So now the debt ceiling is raised and we all are crying the blues that our children and grandchildren shall be enslaved by this massive shortfall between spending and income (that is, taxes). Well, let me propose something to you. Let me propose something so outrageous that it almost makes sense.
What is the issue with debt? Obviously, someone has to pay it back; otherwise we're talking bankruptcy (another subject for another day). But is it true that the taxpayer necessarily has to pay back the national debt? What if the taxpayer was off the hook for the national debt?
How, you say?
Imagine the debt ceiling was unlimited. "Go ahead, federal government, spend all you want." Now imagine that we have a Constitutional amendment that limits income tax to 10% for both individuals and businesses. No matter how much the government spends, the taxpayer cannot constitutionally be held liable for that debt.
"Wait," you cry out, "the government is devious. They will figure out a way to get us!" Correct. Therefore, we also cap Social Security, Medicare and other federal taxes at or below current rates. Not only that, but we forbid any national sales tax, VAT tax, or internet tax. We also cap federal taxes on gasoline, cigarettes, and other such tariffs. We also cap or forbid increases in tolls, park and museum fees and so forth. Death to the death tax. In other words, we do not in any way permit the federal government to pay the debt off our backs.
Furthermore, the Amendment should forbid back doors. The federal government should be forbidden from taking any portion of State taxes, County taxes (such as property taxes), Municipal taxes, and so forth. Bar the doors!
Furthermore, the national debt should not be linked to any private property as a form of collateral. The people should be separate from an overspending federal government.
In this manner, the American taxpayer can never be responsible for the debt of an out-of-control federal government.
"But won't endless debt debase the currency, as inflation?"
Yes and no. The amount of money traded for labor should not be affected by increase in money supply. Neither should commodities necessarily be affected. Currency and metals markets may be affected, but these are internal, really indicators of strength of trade in arbitrage for these things. An inflated currency is only as debasing as the taxation which comes out of the people's pockets.
If taxes are at 10%, you keep 90% of your money. Compared with today's tax rates, that's more money for you. Buying and selling should not be affected.
What about the stock and bond markets? Bonds will be dead. International borrowing will grind to a halt. Stocks will go sky-high but volume will fall. Why?
With endless money supply and low taxes, the credit markets will freeze. Therefore, it will be harder for people to get money to invest. As well, mortgages and automobile loans will be more difficult to obtain. However, the increase in money retained, through lower taxes, insures a brisker economy. Local economies will thrive as international markets shrivel. Banks can make loans based on actual solvency and payment history rather than cooked-up rations, as now under Dodd-Frank.
Now hear this. The reason for government printing is ostensibly a weak economy. With lower taxes, the economy grows. The REASON for printing money, therefore, disappears under this plan. This means an increase in the debt is indefensible. By design, though not law, the debt MUST be limited, not unlimited.
When the poor and middle class get to keep their money, the poor no longer need as much help. Reagan made this clear in his 1964 speech, and the principle is as sound to capitalists as it is to socialists. Socialism is only as strong as the need to help the poor or disenfranchised remains. When taxes are low, the poor are helped and socialism weakens.
When it becomes clear that the primary "reason" for printing money, to aid the economy, no longer exists, the federal government will be forced to stop printing and spending. Even the most diehard Marxist cannot withstand such economic pressures. The prosperity of the people disembowels the need for big government.
Only New World Order types will resist. This is because my plan emasculates their power. When government realizes it no longer has an overt need to grow, and the power-mad are exposed, the government must by necessity shrink over time.
The banks no longer can rely on government handouts and bailouts. The corporations must acquiesce to their customers, not their stockholders. Profit is still important, but solvency becomes the greater issue. The REAL redistribution of wealth is lower taxes!
What about the debt piled up? Since under my plan taxes cannot be raised, the federal government will be forced to trim below net income. That surplus will be used to pay off the debt.
What about government workers who must necessarily be dismissed? I believe there is so much duplication, waste, fraud and abuse in the federal government that this is necessary. Government cannot keep hiring multiple people for the same job, paying inflated prices for ordinary items, subcontracting expensively. Salaries and benefits can be trimmed. Serving in government is not supposed to be a blue-ribbon prize in America.
Obviously, this is a skeleton and there are many questions to be answered.Don't forget to Like Freedom Outpost on Facebook, Google Plus, & Twitter. You can also get Freedom Outpost delivered to your Amazon Kindle device here.