What can we do to turn around an economic downturn?

Below, Clip from Bloomberg News (November, 2007): David Tice, Fund Manager for Prudent Bear Fund said stock market would decline 50-60%.

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Next Steps

Over here in Europe, economies seem to be responding positively to a flat income tax. That’s the official story. We are told that when corporate profits are unburdened by heavy taxes, the money goes into things like employment, consumption and investment in innovation. In other words, the money keeps moving.

Russia went to a 13 percent flat tax on personal income in 2001 and some economists claim this facilitated the recovery of Russia’s economy without the help of the oil boom. Slovakia was the first to adopt a 19 percent flat tax on corporate and personal income. Romania followed with a 16 percent flat tax on corporate profit and personal income.

In the United States, the Republican and Democrat parties have not made any serious commitment to the concept of flat taxes. Jerry Brown (D) and Steve Forbes (R) were among the only presidential candidates (1992 campaigns) to forcefully advocate such a sweeping tax policy change. Generally speaking, Democrats and Republican seem to be stuck in a way of federal spending that only allows them to think about slightly raising and slightly lowering taxes.

The problem remains, however. How do we support and encourage small and medium size business start ups and growth in order to get the money moving again in now-vulnerable middle class circles? Getting American money moving again in the right places is one factor among several that are needed to turn around a global economic downturn.

Below, background noise for reading: David Gahan (of Depeche Mode), Kingdom:

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