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When the federal government spends money, politicians like to say its outlays are financed by taxpayer money. In actuality, taxation is only one way the federal government can raise cash. Another way is to issue Treasury notes – that is, debt – to Americans and foreigners alike. But this is still arguably using taxpayer dollars because the debt will need to be repaid from some source.

The easiest way for the federal government to raise money is to print more cash. The Federal Reserve Bank does the printing, and Congress oversees its operations. There is only one limit to the amount of money the Federal Reserve can print, and that is the value of the dollar. But even inflation can work in the government’s favor when it is seeking to reduce debt, because inflation effectively lowers the cost of repayment.

If taxpayer money was the only way the federal government could raise revenues, it would be impossible to finance a perennial deficit.

Taxing the Rich

Politicians can earn consistent political capital gains by “taxing the rich.” But there are several problems with this strategy. First is their definition of “rich.” The working definition deals solely with income rather than net assets. I consider someone rich if they have a lot of money, not if they earn a high salary.

Who is wealthier? It is the physician who recently finished his residency and began earning a salary of $250,000 but has student loans totaling $200,000? Is he wealthier than a retiree who has a pension of only $60,000 annually but saved and invested $2 million? According to most politicians, “taxing the rich” means soaking the doctor while leaving the retiree untouched.

That Won’t Work

Taxing the rich, either kind, will not work. By “work” I mean the government generates more tax revenues and reduces the financial burden on “middle” and “working” class families – two more terms with political definitions worth disputing, but not here.

Taxing high income earners will not work because most of them are valuable professionals like doctors and dentists. When taxes go up, they will demand and receive higher salaries. This will increase the cost of some basic services, even while the government uses increased revenues to subsidize other services. The result is zero change to cost of living.

Taxing those who are truly wealthy is still more problematic, for three reasons:

1. Rich people decide what their taxable income is. The majority of their assets are investments in businesses, where the primary return is appreciation as opposed to earnings distributions. So the rich, in normal times, pay most of their taxes on capital gains from liquidated investments of their choice. If taxes get too high, the rich may simply hold their investments and pay nothing on the gains, if there are any.

2. Rich people are mobile. Tax them too much and they will move their assets overseas. With a good strategy, it is amazing how much they can save.

3. Rich people oftentimes own businesses that sell goods and services to the government. Tax dollars do not enter a black hole from which they never return to the private sector. The federal government spends its tax dollars. And many wealthy people own businesses that are recipients of this cash. The businesses earn a higher income and repay a higher portion of their income in taxes. So raising taxes merely shifts positioning in a cycle, but it does not reduce the flow.

If politicians are trying to hurt wealthy people with higher taxes, they succeed at this goal. It is more than a little inconvenient for them to apply some of the above tactics. However, the only way to achieve widespread, lasting prosperity in any society is by true fairness. A “flat” income tax – much like employment taxes, but applied to all income – may be politically impossible at the federal level. Nonetheless, it is the right thing to do.

Alexander Typaldos

Send in the soldiers (chemotherapy), fly the bombers overhead (radiation therapy), and roll the tanks over the enemy (surgery). Maybe with superior firepower, we can win the war on cancer.

If drugs, radiation, and surgery are the weapons, cancer is the enemy, and physicians are the generals, then what is the patient in this war? The patient’s body is the battlefield! What does a battlefield look like after the fighting is over? Not so good.

Yet again, medical philosophy bottlenecks medical science. As long as physicians possess a war mentality, they will continue blasting cancer with steadily increasing firepower and success. Eventually, they will discover that the easiest way to kill cancer is to kill the patient. It will cease growing immediately!

Cure for Cancer

Is this possible? The answer is no. Cancer doesn’t work that way. It is not a foreign invader we need to fight; it is our own cells gone bad. Genetic material in numerous types of cells becomes corrupted through various means – chemicals, pathogens, radiation – and these cells grow out-of-control, damaging healthy tissues.

Medicine can cure tuberculosis; it can cure smallpox. Medicine cannot cure different cell types in different parts of the body from failing to replicate properly in different ways and for different reasons. Physicians should recognize that diseases like cancer require a different approach.

The important thing to remember is that while certain causes of cancer come from outside our bodies, the cancer itself is a part of us. Because of this fact, the only safe, sustainable solution is to make sure the cellular reproduction mechanism continues to function as it should. And to do this, we need to understand what causes it to malfunction.

Practical, Workable Solutions

I hate this awe, reverence, and almost magical hope that many Americans hold, believing that scientists and doctors will some-day find a cure for cancer. This mystical hope wreaks havoc on logical, rational, and reasonable thought that is directed toward practical, workable solutions to clearly-defined problems.

What I love is good common sense and a balanced, realistic outlook. It is not glamorous, but it is very powerful. This is one thing I loved about my father. Unlike his peers, who were obsessed with their status of being able to prescribe medications, my father approached injuries more like an engineer approaches his projects. He knew what the problem was and what he needed to do to fix it, and he did not think twice about shopping at Home Depot to find the right equipment.

No hype, no self-promotion; just concrete, measurable, reproducible results.

Balanced Hope

Americans are starting to get what needs to be done to fix the cancer problem. Live a healthy lifestyle, avoid carcinogens like the ones in cigarette smoke, and keep your immune system in good shape. The public may be catching onto this idea faster than physicians, who apparently prefer their reactive, combative approach, whether or not it works.

The medical profession’s idea of cancer prevention is regular screenings. What to screen for depends on statistical risk factors, such as age and sex. In this case, statistics are misleading. One man’s risk of prostate cancer may be 100 percent; another man in his same demographic may have a risk factor of 0. It is incompetent and lazy for doctors to tell them they both have a risk factor of, say, 2 percent, as if cancer is random.

Do you think that if only the American Cancer Society had more money it would have found a cure by now?

Alexander Typaldos

At the center of the healthcare industry lies a corrupted system that is the source of innumerable troubles. That core is the medical profession.

Medicine underwent a period of growth, reform, and cohesion in the latter part of the nineteenth century that formed the medical profession of today. Newly transformed, during the first half of the twentieth century medicine used advances in technology and industry to cure infections and injuries that had been previously untreatable.

Unfortunately, the medical profession failed to adapt itself to a new wave of epidemics surfacing during the second half of the twentieth century. It had served the profession well to use drugs as weapons against a deadly array of pathogenic infections. However, medicine did not change its tactics to meet recent challenges of lifestyle- and pollutant-related illnesses.

One might wonder why a profession that prides itself on being modern has stubbornly resisted change. The answer is that there is no good reason why physicians abandoned rational thought and adaptability, but there are reasons:

1. Self-preservation. Physicians fear that fundamental changes in the practice of medicine could limit their viability, jeopardize their livelihood, and require further educational pursuits.

2. Self-esteem. Too many physicians have sacrificed their families, friends, and identities for the sake of their practices. Having failed in every other area of life, emotionally it is unthinkable they have also failed in the practice of medicine.

3. Indoctrination. Strange though this sounds to the outsider, a cult-like mentality prevails within the medical profession. Members are expected to believe the tenets of medical philosophy and not think for themselves. Most American physicians are competitive, ambitious professionals who long for approbation and acceptance. Only a rigid framework of universally-held “doctrine” provides them with a concrete measurement of their achievement.

4. Unholy alliance. Why do physicians willingly cater to the business interests of pharmaceutical corporations by prescribing expensive and unnecessary medications? Drug companies ensure physicians keep their niche as gatekeepers of the medicine cabinet (see reason 1, above); drug representatives are readily available as buddies to physicians on a personal level (see reason 2, above); and drug companies determine the “standard” in medical care (see reason 3, above).

What is notable is that all these reasons have to do with the physician and none have to do with the patient. Physicians have subordinated patient results to their own interests, including their desire to feel like they are helping patients.

The profession has become so corrupt and ineffective that there is a trend toward marginalizing physicians – replacing them with nurse practitioners, physician assistants, physical therapists, nurse anesthetists, and online pharmacies. Healthcare’s rotten core must be either repaired or replaced. In other words, to reform healthcare we must also reform medicine.

Alexander Typaldos, JD

After the stock market declined sharply in September and October of 2008, it was revealed that investment manager Bernard Madoff had been running a giant Ponzi scheme for decades which allegedly stole $50 billion from his investors. But is it the biggest Ponzi scheme ever?

Ponzi schemes “work” by promising and posting unreasonably high returns on investments, and funding payouts with money brought in from new investors. The schemes inevitably lose money over time because payouts to both investor and investment manager exceed revenues. Usually, Ponzi schemes are short-term cons. However, if performed artfully, they can last for a very long time.

Surprisingly, the characteristics of a Ponzi scheme apply to the stock market itself. To maintain the value of stock, investors must believe there will be future demand for that stock. And future demand itself depends on the belief that there will be more future demand. This is true of many assets, but in the case of stock investments, most investors have little use for the assets other than later selling them for a profit.

Monetary dividends from stock investments are far too low to justify their value. Dollar for dollar, bonds pay much higher returns. And as a practical matter, most investment funds and virtually all small investors have no use for the voting rights of common stock. It takes a lot of shares for your vote to count in a large corporation, and even then you probably want those who are more involved with the organization making decisions.

I need to clarify that stock ownership itself is not a Ponzi scheme, only trading on an open stock exchange. When you own stock you own a piece of a corporation. With it, you have the right to vote and you are entitled to a portion of earnings paid out each year. The value of the right to share in profits and make decisions should equal the fair market value of stock.

In the case of publicly-traded corporations, their stock is typically valued higher because public trading adds an element of speculation. This fact becomes apparent when a corporation “goes public,” meaning it allows its stock to be freely traded in a stock market. Share values can spike (although it is not guaranteed) and the corporation’s current owners and executives often enjoy a windfall, for two reasons.

First, offering shares for sale in a public exchange drives up the value of the shares the owners and executives already own. Second, when investors purchase the newly issued shares, their investment money goes directly to the corporation, which becomes more valuable as a result. If you think this infusion of cash justifies the heightened stock values, keep in mind that in a Ponzi scheme the infusion of cash from new investors merely perpetuates the scheme. It cannot turn losses into gains nor reconcile the book value of investments with their real value.

Caught red-handed

Many economists think the mortgage and credit crisis caused the recent stock market collapse. In actuality, the credit crisis had no more to do with causing the collapse, than the collapse itself had to do with causing Mr. Madoff’s Ponzi scheme.

The mortgage crisis has instead revealed fundamental instability in the stock market. Values on paper were too high, and as shocking as it is to witness trillions of dollars in assets vanish over a period of several weeks, understand that those assets were never really there.

Government intervention

When millions of Americans suddenly have reduced assets resulting from drastic losses in their stock portfolio, they effectively have less cash because they can no longer sell their investments for the same amount of money they could several months ago. The Federal Reserve Bank can now print large amounts of currency without an immediate risk of corresponding inflation. The federal government is able to use this money to purchase toxic mortgages, bailout companies, and stimulate economic growth.

However, more currency does not equal more value; we must add valuable goods and services to our economy to sustain growth. If we try to force growth by speculating in stocks and printing currency, we are setting our economy upon a weak foundation – one that will be subject to more crises and a prolonged recession.

I know corporations need a way to quickly raise capital. I know investors claim future growth is the justification for otherwise unjustifiably high stock prices. I know market values have climbed more or less steadily since the great depression. But could it be that a time will come when the world’s largest Ponzi scheme collapses, losses are measured in trillions, and everyone wonders why the signs were ignored? Could it be that time has already come?

Alexander Typaldos, JD

Some people think the growth of healthcare is a good thing for the United States economy. In fact, it is a tremendous burden. Let me provide a simple explanation that most can relate to. Is it a good thing for healthcare costs to grow as a percentage of your family budget? Of course not, because every dollar you spend on healthcare is one less you have to spend on things you really want. Likewise, at the national level, healthcare’s growth as a percentage of the economy is draining the resources of other industries we would rather foster, such as education and construction.

It is best for our economy to keep healthcare small, because healthcare is what I classify as a negative industry. A negative industry is one that corrects errors, solves problems, and fixes things when they go wrong. It takes bad situations and makes them neutral. In short, a negative industry is one that would not exist in a perfect world. This includes healthcare, law enforcement, social services, and armed forces, among others.

A positive industry is one that creates something of value. It turns neutral situations into positive ones. Examples are agriculture, transportation, textiles, and communications, to name a few.

Negative industries are not bad themselves. They are equally important to society as positive industries. However, our goal should be to reduce the size of negative industries, while ensuring they are still able to accomplish their purposes. This makes more resources available to positive industries so they can create the goods and services we really want to spend our money on.

From Negative to Positive

America’s healthcare system is fundamentally flawed. And society is so dependent on its services that it is pouring massive resources into healthcare just to keep it functioning. The obvious solution is to reform healthcare so it can function better than it does now with far less resources.

In this article, though, I want to go beyond the issue of healthcare reform and share my vision. In society today in America, we are too focused on preserving what we already have and protecting ourselves from fears, real and imagined. We should be more focused on growth, advancement, and improvement.

What this means for healthcare is that we can fix the system. More than that, we can reform the practice of medicine so that all conditions are treatable. How will we do this? By systematically categorizing the various but limited causes of illness and injury, and then logically, rationally, and reasonably analyzing treatment options, while placing value on creativity and having one goal in mind – results. We have the talent and technology to do this; it is medicine’s bad ideas and philosophies that stand in the way.

My ultimate objective is to turn healthcare into a positive industry by inventing protocols and procedures that enhance the mental and physical performance of already healthy individuals. Your annual checkup will become a comprehensive diagnostic process to look for ways to improve energy levels, mental clarity, flexibility, even appearance.

Again, we have the ability to do this; it is just not a part of medicine’s culture. Lasik surgery is an example of this type of treatment, because it can give people with good 20/20 vision even better eyesight. With a focus on nutrition, hormone levels, the musculoskeletal system, habits and health practices, this approach offers a lot of promise for improving Americans’ quality of life.

Growth in this part of healthcare will not take from our economy, it will add in the form of healthier workers and products and services we can export overseas. Economic growth is not certain; it happens only when we add something new and valuable. We await a revolution in medicine on the scale of the industrial and technological revolutions that preceded it.

Alexander Typaldos, JD