buy" the services of politicians and other corrupt public officials to create special administrative rules and legislation that financially benefit those special interests and the companies they own. All at the expense of the general public.
4. A healthcare system that is forced on the entire population and is concentrating on healing rather than prevention. "An ounce of prevention is worth a pound of cure." (Benjamin Franklin). Applying simple prevention to the current cost of over 4 trillion dollars per year could reduce the cost by 2 trillion and it would turn many healthcare specialists into prevention specialists.
My research and logical deduction resulted in a number of ideas that are now part of "SimpleEconomics" that I hope will replace the current "ComplicatedEconomics" that have created so much failure and misery.
Following are the simple conclusions I drew from observations that led to the surprising conclusions:
1. All major recessions start with a large decrease in consumer and government spending for purchases of products and services.
2. When such decrease in consumer spending is for example 20%, all businesses will have on average 20% less monthly receipts. Many businesses cannot survive such large declines in income because they can no longer meet their overhead expenses (wages, rent, utilities). A percentage of businesses have to close their doors and many other businesses must reduce their overhead expenses by laying off employees. All this resulting in a large increase in unemployment and less production of goods and services.
3. Unemployed people have less money to spend than employed people and that means another round of less spending and less income for the remaining businesses and more businesses closing and additional unemployment, which in turn will reduce spending some more and an ever more spiraling down economy with consecutive rounds of ever lower spending on product and service purchases with the result of more business closings and more downsizing and greater unemployment.
4. Governments generally have little or no idea how to stop the spiraling down of additional rounds of lower consumer spending and higher unemployment. When the start of a recession has been detected, measures to stop and reverse the downturn of the economy must be taken immediately because the longer a recessoion is allowed to continnue, the more economic infrastructure will be destroyed and it takes longer and is more costly to rebuild or replace those businesses. When a restaurant closes its doors, the kitchen equipment will be auctioned off at 10% of replacement cost plus installation. Restaurant furniture is auctioned off at 20% of replacement cost. When a factory closes, its machinery is auctioned off at 20% or less of replacement. The most costly part of reopening a factory is the building of a new team of employees and teaching them the skills that the former employees had before they lost their jobs. The most skilled and best educated employees are likely lost forever to new employers.
5 Governments that are subject to a recession generally have no idea what to do. They act like deer in the headlights and do nothing at all in hopes that the economy will recover all by itself. What is needed to prevent recessions and to reverse recessions is the ready means and knowhow with a ready plan that is available for immediate implementation. Just like fire departments have the equipment and the means to contain and kill a fire immediately and take measures to prevent fires, so must governments have an executable plan and the means to kill a recession as soon as it is detected. I have created such a plan that kills a recession in its early stages and, better yet, will prevent any and all recessions from developing in the first place.
6. The first thing governments, with a recession in progress, must do is stop and reverse the recession back to prosperity by increasing consumer and government purchases of products and services. Unfortunately they think that they need to know what started the recession before they will do something to stop and reverse it. That is just as stupid as if Firemen will do nothing about killing a fire before they would know what caused the fire. With an economy in recession it is totally unimportant to find out what caused the decline in consumer purchases of products and services. The only thing you need to know is that you will absolutely guaranteed bring the economy back to prosperity in record time as soon as you increase consumer and government purchases of products and services and you need to know how to make that happen as fast as possible. The longer it takes to increase consumer purchases, the longer the recession will do more damage to the economic infrastructure. Speed is of the essence.
7. Governments are of the wrong opinion that an increase in employment will bring an economy out of recession and back to prosperity. An increase in consumer spending will increase demand for products and services and that in turn will increase job creation. Because of their incorrect opinion they concentrate much of their efforts on job creation and are very disappointed when that does not have a great deal of success. They also believe that an increase of money flow into the economy will get an economy out of recession. That is partially true only when that extra money increases consumer purchases of products and services.
8. The government turns to economists for recommendations. The economists do not realize that the only stimulus that will get an economy out of recession is an increase in consumer spending and their recommendations are a grab bag of largely useless stimulus ideas of getting more money into the economy. Stimuli such as Tax Rebate Checks, Cash For Clunkers, $700 billion for banks that are too big to fail with hopes that banks will use part of that money to lend to small businesses for improvements and expansion of the business. All stupid, wrong and too little too late. Tax Rebate checks go only to people that have paid taxes and are less likely to be short of money to consume products and services. People who have paid no taxes are the ones that are more in need of money for consumption. Cash for Clunkers only goes to people who are in the market for a new car and it is only a small temporary stimulus to only the car industry. Hoping to lend money to businesses in a recession is nonsense. Businesses in a recession do not want or need money to expand. What businesses need is customers. A restaurant in a recession has not enough customers. A manufacturer in a recession has more capacity to produce products but does not have enough customers to buy the products he makes. Customers is what businesses need to survive and grow and to increase employment, not loans to expand. So we need to create consumers instead of employees. The employment will result automatically from more government and consumer purchases of products and services.
9. A very hard to digest fact is that increased government spending on infrastructure, maintenance and true government services will also boost the economy, as opposed to spending on disservices such as Internal Revenue Service, which is a horrible and hated disservice.
10. So enough already of all this argumentation for an increase of government and consumer spending. How can we instantly increase consumer spending on products and services? To increase spending by Governments is not difficult, politicians will be happy to spend money on their pet-projects and specially projects that facilitate corruption with money flowing into their back-pockets. The surprising thing is that even "wasteful" spending is good for the economy because more people will get spending money with which to purchase products and services.
The harder thing is to get the general public to spend more money. The president cannot go on television and ask the people for help "Folks, please open your wallets and spend lots of money because it is the patriotic thing to do that is good for the economy and it will get us out of the recession very quickly". Most of the people have no money in those wallets to spend and those that do have some more money want to hold on to it a little longer in case things might even get worse in the future. So what is the solution to get people to buy more products and services? It took me awhile to hit on this seemingly idiotic idea and finding it to be the most brilliant one I had created.
Here then finally is the simple solution to optimize prosperity
2. So how can we do that, and where will that money come from? The Federal Government must create 313 million Federal Debit Cards (one card for each of the 313 million people in the United States, babies and small children included). These debit cards will have the same number as a person's social Security Card. The Federal Treasury will fund these debit cards every month with a carefully calculated amount that comes with the mandate that it must all be spent every month in the next 30 days following funding of the debit cards. But what if the government does not have that money, what to do now?
3. The solution is very simple. Ask the Federal Reserve for additional funds with which to fund the FederalDebitCards. The FED and its Board of Directors love to lend more money to Governments because it means that the National Debt, that stands currently (June 2017) at nearly $20 trillion, will increase by another few trillion and that makes for more interest to be paid to the FED by the general public, by "We the People". Who owns the FED anyway? The ownership question seems to be a great mystery shrouded in secrecy. The website of the FED says that the FED is an independent entity within government -and- it is not owned by anyone and is not a private profit making institution (so states the FED website). Read it yourself, click on the FED website (https://www.federalreserve.gov/faqs/about_14986.htm) Of course you can expect that website to disappear now that it has been mentioned here. Or even more likely you can expect this www.SimpleEconomics.com website to disappear because it might be "hacked" off the Internet by hackers that work indirectly for the "Master Puppeteers).
Other people say that the FED is owned by foreign bankers, mainly London based banking interests. That of course is not so good and in that case the United States should undo the 1913 Federal Reserve Act and start creating its own money as was the intention in the Constitution for the Federal Government to create its own currency: Article 1, section 8, Clause 5 "To Coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures". So what is stopping us? In case the FED is owned and operated for profit by Foreign Bankers. These banker have enormous power and they of course can be expected to do anything and everything in their power to stop us from being free of them.
4. So let's decide to get rid of the hated FED that is such a pain in our economy. It should be easy because it claims not to be owned by anyone, so there would be no one to oppose the elimination of the FED. Then we can create any amount of money out of thin air and we do not have to borrow it or pay it back because the money we create is already our own money, we created it and it is ours.
5. So we can "create/print" all the money we need for the revival of the economy and the creation of a recession proof prosperous economy. But how do we get that money to all the 313 million people in the United States?
6. Easy, we create the above mentioned 313 million Federal Debit cards that all get funded every month with the appropriate amount needed for the people to spend the economy out of recession. The amounts are determined by a computer program, adjusted each month to the correctly calculated amount that will not create too much inflation with the rapidly increasing consumer purchases that are designed to stop and reverse the recession and guide it toward optimum prosperity.
7. Eliminating the Federal Reserve System will not be an easy task because it is owned and operated by the real rulers of the economy the "Master Puppeteers". They are invisible and exercise power from behind the scenes. I have called them the MasterPuppeteers because they pull all our strings of the millions of people who they regard as their Marionettes that they swindle out of at least $3.5 trillion per year by creating new money out of thin air and with the other way of creating money by way of fractional reserve lending. The MasterPuppeteers are expected to do anything and everything to keep the FED and the FractionalReserveLending scam in place. The MasterPuppeteers are a formidable force they own most of the media and have endless amounts of money with which to protect the FED, the IRS and the FractionalReserveScam from being eliminated and keep them under their own control.
8. Eliminating all the 30,000 or more tax or revenue entities in the United States at all levels of jurisdiction, the IRS at the Federal level, 50 State tax agencies one for each of the 50 States, thousands of County and Parish taxing agencies and thousands of municipal and other smaller tax agencies will be replaced by a single method of 5% exise tax collection that creates more tax revenue than all the 30,000 eliminated taxing agencies combined. It is a 5% tax on all deposits into any bank account.
Governments in most countries are for sale to the highest bidder because some (or maybe most) politicians will sell their votes for whatever they can get. The highest bidders are a small number of very rich individuals that have a financial interest in one or more large monopoly industries. I call them (as above mentioned) www.MasterPuppeteers.com .
Some of the largest monopoly industries are:
and many more, too many to be mentioned here. Monopolies can only exist with the help of Government laws and regulations, most of which we should gradually eliminate to restore competition to the marketplace. Competition is a major backbone of a healthy and strong economy. Almost every new law or regulation creates crime in that the laws and regulations will be violated and will be policed and proscecuted on behalf of the monopoly special interests. The more laws and regulations are created the more police and proscecution is needed for enforcement and that gradually turns any economy into an oppressive police state.
The laws that are created rarely benefit the people, they benefit the special interests at the expense of the people and the country as a whole because most every law restricts the freedom of the people and conveys benefits to the special interests. They create corrupt laws that the special interests pay them for in various ways of bribery. In the United States they get paid through lobbyists that reward them in various ways that are difficult or impossible to trace. It is not a big mystery that many elected officials are able to live way beyond the standard of living that would be able to be supported by their official salaries and incomes from known sources.
4. The accounting industry: Accounting is huge business because of all the government mandated paperwork required from businesses and from all companies that are traded on stock exchanges. The shareholders want to know what is going on with the finances of the companies that they have purchased stock in. Again the favorite tactic for the accounting industry is to sponsor legislation that requires more regulation and oversight of the financial industry and that requires more government paperwork from all businesses, big and small alike. The additional cost for small business and the time requirement to deal with all that extra paperwork becomes too much for many a small business and discourages new small businesses to be started by young entrepreneurs. All these extra laws and regulations can be selectively applied to the smaller financial service industries to squeeze them out of business with an overload of work that is requested/mandated by government auditors.
5. The insurance industry has lobbied the legislatures at all levels of jurisdiction for more laws and regulations that make insurance mandatory in allmost all sectors of the economy.