Our economic problems have been festering for many years – at least 20. There are several key factors to our current situation which I name below:

1.       Political corruption (both parties), special interests and special favors which lead to altered markets (not free markets).

2.       Abusive/Intrusive taxation and class warefare.

An excellent read on this meltdown story can be found here - http://townhall.com/columnists/NealBoortz/2008/09/19/the_rest_of_the_meltdown_story. It is a short read but, in a nutshell it describes how our government altered our mortgage industry by encouraging (forcing) lenders to relax standards so that more poor people would own homes. This, along with Greenspan’s cutting interest rates so drastically lead us to this big financial bubble (to save us from the tech bubble) that our government even today will not allow to deflate (as is evidenced by the take-over of AIG, Fannie Mae, Freddie Mac, and other extreme bail-out activities).

I understand that former heads of Fannie Mae and Freddie Mac who happened to have been appointed by the Clinton Administration (as reward for getting Bill elected) walked away with tens of millions of dollars in income and bonuses for basically driving our financial system into the ground. I wish our country would confiscate their assets and put them in jail. These heads of Fannie and Freddie happen to be current economic advisors to the democratic candidate. So if you are swayed by the campaign slogan “more of the same…”, you might want to take this into consideration.

In short, our elected officials are so dependent on/beholden to special interests (which promote mega-corporations at the expense of small business and free enterprise) that our government refuses to tell the public the truth. I blame both parties. Our future is headed toward financial ruin because there is just no way we can support the (financial industry) house of cards.

Getting to the taxation aspect of my communication… Our taxes and regulations force manufacturing and many service jobs (offshore software development, etc.) away from our lands. If a mega-corporation wants to be subject to the 2^nd highest corporate tax in the world it can keep its home in the U.S.A. but we have seen huge corporations move away like Haliburton, Inger Sol Rand, and many others. If they don’t move away, they move their jobs away to avoid the following:

1.       Payroll Taxes

2.       Fed/State Unemployment Insurance

3.       Required Workers Compensation Insurance

4.       Etc.

These additional costs of doing business affect the agility of U.S. companies which puts global competitors at a huge advantage which causes us to lose jobs. Think about it… what would happen if many of these obstacles for U.S. productivity were removed? Would we need departments to pay out unemployment insurance if our nation was flourishing? If a company downsized (or folded) because it was no longer competitive, wouldn’t it be better to have another job in a prosperous growing company available rather than have unemployment benefits? We should promote working prosperity rather than unemployment benefits… Did you know a company that lays off an employee gets tagged with a higher unemployment rating? What affect does this have? It causes companies to think twice about staffing up and taking risks that create wealth in our nation.

Our huge financial institutions get special treatment which moves more and more of our workforce into mega-financial corps (that don’t really produce anything) while any job that really produces anything (manufacturing, high tech, research and development, etc.) moves away. At some point, the folks who buy financial services who no longer have jobs because they were outsourced can’t buy the financial services (or pay their mortgages) so mega corporations fail. Now, who is picking up the tab for this?   You and I are (and more importantly… Keira, Christopher, and Kylie are).

What happens if we strip away a lot of the nonsense taxation (income, corporate, capital gains, and estate taxes) and replace it with a simple a national sales tax that gets collected by companies who sell new goods and services to end-consumers, forwarded to the state along with state sales taxes, and then sent up to the federal government? We simplify a lot of things and make our country much more efficient. We also unleash the great potential that we have as a nation.

Consider going in for, what today would be a $10,000 medical procedure. When the doctor earns that $10,000, he is taxed at 40-50% (i.e. $4,000 to $5,000 goes to the Federal government in income and/or corporate taxes). Consider if the FairTax were inacted… That same doctor would pay 23% to the Federal Gov’t ($2,300). He wouldn’t have to keep all kinds of income and expense records, tax write-offs, etc… He wouldn’t have to hire a high-priced CPA or tax attorney help him file taxes. He wouldn’t have to go through the pains of payroll taxes for his employees. He would simply know that $2,300 would go to the state which would be forwarded to the Fed. Heck, he could even lower his prices and still be better off than our current system. Okay, you ask… so who makes up the difference if our doctor friend is paying less tax? Answer: those who visit our lands (tourists), those who evade/avoid taxes within our lands (illegal aliens, gamblers, drug dealers, prostitutes, pimps, etc.), and the ultra-rich when they spend their money.

The long and short of it is that we need a grassroots effort to take back our country from the stranglehold that special interest have on it.