Jim Rickards Predicts an AfterShock Like Economy as Debt Explodes While Economy Weakens

Please read link way below regarding an interesting analysis and projection by successful investor Jim Rickards, with some great stats such as the Federal Reserve being leveraged 77:1; I believe that is up from 22:1 in 2008. Also note that $1 debt used to increase GDP by $2.41 in 50s and 60s; now this $1 increases GDP by only $0.03 and is in danger of turning negative, per Rickards.

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1 theme he expands on therefore is that the Fed and Treasury are our greatest threat to national security. Rickards does predict an economy soon (perhaps within 6 months) that is quite similar to what Robert Wiedemer has been predicting for past few years – a $ collapse with severe economic adjustments required by the US. Reference AfterShock Economy:

http://economics501.wordpress.com/category/aftershock-economy/

Subsequent to further degrading of our debt and economic growth, Rickards foresees the possibility of the IMF bailing our Fed. The IMF is only leveraged by a 3:1 ratio.
i have not validated the stats or analysis but as i said – very interesting …

So how can we jump start the economy? Clearly tax reform must be one significant approach and be dealt with immediately. For more details visit — http://economics501.wordpress.com/category/tax-reform/

see link below

http://pro.moneymappress.com/MMRBSLG39EXT/LMMRQ9AH/?h=true

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Replace NJ Income Tax with state version of the Fair Tax

Following letter by Ted was published in The Daily Record June2 — http://www.dailyrecord.com/story/opinion/readers/2014/06/02/fair-tax/9802775/

 

I further expand on former state senator Ray Bateman’s argument that it is poor economic policy to tax the rich to the point where they leave the state. This not only takes away state revenues from their exit but also diminishes future revenues from the jobs many rich entrepreneurs create. In the end the state suffers from punishing income taxes. Tax more income and thereby expect less of it.

 

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New Jersey should eliminate the state income personal and corporate taxes, thereby reward success (income), encourage more of it, and subsequently grow the economy along with more revenue potential for the state. New Jersey should then closely implement, at the state level, the Fair Tax. The idea is to replace income taxes with revenue neutral consumption taxes on new products and services. This tax reform at both the state and federal level would more strongly grow the economy, add new jobs, and thereby provide governments adequate revenue sources. Annual budget deficit woes may then finally become just memories.

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Answer Karl Marx Capitalism Prediction with the Fair Tax

Karl Marx predicted that capitalism contains the seeds of its own destruction.  That is correct if a capitalist government embarks on an extensive and ultra progressive tax system to finance excessive entitlements.  Marx succinctly stated this strategy would eventually lead to socialism and ultimately communism.

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Our current tax system fairly close matches the above.  It punishes success (income growth) and thus stunts economic growth and widens the income gap.  Many of the poor likely realize that income is heavily taxed so why risk getting a job when the Government provides so much?

The Fair Tax (FT), in Congress as HR 25, provides incentives for all, by not taxing income and thus encouraging one to generate more income.  The FT is revenue neutral while eliminating all federal income and payroll taxes.  The FT generates revenue via a national sales tax on new products.

More of the poor will realize they can better themselves significantly by earning tax free income and not being punished by earning as much as they can.  They can then do their part to narrow the income gap.  To learn more visit http://www.fair tax.org, http://economics501.wordpress.com/category/tax-reform/,

www.returntoexcellence.net

Twitter @Economics501

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Will Bill O’Reilly be tough enough to ask questions about Marxism?

Bill O’Reilly encourages us to send him questions for his pre Super Bowl Obama Interview.  Here is my top 1:

Hey Bill – with no evidence against Paul Ryan, the Left states he is out to gut health care and benefits for the elderly and creates a commercial with a Paul Ryan look a like pushing granny off a cliff.  So why can’t the conservatives get an opportunity to ask Obama a question where there is tons of evidence he is implementing a Marxist strategy to “fundamentally change” the US?  Please read the below to him:

Mr President – I was a Marxist scholar in college (1978) and at that time liked many aspects of Marxism but since then changed and became a free market capitalist.  Observing your 5 years as president it seems you have successfully implemented an onslaught of Marxist values on an unsuspecting public.  Your “war on work” and massive expansion of the “Dependency on Government” class have created a true “proletariat” class that may soon embrace a 21st century Obama version of Marxism.  Please comment

** Bill do NOT let him get away with spin.  Remind him that he seems to be following Vladimir Lenin’s main strategy that lead to Lenin’s version of Marxism.  That strategy is:  the quickest path to revolution is to debase a currency.  Cite the debt that has grown from 9.6 trill to 17.5 trillion in 5 years under Obama.

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Other 27 questions I sent to Bill :

Bill I dare you to ask even one of these hard questions.  How about asking  the 5 toughest ones and NOT letting BO “spin”?

Was Benghazi used to deliver weapons to Syria rebels, many of who were associated with al Qaida?

Where were you during the Benghazi crisis?

Defense Sec advised you right away Benghazi was a terror attack with al Qaeda influence.  Why did you for 2 weeks state it was due to a video?

What were the motives of the Benghazi terrorists?

Why is Clapper still in office as head of intelligence?  He lied under oath about NSA spying.

Why is Holder still in office?  He lied in Congress about his role in journalist wiretapping.

Why do you rarely speak favorably about the role of the private economy?

Do you believe the US should ultimately be a socialist nation?

What motivated you to take a job as community organizer in an organization founded by Saul Alinksky?

can you mention a few aspects of Alinsky’s rules for radicals that you still follow?

Do you consider that Saul Alinsky presented a more modern version of Marxism?

Why do you believe Government controlled health care is superior to one managed by private markets?

Are you worried your debt explosion may result in a dollar collapse?

If you are so concerned about income redistribution, why do you not take action to cut much gov waste?  If you did you would have more useful $ for all.

How can you justify the $430 billion annual cost in complying with the IRS and our tax code?  Is not that a huge waste and drag on the economy?

Pleas provide a few reasons why you are against the fair tax.  Please be aware the fair tax eliminated the IRS.

Why are you implementing immigration reform via executive fiat?

Why did you negate Clinton’s welfare reform without getting Congressional approval?

Why did you disobey a fed Court order that you rescind your sever restrictions on drilling oil off shore?

Where in the Constitution do you get such extensive powers to circumvent Congressional legislation while issuing executive orders?

Do you really think most Americans believe you were clueless about the IRS harassing of conservatives, NSA abuses, spying on journalists, fast and furious! and most of all that you did not lie stating that Americans would not loose their doctor with ObamaCare?

Did you and Candy Crowly rehearse how you would respond to the Bengahzi attack during the second Romney debate?  After all when you asked her to read the transcript it was on top of a huge pile of documents.

Did you lie about Benghazi  to get re elected?

Are you happy how you handled Benghazi – especially the part when you knew it was a terror attack but you said for 2 weeks it was about a video?

Vladimir Lenin stated that the quickest way to revolution is to debase a nation’s currency. Do you agree your policies mimic Lenin’s?  You started with a total debt of $9.6 trillion. It is now $17.5.

A result of many social welfare states over past century is that the lower income suffer most with growing income gaps.  Those with incentive learn new skills continuously and prosper.  many who become brainwashed by the Left believe they are victims of the rich and tend to loose focus, loose ambition, and loose jobs and income growth potential.  The Left needs this income gap and a villain in order to stay in power. They have been very effective in influencing the mindsets of many. we need more grass roots advocates of free markets and individual liberty.  Will you join  me in changing this mindset?

Twitter @Economics501

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Fair Tax Will Reverse US Progression to Deep Socialist Jungle

 

The Fair Tax (FT) changes dynamics for the poor and encourages them to create more income instead of relying on the Government.  The FT thus reverses the nanny state or the progression towards a deep socialist jungle.

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Since LBJ’s 1964 start of war on poverty (when poverty rate was 15%), the US has taxed, borrowed, and spent $21 Trillion on wide variety of poverty programs.  Since then the poverty rate has fluctuated between 11% and 15% and has been 15% the past 4 years.  Many poverty programs simply decreased the poors motivation to better themselves.  The Left brainwashed the poor, drilling into them, that they are poor due to greedy rich who take advantage of them and do not pay their fair share of taxes.  The rich are villains per the Left.  The elite Left know that if the poor better themselves that the Left will be out of power.  Hence they continue promoting policies that increase a Dependency on Government class.  The Left therefore attacks the FT as a give away to the rich but it is clearly not.  Some on the Right mistakenly attack the FT as an extension of the nanny state.  This also is incorrect.  Next we further debunk the Left and then focus on the attacks from the Right.

The poverty rate was in sharp decline when Johnson initiated the war on poverty program.  It fell from almost 23% in the late 1950s to 17.3% in 1965, a year after the program was announced and before it could have made any significant impact.

Meanwhile, an all-time high of Americans — nearly 9 million, 20% more than when Obama walked into the White House — are on disability. And not because they’re disabled, but rather because they can’t find jobs in Obama’s economy and have exited the workforce.  And what is Obama’s economy?  In a nutshell it is to increase the Dependency on Government class to keep the poor as poor and keep the Left in power.  Nearly a $trillion to the non productive public sector in stimulus was a total waste.  It is the private sector of the economy that creates new jobs that self sustain them, create ancillary jobs, new products, services, and industries. In essence Obama focused on the wrong sector.

(For more please reference IBD link below).

http://news.investors.com/ibd-editorials/010814-685709-johnsons-war-on-poverty-has-been-lost.htm

To the Right objectors:

The prebate is just up to poverty level and is fair; most poor will spend up to this point.  It is not a give away to the poor.  All will receive prebates up to the poverty level to offset the impact of the revenue neutral consumption tax.

FT taxes only new products and services and is revenue neutral.  The % is simple.  For something costing $77 one will pay total of $100.  This is 23% of the total cost or 23/77 or 30% of net cost.  Again this is required to make the FT revenue neutral.

Regarding Social Security (SS) and Medicare:  – all payroll taxes are eliminated for all.  Whoever works generates income which is not taxed at federal income level with the FT.  This pays for SS and Medicare.  By encouraging the poor to generate more income, the FT thus increases odds that the poor contribute more for payment of all entitlements by generating more income and consumption and thus tax and entitlement revenue.

Why do the gaps between the rich and poor continue to increase?

Two main factors are:

1 – Government policies that have encouraged many to become overly dependent on Government welfare programs.  Think of the Great Society programs that started in the mid 1960′s (already discussed).

2 – Archaic tax system that benefits the very rich at expense of the poor, small businesses and entrepreneurs.

The poor rely on the rich providing them with handouts and jobs.  New jobs are limited with a tax system that punishes success (income).   Our tax system retards our private entrepreneurial activity that in the past fueled our economy much faster.  Hence the poor stay poor while the rich become richer.

Given our tax system, many of the poor lack incentives to better themselves. Many have developed a mindset that entrenches them to stay poor long term if not forever.  Many of the poor likely realize that income is heavily taxed so why risk getting a job when the Government provides so much?

The Fair Tax, in Congress as HR 25, provides incentives for all, by not taxing income and thus encouraging one to generate more income.

The Fair Tax eliminates all deductions. It also eliminates federal personal and corporate income and payroll taxes and replaces that with a revenue neutral consumption tax. This will empower the private sector to significantly lead us back to prosperity as our businesses will be able to more strongly compete globally.

The elimination of federal income and payroll taxes will encourage all workers including the poor to improve their skills to earn more.  Upon examination, more of the poor will realize they can better themselves significantly by earning tax free income and not being punished by earning as much as they can.  This will encourage many to leap from their comfort zone of Government dependency.

The zero percent corporate income tax will entice domestic and foreign entrepreneurs to create new  businesses and jobs in the US.  The increased jobs growth will provide yet another incentive for the poor to strive for higher incomes.

In conclusion the FT is progressive while at same time reversing US drive to socialism.

More details in http://economics501.wordpress.com/category/tax-reform/.

To learn more also  please visit www.fairtax.org

Twitter @Economics501

 

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Tax Code Prevents Effective Capitalism – so Pass the Fair Tax

Ted recently had a letter to editor posted in the Daily Record – Morristown NJ local paper – again regarding the Fair Tax.  Below is the letter and link along with comments that followed on-line.  I invite all to join this debate and answer one question Ted raises:

Main argument here is that current tax system unfairly benefits large corporations. I propose the fair Tax as a remedy. To all readers – please propose your remedies, would love to read about them.

The letter:

Alex Pugliese is absolutely correct in his letter stating that “Capitalism works, when not playing favorites.” The current tax code by itself is a huge impediment to a more free market capitalist economy. Approximately $900 billion of annual corporate and individual tax deductions are of dubious value to economic growth. Many of these tax deductions are for large corporations. This mainly insulates them from threats from new, small, innovative companies. As a result our economy staggers. Clearly tax reform is needed.

The most promising tax reform alternative is the Fair Tax, now in Congress as HR25. It eliminates all personal and corporate income taxes, deductions and breaks, regressive payroll taxes, the IRS, and gruesome $430 billion annual compliance cost. It replaces that with a revenue neutral consumption tax on new products and services.

All will receive monthly prebates up to the poverty level to offset the consumption tax and render a progressive tax structure. Results will include domestic and foreign entrepreneurs investing in new industries, companies, jobs, thereby creating more wealth for all. To learn more please visit www.fairtax.org.

Ted Hruzd

The link:

http://www.dailyrecord.com/article/20131219/NJOPINION02/312190004/Tax-code-preventing-effective-capitalism

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Twitter @Economics501

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Fix #ObamaCare Now!

Fix #ObamaCare Now!

An immediate fix to our worsening health care plight can be accomplished as follows.

From congress 1 Democrat and 1 Republican will propose and immediately push through:

Strengthen private insurance industry and increase competition  and thus decrease costs by allowing all to contract with insurance companies across all 50 states.

Revert all ObamaCare insurance regulations except for these regarding pre-existing conditions.  Yes – allow consumers freedom of choice.  It is ok for a healthy 25 year old to opt for only catastrophic insurance.  Why must a 25 year old pay for colonoscopy insurance?  Why must a 60 year old woman pay for maternity care?

For the poor, increase funding for Medicaid and Medicare by as much as 50%.  Yes – this will cost billions and increase federal taxes for the (only 50%) that pay them.  But we must provide better quality care for the poor.  We are still a nation of strong morals.  ** I will need to calculate the total net cost of this.

What about those who choose not to buy insurance or cannot?  This may be 30 million. Continue to allow them to utilize ER services when needed.   Allocate a risk pool fund of $30 billion per year to handle this.  Care from this pool will not be as thorough or available as those who pay for insurance.  Hence it will be an incentive for those who can buy insurance to do so.  Why $30 billion per year?  Project 10% will require quite extensive coverage and thus multiple 3 million by $10,000; this is $30 billion.  This is just a rough projection and can be made more accurate.

Much damage has been done to current health care industry.  It will be expensive to fix it but we must.  Otherwise it will be extremely expensive and destroy our private health care industry, our world leading health care and tank our economy.

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Consider …

To leave our health care as is?  More have lost insurance than gained since Oct 1.

Sign up for #ObamaCare and you may be signing away your identity.
Many who expect to have signed up for insurance may find out Jan 1 that the insurance companies were not able to process applications due to web site back end processing bugs.  What about revenues for the insurance companies?  How about uncertainty among all corporations about ObamaCare impacts in late 2014 and 2015?  Any of these by themselves can tank the economy and cause long waits for health care services.  It is time for brave bipartisan team to tell BO this debacle is enough!  We will pass legislation veto proof to save our economy and health care.

How about Democrat Senator Joe. Manchin and Republican Senator Kelly Ayotte;  both are very bright and moderate.  Some must step it up now!  Time is of essence.

Twitter @Economics501

Dec. 8, 2013

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