Tuesday, January 14, 2014

Protection from a Cyber-Economic Attack

We are to be the recipients of cyber-economic attacks
Actually, we already have been and can expect to be again. This is not if, but when!
Kevin Freeman in his book Game Plan discusses the problem in depth and suggests some solutions urgently needed. 
This book is an important read. I highly recommend you read it and take note. Here are some excerpts from the book:
There Is Hope
The amazing thing about the current global economic war is that the United States of America is still ideally positioned to win. If we act properly, it’s not too late to usher in a period of global peace and prosperity. It’s not too late, even though we have accumulated the largest budget deficits and national debt in history. Even though we have over-shackled our people with crippling rules and regulations. Even though we have nearly abandoned all the things that made America great in the first place. It’s still not too late. But it is close.
There are dozens of reasons to believe that the American experiment will end in failure. We have plenty of internal problems— out-of-control spending, paralyzing political agendas, a government that operates more like a confidence game, an apathetic population, and a system that rewards failure and punishes success. In many ways, we are our own worst enemies.
Externally, we have enemies who want to see America go away. Some of them are parasites on our prosperity and intend to bleed us dry over the long term. Others hate us ideologically. Some simply resent our success. Whatever their motivation, they are intent on our destruction.
There are eight steps we must take to restore our greatness. The first is to admit we have a problem.
Step One: Recognize the Global War Under Way
Officials in defense and intelligence have little training in economics. Even those who appreciate our economic problems don’t understand that our enemies could use economic weapons to damage us.
Step Two: Take Reasonable Precautions
The United States should take a few reasonable precautions to protect its financial system and infrastructure. These measures are not costly, but they will provoke opposition from some powerful interests that benefit from the status quo, so they will require political will.
First, we should prohibit naked short selling and naked credit-default swaps.
Second, we should also look into ways to strengthen the cybergrid. The military has developed a Cyber Command, and that is a start.  But we have little in the way of private-sector defense.
Third, we should reinstitute the civil defense measures that were maintained during the Cold War. There was a time when every school-child in America had an action plan in case of an attack. 18
Finally, there is promising legislation aimed at preventing disaster from an electromagnetic pulse— either natural, from solar flares, or from a deliberate missile attack— that should be adopted.
The key is to take sensible steps in response to the reality that we face a global economic war. Now is the time to prepare— before disaster strikes.
Step Three: Get Money Moving without Money Printing
Since 2009 the Federal Reserve has conducted three rounds of “quantitative easing.” It has pumped trillions of dollars into the system, and yet the economy remains stagnant. Just before the 2008 crash, the Federal Reserve’s balance sheet was around $ 800 billion. Five years later it was in the range of $3.6 trillion. The unemployment rate has barely dipped, and that minimal decrease is attributable to workers’ getting discouraged and giving up the search for a job. So why isn’t all this new money from the Fed making the economy strong? The answer from economists is that the “velocity of money” is too low. In plain English, that means that individuals and businesses have been hoarding cash. Consumers have been reluctant to spend, and companies have been slow to expand.
So where has all the money gone? Corporations now hold a record amount of cash, and they have kept almost $2 trillion of that overseas. 26 A mere eighty-three companies hold almost $1.5 trillion among them. The reason that American companies hold so much cash in offshore accounts is our tax code. The United States has the highest official corporate tax rate in the world. Even accounting for various deductions and manipulations that allow companies to pay less than the stated rate, we are ranked ninety-fourth out of one hundred nations in tax competitiveness. . . .
Corporate leaders have made it clear that if the U.S. tax system didn’t penalize them, they would invest and spend at home.
Step Four: Achieve Energy Independence
One of the areas in which we could let American companies invest that overseas cash is energy. The same government that wants to tax corporations’ overseas cash at 35 percent set aside $80 billion of the $800 billion stimulus for green energy. While not all of that money was spent, at least thirty-four of the recipients of this federal subsidy have already gone bankrupt, taking billions of taxpayer dollars with them. Were these projects chosen solely because of their economic merit? Not according to the Hoover Institution’s Peter Schweizer. In Throw Them All Out, he writes that 71 percent of the Obama Energy Department’s grants and loans were given to “individuals who were bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party. . . .” Politico reported in late 2011, “The Energy Department’s inspector general has launched more than 100 criminal investigations related to 2009 economic stimulus spending.” Everyone knows about Solyndra’s bankruptcy (costing taxpayers a half billion) and should understand that the government isn’t the ideal venture capitalist.
There is an understandable interest in developing new forms of energy with the hope that they will create jobs and strengthen our economy. But when you contrast the government failures with private-enterprise successes, you begin to see why we should promote the free-market approach to energy development. . .
Alternative energy is only one step toward American energy independence. What if we allowed some of that corporate cash to accelerate fossil fuel development as well? . . .
What if American corporations were allowed to repatriate foreign cash if they invested to promote energy independence? . . .
Lifting the ban on offshore drilling could result in a million new American jobs, according to some estimates, and reduce our reliance on foreign oil. Our energy future is bright— if we don’t foolishly spoil it. . . .
Developing our domestic energy resources is essential to our fight in the global economic war.
Step Five: Reduce Regulation
A couple of years after President Ronald Reagan left office, [the author]  had the privilege of presenting him with the Adam Smith Award for Individual Excellence in Free Enterprise. Reagan’s modest response was: “Really, all I did was get the government the hell out of the way so good people like you could grow the economy.”
Since the end of Reagan’s presidency, however, the regulatory burden has grown uncontrollably. Back in 1974, Reagan, then the governor of California, complained about forty-five thousand pages of new federal regulations. Today there are about 175,000 pages of new regulations.
Step Six: A Workable Tax Code
Reform of the tax code should go hand in hand with a reduction of regulation. Nearly everyone agrees that the current tax system is a convoluted mess. It does not maximize revenues, and it hampers economic growth.
So how do we fix it? There are four basic options:
1.      Simplify the system by stripping it of numerous breaks, leaving only those which help grow the economy or make the tax code fairer.
2.      Implement a flat tax, which would give people more incentive to work and invest their earnings back into the economy.
3.      The so-called fair tax would eliminate the payroll tax and impose a national sales tax on purchases of new goods and services, excluding necessities. The fair-tax rate after necessities would be 23 percent, which equals the lowest current income-tax bracket (15 percent) plus the employee’s share of payroll taxes (7.65 percent).
4.      A combination of the flat tax and the fair tax might ameliorate the problems with each. The flat tax does not eliminate the payroll tax, while the fair tax, depending on one’s state sales tax, could leave someone with a tax burden of close to 40 percent of his income. One proposal is to combine a flat income tax of about 16 percent (eliminating altogether the tax liability of the poorest) with a national sales tax or VAT of roughly 10 percent.
Each idea has merit, and each has its proponents. Regardless of what we do, we have to fix the tax code. Such a fix would dramatically enhance our ability to fight in the global economic war.
Step Seven: Teach What America Is All About
Immigration is a serious problem. Some argue that because our native population is declining, we need more immigrants to fuel growth and allow America to compete in the global market. Others argue that uncontrolled immigration will destroy the fabric of society. Richard Lamm, as governor of Colorado, “saw how employers were using illegal immigration for cheap labor and in some cases firing Americans so they could hire illegals who they could pay less and work harder. I saw the incredible flow of illegal aliens who crowded out American workers in construction, packing plants, the service industry, etc, many of whom were paid ‘off-books’ so we got no state income taxes from them.”
Others worry that our lax immigration policies will allow terrorists to infiltrate our nation. . . .
Immigrants built our nation, and immigration is an essential part of the American story. What’s different, however, is that immigrants are no longer taught the uniqueness and greatness of America. It used to be that we were a cultural melting pot. Now political correctness teaches us to maintain and celebrate our differences rather than coming together. Our educational institutions seem intent on developing disdain for America by highlighting failure rather than celebrating success. . . .
Our own government is in on the act— often leading the way. The air force teaches that the Founders of the United States were extremists: “In U.S. history, there are many examples of extremist ideologies and movements. The colonists who sought to free themselves from British rule and the Confederate states who sought to secede from the Northern states are just two examples.”
This is a nation that has lost its moral compass and so has lost its way. The corrosion of Americans’ self-understanding has seriously weakened us. But there is a solution. We can begin celebrating the Founders and their principles. We have to return to old-fashioned patriotism. And, we have to make such teaching a part of any immigration solution.
Step Eight: Return to Our Spiritual Roots
 Of the eight steps, this one is the most important. American was founded on the Judeo-Christian principles of Western civilization. As George Washington affirmed, “It is the duty of all nations to acknowledge the providence of Almighty God, to obey His will, to be grateful for His benefits, and humbly to implore His protection and favor.” He also said, “Of all the dispositions and habits which lead to political prosperity, religion and morality are indispensable supports.”
President Reagan warned us not to forget our national dependence on divine Providence: “If we ever forget that we are One Nation Under God, then we will be one nation gone under.” . . .
[The author agrees] with President Reagan. Remembering our spiritual heritage is the most important step we can take in defending America, because our problem isn’t really economic or even political. Our real problem is spiritual. “Blessed is the nation whose God is the Lord,” writes the psalmist (Psalms 33:12). The Bible promises blessings to the obedient: “The Lord shall open unto thee his good treasure, the heaven to give the rain unto thy land in his season, and to bless all the work of thine hand: and thou shalt lend to many nations, and thou shalt not borrow. And the Lord shall make thee the head, and not the tail; and thou shalt be above only, and thou shalt not be beneath; if that thou hearken unto the commandments of the Lord thy God, which I command thee this day, to observe and to do them” (Deuteronomy 28:12– 13).
To the disobedient, in contrast, God promises a curse: “thou shalt not prosper in thy ways: and thou shalt be only oppressed and spoiled evermore, and no man shall save thee” (Deuteronomy 28:29). “The fruit of thy land and all thy labors, shall a nation which thou knowest not eat up” (Deuteronomy 28:33). “The stranger that is within thee shall get up above thee very high; and thou shalt come down very low. He shall lend to thee, and thou shalt not lend to him: he shall be the head, and thou shalt be the tail” (Deuteronomy 28:43–44). By these verses, America today sounds more like a nation under a curse than a nation under blessing.
The Bible also warns that “the borrower is servant to the lender” (Proverbs 22:7). The decline of American influence has been rapid and has coincided with the rise in our federal debt. The Canadian newspaper publisher and biographer Conrad Black has observed, “Not since the disintegration of the Soviet Union in 1991, and prior to that the fall of France in 1940, has there been so swift an erosion of the world influence of a Great Power as we are witnessing with the United States.”
Now, if the problem is spiritual, the solution will be spiritual as well. America needs wise economic and security policies, but those policies alone will not restore our greatness. America needs a spiritual revival: “If my people, which are called by my name, shall humble themselves, and pray, and seek my face, and turn from their wicked ways; then will I hear from heaven, and will forgive their sin, and will heal their land” (2 Chronicles 7:14).
After in-depth research on behalf of the Pentagon, it became obvious to me that America suffered a financial terror attack in 2008. . . .  Make no mistake; we are in a global economic war.
The bad news is that we are fighting blindly. Too few in our nation’s leadership have grasped what we are facing. Call it ignorance or arrogance. Either way, we are not prepared to defend the dollar in world trade, protect trade secrets from corporate espionage, or safeguard our financial systems from cyber attack. There are even more serious risks, like the EMP that could send us back to a pre-industrial age. Our $17 trillion debt creates a whole host of vulnerabilities. Yet we go on as if American supremacy will endure forever.

Excerpt from Chapter Twelve of Game Plan: How to Protect Yourself from the Coming Cyber-Economic Attack by Kevin D. Freeman. Available from Amazon.com in either hard-cover or Kindle versions.

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