Countless Trillions Spent (Wasted) Yet Stagnation Continues
It should come as no surprise to the average citizen that our economy is struggling at this point in our post recession growth phase. Historically speaking at this point we should be achieving GDP growth levels of the 4%+ range yet we are barely at 2%. I suppose it did not surprise many when Gallup released a poll last week reflecting 83% of our citizens feel we are in a severe recession.
How could this be?
$1,000,000,000,000.00 in stimulus was spent by our President and of course we all know the major Banks were infused with somewhere between $2-4 trillion depending on whom you believe. We also know that corporate coffers hold another $2 trillion or so and the bulk of it is held offshore to escape onerous taxation. And many of our fellow citizens cumulatively hold roughly $4 trillion on deposit with various institutions.
Having stated these facts, why won't people spend and why won't jobs be created and why does business not expand over and above the status quo?
I submit it is massive over regulation at work here. New rules either forbid Banks from lending so as to raise their capital base or the regulators have them so scared that it is easier to sit on the cash. In the mean time they must hire some people to figure out these new rules and regs and to comply. All in all not very productive. And I am not here advocating to let them run wild and do as they please with these secured deposits. Just some common sense and being in the lending business I can assure you there is a great lack of this being utilized today.
The tax code is another problem. GE pays a 0 rate, Apple pays a 9% rate and the peanuts I earn pays a 20% rate. If I could afford accountants like GE I too would likely pay zero yet alas I can't. And I can't fault Apple for parking money in Ireland and neither should you. The problem is the tax code which forces them to do so. Before you shout "tax the rich" let me tell you it will hurt us all in the end. Solution to this problem is as simple as the constitution. We are all to be treated equally in the eyes of the law so we should all pay the same tax rate of say 15%+-. Oh and by the way it should be in the form of a sales tax as this would save the $300 billion we spend in compliance every year not to mention the man hours wasted which equal the man hours used to build every moving vehicle in this country every year. What is better, building vehicles by workers or filling out forms instead of being at the movies with your family. And of course the underground economy is estimated to yield $500 billion to the treasury under this proposed system as it currently escapes taxation today. Great idea. Yet the pols won't have it as their power would evaporate as well as the campaign dough and perks.Continued on the next page