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Viewpoint: Political parties prevent debt elimination

 Federal Reserve Chairman Janet Yellen

Federal Reserve Chairman Janet Yellen

By V. Kurt Bellman

Once again, in his recent piece in the July 21 e-newsletter entitled “Safer with gold, silver,” Mr. Patrick Heller correctly identifies the problems facing the intermediate term American economy. He even correctly reports the words Federal Reserve Chairman Yellen reported to Congress regarding the unsustainability of our present course.

But where Mr. Heller yet again fails miserably is in the quite easy translation of the policy recommendations made by Chairman Yellen. Her advice was, and in this I believe Mr. Heller and I will agree completely, “We can’t keep doing what we’ve been doing or the debt will consume us.” So far, full agreement.

The problem is that the solutions exist, but all of them are politically unpalatable or unthinkable to one major party or the other. That is what we have to change, not wave our arms in alarm and run to bullion investments. The solution is simple – we must reject the current party platforms of both major political parties, completely and simultaneously and forever. Both are prescriptions for financial Armageddon, and there isn’t much time to lose.

The democrats’ addiction to higher and higher levels of benefits of a welfare state must end, but so must the republicans’ addiction to lowering taxes for highly compensated individual taxpayers and corporate welfare for the cronies that fund their campaigns.

Don’t smirk, democrats. Labor unions must also be de-fanged to become cuddly little pussy cats, as must the American Bar Association, rather than the lions and tigers and bears, oh my, of the political left wing. Silicon Valley, your self-absorbed self-protective baloney is next on the chopping block.

Here is the prescription that will save us from ourselves without turning to the paleo-economic fantasyland of precious metals. And yes, every reader will find something in here to hate. Too bad. Get over yourself.

1) Individual marginal tax rates will have to climb, on the whole. That means more must be collected by the FIT on individuals. It doesn’t mean everybody pays more, just that the whole pool does. The details will likely have to include high standard deductions and more progressivity of tax brackets. Too bad.

2) Corporate tax rates must fall to approximate parity with our major trading rivals. Corporate giveaway? Nope. An incentive to do business here. Dividend earnings lose all preferential tax treatment, and so do C-corp held capital gains. Income is income, period.

3) S corporations are abolished completely. Don’t want to get sued individually in your small business? Fine, don’t act like a jerk. We’re de-fanging lawyers, remember?

4) All tax shelters go away. All of them. We find you doing one overseas? Complete confiscation of all assets held plus a 25 percent surtax.

5) All true physical investments (not paper, not metals) – physical plant, equipment and inventory – get tremendously unprecedented favorable tax treatment. Why? To supercharge economic growth. No government choices of industries to promote. No more Cylindra disasters. If it’s economic activity to employ Americans, it gets favored. If it doesn’t, it doesn’t. End of story.

6) 5-Year “Congratulations, You Beat Us” Foreign Assets Repatriation Tax Amnesty Program. Apple has managed to salt away over $200 billion in idle cash in low-tax countries. Admit that Apple is smarter than the U.S. government, as if it were ever in doubt, declare defeat, and stop being so stupid with the tax code. Tax repatriated assets at half the new lower corporate rate and move on.

7) Every reader is going to hate this one. Abolish all cash. It is all instantly worthless as legal tender and only useful as collectibles. Every series just became a closed one numismatically. Go to town! You’ve got one year to turn all cash into an electronic currency on ABT cards. You even get to keep the cash, but it gets canceled like a redeemed stock bond certificate. The IRS has records of every transaction and you pay your taxes automatically. No return preparation services. The IRS does it and you get a right of appeal.

8) The EPA to EAA Transition. The EPA is turned into the Environmental Assistance Agency to work as a partner with industry to create and implement best practices in industry with tax incentives for green policies. But all adversarial roles at EPA are forthwith abolished. When push comes to shove, more good-paying jobs always wins, period.

9) Health care is not a right, but as long as we’re going to pretend it is, as we seem to have decided, we go instantly and completely to a Canada or Great Britain style single-payer system. Insurance companies? Big pharma? You become public utilities and get your backsides regulated like one. Otherwise, go to the nearest volcano and take a downward turn. Or take up another line of work. By the way, lobbyists get banned, too.

Reasons. Much of this has been done. The twin economic reforms of New Zealand in 1984 and 1990 proved the economic magic that can occur when a strong and free people are set loose to create without the twin shackles of the “entitled classes” protected by the respective protectorates of the political left and right.

If some of these prescriptions can’t work for you, propose others. There’s only one rule. It’s the only rule Janet Yellen and Patrick Heller and Kurt Bellman all agree on: what we’re doing right now is unsustainable.

This “Viewpoint” was written by V. Kurt Bellman, a hobbyist from Harrisburg, Pa.

Viewpoint is a forum for the expression of opinion on a variety of numismatic subjects. To have your opinion considered for Viewpoint, write to David C. Harper, Editor, Numismatic News, 700 E. State St., Iola, WI 54990. Send email to

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More Collecting Resources

• The Standard Catalog of World Coins, 1601-1700 is your guide to images, prices and information on coins from so long ago.

• Order the Standard Catalog of World Paper Money, General Issues to learn about circulating paper money from 14th century China to the mid 20th century.