Solutions to Our Failing Economy
by Adrian H. Krieg


The economic and financial problems America faces are not insurmountable but the Bernanke-Paulson, politically-motivated efforts of the RepubliCrats will certainly not resolve it. If we are to survive our present economic situation, we must look at some drastic changes in government, taxation, finance, banking and insurance. Our problems are not just a corrupt political, banking, taxation and insurance industry, but they are systemic in that they reside in our entire set of laws, government, and financial industries.


Issue 1:

We have embarked on a national enterprise that is for lack of better anachronism is called "Free Trade" this supposedly based on Libertarian concepts operates under the false assumption that goods and services can move across international boundaries unhindered and unencumbered by duties, and that this will result in lower consumer prices more availability of goods, and be a general benefit to the society at large. While this sounds good the reality is quite different. Firstly there are scores of international and bi-national treaties and agreements like, WTO, NAFTA, CAFTA, GATT, (1) and others. Every one of these alphabet soup of agencies in one way or another restricts and regulates international trade. So, in point of fact, trade is not free, international treaties control it. Secondly is the false economic assumption that goods and services will be provided on an equal and just basis between nations. This academic idea is based on the erroneous assumption that production costs are equal worldwide. Taking just one of our trading partners Mexico we can reach the following conclusions. Wages for blue-collar labor in Mexico in 2008 averages $1.54 per hour in America the minimum wage as of 2008 is $5.85. Unfortunately that is only the tip of the problems. Mexico does not have any workman's compensation laws; the Mexican government actively discourages any labor unions, Mexico does not have a Social Security system or a tax for SS. In fact Mexican laws so adamantly supports employers over employees as to make the entire process laughable. Based on current statistics an employee in America costs his employer at minimum $10.77 per hour, which is matched by a Mexican equivalent of $ 1.66, a disparity of $9.11. Since the average cost of production in the industrial sector is about 65% labor 20% raw materials and 15% other, anyone with even a minor amount of intelligence can see that an American producer cannot compete with a Mexican one producing the same products and utilizing similar machinery. The result of this policy (NAFTA under control of WTO and GATT) has accomplished the following in the last ten years; The loss of 4,300 American manufacturing plants, the loss of over 7 million blue-collar manufacturing jobs, (the highest paid blue-collar jobs available), the reversal of a Mexican trade surplus of $ 5.7 billion annually to a trade deficit of $67 billion annually, that equates to a loss to our economy of $ 72.7 billion.

Fix: Scrap NAFTA, WTO, GATT, and all free trade policies. Annualized savings to America about $800 billion.


Issue 2:

The wars that we are waging are too expensive, totally unproductive and are draining our economy. It is estimated that by the end of 2008 just the war in Iraq will have cost America three trillion dollars. (2) The war with Iraq is not about terrorists or oil it is about imposing our will of governmental organization on others. The war was preemptive something not allowed in our form of government. The case for the necessity of the war was based solely on lies produced by the Israeli Mossad and disseminated by our Bush Cheney government for their profit! The war in Afghanistan is a shadow war against an enemy created by the CIA. It is seated in Heroin production and a pipeline; its main character was a CIA asset for over ten years. The very concept that a bunch of Islamic clerics living in caves in Peshawar orchestrated the most complex and diabolical act of terrorism in world history is ludicrous. Any even cursory examination of the 9-11 attack implicates our as well as the Israeli governments.

Fix: End the wars, bring the troops home and put them on the Mexican border including those in the other 120 nations thus saving America $750 billion a year.


Issue 3:

Rescind the 16th amendment to the Constitution, dismantle the IRS and change the way America's government raises taxes. The IRS codes are a national disgrace, no one, not even tax attorneys understand this hodgepodge of over one million words. Every time congress tells us they will simplify the tax code they add another 800 pages. Dispose of the entire mess at one time. Institute a national 15% retail tax on everything except homes. Exempt from this tax any American below the poverty line; everyone else pays it regardless of the product purchased. An extensive Harvard study has demonstrated the prices will not increase with such a tax because the present tax code is what is jacking up prices. Those people who are now not paying income tax will be paying the national sales tax. Such a tax would eliminate thousands of bureaucrats, IRS courts, harassment of citizens, and fear of government. This tax must require a super majority of congress (both houses) for any increase.

Fix: Rescind the 16th Amendment and disband the IRS replacing it with a 15% national sales tax. Estimated savings to America are $1 trillion dollars per year. $10.7 billion in operation of the bureaucracy, untold billions in wasted taxpayer time and effort.


Issue 4:

Eliminate the tax on savings. This ludicrous concept stems from Communist ideas. Why should anyone's savings, that are the residual amount of income left after taxes, be subject to additional, second-time taxation?! This Act will encourage capital formation not only in banks but by individuals.

Fix; Eliminating taxes on savings accounts will saves America at least $8 billion a year and begin to put a dent into capital formation problems.


Issue 5:

Eliminate the Capital Gains tax. This tax is based on inflation. The only reason capital investments grow is due to inflation. Furthermore the subject of the tax was paid for with taxed assets. The Capital Gains tax is double taxation, counter-productive and should be repealed at once. The pronouncement of the "Progressive" demagogues that this taxes only the wealthy is a lie. It affects every homeowner and business in America.

Fix: Frees up capital, brings America in line with the other G-8 nations, produces wealth and provides capital for investment. Savings may be assumed at $20 billion in the first year.


Issue 6:

Eliminate the inheritance taxes ("Death" tax). Inheritance taxes are the bane of small business that employs over 70% of American labor. These taxes are in fact a tax on capital or investments of businesses that are paying taxes and have been paying taxes. Often the result of this tax is the closing of a business, loss of jobs and loss of capital. The inheritance tax reduces employment, destroys small business, eliminates family farms, all the while reducing federal income based on the loses created by the unfair tax.

Fix: Eliminates 60% of small business failures, increases employment, sustains the economy and, in the long run, will produce 40% higher government revenues.


Issue 7:

Tax all imports at a flat 8% and apply the proceeds of that tax to finance Social Security, Medicare and Medicaid. The immediate benefit will be the rebuilding of the politically-looted Social Security Trust fund. A secondary, and no less important benefit, will be to make domestic production more competitive and bring jobs back to America.

Fix: Returning jobs to America. About three million jobs first year is equal to $144 billion. Eliminates Social Security taxes, as well Medicare and Medicaid taxes.


Issue 8:

Eliminate all foreign aid. It's a great thing to be generous when you have the available funds, but we are broke. Furthermore the largest recipient of American foreign aid is to Israel, the 16th wealthiest, per capita, nation in the world. They don't need our foreign aid and when we withdraw it they will ceases their endless belligerence against their neighbors and peace would soon ensue. Our second largest foreign aid recipient is Egypt, a nation that can only be considered the world's largest moocher. Egypt ruled the known world for 4,000 years; let them begin acting like the men their forefathers were and begin supporting themselves.

Fix: Saving of a total of $22.8 billion.


Issue 9:

Shut down the Federal Department of Education. The U.S. Department of Education consumes about 74% of its entire budget in management and payroll of its own bureaucracy. Furthermore, education is a local issue not a federal issue. The estimated cost of un-funded mandates, on local school districts, is about 44% of each district's budget. All this is wasted money, money that does not improve or aid education in any way. Most of the special mandated programs, like Headstart, have produced nothing, and national drop-out rates in high schools have escalated ever since Carter setup this useless megalith.

Fix: Saves $56 billion in federal taxes; will save local school districts about 40% of their budgets.


Issue 10:

Shut down the Department of Energy. The U.S. Department of Energy is another worthless waste of tax dollars. Their most celebrated effort was the address of the gas crisis and shortage by the 1979 Carter Administration. Lesser known have been their, and the NRC's, stalwart opposition to nuclear energy and policies that have stifled new energy production, innovation and development.(3) In all the time these nitwits have operated, not one of them has figured out that coal liquefaction is cheaper than imported oil by almost half.

Fix: The U.S. Department of Energy's budget for 2008 was $25 billion. We did just fine without this agency before Carter created it in the 70's.


Issue 11:

Eliminate the Department of Housing and Urban Development because we are unable to ascertain what the federal government is doing in the housing business. There is certainly no Constitutional requirement for this agency and housing has nothing whatever to do with the function of government. It is also a fact that much of our present foreclosure problems can be placed on the doorstep of this agency.

Fix: This agency spends $33.6 billion on, it may be assumed, inducing people into taking mortgages they cannot afford for sub-standard, government-ugly, socialist-built "housing."


Issue 12:

Eliminate all farm subsidies. They only go to mega-farmers who use the subsidies to try to run family farms out of business. I farmed for fourteen years and never even saw a Department of Agriculture employee; and neither did anyone else in our county. This one was hard to figure out because, as far as I have been able to ascertain, total budgeted 2007 farm subsidies were about $11.86 billion. An interesting side note is that they changed the payout whereby, as of 2008, anyone earning over $200,000 a year was no longer eligible for subsidies. When average American farm income is $81,480, you begin to understand who is getting these subsidies.

Fix: Savings $11.86 billion.


Issue 13:

Disband the Department of Homeland Security. This is the worst and most poorly-run agency of our government. Thanks Mr. Chertoff: the agency has over 240,000 employees, including the secret service, the U.S. Coast Guard and over fifty agencies. All this should be divested back to the way it was before (5) the creation of this catastrophe. Agency budgets are unavailable, however, based on realistic costs, a saving estimates of $280 to $300 billion may be realistic.


Issue 14:

Our army must be placed on the Mexican border with loaded weapons. All illegal immigration must cease immediately. All immigrant felons -- estimated at over 500,000 in prison or in the population -- must be rounded up and immediately deported to their country of origin (after being injected with RFID marker). All Illegal immigrants are to be issued a 90-day green card during which time they can pay back taxes and, after doing so, apply for citizenship, which can only be issued under the following guidelines: Five-year residency; total fluency in English; American History exam; proof of continuous occupation; no immigrant having, during the five-year term, accepted any state largess or been convicted of any crime. All immigrants must have an American citizen sponsor, who cannot be a member of the immigrant's extended-family.

Fix: Will save American taxpayers well over $300 billion annually.


Issue 15:

The federal budget, under King George, has grown by 8.26% in just 2007. This is untenable in this economy. All existing branches of government remaining should be forced to implement the following steps.

  • Freeze all employment;
  • Freeze all pay at current level, including congress;
  • Eliminate all government pensions and require all government employees, including elected officials, to subscribe to the standard Social Security system;
  • Stop all purchases of furniture and fixtures;
  • Forbid the CIA from using any funds (such estimated to be 30% of their budget) for the propagandizement Americans and reduce their budget by 30%;
  • Reduce the NSA budget by 40%;
  • Bring military staff officer's pensions in line with private sector benefits;
  • Reduce employment in all federal offices by 5% per year for the coming five years;
  • Sell (only to American citizens or corporations without the right to resell to any foreign entity) all existing federal lands.


    Issue 16:

    Abolish the Federal Reserve System. This bank is not federal (but private); not a reserve (because it has no reserves) and not a system (because it's corporation incorporated in the state of New York). It also issues fiat money with is illegal pursuant to Article I, Section 8 & 10 of the U.S. Constitution. All matters relating to currency, interest, borrowing, etc., must be returned to Congress where such were until 1913 when the Fed was established.

    Fix: A savings of $188 billion per week for July and September of 2008 ($1.5 trillion) and $700 billion bailout, suggested loan by the Fed.


    Issue 17:

    Shut down the War on Drugs. This ludicrous "war" has cost America more money than can be counted with virtually no results. Legalize marijuana but make the illegal sale of hard drugs punishable by twenty years at hard-labor twelve hours a day with no option for parole or leniency.

    Fix: Savings $22 billion.

    Issue 18:

    Stop the War on Poverty. This ridiculous "war," started by LBJ in order to get welfare recipients to vote for the Democrat party, is a complete bust. Estimated expenditures over the last two decades have exceeded $8 trillion dollars the net-effect is that today we have exactly the same number of individuals below the poverty line we had when LBJ instituted the program. It is a total failure and a waste of money.

    Fix: savings $1 trillion dollars per year.


    Now comes the hard part:

    Many of our government agencies are run like a kindergarten. When I called ranking officers of the Department of Energy and Department of Education and the IRS none of them were able to respond to simple questions relating to their agencies. Not one person could quote their agency's 2007 or 2008 budget. The fact of the matter is that from the State Department to the Department of Treasury our government is staffed by a bunch of incompetent boobs. By reducing the number of employees, mostly through attrition, this will improve.

    Make it illegal to lobby congress, except as an individual.

    Instead of listening to the People, our elected leaders listen to the lobbyists who pay for their reelection campaigns. Pass a law to make the offence of corporate, union, and organizational lobbying finable for $500,000 per entity and ten years mandatory imprisonment for the offender. If you don't think this is a problem, consider the following contributions to politicians: Bear Sterns $829,289; Fannie Mae $484,648; Freddie Mac $202,804; Lehman Brothers 1,576,601; AIG $448,639; Merrill Lynch $448,639 and Morgan Stanley $2,452,488. All of these firms went belly up in 2008, all of their CEO's walked away with millions, and you and I are paying the bill of about $1 trillion dollars.

    Make any, but individual campaign contributions illegal and require all contributions to come from the congressional or senatorial districts. For far too long congressional elections have been the foray of AIPAC and other well-funded bundlers and organizations. Once this is stopped, sanity will return to Washington. Personal contributions should be limited to $300 per family, not to exceed $1,000 and a penalty of ten years imprisonment if this is violated.

    Repeal the 14th amendment. The required three quarter majority in the Senate, never legally ratified it in the first place.

    Repeal the 17th amendment. This removed much of the power the original Constitutional intended for the individual states to have as a say in the governing of the nation. This was the second worst Act of Congress and came to suppress state rights and has led to the establishment of federal power that has become an empire we may be stuck with.

    Estimated total savings first year of changed operations about $4 trillion.


    Suggested Reading:

  • Our Political Systems ISBN 0-9748502-7-6
  • Money: a primer ISBN 0-9748502-6-8
  • Before Departing: a few words ISBN 0-9748502-8-4


    Many other issues must be considered but this is a start!



    ----------------------
    (1) World Trade Organization (WTO); North American Free Trade Agreement (NAFTA); Caribbean American Free Trade Agreement (CAFTA); General Agreement on Trade and Tariffs (GATT)

    (2) The $3 trillion war.

    (3) Discovering what federal agencies total budgets are is no simple task.


    02 October 2008



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