There are numerous ways to explain and decipher the functioning of the US economy and the world economy. But there is little talked about the basics of what actually defines a healthy economy. It is not complicated.
A human body, whether living unhealthy or dead, the same blood volume. The difference is in circulation. We are healthy when our circulation is maximized, and our body begins to fail when our movement is inhibited. The same is true for the economy. All entities – individuals, companies, or countries – are healthy to the extent that they are excellent. For a land, money is the equivalent of the blood in the body. And if the money is not flowing properly, the economy suffers.
The government, in particular of our present federal government, is equal to a blood clot in the economy. the flow is stopped by the removal of the system and the distribution to the public programs largely ineffective, allowing to operate the system more difficult to compensate for. The extent to which we increase government correlates with the amount of money withdrawn from circulation in the country. An example of this is the income tax.
Throughout the history of the world there are countless examples of kings tax their population to the point that poverty and slavery was normal for most. In such cases clearly excessive load. But in modern times, the complexity of the government disguises this effect.
Money is only valuable insofar as it provides incentives for the exchange, generating traffic. It’s a delicate balance, and people have a desire for the currency of a nation, and the currency that expenditure should be comfortable with the process of acquiring more sense. If the money was devalued, either because of a lack of confidence in our government or as a result of dilution by the government by printing money at will, there is a break in the stream rather than an increase.
An example of an interruption of the flow occurs when the population uncomfortable with money, which means that the money does not flow. Another example is the accumulation of money from financial institutions and companies – mainly sitting on the funds and not spread across the economy – and that is again due to a lack of confidence. That money should be generated back into the system to expand markets and other outlets. This lack of space, have a double negative. Not only is the money withdrawn from the system, but the system crashes, slows down, and forced to work harder in order to compensate.
From there, the currency of the country are being diluted, and other countries and companies not correctly valued, causing a reduction in demand. The most basic example of this is the current value of the US dollar against European currencies. Currently, the US dollar is worth 73 percent of the euro – despite the widespread economic disasters in several European countries, such as Greece and Spain – which is a very strong indication of the lack of confidence in the economy of our country. Moreover, the US dollar is worth only 60 percent of the British pound. Only recently has the US dollar has also appreciated (slightly higher today) that even the Canadian dollar. Fifteen years ago, the US dollar was worth more than twice the Canadian dollar. In short, other countries are just not the value of the US dollar, or want. All this leads to an inhibition of the flow of money by the system, and a weakening economy. So what’s the solution?
For the economy to go back to a healthy state income tax should be reduced and programs to help, rather than punish successful companies should be established. What needs to happen is the opposite of taxation. It should constantly be raising taxes, because it simply needs to withdraw money from the system. Contrary to popular belief, most companies in the US They have relatively narrow margins. You do not have bottom lines of companies with 50 per cent, but instead of lower lines of 5.10 percent on average.
If you take the average and raise taxes, is a heavy burden on a company that forces shrink. The company is now in an impossible situation, and lay off employees, rent and termination often freezing the assets that otherwise circulated back into the system. It is the result of a further downward cycle blocks the necessary circulation. Virtually everything the government has been practiced in the past decade has led to restrictions on movement, with short-term decisions made by elected officials not to implement a solution and long-term strategy. In the end, very little is done on the federal level in order to stimulate the circulation.
If you’re a country or state of health, taxes should be lowered to the companies and that policy should be used as an incentive to attract new businesses to stimulate both companies and existing companies. The result is an increase in rents and newly created confidence in the economy and is not intended essentially punish businesses and successful people. And how necessary public services are funded? The answer is a usage load.
First, the government needs to become more effective simplified compared to the current situation, which is a bloated and inefficient calamity. Many ineffective programs could be reduced or even completely eliminated, and a greater dependence on a use tax – excise duty and goods and services, shops, real estate taxes, etc. -. Established. In December, Sen. Tom Coburn explained specific examples of wasteful government spending, including $ 297 million for an airship army and $ 5,000,000 for luxury eyewear at US embassies. The Internal Revenue Service is another example of the bloated waste.
The exorbitant cost involved with the IRS can be drastically reduced by changing the tax code. The introduction of a flat tax and simplification of the tax code that the need for the monitoring of costs and staff due to the fact that specialists with an encyclopedic knowledge of a complicated tax code would be redundant would decrease. Instead, all that is required is someone who can count to ten and to apply that knowledge to control the statements appropriately.
Moreover essential programs such as infrastructure and education is adequately funded using tax (and priority to social programs and welfare of unnecessary or over-funded) – a model that has proved successful at the state level.
In the US, it is rare that taxes raised to actually have a positive impact on state economies. California, where the state and local taxes are among the highest in the country, remains insolvent. However, if the states should encourage greater confidence in the use of taxpayers’ money which is otherwise registered as the income tax would keep the revenue stream, and so is redistributed into the system to the economy. Many countries that have little or no income tax have actually healthier than their counterparts with a high rate of income economies.
But the cuts that the government should do. California is a good example of a state that is reconsidering its policy that led to insolvency. In recent years, California has tightened their belts and reduce the budget deficit. And was not the consequence of higher taxes. Indeed, the strategy was to virtually all government programs cut by 30 percent, which is an immediate positive impact on the transformation of the state has had around. This shows that the revenue from the income tax is not the answer to problems. Rather, it is the management and the organization. If the government systematically reduce income tax to a flat tax that no one can hide from satellite lagoons and several others to adopt accounting techniques, the country would push forward.
This must happen if the US expects to return to a healthy state of the legal economy. When the current is reduced, since in the last few years, is the result of the accumulation of money in the hands of a few. The economy, using the metaphor of the human body is a closed system. The same amount of blood (or money) is available, even if the system is diluted. The same amount still in its entirety, and if the money is then accumulates out of the system in some clots. The end result is a dismantling or destruction of the middle class – is taking place at an alarming rate – and an increase in poor and dependent classes.
Economies are extremely sensitive, and thus would lead to the gradual cuts in government to immediate improvements. Moreover, it would restore the confidence of businesses, beyond the immediate transmission of a message about the mentality of a pro-business government with a value of the currency. Improved government would quickly lead to a tangible improvement in the economy.
If we continue on the current path we will have, without exaggeration, will continue to creep slowly become the equivalent of a Third World country. According to a report in the Hall of December last year, has no US city included in the top 10 most livable cities in the world, and the only airport in the United States publish the list of the 100 best in the world. In addition, high school students nationwide are rated 30th in math, and 30 countries have a higher life expectancy and lower infant mortality.
President Bill Clinton, perhaps the best president in modern times, was effective in the growth of a healthy economy, because it was not a Democrat or Republican, in the traditional form. He was pragmatic and understands that encourage businesses, establishing confidence in the economy, success transcended party lines, not punish. His work helped to promote business at different levels – both domestic and international markets with legislation revitalized NAFTA and deregulated markets. The increase in trade due to NAFTA helped increase the value of the currency of the nation. There was a palpable global confidence in our economy so strong and safe. A return to this policy is the cornerstone of a healthy economy in the long-term value and application. We should use history as our guide in this sense, and considering tactics Clinton is an example of how to return to a healthy economy with maximum circulation. Given the alternative, which is our current trajectory has such far-reaching consequences and cataclysmic, anything less is simply unacceptable.