Interest Rate

The increased interest rate, announced yesterday, may have more to do with the trade deficit than inflation. 30-40 billion a month trade deficit cannot be sustained without an influx of foreign capital into bonds and equities. It must be a delicate balance. Lower interest rates and foreign capital stays home. Higher interest and the equities market suffers. Like it or not the equities, market is the oil that runs our economy.

The deficit looms at 7.2 trillion in an 11 trillion economy. The Treasury's revenue amounts to 2.6 trillion at the year to date rate of collection, just 400 billion ahead of last year. The year-end expectation was for 2.2 trillion. That's like 72 thousand in debt for a family with 22 thousand annual incomes. OK if it's your home, but you don't want to loose your job. The US of course has enormous net worth and the highest credit rating.

Taxes may not be the solution. More taxes and the economy hesitates, less taxes depends upon economic growth to increase revenue. Obviously too much tax reduces revenue and too little does the same. On the middle ground, it makes little difference as the General Accounting office pointed out before Congress. The solution rests with an unfettered high tech information based business world. Small business especially new business drives innovation and prosperity.

Far more important than the interest rate, the destructive interference of legislators from both sides of the isle holds back the economy, stifle innovation and support top-heavy monopolies and cartels, artifacts from the Pleistocene of the Industrial Age. You cannot lock up information behind infinite walls of copyright and support the sagging phone-lines of the outmoded phone companies in an artificial and unearned profit while expecting any growth in the Information Economy. According to the last rendition of the DMCA, the pencil manufacturer can be held guilty for a student copying an assignment out of an encyclopedia. With the hundred dollars, a month fee the phone company extracts for DSL, itself a hopelessly outmoded technology, the incumbent carriers alone could pay off the national debt, and that's not a bad idea. These idiots have got to be stopped.

The problem though stems from the enormous campaign contributions these fossils make to both parties. The IP community articulates the woes quite well but are naive and impotent politically. They will have to grow beards before they topple the cast statuary of iniquity.