What to Do ?

Many people are now turning attention to the future as the memories of the Panic of 2008 fade ... at least for those with jobs. The victims of the Wall Street and international bank lust for trading profits have not been forgotten, as a poll published yesterday shows high levels of "hate" for the finance industry. Maybe Congress will pass some true reform. Maybe they will fake it. Time will tell.

BUT the huge amounts of borrowing by the US, its States and cities, and many major developed nations will have to dealt with eventually. For now, I'll stick to the US. What is rather obvious to me now after the enacting of ObamaCare and its huge tax burden on higher income people, is that when combined with the coming huge tax increases on those same people (due to the expiration of the Bush tax cuts, which really helped only those above the AMT thresholds, viz. those making almost $1 million per year), that the ability of government to get more money from that well is nearly gone. They need to go after another pot of money.

Who will they target ? To me, it's obvious that big corporations will be the target, either through rate increases or technical changes or through more mandates. That means stock prices will be hurt.

But the title of this post is "What to Do ?", not "What will they do ?".

We need REAL reform. The elections of 2010 should be nationalized with a new Compact for Reform. Some party, or both, should adopt the following policies for the Compact for Reform.

1. No more secret earmarks, none. Forever. All appropriation requests are fully disclosed in Committee for 30 days in advance of any votes with sponsors identified.

2. Any lawmaker taking political contributions from any person or group benefiting from specific appropriation which they sponsor will be subject to ethics violation and fined - paid personally - equal to double the amount of the contribution. The public money MUST benefit the public, not special interest groups. Spending the public money must be based on reason and open argumentation, not bribes.

3. All taxes on jobs must be replaced with a value-added tax. High taxes on employing people are a cause - maybe THE cause - of long term high unemployment. A value-added tax shifts the burden to those spending the money, not working to create it. A value added tax on ALL goods makes those who consume imported goods pay for something to support the nation. Now production of those goods overseas and their consumption here adds NOTHING to the nation. This will be a huge shift, but a needed one.

4. All mandates on employers regarding employee benefits will be removed except ONE. This one mandate will be that ANY benefit provided to top management be equally provided to all employees in strict proportion to salary or wages (or that gives the lower pay levels more). An excise tax will make "top heavy" benefits prohibitively expensive. NO more will the bosses get great pensions and benefits when the workers get the shaft.

5. No more secret laws voted on by those who cannot have not read them. All bills in excess of ten pages shall be publicly disclosed for a minimum of thirty days.

6. A Fairness Commission will be created to compare all public sector wages and benefits to those in the private sector (the whole private sector, not just big companies), and shall take into account job security; small business will be a major part of the comparison. The commission will make its results public with recommendations for changes needed to equalize pay and benefits.

7. A new small business tax policy will remove ALL taxes on newly created businesses UNTIL they recover 100% of invested capital. This will apply to corporations, partnerships and sole proprietors.

Those simple seven reforms will shift governmental policy in America toward honesty, openness and pro-employment policies. Some can be done with rule changes in Congress. Some require laws. They should be adopted with large bipartisan majorities.

Word of the Day

"Fillip" - noun [$10]
Fillip means something tending to arouse or excite
Sentence: With adoption of the reforms of Bunkerman, appropriations bills and seats on Appropriations committees will no longer be a fillip for lawmakers and lobbyists. The strict standards will draw those devoted to public service, not to sticking their snouts in the trough.