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Thursday, June 2, 2011

America's Coming Economic Collapse, A Possible Solution

      Collapse is not probable, it is inevitable.  Many people are trying to make a big deal about the economy and trying to make out like it is going to magically recover.  The housing markets recent slide tells the true story. It is not rocket science to figure out what is pushing it down.  The almost fourteen million people who are on unemployment are quickly becoming 99er's.  They are running out of the only resource that helped them keep ends together.  Simultaneously gas prices have spiked again just as they did three to four years ago.  People living on the edge have to make decisions.  When it comes down to eating, keeping the car or paying the house payment it quickly becomes a no brainer.  People are going to eat and they are going to keep their mobility.  It will not turn around till the government comes up with a job program that puts millions of people to work.  It must also help the states to pay their bills.   As people go to work they pay taxes, when they get laid off they do not pay taxes.  Something has to give. 

     Unless bold action is taken, and taken immediately America is going to slide into a major depression that makes the Great Depression look like a cakewalk.  National Debt, Jobs, Infrastructure, Health Care and Social Security all are related.  The recent tax break given to American tax payers was done by borrowing against the future.  The government cut Social Security deductions to put more in people's paychecks.  What they did not say is this will cause a shortage in Social Security funds down the road.  Peter and Paul no longer have anything to take from each other the government has taken it all.  With a national debt that equals more than $40,000 dollars for every man woman and child in America, we have a problem.  The median income in America is onlyu $34,000.  That means if half of everybody gave all they have to the government they would still be $6,000 dollars in debt.   Who is this going to fall on.  Not this generation, and not the baby boomers,  it is going to fall on our children and grandkids.

      Right now there is an opportunity for a solution.  A year or more down the road it will be to late to make a difference.  President Obama supposedly put in place a "Paygo" program that requires all new expenditures to be paid for by budget cuts or tax increases.  Yet his present budget package asks for an increase of the national debt limit by 16 % over what it is now.  It America is to maintain its credibility it has to be done, but it should be done conditionally.  It should reguire the 2013 budget to be no more than the 2012 budget and the 2014 budget should require a reduction of the same 16% that it is being raised this year.  That gives time and room to solve some of the budget problems.  One condition should be the bringing home of all American forces overseas.  All means all, and includes the ones in Germany, Japan and Korea where our troops spend billions of dollars that could be spent in the American economy. 

      A permanent tax should be assessed on gas.  This tax should be strictly for rebuilding America.  While it is a tax, it is not going to the federal or state governments who have proved to be to incompetent to do the job.  Each state will have to appoint a commission to adminster and manage the funds.   My opinion would be around $1.00 per gallon.  That money would go to the states it is collected in for infrastructure repair and renewal.  Twenty percent of that money should be dedicated to upgrading our energy infrastructure and reducing our dependence on foreign supplies.  This system should be ongoing and permanent.  Infrastructure is the backbone of America.  Without roads, bridges, dams and waterways just to name a few things, America will cease to be able to compete on the world markets.  One restriction should be placed on the tax money from the gas tax.  The state and federal budgets should not be able to access the funds.  The states and feds will benefit as they will no longer be required to budget for infrastructure.  The funds will be restricted to taxes collected.  This will in the long run help restore soundness to the system.  It should be called the America First program and as it creates jobs the economy should turn around.  It will buy time to get the rest of the budget in order.  If it is not done and quickly the consequences will be dire. 

     If America defaults on its debt it will lose the faith and trust of the whole world.  The saying will not be "Buy American,"  It will be "Buy Anything, But American." and that will hurt.  The first thing that needs to be addressed after the jobs situation which this tax takes care of is the Health Care System.  There are solutions but they require tough choices.  The problem is Americans do not like tough choices, but if they are not made now.  Tougher choices will come later and we will not be living in an America as we know it now.

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