Bartering with the Morbidly Turgid

As referenced in the article Bartering with the Morbidly Inept I committed to continuing the discussion on the interconnectivity of our political climate and its relationship to the National Debt and the National Economic quagmire. In doing so I toyed with several titles for this current exercise and ultimately decided simply to persist with my personal amusement and elected to stick with the Bartering with the Morbidly… theme. 

With all things that appear in the physical realm each possess a unique purpose and/or resolved as the effect of some cause; assigning a title, at least for me, is no different.  As I observe the dialogue-of-the-day, both in print and in media format, there appears a most conspicuous and unholy dance of topical-teasing being waged that is particularly ephemeral in form and context. The consequence of these curious musings seems to be that as the Public becomes more and more distressed over the impressive incongruity of it all they are forced into a twisted form of barter; attempting to reconcile their intuitive sense that there is something gravely wrong, the overwhelming sense that nothing is being done to remedy the situation and the believe that there’s a deliberate scheme in play to avoid acknowledging that the charade is actually occurring.  And so, the use of the term(s) bartering, morbidly and inept which of course brings us full-circle to my choice for the current effort: Turgid – a fabulously acute and relevant word which is often associated with the state of being swollen, bombastic or even pompous. So now you know. 

As a quick reference to the article above (link) and by way of a sure suggestion that if you haven’t already read the piece I wholly recommend that you do, permit me to recall a comment from said effort:  

“Do consider that there are two distinct components to the discussion of Deficit and Debt Ceiling issues; one is a political component and the other is a structural component and I assure you there are no painless ways to address either. Though try as they might, these simply cannot be dealt with as separate issues, they can only be dealt with (effectively) unilaterally. The structural component mostly deals with tax regulations and economic reformulation and I will address each of these in series.”  

As is always the case with me I tend to be far too assiduous in my articles the risk of which is that they end up with word-counts that are slightly short of treatise territory so I will simply state that if a reader wants a more thorough discussion on the following matters then be sure to purchase all three Volumes of the Blind-Vision Series“We Hold These Truths”, “Value Given, Value Received” and “Valor in Prosperity” now available in 2nd Edition form.  Now then, let’s begin! 

“The greatest calamity which could befall us would be submission to a government of unlimited powers.” Thomas Jefferson

As most Americans can attest there is a fundamental law in personal finance: You can’t spend money you don’t earn and although you can accumulate debt to substitute for the income disparity occurring from having spent more than your income would otherwise allow, sooner or later you are confronted with an impassable void which one is unable to breach. One has only two options; either increase your income or decrease your expense (yes, you can file bankruptcy but it doesn’t cure the cause.) This simple law, believe it or not, applies to government as well though due to three rather apocryphal devises at its (government) disposal, the beast attempts to defy the inviolable. What are these three devices? 

  1. Unchecked Legislative capacity.
  2. Unchecked ability to Borrow.  And,
  3. Unchecked ability to Tax.  

“I didn’t fail the test, I just found 100 ways to do it wrong.” Benjamin Franklin 

In each of these three areas lies the causal force for the Political, Financial and Economic degradation this Country now experiences and I will go so far as to say that each of these contribute directly to the operational depravity which persists in direct opposition to the core fundamentals that are foundational to our stated construct as a Nation. In every aspect of government since the early 1900’s it is striking to consider that it may be upon the pure strength of these fundamental principles that this Country has persisted as long as it has and having done so being a validation of the same.  So then if we are to be faithful in our efforts toward resuscitating the beach-whale that is our National Economic Engine two areas, and certainly not to the exclusion of others, that associate directly with our structural economic flaws and in each, given a surgical approach, can be at the heart of a lasting recovery as well as perpetuating our successes: 

TAX CODE: 

To consider the present Tax Code as emblematic of the pandemic that is unchecked governance would be a supreme understatement. It is the prism by which any conscientious person will witness first-hand the wretchedness of excess and the abuse of legislative bias exceeded only by the unwillingness of politicians to correct it. We should also consider that the current economic climate is the result of government actions, not Individual Taxpayers. 

There is no repairing the existing Code as it lies far beyond the boundaries of reclamation. It must be completely vaporized and replaced with an eye and mind attuned to the idea of economic productivity and not government sponsored piracy. The following points should be at the heart of a viable construct (associate comments added): 

  • Income must be classified and taxed according to its type and source: Active Income (productive output) and Passive Income (non-productive output).  Source distinctions are Individual (household) and Non-Individual income (everything else.)

Comment: Individual Income should never be the bedrock of a viable revenue generating mechanism; doing so defeats the very lifeblood of an open-market system. Non-Individual Income (Business, so-called Non-Profit) has no such vulnerability to open-market concepts as it exists as a result of the only driving force behind a productive open-market response; the Native Economy and thus should be treated accordingly. The current tax code is saturated with near infinite examples of government-sponsored bias at the expense of the productive economy and nowhere is this more conspicuous in the absent distinction of Active vs. Passive Income. Entire components of the U.S. Economy avoid equitable responsibility for government processes attributed directly to this breach in reasonableness.

  • Remove Tax Liability for all Household Active Income (HI) below $350,000 per year provided that the Household contributes (10% of HI) to and maintains an active retirement plan of suitable form as well as appropriate healthcare coverage.

Comment: Each of these points is covered more thoroughly in the “Blind-Vision” Series.

  • Tax Rates for Business & Non-Profit Enterprises should also be distinguished by both Active (productive) and Passive (non-productive) source designations as well as Origin (domestic vs. non-domestic.)

Comment: This is not so much a paradigm shift in thinking as it is a restorative feature. We must restore the core notion of viability to the economic discussion; why should business inefficiency or failure be subsidized?  Further, avoid the trap of the specious argument that suggests companies will simply pass their tax burden on to the consumer as the means for opposing the viability ideal.  Do you really believe this doesn’t presently occur?  The primary goal of the Tax Code should NOT be to endorse massive accumulation of wealth by the inanimate entity of these Enterprises but instead to orientate these entities into a perpetual perfecting process by tethering excess accumulation. As it is, through the use of Tax Credits being just one example, the Tax Code openly endorses hording in lieu of pressing accumulated wealth in to the perpetual creation of wealth cycles whether in productive output, elevated wage base or distribution of gains to Investors (passive income). The concept of Origin directly address the non-proprietary nature of contemporary Multi-National business models; promote domestic sourcing, productivity and development by assigning tax rates based on Income Source; the more favorable the source, the better the tax rate.

  • Reformulate the accounting methods by which Household and Businesses Entity’s calculate and report their income. As it presently occurs, Tax Revenues are based on Net Incomes all of which are calculated using archaic and defiantly specious methods all designed to minimizes Net Taxable Income. Tax Revenues should never be based on “allowable deductions” and so the Code should never adjudicate the concept of “allowable” and only that which is subject to tax.

Comment: Returning to the notion of viability the methods of accounting should be modified to report Income type, source and origin and the associate direct-revenue-generating expenses associated with each. The processes driving maximizing profits by evolving and perfecting efficiencies should be the responsibility of the Enterprise and not the Government. Government revenues should be based on revenues created and driving productivity and not on methods applied to distort, conceal or evade tax liability which of course is precisely what the current system endorses.

  • Banking and all Financial Market activities by their nature are passive income source (type) revenues and save for those revenues directly and specifically related to direct domestic productive development, research and productive investment these tax rates should be subject to the rates (surcharged) associated with all passive income sources.

Comment: For many who are not familiar with economic processes and the native forces which drive and perpetuate the same the distinctions of active and passive incomes may seem somewhat odd and I can only, with the increasingly limited space herein, suggest that you consider the idea from the following perspective: As it is we are overtaxing the very component that gives life to the economic cycle – the income that you earn and from which you spend and by doing so fuels the economic cycle (active income.) Passive Income is nothing more than one of the following: excess accumulated income or income that is generated from a none-productive operation. A viable tax system is one that encourages the productive cycle which produces and sustains wealth and advantage tax revenue generation by leveraging the non-productive revenues that do not.   

There’s so much more to offer on this topic however I’d best leave it for now and move on to the final component of this exercise: 

Economic Reformulation: 

One of the great ironies of all time is one that mystifies most observers of the American System. A Nation, for the first time in history, founded a two very simple principles that when left to their native tendencies produced a form of government and an economic marvel that when we consider the expanse of human history, in a very short period of time became a standard unequaled in all the world. And then as if perfecting a winning formula seemed too predictable, we proceeded to disembowel the entire process in less than seventy years.  Go figure! 

Ultimately the blame for this structured degridation lies directly at the feet of the American Public who through willing ignorance or indifference apparently decided that the price of vigilance was no price worth paying.   

“I trust that the Public Conscience is awakening to the truth of the statement that “choice is not choice at all if the available options do not exclude the certainty of failure!” 

Well the roulette will has spun and as fate most certainly assures there is the inevitability of an adverse consequence when one abandons control of the process. The price of course can be seen in the continuously growing number of foreclosures, the rising debt loads from government attempts at debt-spending in to the false-belief that inflation is the glorious measure of prosperity all the while the national economic output plummets to less than 3% of U.S. GDP. Still the erudite bureaucracy of sclerotic mollusks continue to espouse the we are a global economy myth as if it were by necessity when it fact it was by deliberate abandonment of all things relevant to sound mind and sovereign deference to our National Sovereignty.  A quick side-bar; you might find it interesting to know that over the last twenty-two years the growth in our National Debt closely mirrors our accumulated Trade Deficit.  So much for the it’s cheaper to build it in Asia argument! 

“You can’t import Wealth by trading for it but as the American Government demonstrates with rapier-like efficiency, you can sure export it for free!” 

What to do? Well, in conjunction with the Tax Code concepts referenced above, the concepts covered in my Books, various writings and of course the companion article to the present might I suggest a review of the following: 

  • If only from the implementation of the ideas referenced above relating to Tax Code, here are just a few of the side benefits:
  1. Excess liquidity applied to emerging technologies.
  2. Restoration of Domestic Productive Capacity.
  3. Expansion of productive capacity into target growth industries.
  4. Diversification of productive capacity enabling broader product range.
  5. Regeneration of Community environs from increased employment and correlative revenues.
  • As part of the reformulation of the Tax Code we might consider allowing Passive Investment applied to direct economic development to avoid the Passive Income Tax Surcharge. There would of course need to be strictly enforced and targeted requirements insuring that studies on the mating habits of grunion are not part of the menu of options.
  • Orientate industrial and manufacturing output/capacity as specialized, modular and diverse. As a progenerative business model this concept allows for increased diversity of output, stabilization of routines and accommodation of diverse product mix orientating design, development and sourcing as distinct and separate function. Eliminates capital intensive requirements of the more conventional product-to-market routines.
  • Defuse tendencies toward conglomeration of retail services. One of the fiew areas “economies of scale” are counterproductive.
  • Focused and disciplined research and development of sustainable low-cost energy with specific intent toward next-generation technologies. Notions such as green energy are benign at best largely due to the collateral damage the cause to base industries and the fact that these technologies are proven net-consumers of energy.
  • By removing Government from the entitlement regime its efforts can be directed toward developing/rebuilding national infrastructure.
  • When government is permitted to operate outside of operational efficiency requirements, such as in the case with Amtrak and U.S. Postal Service, there is no self-sustaining mandate. Solution: insist on self-sustaining mandates for government enterprises.
  • Government funding technological research and development which it retains, as a self-funding mechanism, perpetual economic right (royalties, etc.)  In this area lies perhaps the single greatest windfall for reformulating the U.S. Economy by way of deliberately targeting existing, emerging as well as over-the-horizon technological development however the approach cannot be a government version of corporate entitlement, it will only work by way of a non-government approach.  It must not only be economically self-sustaining, it must also be economically progenerative.
  • Renegotiate all Mineral Contracts sourcing product from Federal Lands and base royalty/revenue generation on direct output and place specific “sunset” provisions on all Contracts not in productive use. Place mandates requiring domestic consumption first to avoid export tendencies effecting domestic supply requirements.
  • Prohibit Government Legislative Bias deferential to select industries.
  • Refocus the Education System toward qualitative processes and remove socialization methodologies. Teaching a child to think and expand their creative though process is far more beneficial than homogenizing the intellect with mindless routines. By adopting the concepts I offer in the Tax Code discussion above Universities will no longer be able to conceal their largess and mechanisms should be employed requiring cycling of their massive endowments in such a manner as to reduce explosive tuition costs.  Further, I think it appropriate that University tuition should be tied to economic output of their Students. Why should a student emerge from our sacred University System, in debt and unemployed?  

As you can see there is no shortage of options available and to be sure I can easily propagate additional topical content however it will serve no purpose if at the heart of the motive there is no fundamental commitment to preserving and perfecting the American Experience absent an allegiances that promotes a beneficial reward for Americans. None of the options I present are at all novel or for that matter difficult though I confess that if we do not first perfect in our own practices the virtue of our construct then there is no distinction of what might be thought of as an Ideal which will draw one into believing any “thing” of value is worth pursuing!  

We do not owe the Globe a lesson in deprivation however we owe one another a faithful commitment to Valor in Prosperity and yes I titled the third Volume of the Blind-Vision Series for this very reason. Indeed, there is something quite noble and valatorious about an Ideal upon the belief that by virtue of your being, i.e., “…endowed by their Creator….”, that you must also be free to pursue to their fullest possible expression, all things in alignment with said Creators design. 

I believe this is our native calling, I believe this is our destiny; a uniquely American Destiny and one that none dare turn away from. Yes, it may seem a peevish notion to some but when I look at the expanse of history and the contribution this One Nation has made toward elevating the standard of Man’s existence, my senses are unaffected by those who might think otherwise and so should yours. 

In closing, as by now you know I’m prone to offer, two comments from Alexis de Tocqueville

“The greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults.” 

“When the past no longer illuminates the future, the spirit walks in darkness.” 

Mindful as I am as to the significance of the topics I’ve covered in these two articles it will remain to be seen if any Politician dare come close to discussing one of them. 

Your influence counts so be sure to express it!

Curtis C. Greco, Founder

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