Categories
Politics

Thomas Jefferson on taxes

Jefferson’s view on Taxation

Did you know for the first 140 years of America  (1776-1916) there was virtually no direct taxation on American citizens? In 1802 when Thomas Jefferson took office he eliminated all direct taxation on US citizens. Tax-free America. This was Jefferson’s vision and I have quotes from him to back it up.

There were times in US history, like war, when it came back temporarily but the federal government was established to protect citizens against the burden of government. There were some excise taxes and duties on foreign imports but the government was kept to a minimum and each person was free and responsible for their own life. This was the vision of the founding fathers for establishing the United States of America.

During the tax-free time in America, citizens rich, poor and middle class of the United States grew richer and there was no social state, which was seen by the founding fathers as the road to serfdom. The whole world envied the US and tried to immigrate. If you want to read even more on the history of taxation in the United States including Jefferson’s views on taxation the US Treasury has an article.

Jefferson on taxes: they are wrong

Jefferson’s view on taxes was clear, they were wrong.  I think it is better to look at people’s original words so I have put together some quotes by Jefferson on the issue. Jefferson believed large debt and direct taxes were a curse and something to be avoided as it was the source of oppression.  Jefferson was one of the founding fathers whose vision of the United States was one of freedom for people to live their lives without the excess burden of government.

And the forehorse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression.

Thomas Jefferson in his state of the Union wrote about the “the freedom of labor from taxation”. He felt the government should protect its citizens from internal taxation.

Thomas Jefferson believed in times of war when a nation was fighting for its survival with enemies at the gate it could raise capital, but it should be paid off as soon as possible and with least burden to its citizens.

I can not but hope that Congress in reviewing their resources will find means to meet the intermediate interest of this additional debt without recurring to new taxes, and applying to this object only the ordinary progression of our revenue. Its extraordinary increase in times of foreign war will be the proper and sufficient fund for any measures of safety or precaution which that state of things may render necessary in our neutral position.

Jefferson continued to write addressing the Nation:

Direct taxation was to be avoided, this could be done by  avoiding expense that are not necessary. when merely by avoiding false objects of expense we are able, without a direct tax, without internal taxes, and without borrowing to make large and effectual payments toward the discharge of our public debt and the emancipation of our posterity from that mortal canker, it is an encouragement, fellow citizens, of the highest order to proceed as we have begun in substituting economy for taxation, and in pursuing what is useful for a nation placed as we are, rather than what is practiced by others under different circumstances.

Jefferson even did not like the idea of accumulating wealth for a treasury for times of war in case it happened.

…but sound principles will not justify our taxing the industry of our fellow citizens to accumulate treasure for wars to happen we know not when, and which might not, perhaps, happen but from the temptations offered by that treasure.

Jefferson recommends no internal taxes on the citizens of the United States:

there is reasonable ground of confidence that we may now safely dispense with all the internal taxes.

Jefferson Vs Hamilton on the role of government

When I was in high school and first read about the Hamilton and Jeffersonian views of America, I thought only hippies and people who did not understand economics would side with Jefferson. Clearly, we needed a strong central bank, treasury and debt to finance the government, centralized financial markets. Jeffersonian views of a libertarian America seemed too radical for me. I was 16 years old in high school when I thought that. Now that I have studied economics and lived in the world for at least 30 years, I realize the opposite.  The government that governs least governs best. If the freedom and prosperity of the citizens are to be protected no or low taxes and debt are clearly the way to go.

Economically speaking it is a question of who can spend your money better, you or the government? Why did Jeffersonian America prosper and not fall apart without taxation? The reason is what Jefferson wrote was correct.

Jefferson’s letters and original writings on taxes in the USA

1787 to James Madison about the issue of taxes:

…the fundamental principle, that the people are not to be taxed

Jefferson’s letter to John Jay in 1789 (August 27th):

The embarrassments of the government, for want of money, are extreme.

What does this seem like to you? If you can find Jefferson quotes to the contrary please let me know. Why does the current President not understand this?

Jefferson when on to write to John Taylor in 1789:

I wish it were possible to obtain a single amendment to our constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its constitution; I mean an additional article, taking from the federal government the power of borrowing.

In 1799 Jefferson when on to Edmund Pendelton about:

the disgusting particularities of the direct tax.

In 1801 to John Dickerson Thomas Jefferson wrote on taxes:

You will perhaps have been alarmed, as some have been, at the proposition to abolish the whole of the internal taxes. But it is perfectly safe. They are under a million of dollars, and we can economize the government two or three millions a year.

Hand was written by Thomas Jefferson

My view’s on Taxation

  • As an economist, I think a tax on consumption, is the least offensive as it does not discourage investment and savings and productive effort.
  • I  pay taxes in the EU and the US as I am a dual citizen, I do not like it. I think it is unfair. I agree with Jefferson. The absence of direct taxes made the US great.
  • ‘No country was every taxed into prosperity’ – Ronald Reagan
  • Government wastes more money than any private person or company ever could.
  • Taxation is a violation of your life, if you work more than 1/2 (aggregate all the taxes including sales and loss of productivity indirectly related to taxes etc) your life for your neighbors wife this is unfair. This is what taxes are, working for your neighbor’s wife. How do you feel about that?

Thomas Jefferson was not a saint, but he was enlightened.

Categories
Politics

George Washington’s economic policy

One of the reasons so little has been written about the economic policy of George Washington is, government way back then is nothing that it is today. The original founding fathers were libertarian.

They believed the government’s roles was to prevent the abuse of government powers on individual freedoms. They fought a revolution over it. It went without saying government intervention in trade between two private individuals or companies was not even something that needs to be debated.

The year 1776 was a paradigm shift. The Wealth of Nations by Adam Smith was published and the colonies declared their independence from King George III’s Mercantilist empire.

When the war ended Washington wrote in his farewell address he clearly outlined an economic vision for the United States.

Here is my complete ebook of  George Washington’s Farewell Address

Download Washington’s words above

I put this together for those who want to read first hand his parting words and vision. It is interest to note he talked about, free trade, taxes, a balanced budget.

Farmer Brown and Washington’s economics

If farmer Brown wants to sell corn to miller Thomas, what does that have to do with anyone else?

Washington’s vision of America stood in opposition to the strong central governments and managed mercantilist economies of England and France. He opposed entangling alliances, and world political policy. George Washington did not even want to have domestic political parties.

Government was to be a simple voice for the people. If George Washington was alive today I am sure he would be closest to a libertarian ideal, as would Jefferson and Madison. I am certain of this. Government was about representation and voice but not economics as it exists today.

Government bailouts, income redistribution, high taxes to support government programs would not even be a consideration. George Washington and the founding fathers would today fight for reducing the burden of government.

You might argue the economy in Washington’s time was not as complex. I would disagree. America not only had agriculture and manufacturing but services also. Of course it was not as complex in some ways but the basic structure was the same. Therefore, the same economic ideas are applicable.

You might ask what about government’s role of being a social state for people? The founding fathers never dreamed of this. The level of subsidence was much lower. The average person back during the time of George Washington did not live as well as the poor do in America today. And still there was not such thing as a social state. Tax and spend defies the ideals of the George Washington. No country was ever taxed into prosperity.

Washington wrote in his state of the Union:

…save the necessity of burthening our citizens with new taxes

Washington himself a Virgina plantation manager and businessmen before was concerned about British taxation and economic policy. England wanted the colonies to be under the burden of taxation and simply a supplier of raw materials for England to manufacture and process. Washington wanted to be free of such burden of government engineering of the economy.

And what about George Washington and government debt?

George Washington on government debt

Washington wrote in 1797 to Sam Washington:

There is no practice so dangerous as that of borrowing money

Speaking to the House of representatives Washington said:

No pecuniary consideration is more urgent than the regular redemption and discharge of the public debt. On none can delay be more injurious or an economy of time more valuable.

What amazes me is why if this is so clear and so many people understand that the United States was founded to protect people from the burden of government.

Where Washington did employ government

The issue with talking about a coherent economic policy of he was no ideologue. He did not have a unified view like Adam Smith. He was a pragmatist at war and business and with the government. After the the US had a huge war debt. Alexander Hamilton (in opposition to Jefferson) established a Federal government with a central bank, taxation and currency system. Washington was not an anarchist anti-government man, rather simply a practical man, who believed in protecting citizens against into the economic life of people. What do you think George Washington would think America’s economic policy today?

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Politics

Countries in the EU

What are the EU counties? I believe in the EU and am a European citizen. I am also an American citizen. The other day I was at the playground with my child and when she was on the swing I was seeing if I could name all 50 US states. I did it with little problem. However, that raised another question, could I name all the nations in the European Union? The answer is no. Therefore, I compiled a list of member countries and will write a little about each one.

List of countries in the EU

  • Austria – Stable low unemployment country but slow to open its doors for other European Union members.
  • Belgium – Capital of the EU in Brussels, makes money on Swiss-style banking.
  • Bulgaria – Low taxes but still behind in terms of capitalism.
  • Cyprus – Tax paradise and create a place to do business and live.
  • Czech Republic – Doing well as Prague is the center and its inhabitants are on the whole richer than most EU citizens, the Czech countryside is poorer.
  • Denmark – If I ever needed to live another country I would consider Denmark. Clean and stable.
  • Estonia – Baltic country has nice small entrepreneurial firms.
  • Finland – Its citizens are rich and spend time in the south of Europe for obvious reasons.
  • France – Well rounded economy, the richest over all citizens in the EU. If not Per capita but in terms of culture and benefits, like holidays and vacation.
  • Germany – Industrial center of the EU. Is the largest export economy in the world, one reason, cars.
  • Greece – One of the most corrupt EU countries. I love it for vacation but the poor suffer at the hands of the government.
  • Hungary – Cyclical economy.
  • Ireland – Did well as it was one of the first member expansion states of the EU and got a lot of Irish American support, but the economy is over as companies are moving to EU nations.
  • Italy –  The north is like Germany, industrial and businesslike, the south is like Greece, laid-back and agricultural. A very nice European Union nation.
  • Latvia – Small and economy.
  • Lithuania – A few years behind a country like Poland but still progressive in terms of politics and economics.
  • Luxembourg – Rich and stable because of secret banking.
  • Malta – Tax haven and vacation spot for European Union citizens.
  • Netherlands – Free country.
  • Poland – Conservative finances and low credit one of the only EU countries that is stable, despite being a post-communist country, it is doing very well.
  • Portugal – Basically now just for vacation during the EU’s long winter.
  • Romania – Low cost labor a very good country to invest.
  • Slovakia – Has the Euro and is like Poland, pretty conservative in terms of credit.
  • Slovenia – Nation of many small companies.
  • Spain  –  Feeds a lot of the EU. The food from Spain is in every European market.
  • Sweden – Open with the great social system, but very dark and cold.
  • The United Kingdom – With Poland a more American style of capitalism rather than the continental social way. Pursues an independent path with currency and policy. Update: Brexit.

There are other countries like Norway and Switzerland that are not on the list. They are basically EU nations but do not want to join for one reason or another. I think these are rich countries and should join but do not want to help out other countries maybe. I am very pro-European unity as it breaks down nationalism and things in the past that caused division.

The candid list of countries includes Croatia, Macedonia, and Turkey. Other possible countries that might join are Albania, Bosnia and Herzegovina, Kosovo, Montenegro, Serbia, Iceland.

The EU, the Euro and the Schengen zone

These are three separate but interrelated ideas. The European Union represents a free trade zone with free movement of labor and capital. The Euro is nothing more than a unified currency. The Schengen zone is about visa and passport-free travel and living in Europe. The European Union is political and economic, the Euro is financial and the Schengen is a passport travel zone.

More on the EU and its countries

I recommend this website to learn more about the EU countries, it is the official website of the European Union and the page which talks about each country.

The list of countries in the European Union is growing outside just Europe, it is now 27 member countries.  I am very pro EU expansion. My question is where it will stop?

*  Austria
* Belgium
* Bulgaria
* Cyprus
* Czech Republic
* Denmark
* Estonia
* Finland
* France
* Germany
* Greece
* Hungary
* Ireland
* Italy
* Latvia
* Lithuania
* Luxembourg
* Malta
* Netherlands
* Poland
* Portugal
* Romania
* Slovakia
* Slovenia
* Spain
* Sweden
* United Kingdom
Categories
Politics

Will America collapse?

This article addresses the ideas will America collapse, but also why people dream of the idea of the fall of the establishment and the rise of post-apocalyptic reality.

Define collapse of the United States

To answer the question will America collapse or fall, you have to define what this means.

To me collapse means a rapid decline on par with the dissolution or near end of the US political process as we know it today, replaced with a fragmented process disconnected from the American tradition. This could be accompanied by chaos, panic, economic hardship and human suffering from the vacuum created.

For that scenario to play out, there would have to be a catastrophic exogenous event that is unforeseen. It would have to be a cosmic meteor or rapid change in the climate or a spread of infectious disease.

Note a business cycle, no matter how severe would not bring the US to collapse. The US economy is too diverse and always reinventing itself. It will operate at a decentralized local economy if needed.

Note America is not Ancient Rome. Historians would like to tell you so because it gives them academic notoriety, yet, Rome was a dictatorship which collapsed because the concentration of power created internal weakness and allowed foreign invaders. The American system is a democracy with many levels of decentralization, state, county, town level. Each level could function if the main power structure were to be eliminated.

No one can imagine what the fall of America would look like because it will depend on the cause: war, natural disasters or economics for example.

10 Potential reason for the collapse of America listed

  1. Economics– Debt or extreme cycle. National debt – This is real and is the greatest threat to the United States, but in the end, it is a paper financial threat of collapse. The buildings will not disappear nor will the people. This will address in another article. Others believe capitalism is evil and Americans will be punished for their greed. This ridiculous, capitalism is good for the poor and made all Americans rich, if you think I am wrong, check out the post-Soviet lifestyle
  2. Terrorists – Current capability of extremist groups could not execute destruction at that level. Terrorists are like the Anarchists of the 20th century. They cause limited actual destruction but use fear as their main weapon. Fear is dark side energy, which can not be sustained. Unless the majority of the world, and I mean close to 100% converted to their side there is no way they could pull off the destruction of America. For example, look at the Soviet Union or the Third Reich. With all the technology and people behind them, they could not bring the destruction of democracy and freedom. Terrorists are no different, just another extreme ideology with less backing, and technology than the forces of evil of the past. Even if the weapons are more powerful, they are countered by the defense which is exponentially more powerful. If you have ever played the game Civilization, this difference in technology makes all the difference in who is dominate. What will happen is terrorism will decrease in the far future as humankind continues to evolve. The females of the human race as they gain more power will soften the extremist. The human genes of extremism will not permit long run chaos as the Homo Sapiens genes want to survive. If think about this, you will understand.
  3. Famine – Food is always an allocation problem, not a production problem. Unless there was a massive blight of some sort affecting multiple species of plants there will always be enough food. Plants have natural defense mechanisms and as do humans. What is actually happening is the food supply is getting weaker and sterile from a health perspective. Look at your grocery store, people are obese and falling apart. I know this sounds harsh but it is true. It is caused by eating non-organic foods devoid of micronutrients. Micronutrients and enzymes are the sparks of life. People are declining in health, but famine is not in the future.
  4. Immigrants – This will cause overcrowding of the US, but not its destruction. More people will live in cookie-cutter homes on smaller plots of land. This will be the new normal and replace storybook America. Further general wages will decrease as the supply of labor increases. Compare counties like Switzerland and Norway with counties that are overpopulation competing for limited resources. Immigrants are not bad, just illegal immigration that does not keep the flow in balance. Will change the landscape of America but not destroy it and America will not collapse because of it, even if the population doubled as long as the people are productive and adding value there will be no Malthusian doomsday.
  5. Civil war – succession. There is a real potential through a peaceful political process sometime in the distant future, Vermont or California could separate from the union. It is just a hypothetical that will not cause suffering but more an intellectually curious topic. In essence, even if the US dissolved from the Federal system it would be closer to a loose confederation of states that the founding fathers initially envisioned.
  6. Disease – This is the disconcerting threat. Unlikely despite the Hollywood hype, as humans have been on the earth for 100,000 years and if anything we are strong and more advanced. However, the human gene pool is so diverse that not everyone would be susceptible. Even the most catastrophic disease or plague, some people would be immune. Some people are immune to the Plague and HIV. There would be a depopulation but no reason to believe this would cause a collapse.
  7. Climate change – This is unpredictable but based on the current data will not be in play for at least 100 years. Technology will change exponentially and mitigate this. Even dumping massive amounts of metal in the ocean will generate more O2 for example. Balloons can be released to repair Ozone. Microbes now can eat plastic. Climate change is real, however, I think Malthusian predictions are countered by technology.
  8. Meteor – At this juncture, we have too much warning and anti meteor strategies in place such as missiles and rockets that would not make this a plausible scenario.
  9. Invasion – Not a chance. The British could not make headways at the start of our nation and no foreign power could ever pull off an invasion of America. Not a chance. Besides the military people, Americans are too patriotic in this country and every person would defend the US.
  10. Absorption – Joining the EU/UN or some other world order would not happen because there are too many patriots in America. Think of the Brit-exit, the tend is against a one-world order. There is no need for it as decentralization celebrates diversity.

America is too prepared, resilient and organized for the fall of America.  I am confident the US military and homeland security as the citizens can handle any threats so we can continue to live out our dreams in peace.

Why people have negative fantasies of destruction

People often have negative fantasizes connected to the destruction of the United States because they feel somehow we are an unjust imperial power that oppresses people and the world would somehow be better off with an alternative.

People who indulge in thinking about this scenario are usually negative people on the metaphorical dark side filled with hate or resentment. They might ideologically be extremely liberal or on the other side of the spectrum foreigners who see the world differently.

My answer to that is: Why are you festering in negative feelings? Do you feel that bad about yourself? Really, let us be honest, to hate a whole culture, a good culture of religious, hardworking free people means you have some problems with your own self worth and so try to boaster by affiliating yourself with some ideology.  It is a classic case of weakness. If you do not like an aspect of US politics, for example, try to improve your own life and those around you.

What is the alternative to Americanism?

The US is a free democratic process which has been the evolution of a political and economic system that goes back to the Ancient Greeks. Humankind has tested and rechecked different political systems and at this juncture, a republic/democracy with a generally free economy with a Constitution that lays out the ideals and principles is superior to any alternative system.

I am a religious person but theocracies do not make sense as religion is connected to the ultimate reality not some temporal governing of justice. People will split hairs over theological differences and one group is repressed.

Kingdoms do not work either, because history has proven there is an abuse of power when concentrated.

Communism and socialism literally collapse under the weight of government. So when people subconsciously wish for the destruction of the US, what do they want, Warlord ruling?

Wishing for the destruction of America is different than indulging in visions of a future where people struggle for survival

I believe many people like to dream about a post apoplectic world not because they are bad people, but they are bored with their lives and desire to feel more intensely the sensations of life, including self-preservation which is programmed in us.

Shows like:

  • The Hunger games
  • People of Sparks
  • Terra Nova
  • 100
  • Any garden variety Zombie show

They capture the essence of that people feel. This is largely brought about excess consumerism. They feel ennui with their day to day cubical lives and would like to live like a hero struggling for surviving not as a Lego person. The good news is there need not be destroyed for you to live like that. You can be a homesteader or a prepper.

Alternative fantasies from good people

Hipster homesteading – People engage more rustic fantasies and live that life now without waiting for the fall of America or whatever culture they live in.  People simply have a primordial longing to struggle to survive, that is not being expressed. Therefore this takes the form of homesteading. This has nothing to do with survivalists as portrayed but a fun peaceful way to live your fantasy of being with your family rather than in some corporate slave. You can read more about that here: Corporate slaves of America.

Preppers – Other people who are using common sense to prepare, maybe not for a doomsday scenario, but a hypothetical time when survivalist is needed also are having fun doing so.  Let us be honest as much as I am not a conspiracy theories and as much as I am a skeptic, no one can predict the future. Nobody. The future is never how we ever imagine. Not in our wildest dreams could I imagine life as it exists today, my life and the world’s scenario. People could not see the Great Depression, the 2008 crisis, people would not even predict the election of Donald Trump. The future is always not as we imagine. So being prepared is a good idea, and it is mostly more for fun.

The Bible and prophecy about America – Other people equate the fall of the USA with biblical apocalypse predicted. Wrong, the Bible is about personal transformation, rather than a document of ominous fateful predictions. The Book of Revelations, for example, was talking about the stamp tax in Rome in metaphorical language, but our time in America.

Apocalyptic fantasies have a strong sublime element of being the primordial sensual romantic humans we evolved from, an escape from this sterile matrix we live in now.

Why do so many people really dream of these things? Hint it comes from our DNA

Waiting for the fall of America or some catastrophic event largely comes from an unconscious desire that is imprinted in our DNA to survived in the wild. It actually is a positive thing, because a lot of good comes from it. People are growing their own food and becoming less dependent on the grid. It also has an underlying sexual theme. People subconsciously want to win over their love in a rustic setting where we evolved from. What is more sensual, some 9 to 6 cubical job or living with the love of your life in a homestead, trying to hack out of the wilderness a life?

I am no Freudian, but do not underestimate the power of reproductive urges shaping our visions of the future.

But the real fall of America will not happen our lifetime, I promise.

I want to live there. If you do not dream of trading your cookie-cutter home and cubical job for a chance to live by your own intelligence in a rustic setting, then I recommend you reexamine your dreams.

The mainstream might see preppers as paranoid, but that is not true. Prepping is fun and practical but not delusional. They are not wanting an apocalypse, but rather taking that extra step of caution to be no depended on others. Even a tsunami or Hurricane can cause destruction that does not destroy the county but devastates a region. On a spectrum, they are like homesteading plus.

History has advisedly and subsequent vindicated people like this many times.

In conclusion

America will not collapse and America is not doomed. Pessimism and talk of crisis are always the biggest news getter than stability. This is why you hear about the end of America. Here is a fact, you can not argue, I live in Eastern Europe and you have no idea how rich America is in terms of land and resources and people. In fact, you could say Americans are spoiled for not seeing this. Short of some natural cosmic disaster, there is no way America will collapse.
Perceived threats against America.

Stop watching the news. You will waste the magical time you have on this planet by feeding off the negative energy of others.

Update: What am I doing during this CoronaVirus?

I am working on my Ph.D. and working in my garden. Since I had money in cash rather than the stock market (I felt the market was overvalued) I will be better positioned than most. What can you do? The same. Find some home industry that will position yourself for the next part of your life. I would say a garden is a good start. Even if you live in the city, you can transform your apartment into an indoor growing paradise.

What do you think is the greatest threat to America and do you think there is any chance it would collapse in the coming years? Is the US over? I think not by a long shot. However, what do you do now to break free of the sterile reality of your life?

Categories
Politics

Balanced budget amendment

The balanced budget amendment is something that comes up from time to time in the political debates but now is still a pipe dream. It simply is a call for fiscal responsibility. It means the government can not spend more in any given year then it takes in taxes. The only exception would be a time of war. You have to keep your household budget balanced and this is what the idea behind this is. To stop the government from spending without care. Every year spending must equal or be less than revenue.

Balanced budget based on the business cycle

An alternative to this idea of a yearly balanced fiscal plan is for the government to balance the budget on a four-year cycle to account for fluctuations in tax revenue connected with the business cycle. This way you do not need to micro-manage revenues vs. expenditures.  I prefer the straight yearly plan and not the four-year plan.

You are out of your mind if you think this is not an important amendment to the US constitution. And you are very selfish. Debt is nothing than transferring payments to your children so you can have current consumption. That is pure selfishness.

History of how the US government was almost debt-free

  • Thomas Jefferson early on wants to US citizens to tighten their belts and end the US debt early on from the Revolutionary war and make it part of the constitution.
  • After the Civil war in 1866 with debt increasing the debate opened again.
  • In 1936 when the US was starting to see some light after the great depression and the New Deal spending got out of control there was again an initiative to balance the budget
  • Andrew Jackson was the only president to have no debt and a balanced budget.
  • Clinton was forced into a budget surplus by the Republican Contract with America. Actually, we were 1 vote away from this amendment. The House of Representatives passed it and the senate it came down to one vote. Can you believe that?
  • This was reversed under eight years of George Bush and in equal proportion to Bush in just one year under Obama the budget was out of control
  • By 2013 the interest payments on the national debt will reach about 18% of the budget and the US could get downgraded from AAA which would mean it would pay more for debt.
  • By 2030 the Government should collapse under debt as fixed payments exceed revenue. Our children will have to pay for today’s consumption bailouts.
  • Nothing short of a balanced budget and pay down on the debt can fix it.

The current Obama plan will not work unless we have about 5% growth a year for several years. It will not happen. Some people argue that the percentage of debt compared to GNP or national income is not at historic highs and that we have been in worst situations. That is nonsense. After WWII we had the ability to grow our way out from the debt as the whole world was rebuilding and needed our production. Now we have a slow-growth economy because of globalization and a trade deficit.

No way can the USA get out of this one without a balanced budget act, otherwise, the national debt will destroy the country. This crisis (no real crisis) was just a money grab by special interests. Now our children will pay for it. If you think I am joking check out the national debt clock.

If you want to do something about keeping the government in control read more about the balanced budget amendment. This is a non-partisan plan, meaning neither Democrat or Republican, just American. It is championed by congressman Bob Goodlatte.

Let me know what you think about this and is it still a relevant issue in American politics.

Categories
Politics

Presidential or parliamentary government

Which is better the presidential or parliamentary system of government? I am both an American and an EU citizen and see the advantages and disadvantages of both. I do not want to compare these two systems as this has already been done. The purpose of this post to tell you based on my experience which works best. This will answer the question which is better a presidential or parliamentary system. I also have a poll to ask you which law creating a government system is better.

Poll what is the better presidential or parliamentary legislative system

Cast your vote for democracy, which does you prefer.

[poll id=”3″]

Parliament or the President

You can not just say one system is better than the others as both works. Both are democratic systems with a long history of success. There are even two forms of systems a constitutional monarchy (what a waste to keep a royal family on the payroll, some figurehead based on heredity and entitlements) and the parliamentary republics. Some countries combine the two. I like the parliamentary republic system because it has minority representation and is more democratic.  I like the presidential system because the president is like a mini king which is moderated by the house of the representatives. The argument is more things can get done.

Reasons I prefer parliament to a mini King called a president

  • I prefer the parliamentary system over the presidential system like it, in my opinion, it is more democratic. The representative body has more power.
  • The parliamentary system has less concentrated power. It has proportional representation. I do not need a mini king Bush or Obama or whoever. I prefer safety in numbers when it comes to democracy. A prime minister does fine as a leader. Think of Tony Blair or Margret Thacher.
  • It does not matter as much unicameral or bicameral legislation is easier to pass. I prefer bicameral as it is even more liberal. Think how the US has such long battles and debates that go nowhere, when the President does not have support, years of stalemate can result.
  • I believe in the free movement of labor and capital and democracy. Basically more freedom the better with some limits which is balances by the ideal of justice.  This is my political economy in a nutshell. I think parliamentary is more represents the ideals of the enlightenment. The presidential system came about because people were still attached to the idea of a King ruling. I do not like concentrated power as choices are often made rash and leaders base their leadership on charisma instead of the issues. People rally around the leader rather than the ideal.

My experience with history and government

Living in the USA and being passionate about US history I understand why the founding fathers did not want to break so suddenly with the idea of a king. However, the states held most of the power at this time, so even with this system, there was decentralization until the end of the civil war where it became a federal system. The cause of the north was necessary but the result is what we have today, gridlock and a lot of political nonsense with big government.  Special interests lobby for power as a replacement for minority representation in the senate or lower chamber.

I also live in Poland, although a smaller and poor country for reason connected with being betrayed at Yalta a served to the communists. This emerging countries parliamentary system works pretty now that it has cleaned up its legacy system. Some people of course complain and there are of course a political joke, as this is politics. However, the fact is the government and budget and debt and special interests are much smaller in proportional comparison.  I believe that a small government is the best government.  This is my experience in comparing these two systems.

I am curious about what you think is better and why? What are your thoughts about either legislative system?

Categories
Politics

Will the EU survive – Europe II

Will the EU survive? People are asking the question because of the crisis and elections. The European Union has only seen good economics times, with the first sign of trouble Europe politicians are using the chaos to their advantage by playing on people’s emotions. I am an American living in the EU (I am a citizen of both). This political question really comes down to economics. The survival is based not on political ideal but one primitive human emotion. My question to you is do you want more? Read on to find out why this is relevant to the Union of Europe.

The economic idea behind the European Union

  • The economical basis of the EU is the free movement of labor and capital
  • The political process is a confederation with indirect taxation and financial control and not direct
  • Monetary policy is centrally coordinated within the Eurozone
  • With more economic freedom the unity will win over nationalism and protectionism

The European Union will survive because of one basic fact. When people start trading and working together differences are put aside. The greatest ways to promote world peace is free economics. When two neighbors start doing business, it will be very hard for them to turn resentful and selfish because the money and economic benefits they are getting from the win-win of free trade will override ego.

Examples of how economic cooperation connects people and Europe

When I go to the market and buy fruit, do I care who is selling it to me? Do I care what nationality they are? No, I just look at the best price and product. I live in Poland and if some Ukrainian guy is selling better produce than a Polish guy, the former will get the business.

England and Ireland were enemies for a thousand years. Now with free economics, my Irish and British acquaintances are friends and work together. I see many Germans and Poles cooperating in business. Former enemies in Europe are not partners.

Think about your own workplace. Do you care where the person in the cube next to you is from as long as you are on the same team? I do not.

Survival on the European Union is based on greed not ideals

Greed is stronger than anger. Anger is a protection emotion and therefore only temporarily, it is adrenaline. Greed is deeper. It is connected to survival in the wild. That is to accumulate wealth to provide for your family and yourself. It is closely connected urges for reproduction. These desires override abstract theoretical political ideas. Unity is greater than division.

Do not underestimate greed as a motivator. Even I, someone who does not work for corporate America and living an alternative life have some elements of greed in me. I want to improve my situation. I care more about helping my family than any abstract political ideology. I do not care if my passport has the EU logo on it or if my bank account has Euros, dollars Swiss francs or Polish zlotys. I do not care which party is in power politically ruling the parliament or who is the president (with the exception of some very strong moral issues I do not want to compromises on). I care about how my day to day life is run.  I write software and I want to know can I sell this in Europe or will some nationalist put some restriction on be based on some artificial border like a river that divides two countries.

I am no idealist when it comes to politics. Political issues are largely based on economics. economics comes down to the majority of people acting on their own enlightened self-interest.  This is why I think the EU will survive. Europe II will continue to develop even with some bumps in the road.

Categories
Politics

Polish president – the cause

The Polish President Lech Kaczynski went down in a plane crash with his wife Maria

The news is a tragedy for the Polish nation and the world.

Where was the President going?

He was on the way to the Katyn remembrance, the place was the Russians shot 10,000 Polish officers and 12,000 other Poles, during Second World War for political reasons, to suppress the possibility of anti-communist resistance.

“It is a damned place,” former president Aleksander Kwasniewski said on Polish news this morning.

Russian people are expressing unity and support for the nation of Poland.

The news is the Polish president Lech Kaczynski and up to 88 people died in a plane crash on the way to an official state ceremony around Smolensk, Russia.  The jet was carrying many Polish leaders, including the head of the Polish Army and central bank.  The Polish president was flying from Warsaw, Poland. The first report 87 people had died, now I am getting reports that 88 people were on the passenger list.  One lady missed the plane flight. There is an unconfirmed report that 3 people have survived, but I think no one survived.  There is no clear information from any news source at the exact number.

Lot Polish airlines have one of the best safety records in the world with only one previous crash in its history. It was actually a Russian Tu-154 and a Russian airport, not Lot Polish airline. This was an official state plane like airforce one – but large when large state ceremonies are involved. This is a huge tragedy.

Cause of the Polish president airplane crash

The cause of the crash was the weather, very heavy fog. It was connected with landing problems as it happened close to the airport. On landing, it brushed against some trees. There is wreckage spread through the forest. The nose of the plane seems intact. But the wheels are face up.

The plane tried to land twice and was about to be routed to Minsk  200 km or about 100 miles away, but there was a time pressure involved. The Russians did not close the airport for bad weather but keep it open.

In the Smolensk airport, they do not have electronic modern air traffic control and everything is more on manual.  Therefore, some people are saying this 100% because the airfield was just more a landing strip in the forest with no modern equipment and heavy fog. It was no one’s fault it was just life or fate.

Russian has declared a day of mourning.

Who is leading Poland now?

Prime Mister Donald Tusk is now in charge of running the country during this state of emergency. It is a state of emergency and morning in Poland. Lech Kaczynski is survived by his identical twin brother who was the last prime minister, Jaroslaw Kaczynski. Kaszynski also has a daughter and a mother still alive.

Prime Minister Tusk has expressed that he did not want to run for the President of Poland in the 2010 fall elections.  However, this could all change. Kaczynski was at first unpopular as he introduced hard policies of fiscal restraint, however, since Poland has prospered during the economic crisis, opinion changed to very positive towards President Kaczynski.

It is not covered in detail on the English news I am reporting the details now.  I am just getting the news now and translating it from Polish.  I am watching the Polish news and I am very sorry about this as I have always thought he was a great man and a patriot.  He was a man of ideas, faith, and honor.

Lech Kaczynski legacy

Kaczynski led Poland through a very difficult time of times. After Poland joined the EU he needed to really bring Poland to transform to a modern Polish economy, while at the same time keep to the ideas that made Poland unique, that is a county of faith and ideals.  He fought corruption and always represented the Polish people under heavy criticism from both the left and the right. The Polish president Lech Kaczynski was a man who had the courage of his convictions.

The President is dead, Lech Kaczynski at age 60. At this point no comment from President Obama.

I am an America living in Poland as a Polish citizen.

Categories
Politics

Government Takeovers – A Road to Serfdom

The purpose of this post is to explain in simple terms why government takeovers will hurt the poor and empower the rich. It is so simple and I have no idea why Republicans and Democrats in America do not understand how Obama’s government takeovers will hurt the poor and give money to the rich. It is the exact opposite effect we all want.

  • Do you want postal workers running Google? What would the search or Google maps look like?
  • Do you want to follow the economic ideas of North Korean or Vensualan leaders?

The unintended consequence of individual action results in greater prosperity for all.

Government takeover – socialist republic style – Russian housing today

I have been living in Eastern Europe a good part of my life. I am American with a Master’s in Economics from Trinity. The reason is when there is a transfer of control of labor and capital from the private sector, the rich get richer and the poor get poorer is as follows:

  • After a government takeover, you will be working for another man’s wife. No one wants to do this. Do you? The expansion of big government means either higher taxes or debt (future taxes). This equates to your productive day going towards working and paying for your neighbor’s consumption or future consumption, that is you will be working for another man’s wife. There is not another way to look at it.  When this happens clever people find a way around the system and become super-rich. This is what I have seen in Eastern Europe. I invite you to come here and see what the nice warm fuzzy secure feeling the government is giving you now, will result in.
  • Rich get richer in state takeovers – I have spent a good part of my life in Socialist and ex-communist countries, where I live now.  In every case, without exception, there is a small percentage of rich and many poor.  The difference between the rich and the poor on a whole is much greater than any free-market economy. I see the super-elite from communist times simply become the new Russian oligarchs. If you think I am a teabagger, please come and live in my neck of the woods for a few years and you will change your mind when you live in gray concrete blocks of flats with public health care with stupid rules.
  • The government always does a poor job – Compare any free enterprise like UPS with a government agency like the post office. A private university with a public. When was the last time a government worker created something innovative like Google or Microsoft?

When did a Federal or State takeover make a country prosper?

What worked for America for 250 years to make America great, that is rugged individualism,  has somehow become politically incorrect.  What did not work for the Soviet Union for seventy years, that is state control over health care and markets is in fashion. It is beyond me how the Hollywood movie star elite like George Clooney and Matt Damon, and do-gooders who support this type of Federal takeover, consider this helpful to others. You will be hurting those you want to help. You will be empowering those you want to put down.   you do not think so I invite you to leave your American lifestyle and live as I do in Eastern Europe you will see your ideology change.

I will end on a positive note. My friend an American liberal came here five years ago as the biggest supporter of socialism.  She wanted to bring back the revolution. She is now seeing things more clearly and heading back to the land of America with a changing view. I personally invite anyone who believes government takeovers are good or a Republican myth, to come to live here.

Categories
Insurance Politics

Expats and US health Care Reform Insurance?

I am an American living as an ex-pat abroad full-time. Will I have to pay for health care insurance in the US ( which I will not use) under this new health care reform bill? This is a good question. The purpose of this post is to clarify the rule for ex-pats regarding new mandatory health care insurance.

Do ex-pats need to pay for US health care reform?

Do you live abroad? What is your medical status with regard to insurance? Here is my situation. I am a dual Polish and US citizen. I live in Poland, not the USA. I pay for Polish national medical insurance and do not need US insurance coverage for my family, as I am never in the USA and living as an EU citizen in the EU. The rule is I have to pay normal federal US taxes no matter what, which I do. However, under this new health care bill, I do not have to pay for this new insurance because I reside outside the USA.

It will be required that all US citizens and US visa holders buy national US health care insurance, if and only if they live in the USA. However, do I have to pay this also if I am not residing in the States?  No, because I am an ex-pat. This also applies to ex-pats who are not dual citizens, that is, they just work or live overseas of course.

Of course, every US citizen living in a foreign country and with or without dual citizenship will be responsible to file normal USA taxes. The United States is one of the few countries that requires its citizens to file a tax return on all worldwide income, forever, with no exceptions.

I have two words for you: ‘”medical tourism”. If I need to have any medical procedure I would go abroad as the cost is a fraction of the US and unless it is brain surgery. The quality is the same or better overseas often. I lived abroad and I can tell you the doctors really take their time with you and you can pay cash for little money. The US health care system is a rip-off.

New health care insurance bill for ex-pats

Summary:

  • Expatriates do not pay for health care reform
  • US residents are required to pay for health care reform or face a penalty
  • I live in a post-communist country and see how socialism destroys the national economy

The health care legislation affects people living in the US, citizen or visa holders as this is where you will get treatment.  Therefore, citizenship status does not matter, only legal residency an important condition in this bill. Based on a place of residency test, you may or may not have to pay for this insurance coverage as an American living in a foreign country.

Here is the rule.  If you live in the USA you must pay or have a penalty for exempting out. Most of the health care reform will start in 2014. Therefore, unless the law is changed ex-pats will not be required to buy health insurance like the rest of the Americans because they are paying for it in another country anyway, and will not use it.  They are not resident (see US tax code resident test) even though they are citizens. Therefore ex-pats do not need to purchase insurance ( I am not a legal or tax expert, just my understanding of this new insurance bill). I think this is very fair for me as a US expatriate not paying for the new US health care bill.

I make very little because of the currency exchange, but it would be a burden with another tax, it would be a huge disincentive for work and productivity. I live in Poland, a post-communist country and I have seen with my own eyes how socialism destroys the economy. Socialism is fine until you run out of other people’s money. Obama has done something that he really is not aware of the full effects. Ronald Reagan said ‘government is the problem’. I am pro-government just not a socialist and if you are come to the former eastern bloc and live as I do.

I am very happy that this new legislation passed by Congress will exempt me out as an ex-pat. Now I am still required to pay normal US taxes, but at least this is not one more straw on the camel’s back.

The impact for consumers if you live in the US will be of course different and the rule for residency for ex-pats will be strict. Foreign multinational employees will also be exempt from buying these health care insurance premiums.

The risk for ex-pats US health care reform

One note is as an American living abroad, if I go to the USA, I do not think I am covered by the US health care plan. I would be covered under my EU insurance policy for someone traveling to the USA.  Therefore, I am not without insurance but if you are an ex-pat making a trip back home be clear as to what the rules are and the type of insurance you have.  I can buy extra private insurance here in Europe when traveling with my family to America. I do this anyway. Just make sure you do not assume you are covered if you are living in a foreign country.

I am not for socialized medicine personally. The government that governs least governs best. However, I will have to wait and see what impact this will have on the US economy as a whole and the political process.  Congress, the House of Representatives, the Office of the President has given this a green light to the American people have spoken. I am just glad as an ex-pat I will not have to pay double for national health care insurance.

Update – I am no longer an expatriate: US social medical coverage will be repealed or largely dismantled by the time 2014 rolls around. I moved back to the States after almost a decade as an ex-pat and am shocked how spotty US medical care is. I think someone is making a lot of money and the average citizen suffers. The last generation was got medical coverage but I think future generations will have access only if you are relatively wealthy. although I am a libertarian, I have no idea about how people will pay medical bills in this new economy.

My advice is to stay healthy or consider medical tourism. My local dentist here wanted $3,000 dollars for a procedure. In Poland, I did it for $300. Insurance is a racket here in the U.S.