Sunday, May 20, 2012

Economic Complexity Index Considered and why America is assured of getting austerity soon enough

I just finished reading the world country economic index data at MIT.  Here is the link and click rankings tab for a good analysis of what is happening globally.  Further, the economic index ranks countries by their economic complexity; and a high score for European countries and us is not a good thing. See

Basically, our domestic economic complexity including federal policies ensure one and only one thing is coming-economic austerity.  The battle in Washington is merely about what groups are going to pay for all this economic austerity on a percentage basis; without riots and congressmen and senators somehow also getting re-elected.  Hence why the GOP folks keep wanting to allow the corporate engine going; while slamming the cost onto those who depend on entitlements.

Today, on Face the Nation, Senator Lindsey Graham mentioned the clause "means test".  What he meant was if it were up to him, a means test would be applied to those receiving federal and state entitlements.  Graham was also asked about alleged DOD cuts that were supposed to happen this year, but instead were increased.  So, to the GOP the war machine remains a higher priority; while lacking compassion for those living on entitlements-Social Security and Medicaid to be specific are not GOP priorities. Now Graham states the nation's highest priority is national defense.  More typical GOP scare tactics-war on terrorism nonsense and besides, what nation is attacking? 

In summary, if a person is not a part of the economic engine of America, hold on for your life because if the GOP gets their way, you are not part of the solution to America-you are the problem.  This includes the retiring baby boomers who are now going to be dependent upon Gen X and Y for paying their future retirement benefits including health on demand.  Something has to give and what the giving is called is economic austerity.  It is just a matter of time and what year.  It is coming.  Get prepared.

Clearly to the GOP party, it is more of Voodoo Economics, Part II.  To stimulate the economy, lower the corporate and small business tax rate and make those hoping to get entitlements think this is not a viable option; unless living in poverty without any hope is their only realistic scenario. If I think of terms of being a patriot and a statesman, focused on my nation; while still concerned about the right of the individual, I have to go back to 1935 when FDR and Congress passed the Social Security Act.

To me, this is when our  nation moved to progressive socialism and ever since, there has been continued expansion of those relying on Social Security increased by Medicare and Part D (drug coverage for Medicare/Medicaid recipients).  We as a nation cannot afford any more social engineering. Internationally, our country has to stop undue reliance on the military-industrial complex to drive the economic engine.

This does not imply I agree with Voodoo Economics either as the right course to take.  But we do have to take austerity actions for many years to come.  In several postings, I have suggested at the federal level, we as a nation still apply progressive tax system that gets rid of all the various deductions in our tax code. The poor very seldom benefit from tax deductions.  Conversely, those that master our zany special interest group tax code the best are the rich-like Warren Buffet as an individual and huge multi-national corporations like General Electric. 

Naturally the rich, special interests and corporations want the typical American to buy into a federal consumption tax cleverly called the flat or fair tax.  Both the fair and flat tax are nothing but regressive federal tax policy to further aid the rich-a con or shill.  Do not get suckered into allowing for a federal consumption tax to ever be passed.  In America, a progressive tax system is still fair because those that most prosper in America, should be paying more of their share derived from the labor and resources of our nation. 

Then in balance, we have to also consider the zany Democratic Social Engineering plan of redistribution of wealth.  Basically, tax more to sustain and expand federal and state government programs. Equally absurd. So, looking at the 2012 Presidential election, both leading candidates suck.  Neither have the right theories and remain polar extremists; hence why Congress is also polarized and stuck in do nothing land.  Expect more of the same nonsense in 2013 as our nation will be forced to austerity. By 2016, things in America are going to look so ugly, austerity is not an option-instead it becomes a federal mandate.

The austerity alarm clock is set and ticking, second by second ready to explode.  Our economic engine is overheated and that engine is ready to self-destruct due to all the complexity. If you want economic opportunity, the time to look global is now.  This is warning call.  Get out of America, while you can.  Look elsewhere and some of these rising countries that are not so complex, that they rank the best when it comes to having the necessary engine to sustain for decades economic opportunity and growth. The United States is not one of them.

In conclusion, if we may need to do two things-reindustrialze our non-war manufacturing industry creating jobs and apply a means test to federal and state entitlements.  But with the climate in Washington being held by polar extremists, I am expecting very little except for the rich to be the first to leave America leaving behind the 99 per centers with a third world kind of mess.

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