Failure Analysis of 20th Century Economics

'Corrective Actions' Required by ALL Nations for the 21st Century

Beginning with a quote from The Declaration of Independence, July 4, 1776.

"... Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. ..."


A perverse marriage exists between officials of the federal government and the private central banking authority. That perverse marriage constitutes the single largest monopoly and organization of the most wealthy welfare recipients on Earth.
A set of four 'Corrective Actions' is required to bring government and banking to heel as servants, not masters, of labor that digs the ditches, plants the seeds, harvests the crops, builds the houses, fixes the plumbing and takes out the garbage (physical labor requirements that cannot ever be satisfied by the Internet, or any of the most sophisticated of electronic analog or digital computers that can ever be designed and built by the hand of man).

These required corrective actions are predicated on the natural-law-fact that:

  1. The structure of any national household is exactly the same as the structure of the electronic circuit. (Power Supply and parallel loads.)

  2. The circular flow of money is exactly the same as the circular flow of electron energy of the electronic circuit. (Electron energy transfer.)

A series of four diagrams is contained in Appendix 2 of Technical Appendices, provides explanation and description of this natural law fact. See Circular Flow and distribution of U.S. Money Supply and Income Loads.
A set of four 'corrective actions' is repeated below as follows:
1. ZERO INFLATION

Stop and eliminate the creeping rot of inflation of money.

Fix the dimension of money as a standard unit of measure of the cost of human labor, dependent on population growth and population densities. Fix increase or growth of Money Supply to the natural rate of growth of the naturalized citizen population headcount provided by the Census.

NOTE:
Given there is integrity in real-time maintenance of the data base of the Social Security System (Names, addresses and dates of birth and death of U.S. Citizens), the Social Security System data base could be used to conduct the Census, and do so every five years instead of every ten years, and do so more cost-effectively than the costly- time-consuming 'mail-in' and/or supplemental 'door-to -door' solicitation questionnaires.

Whether you like it or not, the U.S. Social Security Number, assigned to each newborn child from its moment of birth, is a U.S. Federal Identification Number.

The U.S. Social Security Card should carry a photo of its 'owner', just as State Driver's Licenses require photo of its owner, renewable every five(5) years. Thus, we would be able to distinguish 'Citizens' from 'Aliens' and update the U.S. Census every five years (at far less cost than the current archaic 'system' of census-taking every ten (10) years.
END THIS NOTE


2. FIX THE COST OF BORROWED MONEY AT 5%

Fix the cost of borrowed money at 5% annual percentage rate (APR) to the borrower.

( 1. and 2. above, applied together, or simultaneously, fixes units of money as a unit of measure of the cost of human labor.)


3. PUT ALL LEVELS OF GOVERNMENT ON FIXED BUDGET INCOMES

Natural law dictates that maximum efficiency is achieved only when the power of the 'load' is equal to the power of the 'source'.

Therefore, this corrective action provides that 50% of the total national money supply (using the M3 component of total national money supply as a number) be allocated and reserved to support the total cost of total government (all levels of government - federal, state and local) with distribution of fixed government budget income amounts as set forth in Essay 7, 'Corrective Action' - Part 2.

This is no other way to contain the power and force of 'government' or 'ruling establishments' to interfere with the natural demand and supply forces of 'trade' in the market place.


4. BALANCE DISTRIBUTION OF THE TOTAL TAX BURDEN

The classic national household management problem has never been distribution of wealth. The classic national household management problem has always been distribution of the tax burden.

  1. Eliminate all government grants, subsidies and loan guarantees.

  2. Eliminate taxes on all goods, products and property, leaving only a single and progressive tax on gross incomes (with no deductions1), where the tax rate is determined by gross income as some percent of total national money supply, without distinction between government agency entity incomes, structured business entity incomes and/or individual or family incomes.
    1 No deductions except the 'time-cost of borrowed money' paid to banks/creditors in a given taxable year, not distinguishing between government agency entity incomes, structured business entity incomes and/or individual or family incomes.

Corrective Actions Required For the 21st Century:

Fixing units of currency as a standard unit of measure of the cost or worth of individual human life

???What is required to fix units of currency as a standard unit of measure of the cost or worth of individual human life???

Re Corrective Action 1:

Fix the controllable rate of growth of total national money supply (M) to the natural and uncontrollable rate of growth of total national population headcount (P). M is the total supply of money/currency of any given Nation, and P is the total population headcount of any given Nation.

Re Corrective Action 2:

Fix the cost of money borrowed by the public at 5% per annum (per year), to support a continuous and un-interrupted circulation of units of currency through the buy and sell transactions of the market place.

Restrict judgement for bank approval/disapproval of loan/credit to a borrower's history of employment and a proven ability to repay loans. Fix the cost of money borrowed by all banks from the Reserves of the Federal Reserve Banking System at 3% per annum, allowing banks a 2% profit to sustain banking operations.

Re Corrective Action 3:

Put all operational and enforcement costs of government (federal, state and local) under fixed budget income, wherein the fixed budget income to support the total cost of total government, federal, state and local, is fixed at 50% of total national money supply (M).

Re Corrective Action 4:

Replace the current system of taxation of all 'property' (land/real estate, sales, capital gains, etc.) with a single tax on gross incomes of all business structures and individuals, totally independent of source of income, to support the total cost of total government (federal, state and local).

That 'single tax on gross incomes' of all business structures and individuals is hereinafter referred to as the 'Gross Income Tax', wherein all other taxes, except taxes on imports from international trade of products, are abolished.


This thesis defines 'poverty level income' of any national household as, "The ratio of M/P (where M = Total National Money Supply and P = Total National Population Headcount)". This ratio defines the 'poverty level' of a single/individual human life, from the newborn to the eldest.

The 'Gross Income Tax' would be progressive, using the 'Universal Time Constant Curves' to establish a progressive rate of 'tax' to be paid on Gross Incomes by individuals, families and business structures.

The 'Universal Time Constant Curves' are those determined by raising the natural number 2.71828... to its negative exponents. The progressive rate of tax is determined by plotting gross income on a horizontal (x) axis against the total national money supply (of any given Nation) on a vertical (y) axis for any current taxable year.

The low limit amount of this progressive tax rate on Gross Incomes is "Two times the ratio of M/P" (where M = Total National Money Supply, and P = Total National Population Headcount); that is, no tax due or payable on Gross Incomes below "Two times the ratio of M/P", wherein all other taxes, tax exemptions, government grants and subsidies, are abolished.

The high limit amount of this progressive tax on Annual Gross Incomes (plotted on the horizontal/x axis) is 50 percent of Gross Income, derived by plotting Gross Income against the Total National Money Supply amount (M) (on the y-axis) for each taxable year, wherein all other taxes, tax exemptions, government grants, loans and subsidies, are abolished. (This explanation will be better served once suitable software can be found to draw you a 'picture' and provide the 'tax table' using the 'Universal Time Constant' curves.)

For preview, see Figure A6-1 Universal Time Constant Curves - Foundation for the 'Gross Income Tax', wherein all other taxes on citizens and the business structures of the national domestic household are abolished.

Under the annual Gross Income Tax, an amount that is equal to twice the ratio of M/P (always the current poverty level of U.S. Citizens, or those of any other Nation on Earth), applied to the gross incomes of all business structures and wager-earners, is not taxable. (In 1997 numbers, that amount is $40K per year.) Under this proposition, there are no other tax exemptions or deductions by or for anyone.


Maintenance and expansion of 'poverty' of the citizens of any given Nation on Earth is forced and deliberate.

'Poverty', and the maintenance and expansion of 'poverty', is forced, by the very simple and destructive act of growing any Nation's 'Total National Money Supply' at some rate that exceeds the natural rate of growth of any Nation's 'Total National Population Headcount'.


If you want the 'natural law of demand and supply' to rule in 'market-driven management', within and between all 'national households', federal and world bank government (International Monetary Fund) subsidy of all markets for products and services must be abolished.

You must also void 'rule':

  1. by the elected 'politician' who will always make 'law' in favor of personal gain.

  2. by the 'banker' who profits only by unlimited rate of compound interest on debt for 'time-cost' of borrowed money.

  3. by the professional 'economists' and 'investment counselers' who influence making of law and the tax code, but don't know the difference between their 'assholes' and 'holes' in the ground.

These 'Corrective Actions' are an extremely Tough sell:

Contrary to all popular myth, ALL MEN ARE NOT CREATED EQUAL into a material existence.

The first two 'corrective actions' are required to fix money/units of currency as units of measure of the variant and un-equal cost or worth of the individual human life.

The third 'corrective action' is required to contain abuse and corruption by elected officials of 'government'.

The fourth 'corrective action', the 'Universal Time Constant Gross Income Tax', applied to balance distribution of the total 'tax' burden, is required to level the playing field for all of us 'self-interested' individuals, in a spirit of free competition for survival in our material existence.


Constitutional Amendment is not required to implement these 'corrective actions'. These 'corrective actions' can be accomplished by simple amendment to the Federal Reserve Banking Act of 1913.

The Federal Reserve Banking Act of 1913 was a deceitful Act of ignorant menbers of the U.S. Congress at that time. That ignorant U.S. Congress of 1913 forfeited original Constitutional power of the U.S. Congress to regulate the value of money and of foreign coin.

In fact, ignorant members of the U.S. Congress of 1913 handed over original 'constitutional' power and authority of the U.S. Congress, 'to regulate the value of money and of foreign coin', to a private banking authority, the 'money changers' in the temple.

Destructive consequence was the 'Great Depression of the 1930s' and reduction of the United States into a 'socialist-welfare-state' and a 'beggar' Nation during the 20th Century.

These 'corrective actions' for the 21st Century offer a way out, hopefully, without resort to violence in the streets in years to come.


Return to Revisit

Return to Preface

Return to Synopsis

Return to Home Page.

See Technical Appendices and Illustrations