Ray Dalio's award winning book "changing world order" has simplistically developed the concept of the long cycle which starts with societies rebuilding a new order, then transitioning to a highly prosperous period, followed by a overextended gluttonous period and ending with the elites being disposed and replaced either through peaceful means or bloody revolution with a new group that imposes a new order. This last stage is where a radical manifesto is required.
the key drivers of these cycles are internal order, external order and the debt cycle. The USA's internal order is breaking down with the left and right unable to work together, the external order is under threat with usa now facing a world challenger in china for the first time since the end of the world war. And the debt cycle is approaching its end state with debt ratios at record highs, massive credit expansion, inflation taking off and interest rates about to rise sharply and bring debt crashing down. Australia may be better then the USA in regards to internal order, but we are going to be dragged into the external clash with China head first and our net external debt problem is worse then the USA thanks to our banks borrowing massive amounts to fuel our mortgage market. Plus we dont have a reserve currency like the USA to protect our debt payments.
These cycles, he argues, lasts roughly 70-100 years and the last cycle for most major economies begun in 1945. I.e. We are approaching the final stage.
so its time to dust off our manifestos because this is the time where they get to shine.
your manifesto can either impose radical changes to the existing system or completely change the system. The latter, however, probably requires a bloody revolution. I propose the first.
here is a simplstic version of my manifesto in ten steps.
1) dramatically reduce income taxes and replace them with wealth taxes. Wealth taxes is the way liberal capitalist systems were always supposed to work, its just it was not possible to measure wealth in the past. This is no longer the case. The advantage of wealth taxes vs income taxes is it gives more cash to the young who are just starting out and have large expenses and it reduces tax penalties for the unlucky and increase its for lucky. The net result is it signfiicantly boosts the utility of wealth to the average citizen and does not to shrink the wealth pie. in fact it probably boosts it.
2) tax inheritance. whilst taxing income or wealth discourages work, taxing inheritance actually encourages work. Its a win win for society. i will use the additional funds for education and health highlighted below.
3) ban private schooling. All kids should be given equal opportunities in education. Its a necessary condition of a fair capitalist system. The resources for public education should also be significantly improved as the success of a nation depends on how smart its society is. The human capital boost will more then pay for itself in the long run.
4) complete rebuild of the banking sector as advocated by sir mervyn king in his book the end of alchemy. the aim here is to reduce risky bank lending that creates liquidity crisises as occured during the gfc but still enable the private sector to allocate funds to create wealth. It should also discourage the smartest people from entering finance which is a waste to society.
5) complete universal education. Before school care will be free for all as will higher education. The benefits to society from increased female participation and improved human capital will more then pay for itself in the long run.
6) remove tax exemption status for religions. This is self explanatory. Religions have the freedom to peddle their propoganda. But they will not be given tax freedoms to do so.
7) reform the housing sector. As warren buffet says. We need to treat housing as hamburgers. Wealth taxes will help with this significantly. But so will removing stamp duty, reducing regulations on housing quality and land releases, remove negative gearing and putting houses in the asset test for the pension.
8) double the size of the health sector. With the aging population and rising threats of pandemics an overrun health sector is the biggest threat to society. double training places for doctors and double hospital infrastructure. However, unlike with education, private health has a role to play along with the public sector. And this is because most patients are adults who have wealth unlike in education where its all children who have no wealth of their own. when someone is sick and needs to see a consultant then they should not have to wait 3 months. 1-2 days max. Likewise when someone needs elective surgery they should not have to wait 18 months. 1 month max. This is the goal of the expansion of funding and resources for the sector.
9) set up an independent fiscal authority to manage the size of fiscal policy similar to the central bank with monetary policy. This fiscal authority adjusts the wealth tax rate to smooth the economic cycle to prevent recessions and control debt (thereby extending the prosperous stage of the long cycle).
10) freedom initiative. adults can drink in the streets as they do in europe. adults can do illegal drugs if they agree to attend information programs and are fully responsible for all of their behaviours and health costs. adults can go nude in public if they want (but not on public transport where hygene becomes an issue), People can camp anywhere thats not private land as long as they fully clean up after themselves and cause no damage, People can be offensive as much as they want as long as they dont lie or incite violence or unjust discrimination (note discrimination isnt an offensive word), adults can ride bikes without helmets, all beaches and natural wonders will be declared public land that everyone will have a right to enjoy as long as they dont damage them (Relgions have no special rights to claim them), people can build whatever they want on their properties as long as it doesnt infringe on neightbours properties (Aesthetics alone is not an infringement).
whats your manifesto? It can be 10 steps. Shorter or longer.
the key drivers of these cycles are internal order, external order and the debt cycle. The USA's internal order is breaking down with the left and right unable to work together, the external order is under threat with usa now facing a world challenger in china for the first time since the end of the world war. And the debt cycle is approaching its end state with debt ratios at record highs, massive credit expansion, inflation taking off and interest rates about to rise sharply and bring debt crashing down. Australia may be better then the USA in regards to internal order, but we are going to be dragged into the external clash with China head first and our net external debt problem is worse then the USA thanks to our banks borrowing massive amounts to fuel our mortgage market. Plus we dont have a reserve currency like the USA to protect our debt payments.
These cycles, he argues, lasts roughly 70-100 years and the last cycle for most major economies begun in 1945. I.e. We are approaching the final stage.
so its time to dust off our manifestos because this is the time where they get to shine.
your manifesto can either impose radical changes to the existing system or completely change the system. The latter, however, probably requires a bloody revolution. I propose the first.
here is a simplstic version of my manifesto in ten steps.
1) dramatically reduce income taxes and replace them with wealth taxes. Wealth taxes is the way liberal capitalist systems were always supposed to work, its just it was not possible to measure wealth in the past. This is no longer the case. The advantage of wealth taxes vs income taxes is it gives more cash to the young who are just starting out and have large expenses and it reduces tax penalties for the unlucky and increase its for lucky. The net result is it signfiicantly boosts the utility of wealth to the average citizen and does not to shrink the wealth pie. in fact it probably boosts it.
2) tax inheritance. whilst taxing income or wealth discourages work, taxing inheritance actually encourages work. Its a win win for society. i will use the additional funds for education and health highlighted below.
3) ban private schooling. All kids should be given equal opportunities in education. Its a necessary condition of a fair capitalist system. The resources for public education should also be significantly improved as the success of a nation depends on how smart its society is. The human capital boost will more then pay for itself in the long run.
4) complete rebuild of the banking sector as advocated by sir mervyn king in his book the end of alchemy. the aim here is to reduce risky bank lending that creates liquidity crisises as occured during the gfc but still enable the private sector to allocate funds to create wealth. It should also discourage the smartest people from entering finance which is a waste to society.
5) complete universal education. Before school care will be free for all as will higher education. The benefits to society from increased female participation and improved human capital will more then pay for itself in the long run.
6) remove tax exemption status for religions. This is self explanatory. Religions have the freedom to peddle their propoganda. But they will not be given tax freedoms to do so.
7) reform the housing sector. As warren buffet says. We need to treat housing as hamburgers. Wealth taxes will help with this significantly. But so will removing stamp duty, reducing regulations on housing quality and land releases, remove negative gearing and putting houses in the asset test for the pension.
8) double the size of the health sector. With the aging population and rising threats of pandemics an overrun health sector is the biggest threat to society. double training places for doctors and double hospital infrastructure. However, unlike with education, private health has a role to play along with the public sector. And this is because most patients are adults who have wealth unlike in education where its all children who have no wealth of their own. when someone is sick and needs to see a consultant then they should not have to wait 3 months. 1-2 days max. Likewise when someone needs elective surgery they should not have to wait 18 months. 1 month max. This is the goal of the expansion of funding and resources for the sector.
9) set up an independent fiscal authority to manage the size of fiscal policy similar to the central bank with monetary policy. This fiscal authority adjusts the wealth tax rate to smooth the economic cycle to prevent recessions and control debt (thereby extending the prosperous stage of the long cycle).
10) freedom initiative. adults can drink in the streets as they do in europe. adults can do illegal drugs if they agree to attend information programs and are fully responsible for all of their behaviours and health costs. adults can go nude in public if they want (but not on public transport where hygene becomes an issue), People can camp anywhere thats not private land as long as they fully clean up after themselves and cause no damage, People can be offensive as much as they want as long as they dont lie or incite violence or unjust discrimination (note discrimination isnt an offensive word), adults can ride bikes without helmets, all beaches and natural wonders will be declared public land that everyone will have a right to enjoy as long as they dont damage them (Relgions have no special rights to claim them), people can build whatever they want on their properties as long as it doesnt infringe on neightbours properties (Aesthetics alone is not an infringement).
whats your manifesto? It can be 10 steps. Shorter or longer.
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