Saturday, November 27, 2010
European financial crisis
Saw this article and had to laugh. Europe is worried about the debt crisis spreading throughout Europe. The problem is that their solution will do nothing but make the problem worse. Their focus is with investor losses and not the economies as a whole. They're fighting the problem ass backwards. One only needs to look at how we got out of the Great Depression to know how to get things back on track. Like it or not the taxes on the wealthy will have to be raised. The middle and lower classes have suffered enough. We see now that the wealthy have no intention of expanding production. They are now sitting on $2 trillion of profits. And if you had been paying attention nearly every bill that's gone through congress in the last two years has had some form of tax breaks for corporations and business. Just how greedy can one be? It was to the point this past summer where a company could hire a worker and not pay one nickel in federal taxes on that worker. How much more do they want? They even got a $1000 per worker credit to hire people and yet unemployment stayed at nearly 10%.
What to do then? As the expression goes "if a carrot won't work then use a stick". Increase income taxes on the wealthy. That's income taxes not business taxes we're talking about here. So rather than pull out yet another big bonus for himself the business owner would be forced to put that money back into the business. He's already received a tax credit for investing in equipment.
But there's the problem of demand you might add. How can a business expand without demand? Simple, using the tax revenues from the wealthy and rebuilding our infrastructure. The money then comes back to corporations in the way of federal contracts. People scream about government jobs but take a look at the face of the boss when a company lands one of those fat contracts. And with all those credits and incentives that have been doled out the past two years business in this country should thrive once again but this time with even larger profits.
As for the poor investors let them be damned. We've been playing a phony paper Ponzi scheme for how many years now? Hedge funds should be outlawed for all but the owners of an asset. A mortgage should be sold and serviced where it originated. No more naked shorts either (sounds like something you could wear at airport screening doesn't it?)
So it's back to basics and don't be fooled by the group of professor backwards out there. They'd have you believe day was night and down was up.