The Solution
Let Them Eat Cake
Part 2 of 2
 

City, county, state and federal governments consume, either directly or indirectly, more than half the gross domestic product. That amounts to eating half the national pie on one of Perot’s famous flip charts. Forcing state and local governments to go on a diet offers little relief when the lion’s share goes to Washington.

Seventy percent of the federal government’s expenditures are on autopilot. Congress, obeying the will of the people, insists on mandatory funding for welfare, retirement security, health care, agricultural support, student loans and many other entitlement programs. Cutting by half the remaining “discretionary” spending — programs such as defense, law enforcement, education, and housing that most Americans do not consider discretionary — will not solve the nation’s social problems. Nor will the elimination of waste, fraud, perks for government officials, and pork-barrel projects pay even the interest on the national debt.

The traditional political solutions of raising taxes or cutting spending lead to a dilemma. More taxes give government a larger share of a smaller cake, a net loss against increasing obligations. Less government spending might eventually produce more cake but the initial effect throws cooks out of the kitchen and compels additional automatic expenditures. Government simply promised more cake than the existing system can deliver. The best solution devises a new system and bakes a second cake.
 

Doubling the size of the gross domestic product while holding government commitments to their current numerical value shifts the government’s share to a more reasonable 25 percent. Sounds easy if you say it fast enough. Can it be done?

TWO CAKES SOLUTION

Maybe. The existing American monetary and fiscal systems are so poorly designed and operate with such inefficiency that significant improvement is surely possible. An increase in gross domestic product of just 5 percent annually for 20 years achieves the goal. Difficult, certainly, but not impossible.

The enclosed bill entitled the National Economic Stabilization And Recovery Act sets out a detailed plan of action. NESARA, pronounced Ne’sara, consists of two parts — Part I provides for banking and monetary reform, Part II for changes in tax policy.
 

“As time goes on, the tax situation inevitably grows more and more complex as different worlds, different sectors within each world, and different economic divisions all  demand and require special treatment. The result is that the tax-collecting branch of the government grows in size and complexity and tends to become uncontrollable. The average citizen cannot understand why or how much he is being taxed; what he can get away with and what he can’t. The government and the tax agency itself are often in the dark as well.

“What’s more, an ever-larger fraction of the funds collected must be put into running the over-elaborate tax agency — maintaining records, pursuing tax delinquents — so the amount of credits available for good and useful purposes declines despite anything we can do.

“In the end, the tax situation becomes overwhelming. It inspires discontent and rebellion. The history books tend to ascribe these things to greedy businessmen, to  corrupt politicians, to brutal warriors, to ambitious viceroys — but these are just the individuals who take advantage of the tax overgrowth.”

The General said harshly, “Are you telling me that our tax system is overcomplicated?”

Seldon said, “If it were not, it would be the only one in history that wasn’t, as far as I know. If there is one thing that psycho-history tells me is inevitable, it is tax overgrowth.”

Hari Seldon from the novel Forward the Foundation by Isaac Asimov