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Chris Whalen : A New Deal

Taxation, the USD, corruption, entitlements based on needs vs. defined benefits … bankruptcy and restructure for states … and much more.

The Dollar
Finally we need to examine and discuss with our allies and trading partners the role of the
dollar as the world’s means of exchange. All of the issues discussed above, particularly
the loss of job opportunities in the US, the focus on housing as a means of spurring
incremental economic growth, and the American addiction to debt and deficits, are
influenced by the artificial strength of the dollar. This stability stems from the fact that
most of the world’s trade and financial transactions still flow through the dollar as does a
large portion of all financial transactions. The dollar’s role as the world’s commercial
currency allows the Fed to monetize government debt and gives consumers access to
cheap imports, but inflicts a cost on American workers and companies in the form of an
over-valued dollar.

Taxation:
At the end of this difficult course, Americans should emerge with a political consensus
that results in an explicit balanced budget amendment to the Constitution, including a line
item veto for the President subject to override as today by both Houses of Congress. A
key part of the discussion ahead for state and local government involves spending
priorities, but we also we need to focus tax policy on consumption rather than income and
investment. Our tax system today taxes the corporate income of equity holders twice and
makes it progressively more and more expensive for employers to hire new workers.

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