Growth or Implosion? The case for abolishing the toxic tax code & starting over.

implosion-softcover(Washington, D.C.) – As readers of this blog know, I generally write about trends in Israel, the Middle East and Russia. But because I love the United States, I feel compelled to write today about how much trouble we are in economically and one set of changes we urgently need to make.

Today is Tax Day, the day all Americans are required to send in our federal income tax forms to the IRS and pray to God we didn’t make a mistake. What an utter disaster our current federal tax code is. As one Congressman put it, our tax code is ten times longer than the Bible with none of the good news. It’s long, complex, confusing, and a magnet for lobbyists all trying to carve out a deal for themselves. It forces Americans to spend six billion hours a year — that’s right, six billion hours — filling out tax forms, and to stay up worrying at night that they’ll get dragged into an audit, or worse.

We can do better. Indeed, we must if we’re ever going to get America back on the right track. It’s time for our nation to come together around bold, sweeping tax reform that will unleash the great potential of the American people, get this economy roaring again, severely reduce the power of the IRS, and drain the cesspool of corruption in Washington.

Ultimately, tax reform is not primarily an economic issue but a moral one. The current system is creating a terrible drag on our economy and suffocating the creation of millions of good, high-paying jobs. But it is also punishing marriage, children, work and savings.

Tax reform should be a bipartisan issue. The vast majority of Americans want to scrap the toxic IRS code and replace with a new system that is pro-family and pro-growth. So let’s get to it.

After all, the stakes are high. If we don’t pass serious tax reform soon, we won’t be able to get our economy growing at full strength. Millions of people will remain unemployed or under-employed. Real wages will stay stagnant or fall. We won’t be able to afford a military strong enough to protect ourselves, our allies or our vital national interests around the world. We won’t be able to honor our promises to the Greatest Generation via Social Security or Medicare. We won’t be able to balance our budget or stop borrowing from the Chinese.

That’s the bad news. The good news is that there are good ideas from good leaders on the table that could help us turn things around.

  • A new poll commissioned by the National Association of Manufacturers show overwhelming bipartisan support for bold tax reform.
  • Steve Forbes — for whom I used to work as the director of policy and communications — continues to make a solid case for the Flat Tax.
  • Former Senator Rick Santorum – who won eleven states and four million votes in 2012 — has an excellent op-ed out today on the need for bold tax reform and the principles that should drive the debate.
  • Many other serious leaders — including Rep. Paul Ryan of Wisconsin – are making the case for serious reform, as well.

In the end, America needs a Third Great Awakening — a sweeping moral and spiritual revival — not just economic growth. But we need growth and opportunity, too.

Here are excerpts from the non-fiction book I wrote in 2012, Implosion: Can America Recover From Its Economic & Spiritual Challenges In Time?

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The Road to Reform . . . ?

Some experts and think tanks believe there is still time to turn things around. At least two have laid out detailed reform plans worth considering.

Congressman Paul Ryan has developed his “Roadmap for America’s Future.” This detailed legislative proposal cuts tax rates and simplifies the tax code to reignite economic growth. It cuts and restrains federal spending. It reforms Social Security and Medicare in ways that protect the existing system for current retirees and those close to retirement while also improving the system for younger workers. For example, Ryan proposes the retirement age be gradually and incrementally increased from sixty-five years old to seventy years old, since people are living and working longer. He also proposes that younger workers can invest some of their current payroll taxes into tax-free personal retirement accounts that permit low-risk investments in mutual funds and annuities. The Ryan plan also includes specific details to balance the budget and reduce federal debt—all, presumably, before an implosion of the American economy occurs.[i]

The Heritage Foundation has also released a very detailed reform plan. It’s called, “Saving the American Dream: The Heritage Plan to Fix the Debt, Cut Spending, and Restore Prosperity.” While the principles are similar to Congressman Ryan’s plan, some of the specifics are different. Both plans call for fully repealing “ObamaCare,” and both create personal retirement accounts within the Social Security system for younger workers. However, while the Ryan plan calls for simplifying the federal tax code from its current six marginal tax brackets [NOTE: at the time I wrote Implosion, there were 6 rates; now there are 7] down to just two (a 10 percent rate and a 25 percent rate), the Heritage plan calls for a single flat tax (the rate is not yet determined). Whereas the Ryan plan would hold spending at 19 percent of GDP, the Heritage plan would restrain spending to 18.5 percent of GDP.

The Heritage plan was designed to balance the federal budget by 2021 and reduce the national debt to 30 percent of GDP by 2035. By contrast, because the Ryan plan phases in some of the reforms more gradually than the Heritage plan does, the “Roadmap” does not bring the federal budget into balance until after 2055. That may seem like a long time—and it is—but the Ryan plan should be compared not only with the Heritage plan but more importantly with the fact that President Obama has not laid out a reform plan of his own. Under the current trajectory, the Congressional Budget Office projects deficits as far as the eye can see through the twenty-first century. Without significant changes, the budget will never be balanced in our lifetimes. Worse, the CBO indicates that the national debt will hit a horrifying 185 percent of GDP by 2035.[ii]

Overall, the Heritage plan is much bolder than the Ryan plan, but there are various policy and political challenges to both. What remains to be seen is whether the American people have the stomach for either plan or a variation of one of them. The point is not that one plan is necessarily better than the other. The point I want to make here is that there are at least two serious, credible plans on the table right now that show us in specific ways how we can boost economic growth, create more jobs, reform our entitlement systems, and get ourselves back on the road to fiscal sanity before we implode. Perhaps others will develop bold, creative, and compassionate plans that will improve upon what Congressman Ryan and the Heritage Foundation have offered. I hope so. The more serious ideas in the mix, the better. There is still a way out of this mess, and that is good news, but the window to get started on such reforms is rapidly closing.

. . . Or the Road to Ruin?

If we don’t make desperately needed reforms, then we are most certainly on the path to ruin. Indeed, we could be on the road to Greece.

“America is on the road to re-creating Greece’s recent debt crisis,” noted business magazine Barron’s in a 2011 issue. “If a country as small and removed as Greece could generate the tremors that it did in the past year, how much worse would a national debt crisis be in the world’s largest economy?”[iii]

The article notes that “Greece, the world’s 27th-largest economy, is a minor player, even in the European Union. Yet a budget deficit of 13.6 percent of gross domestic product spiked its overall debt to 115 percent of GDP. Its debt fell to junk status, and it stood on the edge of bankruptcy. Only the massive May 2010 bailout by the European Union and the International Monetary Fund pulled it back from the brink.”[iv]

Citing sobering data from the Congressional Budget Office, Barron’s warned, “If you think debt problems like Greece’s can’t happen here, think again. . . . [Soon], U.S. debt will hit 132 percent of GDP—well above Greece’s 115 percent. Government spending will consume almost one-third of everything America produces—a level only reached at the height of World War II. Even raising taxes to their greatest ratio to the economy in America’s history wouldn’t offset the automatic spending machine. . . . Washington is on the road to Greece.”[v]

Bottom Line

America in 2012 owes more than $ 15 trillion to a range of creditors, many in foreign countries, including Communist China.

[NOTE: That was true when I wrote Implosion; but today our national debt is over $ 17 trillion.]

That’s bad enough, but it gets worse.

Most Americans don’t even realize that we owe another $ 57 trillion to cover a range of “unfunded liabilities,” including Social Security, Medicare, and Medicaid benefits. America’s most respected financial experts—both Republicans and Democrats—are warning us that such staggering levels of current and coming debt could trigger an economic implosion unless we rapidly and courageously make fundamental and sweeping reforms. The good news is that at least two detailed and compelling reforms have been proposed.

Two key questions emerge. First, does Washington have the courage to follow those plans or variations on them? And second, will Americans reward or punish political leaders in Washington for pursuing such reforms?

As important as those questions are, however, there is another even more important question: Will the Lord give us the time we need to make these changes—however difficult and painful they would be—or will he simply choose in his sovereignty to let America implode financially?

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[i] Ryan, “A Roadmap for America’s Future,” http://www.roadmap.republicans.budget.house.gov/Plan/#budgetreform.

[ii] See Butler et al, “Saving the American Dream.” The Heritage plan quotes CBO projections extensively.

[iii] J. T. Young, “The Road to Greece,” Barron’s, January 22, 2011, http://online.barrons.com/article/SB50001424052970203676504575618561763058500.html.

[iv] Ibid.

[v] Ibid.


Joel C. Rosenberg’s Blog

Scientists Warn of Worst Case Scenario: “Solar Flares… Will Short Circuit Satellites, Power Grids, Ground Communication Equipment”

grid-down-city

Researchers from the University of Colorado Boulder recently completed analyzing data from a Coronal Mass Ejection that took place in the summer of 2012. The CME, which was reportedly the most powerful electrical discharge ever recorded from the sun, narrowly missed earth. It was not “earth directed,” meaning the electro-magnetic mass was ejected by the sun when it was facing away from our planet. However, had it occurred just a week prior, the highly charged particles would have struck earth and, according to CU-Boulder Professor Daniel Baker, would have led to nothing short of a technological disaster across the globe.

The CME itself was massive… and its speed was unprecedented, clocking in at 7 million miles per hour.

While typical coronal mass ejections from the sun take two or three days to reach Earth, the 2012 event traveled from the sun’s surface to Earth in just 18 hours.

“The speed of this event was as fast or faster than anything that has been seen in the modern space age,” said Baker.

While early warning systems are capable of detecting CME’s and solar flares ahead of time, this particular event happened so quickly that it is unclear if monitoring groups at NASA’s Solar Shield Project would have been able to send alerts to emergency services teams in time.

Had it struck earth, says Baker, it would have caused damage so significant that modern electrical systems would have been fried.

Had it hit Earth, the July 2012 event likely would have created a technological disaster by short-circuiting satellites, power grids, ground communication equipment and even threatening the health of astronauts and aircraft crews.

We have proposed that the 2012 event be adopted as the best estimate of the worst case space weather scenario

We argue that this extreme event should be immediately employed by the space weather community to model severe space weather effects on technological systems such as the electrical power grid.

I liken it to war games — since we have the information about the event, let’s play it through our various models and see what happens.

If we do this, we would be a significant step closer to providing policymakers with real-world, concrete kinds of information that can be used to explore what would happen to various technologies on Earth and in orbit rather than waiting to be clobbered by a direct hit.

Source: Colorado.edu via Activist Post

Most policy makers have not taken the threat of an earth-directed solar flare seriously, even though a senior member of the Congressional Homeland Security Committee recently warned that there is a 100% Chance of a Severe Geo-Magnetic Event Capable of Crippling Our Electric Grid.

If such an event were to happen Congressman Roscoe Bartlett, who has advised people to develop individual preparedness plans based on the threat of massive solar flares or electro-magnetic pulse detonations, says that it would take upwards of 18 months to bring the grid back online because of a decaying national infrastructure.

We could have events in the future where the power grid will go down and it’s not, in any reasonable time, coming back up. For instance, if when the power grid went down some of our large transformers were destroyed, damaged beyond use, we don’t make any of those in this country. They’re made overseas and you order one and 18 months to two years later they will deliver it. Our power grid is very vulnerable. It’s very much on edge. Our military knows that.

There are a number of events that could create a situation in the cities where civil unrest would be a very high probability. And, I think that those who can, and those who understand, need to take advantage of the opportunity when these winds of strife are not blowing to move their families out of the city.

If a solar kill shot were to occur and short out the electrical power grid, it has been estimated that some nine out of ten Americans would be dead within one year as transportation systems broke down, food delivery ceased, commerce systems no longer functioned, communications equipment became inoperable and utilities, such as water treatment plants, were incapable of delivery services.

The ramifications would be serious and almost immediate according to a 132-page NASA funded report on Understanding the Economic and Societal Impacts of Severe Space Weather:

To estimate the scale of such a failure, report co-author John Kappenmann of the Metatech Corporation looked at the great geomagnetic storm of May 1921, which produced ground currents as much as ten times stronger than the 1989 Quebec storm, and modeled its effect on the modern power grid.

He found more than 350 transformers at risk of permanent damage and 130 million people without power.

The loss of electricity would ripple across the social infrastructure with “water distribution affected within several hours; perishable foods and medications lost in 12-24 hours; loss of heating/air conditioning, sewage disposal, phone service, fuel re-supply and so on.”

If you’ve ever wondered what a massive electrical surge from an electro-magnetic pulse weaponsolar flare or cyber attack might look like, then take a look at this footage shot in Montreal.

Imagine a powerful X-class solar flare striking earth and sending a surge like the one above across the entire U.S. power grid.

Are you prepared for such an event?

Related reading:

When the Grid Goes Down, You Better Be Ready (Ready Nutrition)

Getting Started: Prepping for a Two Week Power Out (The Organic Prepper)


SHTF Plan – When It Hits The Fan, Don’t Say We Didn’t Warn You

Former Federal Prosecutor Makes Ironclad Case for Impeachment

Former federal prosecutor Andrew C. McCarthy was in rare form on Saturday and his NRO op-ed is worth reading in its entirety.

…The Constitution assumes that the different branches of government will protect their institutional turf. That is, the Framers calculated that, faced with a Democratic president who usurps legislative prerogatives, a Democratic congressman would see himself, first and foremost, as a congressman. Valuing the duties of his office over party loyalty, he would join with other legislators to rein in executive excess.

Today’s Democrats, however, are less members of a party than of the movement Left. Their objective, like Obama’s, is fundamental transformation of a society rooted in individual liberty and private property to one modeled on top-down, redistributionist statism. Since statism advances by concentrating governmental power, Democrats — regardless of what governmental branch they happen to inhabit — rally to whatever branch holds the greatest transformative potential. Right now, that is the presidency. Thus, congressional Democrats do not insist that the president must comply with congressional statutes. Laws, after all, must be consistent with the Constitution to be valid, and are thus apt to reflect the very constitutional values the Left is trying to supplant. Democrats want the president to use the enormous raw power vested in his office by Article II to achieve statist transformation. If he does so, they will support him. They’ll get back to obsessing over the “rule of law” if, by some misfortune, the Republicans someday win another presidential election.

…Impeachment is a political remedy, not a legal one. Thus the quasi-legal component — proving high crimes and misdemeanors — is the easy part. As a practical matter, fundamental transformation cannot occur without high crimes and misdemeanors being committed against the constitutional order that is being transformed. That’s the whole point.

So, as one would expect, President Obama is intentionally and sweepingly violating his oath of office. He is not faithfully executing federal law — he picks, chooses, “waives,” and generally makes up law as he goes along. He has willfully and materially misled the American people — his Obamacare and Benghazi lies being only the most notorious examples. He has been woefully derelict in his duty to protect and defend Americans overseas. His administration trumped up a shameful prosecution (under the guise of a “supervised release violation”) against a filmmaker in order to bolster the “Benghazi massacre was caused by an anti-Muslim video” charade…

…His administration has used the federal bureaucracy to usurp Congress’s legislative powers and to punish political enemies. Obama has presumed to make recess appointments when Congress was not in recess. His administration intentionally allowed firearms to be transferred to Mexican drug cartels, predictably resulting in numerous violent crimes, including the murder of a Border Patrol agent. His administration — and, in particular, the Justice Department — has routinely stonewalled lawmakers and frustrated their capacity to perform agency oversight, to the point that the attorney general has been held in contempt of Congress. The Obama Justice Department, moreover, has filed vexatious lawsuits against sovereign states over their attempts to vindicate their constitutional authorities (and, indeed, to enforce federal immigration laws), while the Justice Department itself adheres to racially discriminatory enforcement policies in violation of the Constitution and federal civil-rights laws.

This is not an exhaustive list of Obama abuses, but you get the idea. If the only issue were commission of high crimes and misdemeanors, the Constitution requires only one for impeachment — not the Obama pace, which is more like one per week.

But here is the important thing: High crimes and misdemeanors are a subordinate consideration. In an impeachment case, they are necessary but they are not close to being sufficient. Because impeachment is a political remedy, its most essential component is the popular political will to remove a president from power.

…As things now stand, the public is not convinced. There is no political will to remove the president…

…Absent the political will to remove the president, he will remain president no matter how many high crimes and misdemeanors he stacks up. And absent the removal of the president, the United States will be fundamentally transformed.

As the pro bloggers say, read the whole thing.

But if impeachment isn’t today an option, are there other alternatives?

Writing at The Black Sphere, J. Andrew Peak suggests that there are.

In the age of reality television, what better than a trial of a president?

The People vs. Barack Obama should be held in two phases… The first phase could be a televised, one hour, grand jury indictment for each matter: Obamacare fraud during passage, its ongoing rewriting and the disparate application thereof; Benghazi; Fast and Furious; IRS scandal; NSA scandal; corruption, etc., etc., etc. If a true bill was returned by the grand jury so impaneled, that single matter would be referred to trial and docketed for a later date. If not, the case on those individual counts would be dismissed.

At trial both sides could be given a finite and equal time, wherein they could enter facts into evidence, give short openings and brief summations and provide oral arguments. Perhaps each affirmative count returned by the grand jury could itself be a two hour television special, broadcast on the weekend, with a brief discovery of public knowledge beforehand and a vetting of facts “in chambers” prior to trial.

Each “trial” could be conducted in a combination of both “mock” and “moot” fashion where an impartial panel of jurors was seated, facts heard, issues presented, the jury appropriately charged and a single poll of the jury taken. A simple majority carries the issue.

…Admittedly, these trials would have no force of law. Nor would they be legally binding. But they would serve two very important functions.

First they would act as an explanation to, and education of, the people. They would serve to inform the populace as to the issues in question and wherein the abusive dangers lie.

Second, any “true bills”, “findings” or “convictions”, made by those impaneled, when splashed across the headlines, would serve to pressure the administration and their agents in Congress to answer, explain, dismiss and rationalize such judgments made by the people.

This alone is the preeminent function of the press – to make those in power answer.

This is a great idea: a reality show.

I suggest Mark Levin and Andrew C. McCarthy for the prosecution; perhaps Alan Dershowitz and Simon Lazarus for the defense.

This, my friends, would be a true ratings bonanza.

And POTUS is such a narcissist, I’d wager anything he’d be glued to the TV watching.

Hat tip: BadBlue Real-Time News. Related: Constitutional Crisis Comix.

Doug Ross @ Journal