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“How can a government use a taxation “…to form a more perfect Union…?

January 12, 2013

How can a government use a taxation “…to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…””  at the same time  reduce personal income taxes to zero, and reduce FICA to zero, while maintaining control of the quality and quantity of its currency?

 
 


What if :
The Federal Reseve Bank (almost all agree can make unlimited purchases of assets)
were to purchase ALL residential and commercial real estate loans outstanding and rather than
continue the stupid practice of being guarantor to actually become the lender of these and future loans.
Correct QE3 (Infinity) stop bailing out the foxes in the hen house, stop foreclosures (85% of which the homeowners wish to stay and pay), start curing the crisis in housing, create millions of jobs.
Immediately , modify all loans at 2% for 36 years.What would that do for the “people” , put an end to the crisis and fix what went wrong ?
Force the banks to comply by doing what the Fed failed to do in 2001-demand 100% reserves and 100% capital requirements..
How great would it be if the banks needed $200 trillion to be at 100% reserve- 100% liquidity ?
At 2% for 36 years that would produce $11 trillion a year in “RAISED REVENUE INSTEAD OF TAXES”.
“The Wealth of a Nation is in How it Redistributes That Wealth” by justaluckyfool.
Excerpts contain quotes by Steve Keen, Michael Hudson, and others but most important
theory of Frederick Soddy “The Role of Money. 1926,1933″.
What if:
As Soddy thought, “A Monetary Sovereignty must be the sole issuer of its currency”
The currency is a representation of all the goods and services of that Sovereignty and that currency
be it paper, metal or whatever form of transmission is used for the system of distribution and or redistribution.
 
A reply received: 
****“Immediately , modify all loans at 2% for 36 years.What would that do for the “people”? justaluckyfool.
Your plan does nothing for non-debtors except perhaps indirectly thus it is not politically feasible…” ***

First, justaluckyfool  must thank you for your challenge because “only after due examination” should a concept be accepted.
If all the loans on land and improved land value were to be  made by the Monetary Sovereignty instead of simply guaranteed that  the loans would be backed by 100% currency , it would only change the direction of who would receive the benefits of the action-Instead of PFPB the revenue raised would go to the US Treasury. Let’s say for example for a sum of $36 trillion (makes the math easy ) at 2% for 36 years would produce a “revenue, or income in place of an income tax of $2 trillion per year.
How good is that for all the people?
For the individual homeowners, especially the 85% that want to stay in their homes, it makes their homes affordable.A home with a mortgage for $120,000 would have a monthly payment of $556 per month and since the mortgage would be assumable it would guarantee the remainder  price value of the residence at whatever $556 per month can exchange for “credit,goods and services.”. With the intended consequence that they would be paying INTEREST instead of income taxes!
Plus the added benefit that they will gain value as the price of the home may increase because the assumable mortgage with its fixed rate will allow the homeowner to capture that gain, while at the same time the governing people will receive double, yes, double the amount of the asset.
 
Or what if, this small move which would produce $2 trillion per year revenue (since all income to the Fed Reserve shall go to the US Treasury) , how about then we drop FICA.
What would that do , (Ask Dr. Wray as in “Job Guarantees”, Ask Warren Mosler? )
*Lower real estate (commercial buildings) cost= lower production cost.
*Lower tax with holdings = raise in pay.
*Lower cost of wages (No corp FICA co-pay)= increase in profit.
EQUALS :  A SUM TOTAL OF MASSIVE JOBS INCREASE WITH PRICE STABILITY INTACT AND INFLATION CONTROL.
Please,
challenge,
clarify,
or improve.
I am just a fool in search of profound answers.
Please, anyone with a voice that is heard, please “after due examination”
promote that which you find to be of a benefit to all mankind.
If I , a fool, who has but only for such a very short time found from “due examination”
articles from Steve Keen,William Black,  Michael Hudson, L Randell Wray, Warren Mosler and taken from them
what I ,just a lucky fool, found to be an opinion, added to that some of my non expert opinion of  what Frederick Soddy wrote in
“The Role Of Money””Virtual Wealth”.
Please,please by the grace of an “Invisible Hand” join forces to do what Lincoln did for
those who knew they were slaves;you can now help set the American people free from possible servitude and turn them on to a path of prosperity.
 
CHALLENGE:
A Monetary Sovereignty can issue its currency in unlimited amounts, any restraints would be self imposed.
A Monetary Sovereignty must be the only source of issuance of its currency.
A Monetary Sovereignty must use that currency as a system of distribution of its wealth.
A Monetary Sovereignty must “by the good faith and credit of its people”
guarantees that no matter what physical form its currency is
it is redeemable in “goods and services” by the Sovereign Nation”
A Monetary Sovereignty must have in place ways and means to protect the quality and quantity of its currency.
As Frederick Soddy wrote, “Money now is the NOTHING you get for SOMETHING before you can get ANYTHING”.
 
“There in lies the rub”,Why blame the private for-profit banks for doing their job-Maximize profits for the benefit of their owners. The solution is in the separation of the issuance of the currency from private for-profit banks and financial institution to that of issuance by one and only one source,that is by the sovereign nation alone.
The solution as stated by Keynes, Minsky and Soddy along with many others is to
“separate private for-profit financial institution from government. ” It is the providence of government “to promote the general welfare”.
Quote Soddy, ”
WHAT IT SHOULD BE,
CONTRASTED WITH WHAT IT HAS BECOME
By
FREDERICK SODDY
M.A. (Oxon) ; LL.D. (Glasgow) ; F.R.S. ; Nobel Laureate
in Chemistry, 1921 ; Author of ” Science and Life ” ; ” Wealth,
Virtual Wealth , and Debt ” ; ” Money versus Man ” ; etc.
PREFACE
This book attempts to clear up the mystery of money in its social aspect. With the monetary
system of the whole world in chaos, this mystery has never been so carefully fostered as it is to-day. And this is all the more curious inasmuch as there is not the slightest reason for this mystery.
This book will show what money now is, what it does, and what it should do. From this will
emerge the recognition of what has always been the true role of money. The standpoint from
which most books on modern money are written has been reversed. In this book the subject is not
treated from the point of view of the bankers as those are called who create by far the greater
proportion of money but from that of the PUBLIC, who at present have to give up valuable
goods and services to the bankers in return for the money that they have so cleverly created
and create. This, surely, is what the public really wants to know about money.
It was recognized in Athens and Sparta ten centuries before the birth of Christ that one
of the most vital prerogatives of the State was the sole right to issue money. How curious that
the unique quality of this prerogative is only now being re-discovered. The” money-power ” which
has been able to overshadow ostensibly responsible government, is not the power of the merely ultra-rich, but is nothing more nor less than a new technique designed to create and destroy money
by adding and withdrawing figures in bank ledgers, without the slightest concern for the interests of
the community or the real role that money ought to perform therein.
The more profound students of money and, more recently, a very few historians have realized
the enormous significance of this money power or technique, and its key position in shaping the
course of world events through the ages. … It is concerned less with the details of particular schemes of monetary reform that have been advocated than with the general principles to which, in the author’s opinion, every monetary system must at long last conform, if it is to fulfil its proper role
as the distributive mechanism of society. To allow it to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government. ”
And for fun, read:

CHALLENGE, IMPROVEMENT, CLARIFICATION, CORRECTION, THEN USE IT AS YOUR GUIDE!
WOW !
“…(E)very monetary system must at long last conform, if it is to fulfil its proper role
as the distributive mechanism of society. To allow it to become a source of revenue to private issuers is to create, first, a secret and illicit arm of the government and, last, a rival power strong enough ultimately to overthrow all other forms of government. ”
“The Role Of Money” Frederick Soddy.

 
  1. justaluckyfool | October 15, 2012 at 4:08 pm | Reply
  2. ***Everyone is being told, ” no plan that could simultaneously (1) cut taxes, (2) end the budget deficit, and (3) increase military spending.”!!!!
  3. Please challenge, edit, improve, or use as a guide, What they should be told,
    “How to cut taxes, end the budget deficit, and increase military spending.” by Justaluckyfool.
    A plan that justaluckyfool has put together as an opinion resulting from reading articles by William Black, Michael Hudson, and Frederick Soddy (“The Role of Money” 1926,1933).
    How ? As stated on ” 60 minutes” (12/11/11)”
    President Obama said,”You can’t raise revenues by lowering taxes unless you get the money from somewhere else.”
  4. So why not do just that, use a proven method as shown to us by Bernanke-QE.?
  5.  As Einstein said, “Keep It Simple”.
    Cut federal income taxes to zero.End FICA.  Pay off the budget deficit at $1 trillion per year and have $5 trillion to spend each year as well as an additional $5 trillion to QE simply because they must do it in order to make it possible to pay back the original QE.
    All this can be done without any new legislation.
    The Federal Reserve Bank already has the ways and means. Almost all economist agree that the Feds can purchase an unlimited amount of assets it needs , and at no increase in deficit spending.
    The Federal Reserve Bank can mandate a change in reserve requirements and capital requirements for all private for-profit banks, that is from the present 10% to 100%.
    To prevent a collapse of the financial system it would make(QE) a $200 trillion fund available as a loan to the financial sector  with a rate of 2% for 36 years.
    As law ,”All profits from the Federal Reserve Bank shall go to the US Treasury”.
    That means a REVENUE STREAM OF $11 TRILLION OVER THE NEXT 36 YEARS.
    “The impossibility of the three goals depends on the definition of deficit. If it is the difference between government spending and revenue then the plan is impossible.” Daniel.
    ******************” no plan that could simultaneously (1) cut taxes, (2) end the budget deficit, and (3) increase military spending.”, As per article.
    WRONG, WRONG !!!! Any government can do all three. The solution was stated not only by Obama but also by Romney.
    ************”You can’t raise revenues by lowering taxes unless you get the money from somewhere else.”
  • *************Lower taxes by 25%….No increase in deficit spending…balance the budget.”
  • Translated: Create a revenue stream using a way other than “taxes”.
    Translated: Create interest payments on the issuance of our own currency.
    Take away from the private for-profit banks that stream of profits and use it as funding for the people,instead of the benefits for 1% make those benefits for 100% of the people.
    Please consider, challenge and improve, then endorse.
    Here is an example of where we are going wrong and how we can fix it.
    The Feds thru QE3 (QE Infinity) will be buying MBS at the rate of $40 billion per month.
    Translated: They are using our money to allow the private for-profit banks to make a profit.
    WHY NOT purchase the pure asset, the actual mortgage. Then modify all notes and set as an assumable mortgage at 2% for 36 years. If $18 trillion is needed, that would produce $1 trillion dollars a year of revenue.
    INCOME RAISED BY “SOMEWHERE ELSE” INSTEAD OF TAXES.
    Anyone,
  • please explain why you would not wish prosperity for yourselves and your children?
     
    COMMENT BY JUSTALUCKYFOOL:
     
    Please challenge, improve, and ” ***** “Believe nothing merely because you have been told it…But whatsoever, after due examination and analysis,you find to be kind, conducive to the good, the benefit,the welfare of all beings – that doctrine believe and cling to,and take it as your guide.”- Buddha[Gautama Siddharta] (563 – 483 BC), Hindu Prince, founder of Buddhism

    Excerpts:
    The solution is in how we redistribute the wealth of the nation. We need to change its path from going to the few that use it for its own selfish aims and benefits. Change that path to that which would benefit “all the people”.
     
     
     

    PROVE IT CORRECT OR IMPROVE IT SO IT IS CORRECT.

    Mankind is endowed with all the goods and services necessary for all to pursue happiness.
  • Make the path clear.
     
    So how do you at the same time  reduce personal income taxes to zero , while maintaining control of the quality and quantity of the currency?
    The Monetary Sovereign Nation must be the only source for the issuance of its currency.
    The currency issued is backed by the full faith and credit of all the goods and services of that nation. Note that it is a symbol that is redeemable in goods and services that are the property of the “people of that nation”. 
    This currency should be issued  with a control attachment to ensure the quality and the quantity of the currency. One that will return it to its rightful true owners, since in reality, as Frederick Soddy said, “Money is the NOTHING you get for SOMETHING before you can get ANYTHING.
     
     CORRECT WHERE WE WENT WRONG AND PUT ANY MONETARY SOVEREIGNTY ON THE ROAD TO PROSPERITY FOR ALL ITS PEOPLE.
    (Written in caps because it demands a challenge.)
    What if the Fed were to lend the banks and financial institutions the $$200 trillion 
    to make them solvent at 100% liquidity, loans with a rate of 2% for 36 years ?
    What if the Fed were to purchase ALL residential and commercial real estate loans ($50 trillion ?)
    and modify them at 2% for 36 years ? Would it instantly create 3-4 million jobs in the home and home goods sector as well as instantly stabilize the home values ?
    What benefit would WE THE PEOPLE have if our government were to have an income (revenue ) stream of over $5 to $11 trillion a year by replacing federal income taxes using interest on our own money as a means of raising revenue?  This revenue would then be redistributed back to the people, it was in fact their “SOMETHING” to begin with ? Presently that income (revenue) is used to increase the gap  of inequality as it is a redistribution now for the benefit of the few (1%). The few who keep it for themselves and seek only to gain more.
    IT is time to use the most powerful force in the universe for the common good and take it away from those who have abused it for their own selfish ambitions.
  • And what if the Fed were to ” QE 4 States” by buying ‘State Relief Bonds in the amount of  $50 trillion at 0.25% interest for 36 years.
  • Allowing the states to invest $30 trillion in assets that would return 2% for 36 years thereby returning the FULL amount of the QE to the US Treasury. WHILE AT THE SAME TIME have $20 trillion to use for state improvements, climate change, security, jobs, “…the general welfare”. 

     
     

     
    PLEASE, “How can a government use a taxation “…to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity,…””  at the same time  reduce personal income taxes to zero, and reduce FICA to zero, while maintaining control of the quality and quantity of its currency?
     
    Challenge.
     
    Improve.
     
    Endorse.
     
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