Idea for economic reform

Discussion in 'Economics' started by lg6s, Jun 2, 2012.

  1. lg6s


    Basically, I had the idea of a liberterian government and combine it with a citizen's dividend. The government would have a limited role in keeping order, safety of its citizens and infrastructure. The government would be funded by a 25% flat tax on all earned income and corporate profits. This tax would eliminate all other taxes.
    5% would go to regulations and maintaining infrastructure while the other 20% collected would go as a divedend to every citizen. Each person, regardless of age, would get $10000 from the government. The dividend would replace social security and other welfare programs.
    There are certain strings that would be attached to the money. The most a family can get, regardless of number of childern, is $40000. In a family, at least one member has to work. School fees and health insurance/costs would come from that money.
    Anyway, I think this idea will get rid of ineffecient government spending, especially as seen in the education and healthcare sectors. In this society, there would be no minimum wage.
    I just want to know thoughts about this.
  2. I dont' know the real problem is that the banking system is about to collapse and that money won't be worth anything. People will lose everything and there is a huge wealth shift to the East. Even if you could get one country to do this the world would not conform.
  3. Humpy


    I don't know which country you are living in but all countries are stuck in their own systems and find it really hard to change.
    Why - because of vested interests. If you had worked hard for 40 years you wouldn't want someone changing the rules to suit themselves

    So largely there is little change. Even after a revolution you are likely to get the ultimate swine like Hitler/Stalin taking over and usually things are much worse for the many.

    Democracy is now a losing force having been discredited by their failures to manage their own financial controls etc. and like the Roman Empire will collapse.

    The Chinese model of a 1 party state has proved superior economically and it's that what counts for a lot. Not pious and largely empty words from the democratic politicians, while they fill their pockets with public money.

    The future doesn't look too rosy imho
  4. yeah lg6s, I like the idea, but as morgan states and you'll find out, the system is already so broken it can't be fixed with any clever new idea. These new ideas of yours are good someday when we set everything back up. Your idea is not that crazy. The new idea is a regressive tax and a huge safety net to compensate and balance things out. But that is for later. The new word now is "reset" which is polite way of saying bankrupt. You can't put everybody in debtor's prison, so eventually a lot of these loans will need to be written off. But I like your rules of the game approach. If we played baseball like we run the economy you'd never know who won the game. The Yankees are too big to fail so every so often the commisioner can add a few games to all last place teams win loss record. And that supposedly is for the good for the game. Traders often like simple percentage payouts, since that is how we are paid. The rest of the world doesn't even know how much they make a year or what percentage they pay in taxes. There's not going to be any meaningful economic reform until all of us go broke in one form or the other. It's no big deal, the rich will still be rich and the poor will still be poor, only moreso. They're just trying to figure out how bad they can screw the poor without them rising up.
  5. Correct. It is not the whole rich and poor wealth distribution situation. It is the inability of the money to purchase things and the expectation of future income that will disapear. That is where the issue lies. At the moment the economic problems lie in the lack of demand and where the government is sending QE. That is creating poverty and making some people rich. The real problem is about to hit that the money people have saved and have been promised does not exist and they will not be able to trade. Everybody is in this situation rich or poor they will lose everything. You could be the richest man in the world today and have nothing tomorrow all you need is a bank default and a government that takes you possessions.

    I developed an alternative banking system that has three factors to reflect risk that would enable restructuring of the debt to prevent default. However people want what they paid in. So greed creates a situation where people will not concede a small loss to stop total default. It is the central banks that created most of the problems with low interest rates for so long and the politicians for allowing banks to get away with bad practice. Even people with money in hidden bank accounts will lose everything so I don't know what they were planning.

    Anyway at least we have our health I hope.
  6. A thought along a related line: FIAT Currency issues and the Govt printing press.

    If our govt calculates taxes based on dollars.

    ie. you earn $100k they take 25K.

    but behind the scenes the govt prints 5x the dollars in circulation. ie bail out

    Your 100K really gets devalued to $20K. Shouldn't you owe only $5K?
    Or shouldn't they give you 5x your 100K from these newly minted funds?

    They're playing a game: imagine making measurements with a foot ruler and the govt changes the value of one inch to .20 inches. Everything relying on measurements is FUBAR.
  7. Yes but then their 25K is only worth 5K so it works out right.

    I guess it depends on how the money printed is distributed. The sad thing is it is going to the people who created the problem. I think the QE in the UK in particular is more about maintaining a lifestyle for some people rather than solving the problem.
  8. Humpy


    Its all a smoke and mirrors game. You don't really think all those billions are just propping up banks. Oh no they will trickle down into the well lined pockets of the usual fatcats.
    If you are a Joe Public then don't expect a bucket full of money in the near future. It's been earmarked already !!
  9. Humpy


    The point is that Europe and the USA are uncompetitive. They have lumbered themselves with high petrol taxes ( because of the greens ), VAT and all the beaurocratic red tape from Brussels. The BRIC countries are taking whole industries and millions of jobs away.

    The Govt/fatcats are going to make the best of it though and pocket billions themselves.
  10. Bob111


    -----The Chinese model of a 1 party state has proved superior economically and it's that what counts for a lot. Not pious and largely empty words from the democratic politicians, while they fill their pockets with public money.---

    they only proved that US politicians are dumb and dumber. like Joe Pesci use to said-you only exist out there because of me..
    because of their stupid decisions businesses moved away from states into china. that about it.
    #10     Jun 3, 2012