Monday, December 31, 2012

How to dampen the financial collapse

As a politician, you should probably read this or; I see above in your future... 

Someone asked me for a viable, and doable, suggestion (or two) that politicians actually could do already today without too much fuzz in order to, at least, soften the approaching blow of our financial apocalypse.
So, let me suggest a few things with my birth nation of Sweden as example. Although this is Sweden specific, it could potentially be applied to your country as well.

First off, let us strengthen the armed forces (not needed in the U.S. that rather should cut their defense budget in half) at the same time as we strengthen our currency reserve and lower our public debt and do so with mostly applauds from the general public.

Can´t be done? Of course it can.

First off, cut politician salaries with 1/3. Secondly lower the number of politicians from 365 MP´s to 301. Also fire a few administrators and 2 ministers so the total number of Swedish ministers goes down from todays 21 to 19, and of course get rid of their respective departments. Also the political contributions to each party, paid for by the state, should be cut in half during 2013, and completely phased out before the election 2014. To further enhance how much effort our bellowed leader does, they should also lose their cushy pension scheme and their double living i.e. no more free apartments. And then it should be argued that all money saved (about 3-4bn SEK /year) should go to the defense budget. Why? Because firstly the Swedish military is a laughable entity and in desperate need of extra founding, and our masters can argue that they are cutting themselves in order to protect the country.

Second thing that easily can be done is to sell off a huge bunch of publicly owned businesses. SAS, SBAB, Nordea, Svenska Spel, and a lot of others can easily be sold today and could bring in lot of necessary extra funds.

I believe that during 2013 government entities for about 150bn SEK could be sold – probably a lot more. Only a few communists and a few union leaders would complain about this if the cash is used in a correct manor.

I would suggest the following on the basis of 150bn;

20bn = pay of public debt, could argue for more, but not necessary since Sweden currently is very financially stable and has a shrinking public debt.

20bn = to strengthen the currency reserve, preferably through purchase of gold. A stronger currency is, contrary to what mainstream cornflake-economists argue, a great thing for both the country and its inhabitants.

25bn = to Defense purchases. Both increase the number of and earlier buy the new fighter Jet of JAS Gripen, also instead of only having two units of surface-to-air missile groups, it should be three, or rather four.

55bn = much needed infrastructural investments. The Swedish train-track system is obsolete and horrible. Several roads need an upswing. We need a few more international airports. Also the government has promised a lot of future investments, which will never happen since the crisis will stop those, but they can instead be put to use during 2013 if they sell off a bunch of companies as is suggested. This big investment would be a great argument to throw around during election time.

The rest = to be put into a municipal rescue/support found and to be combined with the next step below.

This far, they can do it. Easily and fast. And if the political group of misfits currently leading my homeland would do what I just mentioned, they would almost surely be re-elected in 2014. It’s a win-win. They lowered their own income from being super rich and very well off, to become just slightly above rich. And while doing so they increase the safety of the people and country, created lots of military- and construction jobs, they have strengthen the purchasing power of the krona and increased the cushion in case of financial emergency. If they cannot use this together with the 55bn of new and better railways, upgraded airports and better roads to win the election of 2014, they are the most incompetent idiots ever seen.

This is however only the first step - what they can do right now and would be perceived as positive by almost all inhabitants.

These next two steps are not as popular, but just as important.

Firstly they should cut all subsidies to companies, secondly all subsidies to municipalities and local authorities, thirdly all subsidies to media and all other extra funded in society. Also they should cut foreign aid in half, or completely.

Especially the middle one, the so called “robin-hood”-tax that takes from the government and put it out into local branches, will be faced with very stiff opposition. Not a single local political will like this because it means they will need to cut things or raise taxes locally which are not so popular among local inhabitants.

This would save the government circa +120bn SEK / year (conservative number).

I would suggest that 80bn of that should be used to lower the VAT- and gasoline taxes. The VAT tax (Moms) is a taxation of consumption and is really something that hurts the little guy and the poor, lowering that should win a lot of points with the people. Gasoline taxes will of course get some tree-hugging Marxists to scream about destroying the planet, but if such idiots can be ignored almost every person in the country would love a government that lowered their gasoline costs.

The remaining 40bn should be divided up between the military, higher education and pensioners. Sweden is lacking in educational quality and we need more people with higher education, also the defense budget is ridiculously low as already mentioned. We need a proper military able to at least defend the country for more than a few weeks. Pensioners should, if possible, be completely excluded from paying taxes.

But what about the municipalities? And healthcare etc.?

Remember the fund from above? That will be the buffer they need. The rest they need to take care of themselves. It is time that people understand how crappy their local screw-ups are, and this is one way of showing them. Whether local politicians increase taxes or cut costs or a mix of the two in order to meet their criteria, is up to each local bunch of elected frauds.

The final thing that could be done in order to save the country and can be done easily is to increase the cost of borrowing and lower the excess amount of money circling the Swedish system. I.e. we need much higher interest rates and a much tighter grip on banks and their lending practices. This is the thing that most mainstream pundits and moronic Keynesian fools will complain over like crazies, which of course also tells you how important it is. We need to cut the total debt of Sweden by half, at least, and we need to “force” people to repay their loans instead of taking new ones.

So, there you have it. Suggestions that would lower public debt and make Sweden more lucrative and better equipped to handle any crisis, at the same time as we make it a safer, healthier and better place to live without cutting ANYTHING on healthcare, schools or hospitals. In fact if you read above, there´s actually more money going to those priorities.

PS. leaving the European Union would save an additional +25bn, which also is something to strive for... ds.

Why are we not doing this? Oh, that’s right, because we have a semi-socialist and semi-fascist government and not a single person within the elitists wants to change anything. They have it just fine, why change something that they are happy with? Nah, let the people starve… or, they can always have cake…

And above is not really what I would suggest, I would do a lot more and really take this further and truly change things, but it’s a start and if the current government did this or at least took it in this direction, we could perhaps survive The Greatest Depression. 

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