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The Present Economic Failure: Closed System-Positive Feedback

Any engineer can tell you that closed system-positive feedback allows for
very rapid response to a condition that may tend to run out of specification. For
example, if a plane slips to the left, you may want to turn right.

And any garage band member can tell you that closed system-positive feedback
can be detrimental to their concert, as is evidenced by placing an electric
guitar too close to one of the speakers. Very high, very loud whine.

We are seeing this phenomenon right now between our congress and the
Federal Reserver.
Each is trying their hardest to make their process correct without regard
to the other. Or for that matter, any outside process.

The present closed system, with feedback can be enumerated as below:

1 – Congress makes rules that will cost Americans money either by Tax
or edict.
2 – That causes business to withdraw, cutting jobs and output.
3 – That causes lower revenues into the TAX coffers of the U.S. Government.
4 – That causes pressure on the dollar and loss of manufacturing, jobs and TAXES.
5 – That causes congress Spend more in bailouts to attempt to halt the economic
DEATH of the U.S.
6 – That causes the Federal Reserve to prop up the Government Bank Account
by borrowing, printing or devaluing the U.S. Dollar.
7 – Back to #5

All precipitated by #1.

Like the plane or the garage band analogy, it might be a good idea to
let go of the controls.
Pull away from the control of the system. It can right itself. The U.S.
Economy was created to be self regulating and correcting.
Free Enterprise is the perfect model for self correction.
If you charge too much, you don’t make money
If you don’t give what is wanted, you don’t make money.
But if you make what is wanted at a “fair” price, you make money, you hire
more workers, and everyone pays taxes.
The banks loan and everyone pays taxes.
Workers buy houses, and everyone pays taxes.

To think that you can force growth by regulation and taxes is neive.
To think that you can do what was done and failed so many times before
is insane.

If Congress and the Fed just let go of the reigns, the system will fix
itself, just like any other well engineered closed system design. It is
slow, that is the damping facter required for stable, sustained operation,
but it works.

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