This is a rather long post. Here’s the executive summary:
Practically speaking, what should we do? As unpleasant as deflation sounds, collapsing our currency is worse. We must not collapse our currency to bail out corrupt institutions who benefited from unsound practices. A bailout attempt must not tip us over into a run on the currency. With an existing $9.7 trillion debt and $53 billion in long-term entitlement liabilities, we are not the world’s best credit risk to abruptly increase our borrowing.
If pain is inevitable, how can we temper the economic turbulence to come?
Here is a plan that I would support:
- Eliminate capital gains taxes on real estate purchases to encourage existing private capital to buy underlying real assets.
- Affirm that all voluntary barter transactions between two individuals (human individuals, not “corporate persons” or legal entities) are tax-free, regardless of the medium of exchange.
The first step will help stem the fall in real estate prices without increasing debt or bailing out irresponsible borrowers or lenders.
The second step will restore a more reasonable balance of power between individual Americans who have been pistol-whipped in this economic mess, and the corporations who benefit from an unsustainable system.
Together, they will reduce near-term economic dislocations, while providing a platform for sustainable community-based growth over the long term.
This moment in American history calls for principled leadership by an irate minority in Congress who is willing to stand up for the American people. The human people, the individuals — not corporations who already run Washington through their lobbying machines.
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