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A 3-step plan for getting out of our economic mess: 1) Rewrite the tax code 2) Negative interest rates on bank reserves 3) Institute a 2 year draft Now I know some of you saw the word draft and probably want to stop reading right now BUT give this a chance and read on. First things first the tax code needs to be rewritten. The fact that in 2012 only 47% of American paid federal income taxes has to change. There are too many loopholes, deductions, write-offs. In 2012 the government brought in $850 billion in tax revenue from individual tax payers, much less than it should have. If we went to a consumption tax the government would bring in much much more. Let’s look at it in simply numbers. The US economy is $10 trillion annually on goods and services; this is an average number over the past few years. If we had a consumption tax of 25% the government would bring in $2.5 trillion. Would a consumption tax make people shy away from spending? No it would have the opposite effect on those who are just getting by, it would not make the millionaires and billionaires rethink their spending by any means. Look at it this way, if you’re making $60,000 year you are now bringing home $60,000, you feel richer, wealthier so odds are you will be freer to spend, to consume. If you choose not to, great your bank account will appreciate it. Another reason the consumption tax is so great, all those illegal immigrants running around our country not paying anything into our tax system NOW PAY. Every time they purchase something, a shirt, shoes for their kids, a belt, food, plates, anything, they now are paying into our system. They will not be able to avoid it. Everyone is on the same playing field, rich or poor or middle income it doesn’t matter we all pay the same tax rate, 0% if you do not consume or the same rate if you do consume. We will start paying down the federal debt immediately without cutting spending, if the government could figure out a few entitlement programs to cut it would pay it down even faster. Now on top of the individual tax being changed to consumption the corporate tax should be changed to a flat tax. Did you know in 2009 Exxon paid zero in federal taxes, that’s right ZERO. Creating a flat tax on the corporate level will bring in trillions more, our government will be running a surplus in a blink of an eye. Second negative interest rates on bank reserves. Banks have to maintain a reserve balance according to government rules; the government pays interest to the banks on those reserves. The Emergency Economic Stabilization Act of 2008 allowed the Fed to pay interest on reserves, even excess reserves. By January 2009 banks had increased the amount of capital held at the Fed from $10 Bil to $880 Bil. Do you blame them? They are receiving risk free interest. Why lend? If we go to negative interest rates it will force the banks to lend. Lending will become a major force for their revenue and income; they will need to loan on a conservative basis something they did not do during the real estate boom. Also bring back the Glass/Steagall act, the single most important banking rule to be taken down under the Clinton administration and by far his and other politicians’ biggest mistake. Lastly institute a 2-year draft of every man and woman at the age of 18. Yes I know the controversy this will start but hear me out it’s not a bad thing. A draft will increase our military presence and strength dramatically. It will instill a sense of pride in our youth; it will also have the ability to open their eyes to different industries, which they may want to pursue as a career. And very importantly it will turn this economy around on a dime. Imagine the government would have to clothe, feed, and arm millions of young men and women. They would have to build housing, trucks, tanks, planes, etc, all the things that the military currently has but in much greater amounts. Every product the government purchases has to be made here in the US, nothing from abroad, and nothing is allowed to be outsourced. Believe me there will be companies here in the states that would do anything to receive a government contract. The government pays market rates on these products made here in the states, not $40 a hammer as an example under Reagan. Also anyone, up to age 50, who wants to come and live in America, has to serve for 2 years. After the age of 28 they will not be shipped overseas or sent into battle. If anyone who is here illegally, they are given an amount of time to leave the country if they are caught after that elapsed time they will be put in the military for up to 5 years. Once they serve the military they automatically become US citizens. If they have families, fine, the entire family will live on base with them for the 5 years. Yes I know many of you are asking well who is going to pay for it. The answer is the government of course. The new tax code will be bringing in more money than ever before but even if the costs of a draft exceeds the increased tax revenue, which it will, the government will get it back very quickly. Our unemployment rate will drop to 4% or lower very quickly. This plan has the potential to put us back to being fully employed, creating millions and millions of jobs. It is essentially called trickle-down economics with a twist, something our current politicians have completely forgot about. Oh one other thing, it will make us much safer as well.
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A 3-step plan for getting out of our economic mess:

1) Rewrite the tax code

2) Negative interest rates on bank reserves

3) Institute a 2 year draft

Now I know some of you saw the word draft and probably w …

A 3 Step Plan To Fix The American Economy #forex #trading #pips #unique4x #economy #business #news

FOMC minutes: Labor market improvement can’t be ignored Many members say a range of labor market indicators had improved more in recent months than they had earlier anticipated, according to the minutes of the late July FOMC meeting. “The characterization of labor market underutilization might have to change before long, particularly if progress in the labor market continued to be faster than anticipated.” The committee voted 9-1 to maintain the taper and reiterate its commitment to keep rates lower than normal for longer. Dissenting was Philadelphia Fed boss Charles Plosser, who argued the others are underplaying the improvement in the labor market and the march of inflation towards the 2% target. So the Fed is hinting that interest may have to rise sooner rather than later because “labor market underutilization might have to change before long, particularly if progress in the labor market continued to be faster than anticipated.” I have to say that’s some assumption on the Fed’s part. The underutilization of the labor force has not changed over the past year while unemployment as the government reports continues to come down. The Fed should never assume anything, they should let real numbers and true economic accounting determine their interest rate actions. We all know what happens when you ASSUME.
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FOMC minutes: Labor market improvement can’t be ignored

Many members say a range of labor market indicators had improved more in recent months than they had earlier anticipated, a …

FOMC Minutes Reveal Fed Makes Many Assumption #forex #trading #pips #unique4x #economy #yellen #business #news

FOMC minutes: Labor market improvement can’t be ignored

  • Many members say a range of labor market indicators had improved more in recent months than they had earlier anticipated, according to the minutes of the late July FOMC meeting. “The characterization of labor market underutilization might have to change before long, particularly if progress in the labor market continued to be faster than anticipated.”
  • The committee voted 9-1 to maintain the taper and reiterate its commitment to keep rates lower than normal for longer. Dissenting was Philadelphia Fed boss Charles Plosser, who argued the others are underplaying the improvement in the labor market and the march of inflation towards the 2% target.
  • So the Fed is hinting that interest may have to rise sooner rather than later because “labor market underutilization might have to change before long, particularly if progress in the labor market continued to be faster than anticipated.”  I have to say that’s some assumption on the Fed’s part.  The underutilization of the labor force has not changed over the past year while unemployment as the government reports continues to come down.  The Fed should never assume anything, they should let real numbers and true economic accounting determine their interest rate actions.  We all know what happens when you ASSUME.
Jackson Hole Guide: Investors Seek Yellen Job-Market View
By Matthew Boesler and Simon Kennedy, bloomberg.com
Here’s what to look for from the Federal Reserve Bank of Kansas City’s annual economic symposium in Jackson Hole, Wyoming, which runs Aug. 21-23.— Yellen’s keynote: The highlight will be Fed Chair Ja …

Investors Look Toward Yellen At Jackson Hole

#forex #trading #pips #unique4x #yellen #economy #business #news
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Jackson Hole Guide: Investors Seek Yellen Job-Market View
By Matthew Boesler and Simon Kennedy, bloomberg.com

Here’s what to look for from the Federal Reserve Bank of Kansas City’s annual economic symposium in Jackson Hole, Wyoming, which runs Aug. 21-23.

— Yellen’s keynote: The highlight will be Fed Chair Ja …

Investors Look Toward Yellen At Jackson Hole #forex #trading #pips #unique4x #yellen #economy #business #news

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