Ideas
to Save
Richard
Salbato
In
order to save
The
10% unemployment we have now means 13% less money in taxes (added unemployment
benefits). However, the real
unemployment is 21%. This figure is all
the people not working who could be working, whereas the 10% is just those who
are collecting unemployment benefits. To
save
In
order for the unemployment to go down the GDP has to first go up. First let us
look at what is going to happen over the next 18 months as things stand
now. Even if Fiscal Conservatives take
over the House and Senate in November, which I expect, taxes will go way up in
January. In January the Bush tax cuts
will expire. In order to stop it the
House and Senate will have to pass a law extending the Bush tax cuts and Obama
will veto that. So we know this will
happen. Because of the new taxes for Health Care and the coming taxes in 2011,
unemployment may be at 11% before the November elections and go up after.
Although
Fiscal Conservatives can refuse to finance much of the newly passed health care
bill, they cannot stop the taxes that will hit businesses even before the
elections, and this will cause almost every company in
Even
if Obama and his liberal congress do not pass Cap and Trade, Card Check,
financial reform, and immigration reform, which he is planning, I predict the
following for 2011:
1.
Unemployment will go to 16%
2.
GDP will drop to minus 1.5%
3.
Taxes will rise to 55% of GDP (total State, Fed. County and hidden), and in
some states 65%.
4.
True unemployment will go up to 28%
5.
Some cities will go bankrupt
6.
Some states will default on debt bonds.
7.
Housing sales will drop another 10%
8.
The Stock market will drop 40% by April of 2011
9.
10.
The Euro may collapse. It has already
dropped 30%.
11,
The Israel –
12.
Gold will rise to 2000 an ounce because inflation will start quickly in 2011.
14.
Know this for sure, Obama will pass Cap and Trade by executive order through the EPA.
He will pass card check for unions through executive order. He will legalize the vote forIllegal
Aliens by executive order. Before
the elections the house and senate will pass comprehensive immigration so that
they can win the Mexican vote.
When
Ronald Regan inherited Carter’s economic mistakes, he was blamed until he fixed
it three years later. When
Now,
Fiscal Conservatives will take over congress, but for more than two years things will get worse no matter what good they do. Let us not blame them because fixing this
will take at lease 6 years and this is what we have to do and do quickly.
Fixing
Most
of the above would not happen if we could have a veto proof congress or if
Obama could be impeached but these two things will not happen. What we can do and must do will take time and
because of that things will get worse before they get better. I believe if we do all the following ideas,
we can again become the strongest economy in the world and stronger by far than
we ever were before. All the ideas are
geared to reducing debt and increasing GDP, which will increase jobs and
increase individual wealth for every American, rich and poor.
Principle One:
Most
people, even government people, have forgotten the principles of economy. Money
is an easy exchange means of production.
When someone makes a thing or grows an apple, he sells that for money. He spends that money on a service or a
good. The people who help these
exchanges, banks and services also make money.
A
dollar created by making something, generates 2-1/2 dollars of GDP. A dollar created by simply exchanging money
in banks creates 1-1/2 dollars and a dollar given to government to spend
creates 1-1/4 dollars from the government worker spending the money, but it
takes 2-1/2 dollars out of the market, so it looses 1-1/4 dollars.
So production of goods is the greatest way to
create wealth by far. We have become
the third largest nation in the world in production and yet still by far the
biggest in GDP per population. So the
only place we have lost is in production of goods.
Today
we were impressed that the 4th quarter of 2009 had a 5% growth in
GDP. Big deal, over the past two years
our GDP went from $17 Trillion a year to $14 Trillion a year. When we go up 5% we get to 14.07 Trillion a
year. Big deal! It is still a loss of $3
Trillion, not counting the $10 Trillion in lost wealth, although somewhat a
false wealth.
One
of the biggest problems with making, mining or growing “Things”, is an unfriendly government. In 1910 we were the friendliest country in
the world for business, but now we are 17th among industrialized
nations. This is because of rules,
regulations and taxes.
It
is not labor costs.
Rules
and regulations have unforeseen consequences.
Let me give an example. We have mandated air bags for cars, and these
add $3,000 per car to the price of the car. Great idea, but does it work. The
cost including other things forces poor people out of the new car market, so
they continue to fix their old car or buy old cars that do not have air
bags. Because of the mandatory law we
may have more unsafe cars on the road now than ever before.
Do
we make a new car now that even the poor can buy? No! Why?
Rules and Regulations! In most
cities it takes at least 18 months to open a new business because of red
tape. In
Principle Two:
You cannot tax business. I have repeated this over and over in
Newsletters over the years, but it is as true today as it ever was. This new Health Care bill will tax Medical
Equipment and yet the companies who make Medical Equipment are not threatened
and the stock is holding fine. Why?
They
will never pay one dime. Their profits
will even get higher. If it costs them
$100.00 to make something, labor, material, shipping, design and
promotion. They will add 10% to their
costs and make $10.00. If they add
$10.00 tax to their costs and add 10% profit, they make $11.00. Who pays the extra $11.00? Not the business, he makes more, but you
do.
Principle Three
Production takes money? Manufacturing, mining, drilling, ranching or
farming companies (at one time or another) need to borrow money. Sometimes we want to expand but need the
money and other times we have a gap between collecting receivables and paying
debts. Before this bank crash businesses had a line of credit and could make a phone call to the bank to deposit
money for a week or month to carry the pay-role.
Banks
make money by loaning money but there is just so much money in the system.
Everyone now is blaming the banks for not loaning money, but who is borrowing
the money they do have? The government is taking all the money that
there is and leaving nothing for the businesses.
Government
must borrow money to pay its debt, and they sell bonds for 4.5% interest. The
Federal Reserve lends money to banks for .25% interest. A bank can borrow money from the FR for .25
percent and then lend back to the government for 4.5% and make 4.25% profit
without investing one dollar of the bank’s own money. Why should they then loan to business?
Every
dollar the government takes out of the economy is a dollar that business does
not have.
Principle Four
Competing with overseas
jobs! Why
does Nike make shoes in
They
know that by using automation, the labor costs are not a major expense. But the unions, environmental regulations,
corporate and inventory taxes, State business taxes, etc. make it cheaper to
make it’s product outside the country.
For
example, Caterpillar and Boeing are competing well in
We
can bring all these jobs back to
Make
Understand
I do not mind taxing rich people like Gates a high tax, even up to 50% but
Gates has not made one penny until he takes money out of his company and for
his own use. The money he keeps in the
business for future R&D, future product or increasing labor is not profit
and should not be taxed. Why do we tax
inventory that has not yet been sold?
Principle Five
An educated work force! In many cities across this
once great nation we have a 50% drop out rate from high school. These people cannot read or write and as is
evident cannot even talk correctly. Are these the people who are going to build
up
Thomas
In
the short run we cannot do anything about this.
Most of us know how to fix the education system but before changes can
do businesses any good it will take 12 years.
In the mean time we must import from the nations that do have a good
education system.
I
will write about fixing the education and legal systems but for now, we need a
quick solution.
Government
must quickly let businesses advertise all over the world for well educated
people and then streamline their citizenship down to days from the years it is
now. With a partnership of business and
government we can up the intellectual power of
At
the same time we need to rid this nation of all the illegal and mostly
uneducated immigrants in two ways: Pass
and finance the National Work ID card, and round up all illegal immigrants and
send them home. This was very
successfully done before by three presidents.
Back during The Great Depression, President Herbert Hoover ordered the Deportation of ALL illegal aliens in order to make jobs available to American Citizens that desperately needed work.
Harry Truman deported over two million Illegal's after WW II to create jobs for returning veterans.
And then again in 1954, President Dwight Eisenhower
deported 13 million Mexican Nationals! The program was called 'Operation
Wetback'. It was done so WW II and Korean Veterans would have a better chance
at jobs. It took 2 Years, but they
deported them all! You will read more
of my rampage on this when I write about the sins of my own Catholic Bishops,
who are advocating sin.
Principle
Six
Pay off all government debts
by lowering tax. Every time taxes go up,
government revenue goes down. How is that?
By taking more of people’s money they have less to build up
It
is better to have 5% of a million dollars than 50% of a hundred dollars. But no mater how we tax Americans we cannot
pay off 74 Trillion dollars in debt without reducing the size of governments,
state and federal. By doing so we help
business and individuals rebuild their wealth and the productivity of
1.
Sell almost all Federal Property inside
The
fastest way to cut the Federal Government is what some State Governments are
already doing – Sell unused property. The Federal Government over the past 90
years has illegally confiscated property in the name of conservation and has
never conserved anything. In some mid-west States, like
This
is the reason States and private companies who want to drill for oil shale in
the mid-states cannot do so. It is said that we have more oil and natural gas on
this property than in all the mid-east put together and enough for us to last
300 years. Not only could the government make Trillions of Dollars selling this
land to pay off the debt, but because we the people own these natural
resources, the government would make a percentage of all the oil, natural gas,
coal, gold, silver, gems, and water that comes from using this land to further
reduce the debt. When selling it, the government can make reasonable
restrictions so that the land is not abused.
We do that in privately owned land used for logging.
There
is a small peace of land in
Between
the sale of the property and the percent of mineral rites, we could go a long
was in paying of the debt of both Federal and States.
2.
Eliminate all capital gains and inventory taxes.
As
stated above the best way to bring more taxes into the Governments is to put
more people to work. That can only
happen if business has a reason to grow - grow from 14 T GDP to 28 GDP. This
would add 20% more tax to the government. Everything else would reduce taxes
revenue.
3.
Eliminate all tax deductions and little by little drop all taxes until we have
a flat tax
I
would also recommend eliminating all Tax Deductions so that all money taken out
of business by millionaires is taxed.
This would be the first step towards a flat tax, but would have to come
little by little. A flat tax or a value
added tax (both good but not together) would eliminate the need for an IRS.
4.
Eliminate most EPA laws
Eliminate the Federal EPA. That does not mean to eliminate Environmental
Laws, even some by the Federal Government, but it does mean to get rid of the
department that does nothing. States can
enforce the laws as they do now. States
that want to believe in Global Warming, which I think is stupid can do so, and
others who do not want to are free of it.
On the other hand, pollution of rivers and lakes is usually an
interstate problem and belongs to Federal laws, that must be enforced, but by
the states. Land and water pollution is a good thing, but air pollution is not
a proven science. Even second hand smoke is 99% free of harm, and only 1% harmful to others.
5.
Eliminate Red Tap on Off Shore requirements.
Considering
that States own the first 20 miles of the ocean and the Federal Government has
control of the other 80 miles, and both can make 20% of the profits from
drilling, why do they make it so hard to drill?
The Chinese are drilling off our shores now. The Russians are about to do it. The Chinese
have made a deal with
6.
Eliminate all EPA rules for on shore drilling and oil shale.
Except
for visual pollution of land (which can be minimized) there is no evidence that
drilling does any harm to land, air or water.
The jobs, Taxes and Trade balance can bring a great boom to
7.
Sign bill to use Natural Gas for large trucks and start the construction of
Natural Gas stations on major highways.
For
almost a year now there is a bill before congress that has not even gotten to
the floor for vote that would build and infrastructure for natural gas stations
and the conversion of all 8 wheel trucks to natural gas, which is far cheaper
than petroleum and 30% cleaner. This alone would cut our foreign oil by 30% and
create thousands of jobs.
8.
Encourage with tax brakes, the instillation of Natural Gas Stations at all gas
stations and in homes.
The
only logical automobile fuel is Natural Gas, but car companies will not convert
which is easy until an infrastructure is in place. Once gas stations have been converted, homes
will then be converted to fill cars at home.
The real long term future is electric cars that are recharged with natural
gas. We will never improve on this
system, at least for the next 80 years.
This is the bridge to nuclear batteries for cars which have already been
developed.
9.
Water Systems
One of the great problems of the world now
and in the future is clean water. This problem does not escape American, where
water projects have been neglected for 40 years and more. In
10.
Build Nuclear Power Plants
Without
costing the government one penny, private industry can and needs to build 30
New Nuclear power plants, which are already in the system for approval.
11.
Legal System
Everyone
knows that one of the biggest costs for business is the legal system, and most
medium and large size businesses have full time lawyers because the legal
system is so complicated. I could name a
litany of things that are wrong with the system but only two things need to be
changed to fix it: 1. Eliminate
Precedent Cases, 2. Make the looser of every case, pay all costs – all lawyer
fees, all court fees and all awards. I
will write another separate Newsletter to elaborate on this.
12.
Stop funding Government programs
Most
Federal and State continuous programs are not needed. With a new conservative
congress but a socialist president we will not be able to close these programs
but we can refuse to fund them as
Obama did with the National ID card.
When the budget comes up for the Federal Education department, just give
it $00.00 money. Same with the Energy
department, the EPA, and I could name 75 more.
On the ones we would keep, we need to fund them item by item and not a
fixed amount that they can spend anyway they want.
You
will have a hard time believing this but in some States, 45% of their budgets
are retirement benefits. This too can be
stopped but only by eliminating all government unions and making all
retirements a personal thing and not a work thing. You cannot grow GDP, when we give 50% of our
production to the government.
Some
will say that
We are still 7th in the world of GDP per person, and Germany is 28th meaning that they cannot produce like we can.
12.
Immigration
Retired
One thing about retired people like me is that we
spend money in the system but do not take up any job. We produce jobs. There are many retired people in other
nations that make more money per month than Americans do because they come from
very socialist countries. By proper
incentives we could attract these people to retire here, and that will help the
economy and sell more homes. One of the
great booms to
Reform
Where I may differ from many conservatives is that I
want more immigration and not less, but I do not want illegal immigration. Nor
am I willing to reward those who broke the law to get any road to citizenship
at all. I am sick at American Catholic
Bishops for promoting citizenship for those who came here through the criminal
road.
I watched this as a child when I lived in a Mexican
village in
Wake up Catholic Bishops,
you are justifying sin for the expediency of filling your pews with numbers.
When President Regan gave amnesty for all immigrants (seemed like the moral
thing to do), we went from two million to twelve million because the new ones
expected that someday we would do it again and again forever. You cannot
justify the slightest sin because it leads to bigger sins. The law of the Church is “You cannot do evil
that good can come from it.”
However, we need to open up our immigration because
we simply are becoming an old society because we are not having the babies that
sustain economics and growth. To reach
24 Trillion GDP (which is the only thing that can save us), we need more
people, and educated people. If you want
to see what reduced population does to a government, look at
No border control can stop these people but three
things can:
1. We have already passed the National
Tamper-Proof ID Card, but congress has refused to finance it and it has
died off. For those who think this is an invasion of privacy, you are blind to
the fact that we have no privacy now and we do not need it compared to the
benefits we get from knowing who the criminals are and where they are. If we
could not hire anyone without this card, millions of immigrants would just go
home.
2. All immigrants from anywhere in the world should
have to be sponsored by a Business and not a family. That business would be responsible for
bringing them here, seeing to their American education (English, Constitutional
Laws and loyalty to
3. Many large Businesses will set up education
centers in other countries teaching them the trade they need and the citizen
requirements before sponsoring them to American because of the risk of mistakes.
4. Those here now, could find a business sponsor but
would have to leave the country and then come back with the business sponsored
paper.
5. Change the minimum wage law to allow deductions
in the cost for room and board. This
would allow the average American to afford Domestic Help, and get many people
off the streets. Allow farmers to do the same, but regulate the conditions of
this room and board.
Can
we double our GDP to 24 Trillion per year?
Yes we can.
"It
has been said the greatest volume of sheer brain power in one place
occurred when
Thomas
"IT IS TIME TO WATER THE TREE OF
“It is incumbent
on every generation to pay its own debts as it goes. A principle
which if acted on would save one-half the wars of the world.
“I predict future happiness for Americans if they
can prevent the government from wasting the labors of the people under the
pretense of taking care of them.
“My reading of history convinces me that most
bad government results from too much government.
“No free man shall
ever be debarred the use of arms.
“The strongest reason for
the people to retain the right to keep and bear arms is, as a last resort,
to protect themselves against tyranny in government.
“The tree of liberty must
be refreshed from time to time with the blood of patriots and tyrants.
“To compel a man to
subsidize with his taxes the propagation of ideas which he disbelieves and
abhors is sinful and tyrannical.
“I believe that banking institutions are more dangerous to our liberties than standing
armies. If the American people ever
allow private banks to control the issue of their currency, first by
inflation, then by deflation, the banks and corporations that will grow
up around the banks will deprive the people of all property until their
children wake-up homeless on the continent their fathers conquered.”
Mark Twain:
“If you don't read the newspaper you are uninformed,
if you do read the newspaper you are misinformed.”
“Today, if Dorothy were to encounter Men with no
brains, no hearts, and no courage - She
wouldn't be in Oz - She'd
be in Congress.”
Note: Facts of
the Future
One Federal Reserve member just reported that commercial real
estate losses could reach 45% this year. That means $1.54 trillion in
commercial loans could default, sinking the markets and plunging the economy
back into recession.
But there's more. Option adjustable rate mortgages are teetering
on the edge of the abyss, with $29 billion recast higher at the end of 2009,
followed by another $67 billion in 2010. In fact, Barclays Capital says, "We expect 81% of the option ARMs originated in 2007 to default."
Yet those headlines are buried while Wall Street blares out about
corporate earnings that "are not as bad as expected" and "lower
job loss numbers" that don't feel very low to me.
And so unsuspecting investors are grabbing up cheap stocks,
spurred on by Wall Street, and giddy with thoughts of a new bull market ahead.
But you're about to get a rude -- and costly -- surprise. If you
continue down the path Wall Street is leading you on you could lose half your
net worth.
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Ideas to Save America: 1. Line Item Vote
Ideas to Save America: 2. Social Security
Ideas to Save America: 3. Medicare
Ideas to Save USA: 5. Get Congress out of DC
Ideas to Save
Stop Federal Growth Now - Not Later
Predictions and Solutions for America
Science Predictions Related to Politics
Getting away with Unconstitutional Laws