exempli gratia

Some different ideas are kicking around and I need to get them down to develop in more detail.

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Have the individual states issue licenses for firearms. Basically, everyone/anyone can get a license. The states can set some minimal requirements such as training on safe firearm usage from a recognized trainer, such as military, police, scouting, gun club, etc. The licenses can be done in classes, such as shotgun, rifle, handgun, automatic, etc. much as DMV will give motorcycle, standard, chauffeur, and the different weight class truck driving licenses. Licenses may be revoked for felony convictions, judicial orders and similar situations.

In order to buy a firearm, you just have to show a license that supports that class of firearm. The seller can do a quick check to see that the license hasn’t been revoked and away you go.  And you have to show the license to buy the ammunition for that class of firearm.

This all goes back to the well-regulated militia phrase of the Second Amendment. Let the states decree that all firearm license holders are members of the militia and let them regulate as they see fit.

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20% across the board tax on all income directed to the Social Security and Medicare.  If you have a job, the 20% is collected as a payroll tax. If you are collecting non-wage income, like dividends, rents, royalties, etc, the 20% can be deducted by the dispenser. No matter what your income level, you pay the 20%. What you get for that is a retirement plan and healthcare. Social Security and Medicare go off-budget at the Federal level. Congress can maintain oversight of the Trust Funds running these systems, but that is about it.

States, private companies and insurance companies can get out of the basic healthcare business.  Every citizen gets access to basic healthcare. Employers can match the payroll tax.

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After the initial 20% tax on all income, there will be a Personal Income deduction per household equal to the median household, currently ~$50K. I am also tempted to adjust this to the Median Household Income for the Metropolitan Statistical Area you reside in.  Need to look at that in more depth. Single member households may use the 4-member household Poverty Level for their MSA .

The main idea here is to give everyone a large deductible. No itemizing. If you want to give to charities, buy houses, pay mortgages, go to school, go for it. There is no tax advantage or incentive either way.

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As far as our debt and deficit is concerned, Congress shall be mandated to collect revenues to cover their budget. In addition, Congress will include paying back 5% of the deficit each year as part of the budget. We can give Congress some wiggle-room such as the 5% doesn’t need to be included under certain economic conditions, such as the ones we are currently under. Also, in the event of a natural disaster that wasn’t originally budgeted, the 5% deficit payback can be diverted to cover those costs.  If Congress and the President declare a national emergency, then all restrictions are off.

In order for Congress to meet their revenue mandate, they must set a tax rate on all incomes above the deductible that will collect the desired revenue for that year.

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1 Representative per 100,000 citizens.

6 Senators per State. Senatorial elections will continue by the classes as they are now, but the three top vote-getters in each election will each  become a Senator.

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No one elected to Congress may serve consecutive terms in the same office.

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Any compensation paid to individuals in excess of the salary of the President shall be counted as Corporate profit

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Make the corporate tax rate something like 20% which must paid, at a minimum, on the profits reported to shareholders. – No deductions, no incentives, no corporate welfare

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$1 tax on each transaction that hold a share for less than 60 seconds. Taxes raised this way go to an SEC trust fund to prosecute the people gaming the system.

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Bank, or any Corporate, Executives go to jail when their bank, or company, breaks the law or agrees to settlement without admitting guilt.

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Total Personal Income U.S. and All States.

The Total Personal Income in 2011 was almost $13 Trillion. The federal budget for 2011 was $3.8 Trillion, about 30% of the Total Personal Income. I see a lot of wiggle room to put forward a $0 deficit budget and to even start paying back principal on the debt.

How to save Social Security, Medicare, get rid of the deficit, reduce the debt, and save the state’s budgets in one fell swoop.

First extend Medicare to all citizens and incorporate Medicaid into Medicare, taking it off the backs of the states. Basically, go to single payer health care.

Then take Social Security and Medicare off budget. Congress doesn’t even have  a chance at the monies in these trust funds.

Enable a 20% payroll tax that is directed to SS and Medicare. Employer matching as well. For people receiving income without a paycheck, or over and above a paycheck, they would pay a flat 20% tax to the combined trust funds.

The US income is ~$14T. Medical expenses run ~$2T. So that 20% payroll/income tax should cover the all medical expenses and the remainder goes into Social Security.  The citizen is receiving a retirement fund safety net and basic health care for life.

This takes States and Employers off the hook for providing health care services to their citizens and employees, removing a big drag on their budgets.

For the remainder, Congress passes a budget for the year and must pay for that budget with revenue. It must authorize collecting enough revenue to pay for that budget, keeping SS and Medicare off the table.  And unless there is a declared economic emergency, the budget will include paying 5% of the principal of the outstanding national debt.

The base of the taxpayers are already paying 20% of their income to the trust funds, so I suggest that for citizens making more than the median household income or $75K or some amount that won’t crush the lower-income household, that they pay enough income taxes to cover the budget. Congress can determine if it a flat tax or a sliding scale tax. Either way deficit spending ends and the debt starts to come down.

Or we can leave the national debt part out of the previous equation and say that all corporate taxes collected go to pay down the debt, but then it will never go away.

(I just did a quick check and if we pay off the debt at 5% per year, in 60 years it will be @ 5% of the of the current debt. )

A Manifesto for Economic Sense.

It is time for a rational economic debate.

I have been reading David Graeber’s Debt: the first 5,000 years and find it very interesting. The initial question posed is “Surely one has to pay one’s debts.” And from there Graeber looks back 5,000 years from an anthropologist’s point of view at debt, credit, money and economies.

I learned many variations on ‘accepted truths’ . Economists like to start the history of economics with the early human societies developing barter, then money, then credit. Adam Smith in Wealth of Nations started this paradigm and it has been repeated by the following generations. This is used to establish a ‘natural order’ of economics. Yet, the anthropologist finds that early societies built their economies on a credit based  exchange of commodities. Before credit it may have been favor based exchanges. And with credit comes debt and some manner of quantifying debt. It doesn’t have to be money; it may be tokens or tallies or other symbolic measures.

Eventually money, coinage, is developed – apparently simultaneously in Greece, India and China. Not only are states able to demand their taxes in coin, they can use the coin to pay their armies rather than provision them with commodities out of their treasuries.  This puts the coinage into the general population which lets them pay their taxes.

The philosophers start discussing the abstracts concept of symbols and reality, since money isn’t really real, virtual materialism.

Religions grow and start to collect and hoard the coins and start preaching different concepts of sin and debt and obligation and guilt.  Somehow they are all tied together. Different religions approach debt in different ways.  Do you owe a debt to your forebears for being there? Do you owe a debt to your parents or your community just for being there? Do you owe a debt incurred by your parents? Unto how many generations?

There are discussions of human economies and commercial economies. Contrast the unique value of an individual with the anonymous  value of a hunk of metal.

There is some exploration of the nature of the relationship between debtor and creditor. As long as is debt one can not be equal to the creditor. Even more interesting is the situation where a debt paid in full implies the two are equal and that just will not do. Then societal rules can be stretched, twisted and strained to prevent the equality from happening.

One item I found interesting was the relationship of the Chinese need for silver – to keep its coinage system working since they didn’t want to use paper money – to  the European invasion of the Americas.  And there is the oft-repeated theme of armies enslaving people to work in the mines to get the mineral wealth to pay the armies. Seems to have happened quite a bit once they decided to start paying armies in coin.

A market involves using money to go from one commodity to another. Money is just an intermediary. With capitalism, money is used to make money. Money makes money through interest and debt. This is an ever spiraling growth of that will collapse on itself and probably take society with it. Graeber’s discussion of the last 40 years is very interesting and gives me pause as to what we might experience over the next 30-40 years.  Given 5,000 years of history bearing down on us, I don’t think we can be agile enough to avoid a heavy shock.

Graeber shows that throughout history, human societies rebel against onerous debt. They have a Grand Jubilee and reset the meter. I don’t know if I want to see it happen or not.

I highly recommend Debt: the first 5,000 years for a thoughtful read.

What caused the financial crisis? The Big Lie goes viral – The Washington Post.

…they relied on the credit ratings agencies — Moody’s, S&P and Fitch. They had placed an AAA rating on these junk securities, claiming they were as safe as U.S. Treasurys.

After this display of incompetence, why is anyone paying attention to these agencies anymore? Who cares how they rate the US or Europe financially? They don’t know what they are doing.

Frex – Fares & Tickets.

I was just wondering what it would take to commute to Denver.  Just in case…

I worked out that a 75 mile trip in a car that gets 30 mpg (which is a bit more than my PT Cruiser gets, but it is the 2011 CAFE standard) would run me about $8.75 per trip (2.5 gallons @ $3.50 a gallon).  Looking at the FREX prices and adding in that someone else will be driving, using the bus is a very affordable option. And since I would be leaving from the Monument stop, it is even a better deal.  The main problem would be if I had to go somewhere far away from the FREX route.  But I think Denver has a pretty comprehensive local transit system.

And with free wi-fi on the Bus, I can stay connected if I decide not to sleep.

The $7 trillion secret loan program: The government and big banks should be punished for deceiving the public about their hush-hush bailout scheme. – Slate Magazine.

We really do need to give the banks and the bankers ( and their aiders and abettors) a fair trial. Except they seem to be fighting it tooth and nail all the way.

I started thinking about this after hearing PJ O’Rourke on Marketplace. This was an essay answering the question about “If the 1% had less, would the 99% be better off?”

We have a pie that represents the wealth of America. The “1%” controls about 38% of that wealth (2011). The “20%” (that includes the 1%) controls 88% of the nation’s wealth.

If we use a net worth of $56T (2011) then 38% = $21.3T  and 88% = $49.3T.

Wealth is not zero-sum. In 2007 American wealth was over $65T and the control percentages were 1-2 percentage points lower. So while the overall net worth dropped  16% the top “20%” lost only  -3% of their share of the pie (going from 85% to 88%). I wonder where the rest of the loss came from?

Wealth is not zero-sum. But the pie is. It sums up to 100% whether the net worth is worth $65T or $56T. If the top “1%” keeps a lock on $20T and the net worth figures keep falling, their percentage of the pie keeps going up. and the “99%” keeps getting squeezed as their percentage goes down.

It isn’t a matter of declaring wealth is evil or that reward for success is bad. It is a matter of saying that using wealth to promote a playing field that favors your increasing your wealth is bad. Buying the influence to set the field in your favor is bad. Gaming the system with a disregard for intent is bad. (Fraud is fraud, unless you can do enough semantic acrobatics to rob everyone blind, legally.

I don’t disparage the 20% their wealth. No matter how you cut the pie, there will always be a 20%. But 88% of the wealth seems a bit much for 20% of the population.

There are a number of items I would like Congress to implement to start the economic justice pendulum heading back to sanity.

• Restore Glass-Steagall at a minimum.  Keep Commercial and Investment Banks separate. Keep both of them out of the Insurance business. There may be some more regulatory restrictions that have a demonstrated need since the 1930′s but get us back to the 1990′s first.
• Review and reset SEC regulations every 7 years. All those smart guys on Wall Street like to game the system and it would behoove us to reset the games parameters as they stretch the limits.
• Prohibit Federal employees and contractors from working in the financial industry for at least 7 years after they leave their Federal job or contract.
• Un-recognize all Nationally Recognized Statistical Reporting Organizations (NRSRO). Reinstate recognition only to those organizations that are not paid by the parties they are reporting on.
• Pass a law that explicitly states that corporations are not “People”.
• Pass a law that only citizens can contribute to political campaigns and that all donations must be made available to a readily search-able database, maintained by the FEC, within 48 hours. I would like to extend this even further and say that only registered voters can donate to political campaigns but I will settle for citizens to start with.  I don’t know that any contribution caps are needed  if there is transparency about who is buying the candidate but we should not preclude that option if needed.
• Any corporate compensation in excess of the President’s annual salary shall be counted as corporate profit and taxed as such.  No deductions.

I believe this agenda falls under the mandate of the United States:

We the People of the United States, in Order to

• form a more perfect Union,
• establish Justice,
• insure domestic Tranquility,
• provide for the common defence,
• promote the general Welfare, and
• secure the Blessings of Liberty to ourselves and our Posterity,

do ordain and establish this Constitution for the United States of America.