OUR ECONOMIC SYSTEM IS ABOUT TO IMPLODE

OUR ECONOMIC SYSTEM IS ABOUT TO IMPLODE 

The financial ups & downs are faster than ever.. Sign that final collapse is close

Check details of this dangerous instability in NUEVA DEMOCRACIA daily
Bulletin : http://nd-hugoadan.blogspot.com/ 

 

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AUSSIE DOLLAR CRASHES THROUGH KEY SUPPORT AFTER "SURPRISE" RATE CUT.

Submitted by Tyler Durden on 05/03/2016  

By Charles Hugh-Smith of OfTwoMinds blog,

http://www.zerohedge.com/news/2016-05-03/either-reverse-all-perverse-incentives-or-system-will-implode

 

Introduction

As a major leg of many carry trades, the collapse of the Aussie Dollar in the last week has sent ripples through many risk-on positions, following last week's plunge in inflation to record lows,, ... this morning's surprise RBA move has sparked another leg down in the commodity currency, breaking below a crucial uptrend off the January lows as the commodity currency decouples from exuberance in Chinese metals... by http://www.zerohedge.com/

HERE SELECTED EXTRACTS by Hugo Adan

I hope it's not a great shock to discover all the incentives in our status quo are perverse: those who rig the financial system while creating zero real value, jobs, goods or services reap all the big profits; those who take near-zero responsibility for their own health are subsidized by those who take responsibility for their own health; those who try to start enterprises and hire workers are saddled with endless regulations, junk fees and taxes while those who game the system to get welfare (household or corporate) skim the cream for doing nothing for their community or for the nation.

Systems in which all the incentives are perverse implode under their own weight. Those who struggle to pay the mounting costs of Imperial Over-Reach, crony-capitalism and all the skimmers and scammers eventually go bankrupt or quit in disgust, while the army of state dependents and cronies explodes higher.

It has taken decades for the incentives to become so perverse, so we no longer notice the perversity or the pathological consequences.

Corporate profits have soared as financialization and rigging the system have paid much higher returns than risking capital in new goods and services.

The incentives for home ownership have turned the bottom 90% into debt-serfs in servitude to banks while the top 5% own income-producing assets and businesses.

Larded with the most perverse incentives possible, the U.S. healthcare system in the final stages of maximum costs, just before it implodes:

It's not hard to design positive incentives. For example:

1. Make preventative care essentially free to everyone ($5 co-pay) but weight the risks and costs created by irresponsible behaviors that ruin health. Reward those who take responsibility for their health by reducing the premiums they pay.

2. Tax all profits on securities held less than a day at 95%. Raise corporate taxes generated by financial activities to 50%, and lower the corporate tax rate on profits earned from producing domestic goods and services to zero.

3. Lower the tax for the first $25,000 earned by small enterprises to zero. Limit total government fees to 5% of revenues for all businesses up to $10 million in annual revenues.

4. Phase out the mortgage interest deduction. Limit mortgage interest deductions to the first $100,000 of mortgage debt.

5. Eliminate the personal income tax (and the need to file a return) for every household with income of $100,000 or less.

6. Automatically sunset every government regulation. Make city, county, state and federal governments renew every regulation every few years via a majority vote or it vanishes from the law books.

7. Make every politician wear a NASCAR-style jacket plastered with the names and logos of their corporate, union and financier contributors. The California Initiative to make this a reality is seeking signatures of registered California voters. Since politicians are owned, let's make the ownership transparent.

8. Treat drug abuse and addiction as medical conditions rather than crimes.

9. Eliminate the Federal Reserve and its free-money for financiers perverse incentives for debt-serfdom and financial plundering.

10. Eliminate all student loans and debts. Make colleges compete for students on a cash-only basis.

As you no doubt noticed, every perverse incentive is the cash cow for a vested interest or cartel. 

That's why the perverse incentives will endure until the system implodes under their pathological weight.

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SOURCE: http://www.zerohedge.com/news/2016-05-03/either-reverse-all-perverse-incentives-or-system-will-implode

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My new book is #3 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book's website.

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