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The Coming American Spring

By Scott Burns The Coming American Spring

Robespierre, the architect of the reign of terror in revolutionary France, is reported to have said

“If you want to make an omelet, you must be willing to break a few eggs.”

We need to remember this as we enter a period that will likely be called “The American Spring.” It will not be as violent as the revolution in France. Nor will it be as violent as the Arab Spring we have been witnessing in the last year. We already have the freedoms people sought in revolutionary France. We already have the freedoms people seek today in the Middle East.

But the scent of tear gas is in our future.

The coming American Spring is going to be tough. Many eggs need to be broken if we are to save our country. It will start to happen when we begin to tell the politicians they have done enough for us. That we want no more. Things will start to turn around when the first politician doesn’t fake it.

That hasn’t happened yet. Republicans fake it when they argue to cut taxes because cuts “pay for themselves” through higher federal revenues. Democrats fake it when they spend more but call it “investment.” The witless conspiracy of our two parties has brought the country to bankruptcy. It has to end. Not over ten years. Not in (or on) another generation. It has to end now, with sacrifice for all. If it means voting every single existing politician out of office, so be it. If my reader mail is any indication, we could have a national recall and start over right now.

Here are some, but just some, of the eggs that will go into the new American omelet.

  • Break the back of the finance/banking complex. The financial institutions continue to play heads-they-win, tails-you-lose ball. The change from George Bush to Barrack Obama proved there is only one party in America. It is the Institutional Party, the party of finance. Democrats and Republicans put institutions first, people second. We can change this by adopting Limited Purpose Banking. This is banking where the bankers aren’t making their profits and bonuses with our money, while having their extravagant risk back-stopped by our taxes.
  • Whip the insurance-medical complex. This is the complex of vested interests that pushed George W. Bush, a Republican president, to create a guaranteed income for the pharmaceutical and insurance industries with Medicare Part D. If this is a free enterprise country, let the pharmaceutical companies produce products at prices people can afford. In one step Medicare part D created unfunded liabilities equal to the entire Social Security program.
  • Get real about unlimited healthcare entitlement. It has been estimated that 10 to 30 percent of Medicare spending is lost to fraud. Other studies suggest that another 30 percent of all medical care is unnecessary. There is no demonstrated benefit for the extravagant spending. We spend half again as much as Germany as a percent of GDP on healthcare— but our lives are shorter.
  • Admit, and Share, adversity. This means a higher tax rate on Social Security benefits for current as well as future seniors who have abundant income from other sources. Raise the maximum income for paying the employment tax.
  • Want to be a member of the USA? Then pay your membership dues. We can’t have a nation where more than 50 percent of the people pay nothing in income taxes. Everyone needs to put something in the pot.
  • Higher tax rates for the very well off. When some kids go to summer camp in their parents’ private jet, the mal-distribution of income has gone too far. Whether you are conservative or liberal, the growing gap between rich and poor is destructive. It is better to redistribute wealth and income with taxes than with guillotines.
  • Cut defense spending, change foreign policy. Avoid joining the Russians as another nation broken in Afghanistan. Build a more mobile defense capability. Only spend as much as the next 5 largest military spenders rather than the next 20 nations. Get real about the cost of oil: Include much of the defense budget. Build a policy that radically changes energy consumption in America.

Think I’m crazy? Tell me. Hear me loud and clear? Let me know that, too. Send a note to scott@scottburns.com.

Only published comments... Aug 12 2011, 03:00 PM by admin
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Comments

 

Bobh said:

I agree.  When are you going to run for office.  You have my vote.   Bob

August 13, 2011 9:38 AM
 

wapnbp said:

Scott - Very good points and I agree with much of it but I get a little testy when I read the term "redistribution of wealth" and we don't own a private jet or anything close. So---

What does redistribution of wealth look like to you?  At what income level or net worth do you think is "rich" for the purpose of paying higher taxes?  How would the "redistributed wealth" be distributed?  

Welfare is redistributed wealth - how well do you think that has worked?  What government programs of redistributed wealth do you believe have worked well in improving the lives of the recipients?  I believe that working well must mean that the recipients become self sustainable - do you agree?

Self government requires citizens to be educated and politically involved and prosperity through capitalism together with a moral compass which points us to help those who can't help themselves do work - not the government telling us who to "help" via taxes.  

August 13, 2011 10:29 AM
 

al_ said:

@wapnbp -

Something to keep in mind: we're doing a lot of "redistribution of wealth" already:

 - High frequency trading slices off parts of everyone's 401k, and gives it to corporations willing to commit a little bit of (still legal) fraud.

 - Corporate boards and CEOs take a larger chunk of the profits each year, while governance rules allow them to ignore the will of stockholders.

 - Sports stadiums are built with taxpayer dollars, thus ensuring that highly-paid athletes continue to be highly paid.

And we could go on ... that 'moral compass' has failed to stop this concentration of wealth, even though (or more likely because) the recipients are some of the most educated and politically involved.

August 13, 2011 1:38 PM
 

wapnbp said:

to al:

You make some interesting points although greed has always been with us.

So you're favoring government intervention to right what you think is wrong?  If you do, please give me some examples of where that has worked.

Al, do you believe that your American Dream is no longer attainable and if that's the case, is it because the wealthy ( how would you define wealthy? ) have "stacked the deck" so you can't succeed?

My questions are not meant to be a dig - I'm really curious.

Thanks

August 13, 2011 7:10 PM
 

Bobh said:

A man is only worth what he produces.   If he does not produce anything he is useless.  Bob

August 14, 2011 7:25 PM
 

al_ said:

@wapnbp

Hmmm .. government intervention that righted a wrong.  How about the 13th amendment, Canada's health care system, and Glass-Steagall for starters?.  I'm sure you can find some instances where government didn't help, too - I listed some in my previous post.

As to your assumptive "American Dream" query:  Well, I'm 49 and essentially retired, so I have my piece of the pie.  But I don't have enough money to afford my own private army, so for my savings to mean something, I need a functioning society around me.

That society is threatened some by a number of factors, but one of the biggest is mentioned in Scott's article - the growing wealth gap, or the "The Great Divergence".  Timothy Noah has an excellent series of articles describing it at www.slate.com/.../2266026.

As the articles note, there are a number of factors contributing to the growing disparity.  But it an unsustainable trend, and reversing the downward spiral won't be easy. It may not even be possible, but Scott has made some proposals here that have a chance at it.

August 15, 2011 4:27 AM
 

wapnbp said:

@al

Canada's health care system???  You didn't mention ObamaCare - not a fan of that?

Redistributing via taxes from the wealthy to what group Al?  The result would be more symbolic than effective - take a look at  the WSJ 2.26.09 article "The 2% Illusion - taxing 100% of income at $500k+ would have resulted in the federal government picking up only $1.3 trillion. Ok - not enough - let's tax all incomes over $75k and raise a little over $4 trillion.   And then who would be left to provide jobs?  Oh - silly me, I forgot -  Uncle Sam.

The growing wealth gap has more to do with the shrinkage of the middle class than a relatively minor subset of the total population being overly greedy.

The shrinking middle class has lots of causes - greed of the super wealthy being only one of them.

You're s smart guy and have raised some good points - as has Scott.  I do see the risk from a population who believes that they are locked out of economic success.

So give me some examples of where government intervention using redistribution of wealth has worked long term in eliminating this risk.  Any government and any time.

Thanks Al

August 16, 2011 10:26 AM
 

CypressTexas said:

It has now become perfectly clear.

Sometime around 2000 do you remember that the USG was coming so close to balancing the budget that there was fear regarding not having treasurys available to put into your portfolio? What happened?

Two wars, Fannie/Freddie/Wall Street/Auto/everyone and their dog bailouts. But the problem is NOW entitlements and taxes being too low! I think I get it.

If you are a typical middle class couple making $120K together, you are in the 25% bracket. Add 7.2% for SS/FUTA. Spend your money here in Texas and add another 8%+ sales tax. You are now at a total of 40% in taxes.  If you do the math you know that they can't tax enough of the "wealthy" to raise the required revenue. The middle class is next.

Our politicians have bought votes by promising  too much to too many for too long, and we are getting ready to pay for it. Let's just hope the T bill market doesn't experience a meltdown or sudden stop---we've been lucky so far. God help us all.

August 17, 2011 2:17 PM
 

Registered Investment Advisor said:

By Scott Burns In a recent column, “ The Coming American Spring ,” I suggested that the smell

January 12, 2012 11:39 AM

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