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Citizens of Maine:


I have published my declaration of candidacy. In that document, I argued that the current War has made it impossible to institute policy changes for its duration. I also argued that the post-war period will be dominated by revised perceptions of national interests and needs and by an unknowable economic situation. These conditions make it almost impossible to state with certainty what specific policy proposals I will support. That does not mean that I have no convictions about the desirable future course of the country. I will use this article and one to be published tomorrow to discuss those beliefs.



Issue One: Strengthening the Military and Keeping it Strong

I have described my conviction that the current war has demonstrated that many of the policies adopted by the eUS before the attack must be reconsidered when we can evaluate our economic condition at war's end. I have also noted that while the war continues, Congress and the rest of the government have absolutely no ability to do more than to finance the military in defending our existence as a nation. As is necessary and appropriate, the eUS is spending every bit of revenue it can generate to support the military. But, even this expenditure is insufficient to finance even the supply of weapons to all branches of the military. The Home Guard has had no weapons supplied to it in several weeks. Few eUS citizens can afford to purchase five Q1 weapons every day. In general, soldiers who fight without weapons produce half the damage they would if they fight with weapons. Consequently, the eUS loses substantial damage during each fight.


Given these problems, the most important post-war issue is how we reorganize our economy and finances better to support military needs in peace and to create and maintain a reserve that can help meet the military's needs in future wars. Two primary means to these ends have been proposed. The creation of a "reserve fund" of gold to be saved for use only in future wars is one promising suggestion. But, we can set the size of that fund only after we see what our revenue and obligations are at war's end.


A suggestion that has the potential to ease the military's weapons shortage in war time is to create government-owned, military administered and staffed weapons companies. Such companies, especially those that produce high quality weapons for the Marines and Airborne, can help make the military self-sufficient in weapons, reduce the amount the military spends on weapons, and allow the military to build stockpiles of weapons for use in future wars. This is a promising suggestion. Before we implement it, however, there must be a full consideration of the effect of such a program on private companies that now provide the military with most of its weapons. Right now, I support creating government weapons companies, but post-war economic conditions and additional information about their effects on private companies may cause me to revise my position.


Issue Two: Reforming the Tax Regime

Our pre-war tax system was incoherent. Congress changed specific taxes on specific industries at least once per term. When war came, we found tax revenue insufficient to meet our revenue needs. Losses of the tax revenue generated by the loss of companies in conquered regions decreased revenue even more. The immediate emergency response was to increase our already high income taxes. Recently, the tax regime was again revised for the duration of the war. Income taxes were reduced to pre-war levels; value added taxes (essentially sales taxes) were increased to 8% only on manufactured goods; import taxes were reduced to 5% on all manufactured goods except weapons, which were set at 1%, and at 1% for all raw materials. There are enough arguments in favor of this regime during war that I voted in favor of it.


After the war, however, this entire system must be revised. Income taxes are probably too high. But Congress will have to balance the revenue that would be lost from a reduction against funding requirements. That evaluation can only be done when the war is over and the economy has stabilized. Maintaining value added taxes might compensate for any loss of revenue that resulted from reducing income taxes. The value added tax also has the advantage of capturing revenue from foreign entities that purchase goods in our markets. But, in this case, too, we can only determine how much revenue the VAT produces when the economy has stabilized after the war.


Import taxes are another matter. Their current low level is justified primarily by the fact that the loss of regions has created a shortage of product on the market and consequent high prices at times. Low import taxes can attract foreign goods to the eUS market and partially remedy these shortages. After the war, this situation will no longer exist. If import taxes remain at current levels, the eUS will impose some of the lowest import taxes in the eworld. This would have at least three adverse consequences for the eUS economy. The low cost of exporting to the eUS and its large domestic market would attract foreign imports to compete with eUS business. This, in turn, would pressure domestic business to reduce its prices and cause such businesses to decrease wages to compensate. Workers could pay less for necessities, but they would have less money to spend.


A second consequence of running a "free trade" regime in a world composed of nations that impose high import taxes on goods exported from the eUS would be the loss of eUS Gold to other nations. Foreign companies would sell their products here in exchange for USD. These USD would then be exchanged on our money market for Gold which would then be controlled by another nation.


Another consequence applies to our high production resources. With an import tax of 1% applied to them, we are inviting every nation in the world, friend or foe, government owned or private to compete with domestic producers of the strategic resources the Administrators have granted us. It is not difficult to imagine hostile governments deliberately underpricing the resources it exports to the eUS. This would give them two advantages: They could make it very hard for domestic resource companies to survive, and they would be able to collect Gold from the eUS while undermining domestic industry.


A large group in the eUS supports this "free trade in one nation" tax regime. Even after the war has given us a powerful demonstration of the many advantages of having large Gold reserves during a war, they repeat again and again that the cheap goods low import taxes produce are more beneficial to the eUS than is Gold. They argue, without accounting for the low wages accompanying cheap goods, that low prices enable ordinary citizens to buy weapons and do more damage than heavily Gold consuming tanking could do. But there are many more costs involved in prosecuting a war than merely the costs of tanking. For example, Gold must be paid to open a battle and to renew MPPs every month. As this war should have taught us, cheap retail products are no substitute for large stores of Gold.


When these "free traders" run out of arguments, they close with a final statement: If other nations refuse to lower their tariffs, we will boycott them and force them to comply. But this is no solution. If we were serious about using this enforcement mechanism, we would have to boycott many of our closest allies. Romania imposes import taxes of 99% on all manufactured goods and on wood. Norway has import taxes of 99% on all manufactured products except food (10😵 and on oil. Spain imposes tariffs of 99% on iron and 10% on manufactured products. Canada imposes tariffs between 10% and 40% on manufactured products, 75% on oil and 50% on wood. These tax levels are not consistent with "free trade". Do the "free traders" in the eUS propose imposing trade boycotts on these nations, each of which has given us essential help in our defense against PEACE.


seeker1
Senator from Maine