Monday, May 30, 2011

Talk Positively About Freedom

The Wealth of the Nation is produced by the people ... not by the government.

Our intellectual and ruling class tend to ignore the people and focus exclusively on the the the government.

The intellectual class has the hubris to assume that whatever economic policies were in place at a time of growth was the cause of the growth, when the cause of growth and decline usually is the result of changes in demographics, technology or the moral character of the people.

A few people in Washington get it. They understand that the Wealth of the Nation is the people and that the best government is that which governs least.

Unfortunately, when all of the talk in political circles is about government programs and government budgets, the sound argument for fiscal conservatism gets lost.

In order to win the day, folks who support limited government need to change the narrative from government programs and budgets to a broader discussion about how the people can live their lives in ways that create wealth.

To win 2012, the Tea Party needs to move beyond simple agitation about excessive government and re-ignite a discussion about personal finances and the role that the individual plays in a free and prosperous country.

My gig is the Medical Savings and Loan. This is a conversation about how individuals can self-finance their health care.

If anyone engaged in this conversation, then the health care debate would change from a debate about what the government can do for the people to one about individuals living positive healthy lives.

There are many other forms that this conversation can take. The Object Tax that I described in one about changes to the tax laws that empower people with their finances.

The Tea Party would win if the Tea Party started talking positively about freedom.

Agitation against Barack Obama will not restore freedom. If the Tea Party fails to engage in a positive discussion about liberty, then the most it can help to accomplish is to engineer a swing of big government back into the hands of the corrupt Republican establishment ... a group committed to crony-capitalism and not the free market.

Saturday, May 28, 2011

It's About the People Not The Budget

The government budget is not the source of the nation's wealth.

Adam Smith pegged this one two centuries ago. The wealth of the nation has a lot more to do with what the people are doing than with what the government is doing.

Yes, there was prosperity in the Clinton years. This prosperity had absolutely nothing to do with the government.

Clinton had the fortune of being president during the height of the productivity of the baby boom. We had just had a clear victory in Desert Storm. Clinton inherited the tale end of the PC revolution. I spent $2,000 every two years to buy a new computer. My current computer is a 2003 model that will last another several years.

Clinton reigned during the internet boom when companies were bowling over each other to be the first online.

Clinton benefited from the absolute height of the telecom revolution. People, accustomed to a dollar a minute, would rush to providers offering thirty cents a minute long distance and would rush to the streets at the thought of a dime a minute call.

I was extremely angry at Clinton and the Fed. It was clear to me in the '90s that the loose monetary policies were flooding the market that would undermine our tech sector.

To cap off the Clinton years, Al Gore used his legendary scare tactics to convince the world that Y2K was an apocalypse of biblical order. Companies flooded the market with capital to avoid the scare.

The bad money and false demand created during the Clinton years chased out the good money and the whole tech sector blew up in the dot bust.

I agree that Bush was bad for the economy. A tax cut without a corresponding spending cut was poison.

The prosperity of the computer and internet revolutions was the result of computers, the internet and cell phones that appeared on the market. The computer revolution was not the result of the government's budget.

If there is anyone in the tea party or Republican party interested in restoring prosperity, they should look at what people are doing before dissecting the budget.

Wednesday, May 25, 2011

Republicans Will Lose Big Time in 2012

Republicans were trounced in the 2011 special election in the New York 26th Congressional District.

Until Republicans actually come up with a viable political answer to the crushing debt of Medicare and entitlements, they will continue to fail.

Sadly instead of exploring answers to problems, discourse on the right is being dominated by the apocalyptical writings of Glenn Beck, and reactionary rantings.

The dialectics of Hegel and Marx is subtle. People who argue Marx's antithesis do as much to undermine a society as those arguing the thesis.

To restore liberty, those wishing to restore freedom need to start a conversation about liberty.

This is all I've been trying to do with "The Medical Savings and Loan."

The Medical Savings and Loan is a discussion about what real free market health care reform would look like. The central piece of free market reform is savings.

The reform starts from the position that "those who can pay for health care should pay for their care."

In regards to Medicare, the principle translates into the position that Medicare should not provide benefits to the wealthy.

People who've had substantial earnings and who own substantial capital should pay every single penny of their health care bill.

The rich are the trend setters. They are the ones who define the market.

Were the rich to start paying their health care bills from their own resources with their own cash, we would see an almost instant restoration of the pricing mechanism because the rich set the trends.

If the rich were paying their bills, they would demand bills that clearly stated charges, and they would balk and bills with superfluous charges.

The goal of the Medical Savings and Loan is to increase the number of people who are able to pay for their health care in full through a structured savings program.

Once again, the people who saved for their health care will demand clear bills. Their controlled spending would help restore the pricing mechanism.

It is so frustrating watching the Tea Party fail. If people just started talking about ways to solve our health care challenges with real free market reform, they would triumph in 2012.

Instead Republicans will blow the opportunity for real reform with losing issues like the Fair Tax, States Rights and latter day apocalyptics.

I just wish I could find a tea party group somewhere that wanted to talk issues from a sound logical position.

Round Down US

The centennial of the Federal Reserve will take place in two years (2013).

The build up to the centennial might provide an opportunity to challenge people's assumptions about economics.

The Federal Reserve controls our money supply. They established an inflationary money supply. Each year they devalue the dollar.

In the hundred year history of the Federal Reserve, the devaluation of the dollar is about 99%. A 2013 dollar has about the same purchasing power as the 1913 penny.

As the reserve devalued the dollar, small change no longer serves any vital purpose in commerce.

So, for the anniversary of the Reserve, I thought it would be fun to run a campaign that encourages merchants to cash in their jars of pennies and to round transactions down to a quarter.

The campaign is that merchants will continue to calculate prices to the penny, but will round down when they make change. This will cost participating merchants an average of 12 cents per transaction, but will save the cost of handling change.

Rounding to a quarter means that merchants will have only three quarters in the cash drawer and will

I am thinking of running this campaign in 2012. I've learned that one has to reserve names before any public discussion of the program; otherwise, the names will get snagged by squatters.

Anyway, I reserved the domain RoundDown.US and snagged the twitter account RoundDownUS, and will test the market to find anyone interested in the concept.

The Twitter Account will follow all followers ... especially those who are interested in

Saturday, May 21, 2011

Characters that Captured the Exchanges

Deep Capture is publishing a mini-series on the colorful characters that involved in the market manipulation prior to the 2008 economic collapse.

Why do we want to use top-down centralized exchanges for health care when they have been proven susceptible to capture?

Thursday, May 19, 2011

The Heart of Marxism

I've been reading Erich Fromm's "Marx's Concept of Man" which includes English translations of several works by Marx himself.

The following sentence is the beating core of Marxist/Hegelian dialectics.

"Thus Hegel, in so far as he sees the positive significance of the self-referring negation (through an alienation mode), conceives man's self-estrangement, alienation of being, loss of objectivity and reality [...]"

"self-referring negation" is, of course, the the liar's paradox. You can find self-reference in any language or mathematical system.

Classical logicians knew of paradoxes but sought to avoid them.

Modern philosophy (from Hegel onward) embraces paradox.

Hegel developed a number of arguments to show freedom is slavery and slavery is freedom. Marx spewed forth reams on the notion that if we negate the foundations of western civilization and new workers paradise would spring forth from the paradoxical wreckage of culture.

Many years ago, I launched in on a project to demonstrate that Marx was simply using variations of the self-referential paradox to spew forth self-negating nonsense.

I was delighted to find Marx himself admitting that his writings are nothing more than a twist on the liar's paradox.

Classical philosophers (such as the US Founders) worked to avoid paradoxes. Modern philosophers have a tendency to build paradoxes into the foundation of their thinking.

Once you have a self-referential paradox couched in your belief system, you have a way to make anything you want to believe true.

Anyway, I was totally delighted to find Marx admitting that his work is just a long convolution of the liar's paradox. This quote was from page 189 of Eric Fromm's "Marx Concept of Man," which includes an English translation of Marx's "Critique of Hegel's Dialectical and General Philosophy."

Wednesday, May 18, 2011

The Image of Health

Elizabeth Smart looks okay.

I guess that's enough to convince the progressive amongst to reduce the sentence of her tormentor Brian David Mitchell.

That a twenty-three-year-old woman looks great is not surprising (most do).

A person whose been traumatized might respond to the trauma by spending excessive time on appearance. Conversely, a person who is emotionally secure might not spend much time on appearance.

One of the characteristics of the modern age is that people spend more time fretting over image than substance.

For example, modern Americans associate "reason" with the temperment of the speaker and not with the soundness of the speaker's position.

I wish Ms. Smart well, and I am disgusted that our courts even consider the idea of reducing a sentence based on the way the victim looks years after the crime, but we live in a progressive era. We are a society pre-occupied with appearance as we rot at the core.

Monday, May 16, 2011

Web Updates

Apparently, the only way to get the social media bar to work in Blogspot is to change the template.

Changing the template messes up the formatting of some older posts.


BTW, I added a new site called Utah Color to the Community Color family of sites.

I will use the new directory to list web sites for state wide political races, state wide web resources and, of course, any affiliate programs.

Friday, May 06, 2011

A Letter to Herman Cain

Herman Cain currently stands out as the best candidate for the Republican presidential contender in 2012. Unfortunately, he's been bamboozled by the FairTax group. So, I wrote the following letter to Herman Cain to consider an alternative approach to tax reform.

Dear Mr. Cain,

The FairTax is a bad idea.

Making the retailer the tax collector will essentially destroy all of the small independent retailers in the nation leaving only mega-marts and chain stores. Even worse, the "prebate" is an entitlement. To pay this entitlement, one must collect more taxes than needed.

A better solution is to create a personalized consumption tax. My tax proposal is as follows.

All income goes into a savings account.

People pay taxes when they transfer money from their savings account to their spending account for consumption.

This design makes banks the tax collector. People pay their taxes when they plan to spend money. As such, it encourages people to develop a budget and better spending habits.

The tax rate would be progressive depending on the taxpayer's net worth and yearly income. The progressive tax rate will take into account prior income, current assets and current income.

The system creates a consumption tax without burdening retailers. For that matter, it removes the tax collecting burden from employers.

Tax collection would take place at the bank.

This change does not create an onerous burden for banks because banks already handle all of the transactions related to taxes.

The tax collection process is extremely efficient. Taxes would be calculated and collected when people transfer money from savings to spending. People would realize the full effect of their taxes when they prepare to spend money and would not need to file a tax return.

People only touch taxes once at the moment when they budget money for consumption.

This is much more deliberative than the FairTax.

Imagine that your paycheck was $1000 and your tax rate was 20%. Your employer would deposit $1000 in your account. The account would show only $800 available for spending. Let's say you decided to spend half of your money. You would withdraw $500.00 from the account. $100.00 would go to taxes, and you would have $400.00 for spending.

The Fair Tax, the Income Tax and Flat Tax have people revisiting their tax decisions multiple times during the year. My proposal has people realizing the impact of tax related decisions at the moment that they make the decision.

I called my program the "Object Oriented Tax." The system taxes an abstract object between income and consumption. I chose this strange name because I am a computer programmer and programmers use strange terminology because we are all a bunch of geeks.

Geeky terminology aside, the idea of taxing an abstract object between income and consumption allows us to combine the best of a progressive income tax with the best of a consumption tax.

The abstract design lets us apply taxes to assets other than bank accounts. Essentially, all assets have a tax attribute set to either pre-tax or post-tax. One pays taxes to change the attribute. This structure lets us replace all the complex deductions in the current tax code by assigning a tax attributes to purchases. For example, a small business could invest in new equipment with pretax dollars. The equipment would have a pretax attribute. The business would pay a tax to transfer the equipment to personal use. (No more complex depreciation schedules).

The OOT eliminates capital gains tax. Investors could buy and sell investments without considering tax implications. They would pay taxes when they transfer money to a spending account for consumption.

NOTE: The progressive tax rate considers both income and net worth. If a person had millions in investments, he would pay taxes at the highest rate regardless of reported income. Warren Buffet would pay a higher tax rate than his secretary even though Mr. Buffet chose to live modestly.

Inheritance tax becomes very interesting. Heirs would inherit the tax status of assets along with the asset.

For example, the family farm might be a pre-tax asset. The heirs would inherit the farm as a pre-tax asset. If the heirs sold the farm, the money from the sale would go into pre-tax accounts. They would pay taxes when they squandered their inheritance.

The heirs would inherit post tax assets as post tax assets. This eliminates double taxation.

NOTE: Some post tax assets, such as antiques, increase in value. If the heirs chose to sell post tax assets, they would need to pay a tax on the increased value of the assets. A person could inherit the family Rembrandt. They could keep the painting at no cost as an heirloom. However, they would have to deposit the gains from selling the painting into a pre-tax account.

The OOT allows heirs to inherit the family fortune intact. They would end up paying taxes if they sold the assets to consume other things.

The idea of taxing an abstract object between income and consumption allows us to create a sophisticated tax code that is fair and easy to implement.

The design allows people to pay their taxes when they make financial decisions.

The abstract design allows us to build a robust system that follows each step in our decision making process.

I can inherit the family farm intact. When I choose to sell the family farm, the proceeds go into a pre-tax account. When I choose to squander the money on billiards, I pay the tax.

I am a system engineer. I designed the OOT to encapsulate and extend the current tax code. This allows us to transition from an income tax to a consumption tax with minimal disruption. Businesses set up to collect their employees taxes can continue to do so. Employees would get their paycheck as post tax money.

Employees would still file tax returns to help reconcile differences between withholdings and what they actually owe.

Because the OOT encapsulates the income tax system, people can gradually transition to it over several years. This abstract design process gives people to move to the new system at their leisure.

Both the Flat Tax and Fair Tax create a sudden and major disruption in the way people handle their expenses.

Proponents of the FairTax are correct in wanting to transition from an income to a consumption tax. The OOT would create a smooth transition from an income tax to a consumption tax with a minimal disruption.

Using modern object oriented design techniques would allow us to create a more robust tax system in which taxes were collected at the bank when we make our spending decisions.

I am happy to see new faces on the political scene. Washington needs new thinking. Your decision to replace the income tax with a consumption tax is the type of leadership we need in Washington. However, I hope you take time to consider alternative methods of accomplishing this goal than the FairTax.

Thursday, May 05, 2011

Centralized Exchanges and Food

I read an article on the effects of centralized exchanges and food prices.

Big banks get a large amount of easy money printed by the Fed. A decade ago, they plowed this money into Federally backed mortgages. Today, they are using commodity exchanges to plow the easy money into plays on food, precious metals, etc..

The predictable result is a massive increase in the price of food followed by chaotic fluctuations in prices that will have long term negative impact on the ability of farmers to provide food.

Centralized exchanges are at the center of the Utah Policy Project, Obamacare, RomneyCare and many other progressive stabs at health care reform.

The way one improves health is by making individual stronger ... not through a massive centralized bureaus the the Utah Health Exchange.

These big centralized schemes developed by progressive are not improving society. Large centralized exchanges get captured by insider power brokers.

A truly free market is one that is well distributed and much more organic than these contrived exchanges being shoved down our gullets.