Tuesday, January 24, 2012

The State of the Union--Unvarnished

Karl Denninger gives his.


"The simple fact of the matter is that we are borrowing more than one third of every dollar the federal government spends. This will double the national debt in less than a decade -- again. We have added more than 50% to our federal debt in three years, and we cannot continue on this path. Eventually, foreign and domestic creditors who have lent the government that money will go on strike, dramatically raising the cost of financing. When this occurs we will be forced to cut the size of government by more than 50% in an afternoon, instantly collapsing all of our federal social programs....

"The tax system at the corporate and personal level favors debt instead of equity, leverage over thrift and industry. This must end. The Fair Tax is one such way to do so; by zeroing the corporate tax and rendering all taxes on consumption it removes the preference for debt over equity, makes lobbying for special preferences impossible and makes the cost of government instantly visible and transparent to everyone in the nation. The Internal Revenue Code should be burned to ash and replaced with The Fair Tax tomorrow morning....

"...today America is not a bastion of capitalism. Many have claimed that we now have 'crony capitalism' but that too is a misnomer. Capitalism is the premise that one succeeds or fails through the wisdom of one's investment, predicated on capital formation (that is, the investment of economic surplus into various economic activities.) While the vestiges of this system remain in America, what has replaced it is a feudalistic system of scams, frauds, allegedly 'lent' funds that do not in fact exist and bribery of various forms, both legal and not."

Complete address here.

No comments: