One of the best pieces of practical advice ever handed down, was that every once and a while, you have to step back, disengage, look around, and take note of where you stand and what’s going on around you….

So here we go.

We killed Bin Laden.

Christina Schools opted out, then back in to the “Race to the Top”.

Our debt ceiling is coming due, and we have teapeople who want to let us default.

The birth certificate issue was finally put to rest for all intelligent Americans.

Due to man’s insistence he is more powerful than nature, parts of Japan are inhabitable.

Markell is taking on the NRA over their insistence that gun shows should be able to continue to sell guns to known criminals…

Wilmington’s death toll is higher than ever.

Protack is not going to run Delaware’s Republican Party this season. The NRA is.

The General Assembly has been remarkably productive, (There are no Republicans, you know?)

The Republican House of Representatives has been remarkably destructive.

Paul Ryan’s budget is being touted by Republican’s as being “grown up.” (scary: what were their budgets before? “childish”?)

Speculation has driven up gas prices to where they are actually damaging the recovery.

Inflation on food since last May, has risen 50% on basics, but for some reason, no one counts food in the inflation reports.

Energy costs were the highest on record this year, though less carbon was burned. They too are discounted from the inflation index.

Labor unions are in danger of becoming obsolete in tea party states. Workers everywhere see their future as working for less and less each year.

Charitable organizations are in danger of failing; donations are down.

The housing market is still down. To unload a house you need to sell it at 40% of its value.

The Fed Chairman wants 30 Trillion worth of derivatives exempt from regulation.

Republicans think to be president you have to be a cool TV star. To hell with running a country. Whether hunting in Alaska, or the streets of New York; get a show, run for office.

Ok, that’s just a few… ]

Looking back over that list, a couple things jump out… One, is that the economies supporting all the layers of government are doing poorly, and THAT is creating the issues.. Cutbacks are because each layer of government, is taking in too little money.

And expressly because of the tightness of money, we have people losing their jobs, and that… of course causes “drama.” Whether it is rioting in a Middle Eastern street, or subdued protest off the back of John Deere tractors in Madison, or heated exchanges at the Eden Support center off Bear-Corbett road, or wacky Wilmington City Council meetings, or a lot of construction workers sitting at home waiting for a call to come to work…. in all cases, the myriad of problems are because the economy is not working well enough…

Btw, who is doing well?

Investment firms.

What are they investing in?

They are investing in schemes; not hard capital. They are buying companies, and squeezing them dry, then selling the pieces. All told, they make cash; the employes file for unemployment. Banks with money, aren’t lending it. They are buying other banks.

Where did the investment firms get their money? They got it from the Federal Treasury, given with no strings; fully expecting it to be invested in hard capital.

So we have a 14 Trillion Dollar deficit, where we bailed out the investment firms, and they are squandering the money by not creating capital.

So are we due for another crash? History says yes. The crash of 1937 occurred precisely because attempts were made to reign in spending by firing people (cutbacks) and all the gains of 1936, were wiped out…. Only WWII, and out of control deficit spending brought us out.

America was the last power to exit the Great Depression, because of the debacle of 1937…

So when will we get hit? Best guess is November 2011. Unemployment will be over 10%, causing a lot to clamor we are going the wrong way.

How do we move all that money out of investment houses and back into the actual economy?

Do what we did during WWII… The top marginal percent was 94%… All privately earned money went into the war effort.

We need to stop the siphoning of money out of our economy… Raise the tax on capital gains, raise business taxes, and most importantly, raise the top rates on the top 1% of the wealthy.

Pass it with an expiration date 3 years hence. That means like the Bush tax cuts which were set to expire, the revenue enhancers expire on a certain schedule.

And of course, keep the exemptions so that any hard capital enterprise, isn’t taxed at all…

Which means (so all can understand it) that if one builds an American manufacturing plant, none of that money gets taxed, but if you build a third world manufacturing plant, that money is subject to the highest tax rate possible. if you purchase another company in a hostile takeover, the money spent to buy that company is taxed. But were a plant built next to the Fisker Auto Plant, that money would not be touched…

Obviously in such a tax environment, construction would take off. With it, our economy would start to grow.

Pretty much, that’s where we’re at. If we don’t tax to promote hard capital investment, we lose…. if we do tax more, we get our country back. As our purchasing power grows per individual, our economy becomes stronger, and is then able to support all layers of government.

It is so simple. Tax, tax, tax. those with all the money. (but ignore all the money that gets buried into hard capital )… Had we done so in November, as the Democratic House voted to do, …. unemployment could now be 4%, and gas, no more than $2.50 a gallon. ( I know that’s a jump for neophytes, but most of you already know, exactly how those two are intertwined with the marginal tax rate)……

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