Porter Stansberry of the S&A Digest identified the inherent problems within our economic system well before mainstream pundits ever uttered the word recession. His readers were armed with the information and tools necessary to shield themselves from the economic armageddon that ensued once the rest of America and the world caught on to the mortgage crisis and over priced stock market.
But, as Mr. Stansberry has noted in recent comments, we are not out of the woods yet. In fact, unless something changes, America as we know it today is in grave danger.
Porter Stansberry via The Daily Crux
Sooner or later we have to learn to live within our means. Sooner or later, a preference for sound money will appear because inflation will have destroyed our currency. And sooner or later, the idea that you can live at the expense of your neighbor (through progressive taxation) will lead to a collapse. My preference would be to learn these lessons sooner, so the pain of this transition can be minimized.
As Mr. Stansberry points out in his recent article , this is not about politics. It’s purely a matter of economics. Based on our current debt, expenditures, interest payments, commitments, and revenues, we simply can’t afford to keep doing what we’ve been doing. Either we change now, starting within the halls of our Federal and State Congresses, or nature will take its course and force the change. Like the tremors that precede a powerful earthquake, our economy has been giving us warning signs that a major tectonic shift is on the horizon.
Unlike an earthquake, however, We the People still have a say-so in the outcome. Act in unison, and we may be able to soften the tremors as we transition. Ignore the warnings and we can be assured that the “Big One” is not far behind.
Mr. Stansberry outlines the major problems facing America, and provides some common sense solutions that could soften the blow and put the country back on the road to prosperity:
We’ve reached a point where we can longer continue on our current path. America spends 800% more than its nearest rival on its military. We spend 200%-300% more per capita on health care than any other similarly wealthy country. Are we safer? Are we healthier? I honestly don’t think so.
And even if you believe we are, can we afford it? Here are the simple numbers. Americans now owe $56 trillion in total debt, much of it held by foreign investors. We must spend $3.5 trillion each year on interest. That is already more than the federal government spends, in total. I do not exaggerate when I tell you we cannot afford these debts. We will never be able to repay these debts â€“ already equal to roughly four times our country’s GDP. The largest components of the debts we owe are government debtsâ€¦ and they are growing rapidly and show no signs of stopping.
The only way to stop the debt crisis we face is to reduce the total level of government spending â€“ immediately and permanently. We have to stop giving our citizens improper incentives. We have to increase the “skin” voters have in the game by spreading the burden of government more equally. And most important, we must take away the politicians’ ability to debase our currency.
You seeâ€¦ politicians believe, as Dick Cheney famously said, deficits don’t matter. They believe these debts can be safely printed away â€“ which is what the Federal Reserve is doing right now.
How can we accomplish these goals? I believe we need three simple amendments to our Constitution. First, we should have a balanced budget amendment. It’s hard to imagine why anyone would object to this, regardless of his politics. Politicians ought not have the right to burden future Americans with debt. It’s disgusting that we would leave a burden like this for our children and grandchildren.
Next, we need a constitutional amendment that ensures sound money. If you tell the politicians they’re not allowed to borrow, they’ll inflate instead. There is no reason Americans shouldn’t enjoy the stability and safety of sound money.
Every argument you’ll hear against backing our currency with gold comes from bankers and swindlers who need the ability to be bailed out so they can make risky bets with enormous amounts of borrowed money. Let’s put a stop to this, once and for all.
The American government is the world’s largest holder of gold. Let’s put it to work for us, right away, in the form of sound money.
Finallyâ€¦ we need a logical way to put a stop to the narrowing of the tax base. Everyone who votes should share in the burdens of government â€“ otherwise the incentive will always exist to vote for more government spending.
I suggest a constitutional amendment limiting tax rates and abolishing all taxes except for income tax. Tax every adult under the age of 65 20% of his income â€“ whatever the source. Give everyone a $24,000 annual personal exemption. Above that, everyone pays. No other deductions. We could get rid of the IRS. You could do your taxes on a post card. How much did you make? Send the government 20% of it.
These ideas may not be popular in Washington, but that’s only because our elected representatives represent their corporate donors, as opposed to the people who elected them. As we saw in the 2010 Congressional elections, the people do have a voice, and when we speak as one, the roar can not be ignored.
Mr. Stansberry, a long time proponent for liberty and personal responsibility, has created an initiative he has dubbed The Project to Restore America. With the assistance of others, the goal is to make real changes happen in Washington.
For inquiring minds, read Porter Stansberry’s most recent commentary discussing the multitude of problems facing America today, the realities of where we’re headed if nothing is done, common sense solutions, and what you can do.
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