Engineering our Economy

Wow!  What a nice interface.

I'm watching a PBS-like talk about economics which was probably triggered by the U.S. Presidential debate earlier today.

I don't even know what side is which as far as the economists go.  I do know that if the very rich take too many of the world's resources, some people will hurt for it.  If not now, later when we start to run out of something.

Everybody seems to agree there are two absolutes:  death and taxes.

The solution:

Tie the tax rate to our willingness to invest.  If the tax rate is too high, people won't risk their money to pursue new things.  If it is too low, we end up with a big deficit and we can't pay for what we think is important, whether that is defense, education, vice, or health care.

Engineers call this a negative feedback system.  It is stable if the amount of feedback is tuned appropriately.  Here are the two sides of the control: (Stable-feedback rate regulation is a more palatable name.)

• If the income-equality gap is growing too large, tax more for free/assisted benefits for all.
• If high-income people are not willing to invest, lower taxes.

The obvious question here is, why have we not done this?  Answer: The feedback loop is several years in length, so we have not had a chance to experiment with this.  If we go back to a flat-tax system and set taxes at a point where our budget is balanced, we can see where we need to go from there.

Our current system is chaotic.  We need to rein in the chaos...but not too much.

-Todd