The Solution is Relatively Simple if The Will is Relatively Strong

Without extraneous noise from various American factions over the past thirty years, the logic for how America fell into this economic mess is relatively straight forward. The reasons why previously tried and currently proposed solutions will not work are equally as coherent. A solution for digging America quickly out of the circular predicament we are in is relatively straightforward. What is not straight forward is the gerrymandered path through Congress to do what is needed on behalf of the American People. What follows are general truths (although each has exceptions to the rule). See if you agree.

What do we know?

• The Western World’s banks lent to both businesses and consumers beyond historically safe levels for three decades. As a result:

oThe West is now bloated with excess private debt
o The economy is struggling to pay debt loads and default rates are high
o Debt repayment has absorbed discretionary revenues that would otherwise be invested into a growing economy

• America used excessive bank credit to spend beyond its means for the past three decades. As a result:

o Money was available to fund speculative bubbles. Higher bubble values in turn made more money available to spend on consumer needs during the bubble rises
o Investment and housing bubbles propped up 15 million jobs beyond what the underlying economy would have otherwise if America simply spent within our means
o As real economy jobs transferred to the East, America’s underlying weakening economy was hidden by our continued excess spending

• America’s Federal Government borrowed to pay for welfare and warfare for four decades. As a result:

o America’s public debt grew to 100% of GDP, a level that could absorb all public discretionary spending if interest rates rise, spending that would otherwise assist a growing economy
o Further increases in Federal debt could result in America’s credit rating being lowered which in turn could force higher interest rates

• The rubber band of excess spending could only stretch to finite limits. As a result:

o When the limit was finally reached, Banks knew first and moved quickly to protect themselves from what they knew would be a free fall by closing credit lines, charging exorbitant rates on outstanding credit debt, and stopping lending even to credit worthy consumers
o Without access to consumer credit to cover the shortfall between incomes and housing debt, consumer demand stalled
o Without access to credit, the housing bubble popped and housing prices freefell
o To make ends meet, consumers cannibalized financial investments and investment prices fell
o Within a very few years, much of America’s housing and commercial real estate debt far exceeded the value of underlying properties

• With the collapse of housing values and credit, the plug was pulled on the artificial engine of growth. As a result:

o Consumer demand contracted
o Demand for labor then contracted and jobs were lost
o Federal tax revenues contracted as unemployment rose
o Lower housing values reduced state and local tax revenues

• State governments that required balanced budgets and local governments, dependent on housing tax revenues were rescued initially by Federal stimulus dollars. As a result:

o State and local governments failed to react quickly and responsibly to a permanently lowered tax base.
o Many states and municipal governments came perilously close to default

• American multinational businesses were buoyed by Asian GDP growth but our domestic businesses were hammered by a weakened domestic economy. As a result:

o Multinational businesses secured substantial cash balances but withheld investing over concerns of the world’s teetering economy
o Domestic businesses shrank with the contracting economy, lost access to credit, and laid off employees to survive.

How does America wish to respond to the crisis?

Republicans want to:

• Protect military spending
• Recover through less government spending, lower taxes, and less regulations

Yet:

o Even without cutting taxes, balancing the federal budget will require cutting 43 cents of every dollar the federal government now spends
o Military spending and its hidden ancillary spending cost a third of the federal budget. Without drastic cuts to military expenditures as well as all other federal expenditures, the federal budget cannot be balanced.
o If we do not curb deficit spending to quickly achieve a balanced budget, America’s interest rates will rise and cut off federal discretionary priorities
o Lowering taxes without cuts in government spending that offset not only the tax cuts but the extreme deficits now in place would exacerbate an already dangerous interest rate precipice

Compromise issues:
o Government spending is steadily increasing. Government spending increases and not just rate reductions in increases must be reversed.
o While lower taxes are one way to provide the private sector additional revenue for growth, it is not the only way. The private sector can acquire investment capital by other means if credit can be accessed.

Democrats want to:

• Increase social programs, secure social agencies, and protect entitlements
• Recover through stimulus spending and supporting state and local budgets
• Increase taxes on the wealthy to pay for social programs

Yet:

o Even without reducing government spending, federal taxes would have to increase 75 percent across the board to balance the budget
o The United States could not spend enough to stimulate the entire world’s demand in order to recover from a worldwide monetary implosion. Thus far, $2 trillion in stimulus spending and $15 trillion in loans has budged the world’s economy little and has had no multiplicative effect.
o It is evident that the economy will not recover enough to offset stimulus spending with increased tax revenues. Therefore, stimulus will further exacerbate the federal debt and invites a faster debt rating reduction and higher interest rates

Compromise issues:
o To balance the budget, social welfare spending must be reduced, along with all other budget line items, to much less than America spends today
o To at least maintain America’s middle class standard of living, GDP growth must keep up with population growth. GDP growth must be supported by investment capital. Congress must either redistribute Federal spending to support higher private sector productivity, lower taxes to free up private sector investment capital, or entice business to invest domestically by creating a better business environment

America’s unemployed and underemployed want to:

• Find productive employment
• Gain access to credit
• Reduce their debt payments
• Eliminate their housing bubble debt overhang
• Regain savings for retirement

Yet:

o Jobs will not become available until businesses begin to rehire
o Businesses will not begin to rehire until the economy improves
o The economy will not improve until consumers increase purchases
o Consumers will not increase purchases unless they can pay existing debts and have enough left to increase discretionary purchases
o Consumers will not have additional funds without increasing incomes, repairing credit ratings, and gaining access to more credit
o Consumers cannot increase incomes unless the 25 million un-or-under employed gain employment, cannot repair credit ratings without increasing income, and cannot gain access to more credit without repairing credit ratings
o Consumers cannot gain employment until businesses begin to rehire
o And thus the circular argument of an imploded monetary economy………….

Compromise issues:

o In an imploded economy, consumer demand and business supply cannot be corrected in isolation, but must be repaired simultaneously.
o Democrats tried to fix both consumer demand and business supply through artificial government stimulus, but it was not large enough or economically diverse enough to reignite the economy, and it did not attempt to simultaneously correct the underlying debt and credit issues that also must be repaired in tandem for an imploded economy correction to adhere and affect a turnaround.
o To create enough turnaround friction, stimulus must bubble up from the economy wide full employment, improved credit ratings, and access to both consumer and business credit. Government cannot possibly spread stimulus broad enough or create a large enough stimulus through spending programs alone
o Republicans have offered to correct the economy by creating a better business environment through lower taxes, fewer regulations, and multinational businesses incentives. However, the Republican plan for reigniting the economy only addresses methods for attracting capital back to the United States, hoping to make the U.S. a better alternative for multinational corporations to spend capital than elsewhere. Yet multinational businesses are not spending their capital anywhere and will not until the global consumer demand improves. And at this time, Republicans are not offering any solutions to improve the global business environment.

A viable turnaround solution requires that:

• All able Americans immediately return to work
• U.S. consumers are freed from the weight of housing debt overhang and credit ratings that were damaged by the worldwide monetary implosion
• The dollar is uncoupled from attempting to stimulate the entire Western world.
• Multinational Corporations be enticed to bring investment capital into an economy that has already begun its turnaround
• Federal, state, and local governments not be allowed to skim needed growth capital out of a delicately growing economy

One viable solution includes:

• Job voucher plan to employ all able Americans immediately

http://jobvoucherplan.com/must-reads/

• Equity for debt swap to remove excess housing debt

http://jobvoucherplan.com/2011/08/04/hawaiians-have-the-hale-housing-solution-to-right-america-housing-bubble/

• Credit amnesty program to quickly repair business and consumer credit

http://jobvoucherplan.com/2011/09/08/yes-america-can-quickly-turnaround-heres-how/

• Modified Republican multinational incentives that entice domestic investment without giving carte blanche tax holiday and that does not entice further foreign domestic investment

https://jobvoucherplan.wordpress.com/2011/10/26/our-economy-can-be-re-ignited-like-a-boy-scout-fire/
http://jobvoucherplan.com/2011/06/18/can-the-coming-world-depression-learn-anything-from-the-great-blackout-of-1965/

• Republicans and Democrats do the heavy lifting of deciding together which programs will be cut, how to best run the military with a much reduced budget, how to extend the life of entitlements with a much reduced budget, and how to reduce Congress’s incentive to hold to a balanced budget.

Why Can’t America Sue the Federal Reserve and Banks for Violating Their Fiduciary Responsibilities?

The United States of America is claimed to be the wealthiest nation on Earth. Certainly, our GDP is the highest by some measures, our accumulation of long lived assets and infrastructure is historic, and our country is abundant in natural assets and commodities. Yet do the lives of our citizens in terms of material well being and quality of life reflect this great wealth? If a nation’s health is proportional to its material wealth, are our financial liabilities that are four times the size of our GDP degrading our nation’s health? Many are concerned that no matter how America’s wealth is measured, that we have reached our pinnacle and are now in decline. Some suggest that globalization is the cause.

When Adam Smith first penned “The Wealth of Nations” in 1776, the concept of wealth existing within the organism of a nation was not questioned. Nations had grown from their feudal beginnings into mercantilist empires and had begun to develop industrial capitalism within their mostly agrarian societies. However, the concept of businesses being melded to the future prosperity of their growing nations was the accepted paradigm.

Now that globalization is upon us, this marriage of business and nations is no longer a given. The traditional measurement of a nation’s wealth as that of the output of its businesses no longer fits now that cross border transfer of financial, physical, people, and intellectual assets are fluidly afforded multinational corporations. If we can no longer measure a nation’s wealth as that of its corporations, what is the paradigm shift that replaces this measurement?

If we divorce a nation’s wealth from that of its businesses, then a new picture of its material wealth emerges. The sum of a nation’s true material wealth is its natural resources and commodities, its capacity to maximize the value of these resources, and its ability to protect them from plunder. A nation’s wealth depends on its distribution infrastructure, its fixed assets that are capable of production, and the strengths of its people; their legal infrastructure, learning institutions, accumulation of national core strengths enhanced by interconnectiveness of innovation and production, and their accumulated learnedness and capabilities.

In addition, a nation’s material wealth depends on financial liquidity to transfer these assets to their highest and best use. Currency is the oil that lubricates a nation’s wealth producing assets. It provides for the efficient and fluid transfer of commodities, people and productive assets to create a maximum efficient output that will both meet the demands of consumers and that will simultaneously produce profits to feed current consumption and future growth capacity.

A nation’s ability to grow wealth depends not only on maintaining its output at maximum efficient levels but on investing a portion of its output into extending its future capacity. Once again, currency provides liquidity as the medium of capacity extension. Currency is created through debt contracts. A nation’s businesses and individuals enter into contracts to accept debt and, through this process, its banks create currency to supply transactions. Therefore, a nation’s ability to grow depends upon its ability to add debt and to create adequate currency.

A nation’s ability to add debt depends both on its current debt level and on its maximum debt capacity. It can add debt up to its ability to repay it while maintaining current consumption and while providing for future growth at a level that will allow future consumption to be maintained. Adding debt beyond this level will result in excess currency and consumption that lessens its future growth and future consumption, and that heightens its probability of repayment default.

The difference between a nation’s current debt and its maximum debt capacity is its available credit. If a nation adds more debt than its available credit, it adds more currency than its productive output and therefore dilutes its currency, increasing its probability of inflation. Therefore, it is critical for a nation to manage its debt below its maximum effective credit level while growing its available credit through reinvestment in infrastructure and education and through development of concentrated hubs of innovation and productive core strengths.

A nation’s credit capacity is the cumulative capacity of its citizens. Each individual, by his or her own development of education, skills, aptitude, and desire develops an individual maximum credit capacity that grows as these attributes build. An individual’s income reflects his maximum credit and his ability to obtain currency in advance of earning it through loans that add debt. Cumulatively then, a nation’s liquidity is the additive ability of each of its citizens to accept more debt.

Liquidity is provided to a nation through currency distributed by its banking system. Once again, the “Wealth of Nations” paradigm of a commercial bank’s primary mission is to match a nation’s currency to its wealth creating activities in adequate measure. In this paradigm, banks are tasked with the responsibility to evaluate a nation’s entities’ and individuals’ capacity to accept debt, and to enter into contracts that ensure that a nation’s and its citizens’ maximum debt capacity is not exceeded.

The “Wealth of Nations” central bank then ensures that the sum total of a nation’s currency supports maximum efficient output at full employment. Through the central bank’s manipulation of interest rates, it controls a nation’s credit capacity. When interest rates are lowered below historical averages, credit capacity is increased and consumers are enticed to add debt to their ongoing purchases by bringing would be future purchases into the present. In this manner, the central bank attempts to offset peaks and troughs of the business cycle.

However, throughout America’s history, and exponentially more so with the advent of globalization, America’s banks have not accepted nor fulfilled the “Wealth of Nations” mission expected of them by the majority of our citizens. America’s banks and the Federal Reserve in fact manipulated debt instruments to support globalization at America’s grave detriment. Doing so precipitated America’s greatest Ponzi ever, our housing bubble, violating their fiduciary responsibility to our nation. They obliterated their “Wealth of Nations” responsibility, enticing America to accumulate debt well in excess of its credit capacity, feeding a bubble frenzy that manipulated Americans into perceiving debt accumulation as investment.

The housing bubble enticed borrowers to think of their increasing debt not as early consumption but as a down payment on rising equity. Individuals were enticed through low introductory rates to take on long term debt well above their asset debt capacity. This became a logical choice because housing prices rose at 20 percent per year, making the housing bubble a logical “short term investment”. Lower introductory interest rates suckered borrowers to reach for higher debt levels than they could endure long term because of the potential to flip their “investment” for profit during the introductory rate period in what amounted to a dangerous Ponzi scheme.

For the two to three year period of watching their “investment” grow, individuals dipped into their savings and covered their short fall with short term consumer credit that was also made plentiful by the banks. To feed the Ponzi, banks enticed consumers to use short term credit in amounts well in excess of their ability to repay by offering introductory consumer credit interest rates as well. This unsecured consumer credit, well in excess of individuals’ total credit capacity, could be used to finance short term short falls in consumption capacity while their housing investment grew. With available savings and additional unsecured credit through credit cards, the “logical” investment choice was to let it ride on the housing bubble.

When the music stopped, many people who were in the game for quick profit lost their savings, destroyed their credit ratings, and maxed out their debt capacity using all of their available credit. Of course most home and commercial property owners that were not playing the game also lost massive value in their long term real estate investments. In addition, as the bubble popped, many credit card issuers increased their interest rates from low introductory rates to as much as 32 percent per annum, further pegging debt at or above sustainable levels.

This housing Ponzi was a manufactured raising of credit capacity well in excess of America’s ability to repay and an enticement to use that capacity to feed the housing bubble frenzy knowing that the bubble would reach an unsustainable height and that greater fools would be stuck in the end with excessive debt that would stagnate not only individuals’ future growth, but that cumulatively would stagnate America’s growth as well.

If China had not enticed American bankers and businessmen to use America’s credit capacity, if they in turn had not manipulated Congress to eliminate regulations that had earlier been put in place to mitigate excessive credit speculation, if social engineering for the poor had not provided initial cover for the banks to create manipulative debt instruments, if the Fed had not manipulated interest rates to historic lows, if banks had not thrown out historical debt-to-income loan criteria in favor of feeding the speculation with reckless housing loan products and hysterical credit card offers, and if Americans had not allowed excessive greed to cloud their thinking into believing that a new economy had arisen, the debt bubble would never have occurred. Yet it did, and America’s debt, and that of its citizens, has far exceeded its maximum debt capacity. As a result, we now are faced with lower future consumption, lower future growth, and a very high probability of default.

Given that the “Wealth of Nations” paradigm America has been operating under has in fact been inextricably altered and that our nation’s material wealth can no longer depend on multinational corporations or international banks to align with America’s interests, is it now time to develop a plan going forward that puts America’s interests ahead of our multinational corporations and banks? A plan to turn around America must include restructuring our debt load, immediately bringing it down to a level below our maximum debt capacity. It must include quickly forcing the repair of America’s business and consumer credit ratings. And it must include the simultaneous and immediate addition of 15 million jobs, not the paltry 1 to 2 million offered by our meek politicians. This turn around, as further outlined in the links below, should be and can be the initial step in shifting America’s paradigm to a “21st century Wealth of Nations.”

http://jobvoucherplan.com/must-reads/

http://jobvoucherplan.com/2011/09/08/yes-america-can-quickly-turnaround-heres-how/

http://jobvoucherplan.com/2011/10/26/our-economy-can-be-re-ignited-like-a-boy-scout-fire/

http://jobvoucherplan.com/2011/09/13/america%e2%80%99s-new-consumption-paradigm-must-divorce-multinational-corporations-and-marry-new-business-partners/

CONGRATULATIONS PRESIDENT OBAMA!

You have signaled to all that you will use the powers bestowed on you by the United States Constitution to fight for the American people. Wield your executive power to needle Congress to act. Force this stalemating, stodgy, strategizing Congress to rise from political muck to help America return to work. Stare Congress in the eye and dare them to repeat such silly statements as those spouted by an unnerved Speaker John Boehner who said “This idea that you’re just going to go around the Congress is just, it’s almost laughable.” Put the Honorable Speaker and the rest of our bloated Congress on the ropes, then jab and hook for our future.

When you say, “we can’t wait”, the American people chant back determinedly, “Go, Dog, Go”. So press onward and, “SIGN, BABY, SIGN! Sign executive orders for student loans, housing refinancing, research and development, veterans’ jobs and drug shortages. Direct your administration to turn over every stone for more aggressive executive orders that can aid America’s crisis. Do not be discouraged by political backlash. Be emboldened.

No-one expects that your early executive orders will create major shifts. Yet, you are in there swinging, shaking things up, and exposing Congress’s folly as even more foolish and obstinate in their flat footed, rabbit punching retorts. You are acting on the will of the people and are forcing disruption among the purveyors of the status quo. Yes, bolder action is required of you. When you find that the political upper cut responses to your latest executive orders are much less painful than the thrills of maneuvering your vision through the morass, you will swing harder.

Bill Daley, when you support the President, stating “Let’s re-emphasize what powers we have! What we can do on our own! Push the envelope!” America is chanting, “Push on!” Do not be sidelined by a do nothing Congress who would keep the American people unemployed for political gain. Fight for us. Let Speaker Boehner keep “a very close eye” on your bold moves to make sure you “are not doing anything unconstitutional” and then press forward with rope-a-dope for jobs.

And when organization spokesmen like “Americans for Limited Government” President Bill Wilson respond by accusing you of sidestepping the political process and “consent of the governed.” stare their rhetoric down, for you are mandated from the governed to enable a government for the people, not for the governors. This Constitutional Republic can no longer suffer tolerantly our elected officials placing their own interests of re-election above those of their constituents. We demand more.

Congress, let President Obama’s actions be a harbinger for politicians from the Right and Left. Real change is inevitable. If the young people who elected President Obama weren’t a ringing bell of freedom, if the Tea Party movement was not a plague of locusts to change hardened hearts, if the Wall Street Occupiers battling snow and police retaliation do not represent an insurgency for change, will the President’s executive orders be enough of a challenge for you to re-examine you pre-election strategies and tactics? Will you insist on holding firm, stalling the President’s job program and evading a direct, bold, and immediately effective jobs programs of your own? At least 30 million swing voters are watching and will aggressively vote a response.

President Obama, my three pronged plan to exchange bank equity for housing debt, to force credit amnesty to quickly spur economic growth capacity, and to institute a bi-partisan, private sector, domestic job voucher plan is critical to for an American turn-around. Your battling Congress now to put American jobs first is critical for America’s future. When you have my attention, you have the attention of the swing voters. Do not retreat. Be bold. Congratulations.

America’s Economy Can be Re-ignited Like a Boy Scout Fire

They say militaries inevitably prepare to fight their previous epic battles, sometimes lacking an understanding of how geopolitics and progressing cultures change the dynamics of the next war. If sophisticated, strategically centralized military planners continue to find themselves flat footed entering new wars, it should come as no surprise to find that Washington, as designed by our Constitution to be at battle with itself and the states, is utterly unprepared to execute war on our unprecedented flailing economy. By continuing to battle this historic monetary implosion as if it were a really big version of previous recessions, Washington has not only failed to aid the job recovery of our economy, it has actually dug an even deeper economic hole and has obtusely bludgeoned the American people for failing to crawl out from it.

This economy is neither a periodic mismatch between demand and supply as in previous recessions or a simple absence of demand that can be fixed by additional stimulus, low interest rates, or even lower taxes and regulations. Therefore, both the antiquated prescriptions being followed by this administration and the prescriptions of a bygone era being proposed by the Republican Party to win the confidence of the American people in 2012 will not fix our economy but will instead mire us in additional debt and will continue to sputter the economy to false starts and dismal failures.

If only those that would lead our country had been Boy Scouts! Boy Scouts practice their motto of “Be Prepared”, learning important skills of survival such as how to start a fire. As a lad, I was sent by my troop to endure a three day ordeal of survival before induction into the Order of the Arrow. The first night, I was given a match, a raw egg, a canteen of water, and a sleeping bag and sent into the wilderness. Because the night had turned frigid, my first order of business was to build a lean-to and to create the life saving warmth of a fire.

Now with only one match, it is critical to be prepared. Scouts first learn the basics that fire requires more than one match to burn. It needs additional heat, fuel and oxygen. After being taught the simple basics, Scouts delve into the intricacies of one match flame ignition. First, the Scout must find a sturdy, dry and protected environment that will be the base of the fire. The heat from the match must be ready to then ignite delicate kindling such as the under bark of a dead, dry tree. This delicate kindling must be given additional small twigs that snap at the touch. The gently resulting flames must have ample air yet be protected from erratic winds.

The Scout must be prepared to feed the fire with larger twigs at a rate that expands the reach of the flames without burning out rapidly and without smothering passageways of air that will support the nascent combustion. Afterword comes the traditional stacking of small limbs that keep the heat of the flame close yet that forces the aspiration of fuel and air into the mixture. Finally, the logs that will sustain the flame are placed strategically so that a majority of the logs will sense the flames flickering around them and will support air rushing in underneath to stoke the fire’s growth.

If the Scout is to be successful with just one match, he must be prepared to simultaneously manage all aspects of the fire’s preparation, lighting and combustion, and he must be ready to feed the fire once it bellows its life giving heat. The lighting of our nation’s economy is something akin to a Boy Scout’s preparation, lighting, and combustion of a Scout fire. If the manager’s of our economy’s restructuring do not ensure that all required aspects of an economic re-start are present and well dispersed to intricately interact with all its elements, the economy’s new flame will surely sputter like that of an unprepared campfire starter.

Just like the fire must have the proper balance of all three elements of combustion, heat, fuel and air to burn brightly, the re-lighting of the economy must have all three of its critical elements; sustainable debt, sufficient credit, and decentralized demand in simultaneous and sufficient quantities. When the match of economic stimulus is applied to the economy to light new jobs, if new workers are drowning in debt, their new incomes will simply support existing debts and will not spur economic growth.

Even if new workers’ incomes are sufficient to both pay their debt load and to increase additional demand, the impact of stimulus will be muted if their existing credit ratings will not allow them to take on additional debt, thereby increasing America’s money supply and expanding the economy. For any economic plan to be successful at re-flaming the economy, not only must stimulus be applied but our nation’s overhanging housing debt must be immediately reduced and our business and consumer credit must be immediately repaired.

However essential these basic elements of economic recovery are to restarting the economy, just like the Boy Scout fire, their application must be intricately and simultaneously intertwined to affect a delicate combustion from just one match of stimulus. America’s stimulus must flow through the dry, ignitable kindling of the domestic economy and be carefully protected from the erratic winds of globalization. The nation’s housing debt load must be swapped with bank equity to stack small limbs of economic growth near the economy’s fire base. Damaged credit ratings must be given amnesty to expose the limbs to economic oxygen. And our nation’s unemployed must be dispersed throughout the domestic small business economy through job vouchers to intricately mix the decentralized combustible fuel of demand with the oxygen of new credit and the heat of new debt capacity.

Just like the fire must be ready to accept additional limbs to grow its flames, the economy must be ready to respond to the initial turnaround with a growth oriented, business friendly, economic environment. Re-investment of offshore and captive capital into the domestic economy must be incentivized. A fair and consistent internationally competitive footing must be created so that businesses that combust in the early stages of economic recovery will be fed the competitive fuel to thrive in America through measures such as tax and regulatory reform, resizing of government debt load, investment in business infrastructure and modernized education.

Finally, a Boy Scout learns that a fire must be continuously attended, stoked, fueled and protected from the elements if it is to continue to provide life sustaining heat. Our nation has left its economic fire unattended for too long and must resolve to carry on the tradition of Scouting if we are to thrive once again. America should adopt the Boy Scouts’ motto and “Be prepared”.

Yes, America Can Quickly Turnaround, Here’s How:

America is a melting pot of concerns and of people dynamically and distributively acting to improve our nation. But when any one issue overwhelms the others, it drowns out their focus and support. A lack of Jobs has become that screaming voice. While Government’s role is far more than just support of business, with an entire nation affected by 25 percent un and under employment, the focus is on helping them to create employment. It is the equivalent of a Maslow’s theory of Government.

Within that Maslow’s theory concept, the sooner we right our course, the sooner we can expand our collective consciousness again. The following is a win-win, Middle America construct for dramatic economic turnaround that can quickly right our course, that is Government proactive, yet balanced with pro-business, private initiative, free market principles.

A lot more must be done than the following to right our course but as a focus on a quick turnaround, the following is a good start. First, we have to restart the economy with increased consumer demand and business credit and elimination of debt overhang:

Job placement
• Implement distributive job placement through small business job voucher plan
• Place all able Americans in jobs through voucher program
• Guarantee voucher program will exist for a minimum of 24 months before any reductions
• Guarantee reductions based on unemployment figures

Debt isolation and swap for equity:
• Require voluntary complete appraisal of all commercial and residential properties – owner pays
• Enforce mark down of all properties to appraisal by banks if accepted by owners
• Allow banks to swap ownership equity for debt to the amount written down
• Require banks that cannot carry higher equity to merge or restructure

Credit repair
• Institute a credit amnesty program
• Enforce the credit institutions raising credit scores 20 points and eliminate bad credit info two months in arrears for every clean month
• Eliminate foreclosures, workouts, and bankruptcies with 30 months clean record

Business loans and grants
• Provide business grants to small business to cover equity portion of SBA business loans tied to guarantees to hire new full time employees
• Assuming a business loan requires a 200,000 per employee, grants of $40,000 per new job would be required. 15 million jobs would cost an investment of up to $600 billion of which half would return in personal and corporate taxes over a two year period.
• Increase government guarantees on bank loans to small business to 100 percent for first two years of originations
• Provide direct SBA loans for businesses unsuccessful at finding bankers to accept 20 percent

Second, we have to right our long term course. Ideas that are being touted by Republicans [with caveats to ensure savings are not funneled offshore], and **a few additional ideas** will help our longer term economic position.

Budget
• Cap and trade budget
• Require trade of budget within same time period for all new initiatives including salary adjustments
• Require a phased in balanced budget

Taxes
• Reduce corporate tax rate [for domestic business only] and eliminate tax loop holes
• [Eliminate tax deferral of profits that stay overseas]
• [Eliminate taxes for all overseas funds that are re-invested in American business infrastructure]
• [Reduce death taxes that are reinvested in American enterprises]
• **Do not implement Romney’s regional tax plan**

Regulations
• Place a moratorium on regulations
• Cap regulation costs
• Enforce a regulatory prioritization cap and trade of regulation costs

Trade
• [Require economic impact study and public review and comment period for all proposed trade treaties, and a minimum of net nuetral benefit excluding corporate profit]
• Enforce existing treaties with China

Energy
•**Invest in research and development of solar and wind in areas that most promise cost reductions**
• **Build solar and wind economic zones large enough for a 20 percent supply of energy needs**
• **Invest in transmission to those zones**
• **Provide 100 percent, interest free loans for all conservation projects that can show 5 year payback and require payback only from energy savings**

Can America Get Beyond the Three Stooges Approach to Job Creation and Reach a Higher Plane of Solutions?

Listening to all the barking at parked cars is becoming exhausting for all Americans. If what we all desire is a safe, comfortable life, and productive, good paying jobs are our way of achieving this goal, does anyone wonder why no one in government has yet recommended material solutions?

Is our nation really going to accept the Larry, Curly, and Moe alternate solutions that have been presented thus far as our only hope going into the 2012 elections? Are the Republicans really going to stick by their mantra of no government intervention after having participated in the government intervention that optimized the way forward for our banks and multinational corporations to mine America’s wealth for the Great Extraction to the East? Are Democrats really going to bring forward enormous government largesse to create makeshift government jobs as a temporary band aid, when America is already being punished by the international financial market for grossly expanding our government employee base? Is the current administration going to continue to pursue wimpy programs that on their face seem rational, but as implemented are so lackluster as to only support more wealth transfer to the weakest in our society without affecting any real support for a revitalized economy?

If we continue to bicker about our pet peeves, the flees on the dog, without dealing with the fact that the dog has been put out of the house, and will not be let back in until it brings forth a collectively supportable plan, America will get the flee bitten, dog house solution it deserves. But do we really deserve such a fate? Can we not together find a way forward to put all Americans back to work?

Certainly the solution rests in the vast middle plane, a best methods approach, an approach which has been absent in Washington for a great many years. The Democrats and Republicans have denigrated into looking at solutions which are compromise at best. They see the solution set as linear, a thick tug of war rope with alternately competing solutions, with each of the parties attempting to pull the little red flag tied to the middle of the rope toward their side.

After each successive election, the winning party having pulled the rope a little bit in their direction, attempt to implement their full set of solutions as if the flag were triumphantly pulled completely into the midst of their camp. Of course, as soon as the American public gets them home to the next election, they disapprovingly spank them for having acted like arrogant and selfish children.

What is needed is to have both parties see the solution set as at least having two dimensions, a great plane with an x and y axis. At the origin of the plane, the intersection of the x and y axis, both parties get nothing of what they want. However, as the solution pushes farther up both the x and the y axis, both parties get more and more of what each other want without having to compromise at all, a win-win solution.

In the context of jobs, the win-win solution is that America is fully employed, government is an active participant but not a director of the economy, social welfare is supported but not extended, entitlements are decreased, no additional agency is formed, no bureaucracy lives on indefinitely, no shift of electorate power is extended to either party for having implemented a solution that helps all of America, domestic businesses are supported without helping them to send jobs overseas, the rich increase their riches, the poor are protected, and the middle class is secure.

Can such a win-win solution be achieved without it being caught up in the rope pulling? Only if a paradigm shift can occur in the American consciousness will we be able to overcome the partisan bickering that is incentivized by political power struggles, inflamed by media hype, and financed by the remunerated elites. However, if necessity is the mother of invention, then crisis can be the father of epiphany.

So the solution that I have been writing about for the last nine months takes these issues into account and attempts to find that win-win solution as far out on the great plane as possible. The program essentially gives all unemployed a job voucher that lets them work for a small domestic company at the same rate of pay they would receive on unemployment benefits, but the benefits pass through the employer as an incentive to hire them. You can find many aspects of my thoughts here on my blog http://www.jobvoucherplan.com but in essence of it is thus.

•All Americans employed – each unemployed person is entitled to a job voucher, a golden ticket if you will. This voucher allows any qualifying business to hire them essentially free of having to pay the wage. Other overhead costs such as work desks, phones etc. are borne by the business.

•The Government is an active participant – Recognizing that the capitalist economy has a concentration of wealth flaw that breaks the economy every 50 to 70 years of so, the government does not wait to have a broken economy heal itself.

•The Government does not direct the economy – The job voucher program allows the invisible hand of millions in the economy to decide what the highest and best use of our work force will be, not just some inefficient, centralized but well meaning government bureaucracy.

•Social welfare is not extended – This program does not extend unemployment benefits but expects all able Americans to work and to contribute toward putting America back on its feet.

•No additional agency is formed – The program is managed by existing unemployment offices. Their work is somewhat changed now that the unemployed are actually obtaining jobs.

•No bureaucracy lives on – The program builds in unemployment level milestones for drawing down the program.

•No shift of electorate power – No entitlement is created by this program that indebts individuals to any one party.

•Domestic businesses are supported without helping them to send jobs overseas – Job vouchers aid small domestic businesses that have been recently cut off from commercial credit, but are not available to MNCs.

•The rich increase their riches – The program stays in place as long as needed so that a consistent economy can be counted on to boost consumer confidence and sustain the beginnings of a new business cycle. More workers producing means more consumers available to consume, boosting profits.

•The poor can be protected – If more tax payers can be added to the tax base and the economy can begin once again to grow, deep austerity measures that would only further exacerbate our nation’s social problems can be abated.

•The middle class is secure – A growing, competitive, producing economy protects America’s financial security also supports funding of our national security.

This solution set, this extension into the frontier of the great plane is only part of the complete set of solutions that can be achieved once our nation breaks free of its tug of war mentality. We can then put each problem on its own plane, each spinning round the same origin, and now we have a set of solutions on an x-y-z three dimensional axis where the frontier lies on the surface of a great sphere. What seemingly is a set of solutions at the extremities of our political consciousness is actually the result achieved when America sets about to find within its great middle, the best that can support our collective future.

Upcoming Jobs Debates Must Overcome Calculated Political Dogma If Americans are to Return to Work

During the race for the Whitehouse in 2008 until the financial collapse, jobs were not a deciding factor of the presidential campaign. However, just as Americans were being asked to choose our President, unemployment spiked, growing from 6 percent to 8 percent by the time President Obama took office. Americans gave the President a mandate for social change in the accelerating midst of what now can be reviewed as one of the greatest financial meltdowns in history. Our four year stoic process, unforgiving in times of turmoil, elected a president focused on providing his legacy with a steadfast commitment to the platform on which he was elected, including comprehensive healthcare reform. Not wanting to lose momentum for a greater destiny, he spent his political capital on national health care as America roiled in the short term desert of job losses.

It was a major political gaffe. The Republicans beat the ironic drums of elitist insensitivity, swarming the gates to take a landslide victory in which they made jobs a major campaign theme. Now, a year and a half after their congressional coup, Republicans have clearly tied their future to the idea that Americans will understand the connection between taming the national debt and jobs. By political brinkmanship, the Tea Party has successfully changed the debate, focusing attention on slowing the deficit and holding the line on taxing the rich. However, will this all or nothing approach win the hearts of a fickle electorate?

Americans have grown weary of politically staged dances over partisan issues surrounding the nation’s crises, yet not enough to rise up intra-election to collectively demand action. Having grown restless through the misdirection of political energy over healthcare and then having nervously sought refuge from Congress’s unnerving display over the deficit, America’s impatience is simmering into a frothing cry for political reason regarding jobs. The obvious delays by both parties to speak of jobs when one in six Americans is suffering their folly, has pent up frustration that will cause the electorate to violently express their anger in the polls if they are not urgently and effectively attended to by collegiate political attention.

Meanwhile, 900 days after taking office as 25 million Americans wait for signs of a political pulse, President Obama is now finally planning to announce a major jobs focus for 2011. Sensing a massive political opportunity, Democrats are now floating balloons for government sponsored jobs programs that have no chance of passing the Republican controlled House of Representatives and seem much more intent of retaking government by frenzying the 2012 voters against an obtuse Republican party than with truly putting Americans back to work.

For their part, Republicans, steeped in ideologue, are almost ignorant of the ground swell that will surge the American public toward any plan that promises employment. As such, misguided by obsolete principles that have served globalization and the enrichment of globalists in our midst at the expense of the Great Middle America, the Republicans most assuredly are setting themselves up for a pre-election coup, the size and ferocity of which catapulted them into power when the Democrats, cloaked in the civility of unfunded social programs, failed to act in the interests of the same immensely frustrated and growingly isolated electorate.

Without, a real alternative to a Democrat government jobs program that historically have swelled the ranks of government and choked off private investment, ultimately harming long term GDP and creating long lived entitlement debacles, the Grand Old Party will have let its ideology blindly guide it once again to the outskirts of contemporary debate. If the Republicans cannot fathom moving toward some form of activism which touts ideas of free enterprise and a support for domestic business, innovation and jobs, it will be left packing up its personal effects and moving out of the congressional offices that are intended for those that hold the short lived rule of American government.

If the end result of both parties’ calculated political dogma is that a pre-election year of grand political grandstanding fails to find a workable and immediate compromise to put America back to work, that another election punctuated by overwhelming disdain for a broken system swells the ranks of the Democrats as a symbol for America’s cry for help in a two party system, and that the Democrats misread their mandate while the Republicans retrench in confusion over having lost the electorate’s support for responsible long term goals of budget balancing because of a trumping short term goal of feeding their families, the American people will have suffered the greatest of wrongs.

The consequences of our Congress’s inactions will be rising unemployment, increased debt, additional time for the elite to offshore and monetize wealth into gold bullion, a growing obsolescence of job skills in America as the East excels in educational scores, additional international credit downgrading resulting in higher interest rates that rob our social programs of needed funding, increased societal self doubt, and political finger pointing by politicians whose realities have shattered. A real opportunity for improving the lives and futures of all Americans will have been lost.

Keynesian Economics will not Put the Pit Bull Teeth Back into America’s Bite

A business philosophy shared with me long ago suggests that one should never enter an enclosed back yard with a vicious pit bull unless you intend to kill it. If you are going to jump over the fence and face the neck ripper, go over it wielding a bat and swing it wildly, smashing the pit bull until it lays lifeless in its own pool of blood. Otherwise it will rip you to shreds.

If China had re-entered the world stage in 1979 claiming it was going to assert a strategy to overtake America and Europe, gut their real GDP engines, indebting their people to transfer historic levels of real GDP infrastructure to China, and most importantly (because the West’s elite drive political policy and military actions), entering a final pit bull smashing phase (this phase has not yet occurred) that leaves the West’s elite scrambling to protect their wealth from an epic class struggle of debt defaults, wealth redistribution, and financial collapse, the pit bull elite of EurAmerica would have financially ripped the neck of this immense country of wonderful people before they had a chance to implement such an ingenious strategy.

So if one believes like I do that China has proven the masterful central planner above all on Earth, it would be illogical for China to have entered into EurAmerica’s backyard too early. China’s GDP was much too weak to implement any semblance of a world hegemonic strategy that could directly confront the West. She would need to suckle on the teat of her Western nursemaid until strong enough to leave the nest and assert her own world power.

Now that China is strong enough, now that she has enough world hegemonic relationships in place, now that her nursemaid has entered menopause, China’s strategy will increasingly become apparent. Yet she still has no need to enter the backyard with EurAmerica’s pit bull even if she no longer fears its ferocity. China realizes there is no benefit to directly confront EurAmerica yet for the pit bull is old, in foul health and it has lost its teeth to cause any real damage to China’s continuing rise to world hegemony.

Certainly, if one believes that China lucked into such a meteoric rise as the leading economic force in the world, then attributing any intelligence of design to her strategy for doing so would seem conspriratory at best. Yet the results speak for themselves. FDI in China is unprecedented in any other point in the world’s history. It is the greatest gold rush, the most inflated bubble, has caused the deepest competitor indebtedness, and was the least bloody international coupe in history.

I do not disparage China for having the world class skill, patience and confidence to assist EurAmerican businessmen and politicians to shake down their citizens. China offered access of cheap drugs to a culture that had already chosen the addictive personality of consumerism. EurAmerica did not have to accept them but now that we did, we will have to suffer the withdrawal symptoms of our cultural weakness as we now attempt to rehabilitate ourselves.

In the midst of our economic turmoil, there are those that continue to espouse Keynesian principles to spur America out of our economic malaise. Our political leadership wishes to take QE to an even greater level of spending as a potential jobs solution. Keynesian principles suggest that in an absence of consumer demand, government can create artificial demand that will then spur additional consumer demand, increasing money velocity that can reverse the direction of collapsing money supply and right the course of capitalism.

For the principles to work, demand must be perceived as great enough and sustained enough for creditors to offer consumers new credit. In addition, the consumer’s potential income must be large enough to meet the obligations of the consumer’s past debt plus create additional debt capacity that can provide additional spending to spur the new business cycle. The amount required for Keynesian principles to take hold would be orders of magnitude greater than the politics of our day or the world creditors and credit agencies would allow given the historic consumer debt, housing overhang, and government deficits including national through local caused by an international extraction of equity to the East.

Additionally, this large amount of stimulus spending that is intended to spur on the local economy is diluted by the amounts that redirect to foreign economies. Our government cannot isolate stimulus and thus the amount of spending needed for America’s jumpstart would have to be multiplied for the effects of international leakage. America has long since gutted the tools of domestic Keynesian stimulus by allowing the tansferring of 40,000 factories to China alone.
We do not have the economic manufacturing base that supports money multiplying factor to implement Keynesian principles through governmental central planning in this country. The dollars we spend flow like a sieve into the world economy which also is in desperate need of stimulus. To attempt Keynesian principles in America today therefore would also be attempting to jumpstart the western world on our own.

I favor through my job voucher plan (www.jobvoucherplan.com), a distributive, domestic, Keynesian approach of sorts, one that attempts to direct as much of the catalyst into the domestic economy as possible while putting all able Americans back to work. Yet it combines Keynesian stimulus with a redistribution of current social welfare for that purpose and a redirection of the American economy to a modern mercantilism.

Why Can’t I Get Real Numbers on Unemployed?

During an interview on NBC’s Today show on April 5, 2011, Republican National Committee chairman Reince Priebus criticized President Barack Obama’s handling of the economy saying we’ve lost 26 million jobs since he’s been president. Of course he was quickly criticized. I have a hard time finding real job numbers well documented anywhere.

My father told me never to cheat at golf, because if I didn’t count every swing or miss, I would never know if my game was getting better. I quit golf a long time ago when my game stalled out but it would be nice to really know the score on unemployment.

So I pieced together numbers from various websites to make a “educated” guess. My guess is that the cost to the taxpayers of these unemployed and underemployed is about $500 billion dollars a year or about $3,800 for every employed worker. Imagine the good they could do if that 500 billion was put through a job voucher program.

Total Americans (millions)…………………………307

over 18……………………………………………………..226

Less
over 65……………………………..36
In college…………………………….5
In military……………………………2
Stay at home………………………..6
Severe Work Disability…………6
On welfare …………………………..5
Homeless not working…………..2
Institutionalized……………………1
in jail……………………………………3
Available to work……………………………………….160

Less Working……………………..133

Unemployed……………………………………………….27

Plus Underemployed……………..9

Unemployed
and underemployed…………………………………….36

Percent Unemployed ………………………………..17%
Percent underemployed and unemployed……23%

Of course if we add in social security, welfare, disability, welfare, and the institutionalized that figure per working person goes up to $10,600 per working person. Interestingly however, if we add the cost of government employees and divide the number by working private employees the number jumps up to over $24,000 per working private employee per year. Considering that the average wage in America is about $43,000, well that is alot of cost to cover. Just figuring……

Tariffs are a Winning Political Strategy Unless A Political Party Counters with a Solution that is both Populist and Effective

The relative world peace established by the United States’ rise as the world’s sole super power has for several decades lulled the potential for global war. By spending more than all other nations combined on war capability during the previous decades, America effectively eradicated multinational corporations’ (MNCs) only known natural predator. In the absence of other governments organizing their citizens to wage war for control of another country’s resources, multinational corporations have had no natural predators in third world countries for the past 40 years.

In third world countries, where developed and complex economies do not exist, dictators have been easily influenced to enter into one sided contracts and socialist countries’ have had few alternatives to the purchasing power of corporations but to enter into monopolistic contracts as well. Therefore, just as in any ecosystem that is devoid of natural predators, MNCs have proliferated during the previous three decades. While U.S. corporations have led the growth of MNCs, industrialized countries throughout the world have competed for direct foreign investments worldwide.

Two results of this explosion of MNCs have been the driving down of consumer goods prices and loss of jobs in industrialized nations. Since America consumes a quarter of the world’s output, jobs have been lost in countries across the globe to support our consumption. Other industrialized countries have partially subsidized the price benefits that America has received.

However, America has also lost jobs as a result of the transfer of investment to other countries. Some in America claim that we should have imposed limits on our country’s corporations’ foreign investments to limit American job losses. Limiting our investment would have only allowed other countries’ corporations to invest without competition from U.S. corporations. As a result, our corporations would miss opportunities as other nations’ corporations increased worldwide market share. Therefore, America correctly acquiesced to the notion that we must share the burdens of globalization to ensure our corporations maintain world market share of global investments.

Globalization is a worldwide phenomena created by America’s overwhelming military goals. Our military is an economic catalyst transferring the wealth of industrialized nations toward creating household purchasing parity around the globe. And this economic disparity of household incomes is so great that it will continue to provide overseas investment opportunities for America’s wealthy for decades to come unless the disaffection of industrial nations’ middle classes creates another predator. While China is quickly gaining long term worldwide contractual relationships with third world countries and building military defenses for a future military threat to its hegemony, war does not seem a threat to globalization for several decades at least. The more eminent threat to globalization is the political opportunity that MNCs have caused by their increasing structural unemployment in industrialized countries.

America’s Republican Party is now attempting to capitalize on the high unemployment of our middle class by touting tariffs as a way increase employment and to win the 2012 elections. Tariffs do increase employment and America is ready for a populist employment platform. Unfortunately, history has shown that as a government centric solution, tariffs are ineffective and ultimately cost a nation more than they benefit it. However, unless political parties are prepared to counteract waves of populist sentiment, America is destined to repeat detrimental policies. Remember what happened in Great Britain in 1945. Even though Winston Churchill had 83 percent support after the war, his party was overwhelmingly rejected when the Labour Party touted full employment, health and housing platforms.

To win against the party that supports tariffs, the competing party must support full employment that does not raise costs to Americans and that ultimately makes our goods and services more competitive in the world marketplace, two things that tariffs cannot accomplish.

My job voucher plan is a solution that can give the political party that retains it as part of its 2012 platform a winning populist strategy. It makes America competitive without raising costs of foreign goods to our consumers. It creates full employment without creating more social costs than our current unemployment and welfare solution. My job voucher plan does reduce the cost of American goods, does provide full employment for our labor force, does reduce our trade deficits, and ultimately pays back America for its investment in our people.

If you have a member of your political party that would be interested in more details, I would be happy to engage a discussion