Implimenting Trust Spending

Dear Reader,

It seems to me that Instituting the Manifesto of the International Capitalist Party’s system of funding government would be difficult. More so for a rich country than for a poor country. The difficulty would be met at the end with an enormous payback, as I have explored before.

A rich country is assumed to have a well developed economy. With long standing institutions and well worn practices when it comes to taxes and finance. A nation that is wealthy also has a stable government. (A nation without a stable government is not long wealthy). These circumstances build up momentum in an economy. Like a gyroscope the built up moment of inertia makes it hard to change the orientation of laws regarding taxation and regulation. A wealthy nation also spends a lot of money. When the government spends 20% twenty percent of GDP and GDP is measured in the Hundreds of billions or trillions that is a huge amount of money to transition into trust spending.

A poorer nation would have a comparatively easier time. Poorer nations have less stable governments and probably have recently undergone political convulsions. The Department’s of government will be new and ductile instead of old and brittle. The methods of taxation will have been mercurial. Even though a poorer nation probably spends more of it’s GDP perhaps 25%-40% twenty five percent to fourty percent, with a GDP that is measured in the tens or hundreds of millions it isn’t that much money to transition into trust spending. Plus being poor in and of itself means that markets are undeveloped. Undeveloped markets don’t resist change like developed ones do.

In either case a phased transition would be in order. The poorer country would have to successfully implement the other parts of the Manifesto before the transition would take place. The economy and government must be stabilized and the populace must have the basic necessities met. These are preconditions to starting transitioning into trust spending.

A constitutional amendment is another precondition. Without this control later governments will find it too easy to find a reason to spend all the trust money. Near sightedness is a perpetual problem with the Elite. They always want to look like a hero today… let others deal with the aftermath.

A final note about potential positive externalities. With a successful transition to trust government spending the money spent by government would contribute to real GDP. With tax as you go deficit spending, at best, government is a minor drag on GDP. But most often government tax and spend policies serve to produce a huge amount of friction in the economy and sometimes even in peoples daily lives. The Elite will never let taxes go away, there are always good reasons to spend someone else’s money, but they will be less onerous and won‘t have the sand in the gears effect of deficit spending.

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