America from the Outside

                                       Eagles+Birds+Wallpapers_

This report was written ten years ago but may as well have been written today – a $750 million dollar embassy in Baghdad with intelligence officers, last year missed the rise of Islamic State – there is still a lack of co-operation between agencies and one questions if counter terrorism, intelligence gathering & or analysis would not be best partially or fully outsourced to the private sector. If not being outsourced then an independent audit and review carried out. http://www.foia.cia.gov/document/0001229684-0

The Congress as with the Westminster system of government is going to have the occasional polarization over certain issues. Congress has been on a trajectory of polarization which is not going to reverse anytime soon and impedes the legislative process and undermines confidence. Polarization has been the norm in Congress throughout most of America’s history but what about some form of reform. Maybe a forum…”If the dominant metaphors for politics in America are the market and the arena, both holding vigorous competition central to how we think politicians and citizens should behave, perhaps we should find room for an alternative venue: the forum.” http://www.hks.harvard.edu/fs/dking/Extreme_Politics.pdf

What implications are there for domestic and foreign policy with this current system. Health Care & Social Security are two major challenges that have been around for more than ten years and so has the fiscal cliff and yet we keep seeing the same old battered can being kicked down the road. Maybe the House of Representatives could reassert itself somehow and be a conduit for law making…I am not an expert on US legislative process and it is outside of my area of expertise. 2017 is critical mass for the Dept. Social Security where money out will be more than money in – http://www.socialsecurity.gov/oact/solvency/THarkin_20130318.pdf

Economic Flaws – Systemic risks within the economy are real and not perceived based on and not limited to – algorithms, derivatives, collateral debt obligations, lack of a truly free market and more. The 401K is directly linked to the stock market – other countries have a broad spread in the superannuation portfolio which minimizes the risk of devaluation as occurred in circa 2008. The Federal Reserve Bank needs some form of review of its mandate/s. The head of the Fed from Allan Greenspan, Ben Bernanke and Janet Yellen have all failed to address underlying problems in monetary policy. The Federal Reserve Bank is a private company and the owners and board are an interesting read. Fiscal flaws are the responsibility of the government.

The establishment of Fannie May & Freedie Mac by government and regulated by government for the mortgage market (they basically dictated the interest rate for mortgages with around 50% of the marketplace in which they operated) and even as of 2005 Greenspan was waxing eloquently about how wonderful they were –  “Critical to the success of this innovation has been the role of Fannie Mae and Freddie Mac in promoting mortgage securitization–the key to the development of secondary mortgage markets in the United States. Their efforts spawned the vast asset-backed securities market that, along with credit derivatives, has contributed to the transfer of credit risk from highly leveraged originators of credit–especially banks and thrifts–to less-leveraged insurance companies and pension and mutual funds, among other investors.http://www.federalreserve.gov/boarddocs/speeches/2005/20050519/default.htm

The speech found in the link above, is a wonderful read and full of praise for two G.S.E.s that directly contributed to the G.F.C.
How can the marketplace be free with this type of activity occurring and who was at fault, legislators or regulators or both ? Impunity seems to run hand in hand with government along the yellow brick road. Now going back to the Federal Reserve Bank and specifically the NY Fed, why were Maiden Lane LLC, Maiden Lane II LLC, Maiden Lane III LLC established – to take billions of dollars of toxic debt out of the marketplace – http://newyorkfed.org/markets/maidenlane.html#tabs-1

Look at the relationship with J.P. Morgan Chase and the loan where the NY Fed earns profits. Oh but this is all justifiable because it is a free and open market. Has anyone questioned greed, corruption and or dishonesty within the system and apology in advance for my skepticism here, but that would not be politically correct in our modern world and far to cynical. There is nothing wrong with democracy or a free marketplace capitalism…I believe that both of these have benefits and are better than the alternatives. The debt ceiling level and the process of dealing with it is flawed because the answer is not lifting it, time and time again and printing money…it does not address the structural reforms that are required to control it.

What is wrong with Operation Twist http://useconomy.about.com/od/Fed/g/Operation-Twist.htm
I refuse to be drawn into any Zionist debate or argument regarding the Federal Reserve Bank or any conspiracy theories about the same. Facts and figures can do the talking…but I personally believe that the underlying premise of a government monopoly on the money supply is detrimental to the economy and ultimately limits people’s freedom as it promotes the expansion and control of the state is wrong in that it is most flawed. I will cite Australia as an example with twenty two years of successive growth as a combination of the resources boom and well managed monetary and fiscal policy from the Australian Federal Reserve Bank & the government.

Foreign Policy Flaws – Lost opportunities to build and establish strong working relationships post Cold War. Underestimating or over estimating the capacity, strengths and weakness of either US capabilities or the country and culture of intervention/operation. Failure to meet objectives and counterproductive operations in various regional conflicts.  Nicaragua, Vietnam, Iraq Gulf War, Iraq War, Afghanistan, Libya and others. With Nicaragua –  The Republic of Nicaragua v. The United States of America – the International Court of Justice ruled that the U.S. had violated international law by supporting the Contras.
http://www.icj-cij.org/docket/index.php?sum=367&p1=3&p2=3&case=70&p3=5
http://www.alternativeinsight.com/Foreign_Policy_Failures.html
The reader can search for other countries and current flaws in foreign policy.

Constitutional Flaws – the ten questions asked by Professor Sanford Levinson from The School of Law at The University of Texas at Austin are worthy of reading and the very least, serious consideration…the two links at the end of the page are also worthy of  perusal. http://www.utexas.edu/law/news/2006/100906_che.html

The writer is not anti-American. What American men and women do every single minute of every single day in the pursuit of freedom and liberty I am most appreciative of and applaud their courage and commitment to upholding the idea of democracy and global stability. These people are from a range of government and non-government groups and place their lives on the line. If the United States of America can lead by example, then it would be think globally acting locally first.

To conclude, this is one view that does not matter if it is correct or incorrect and I hope it stimulates thought regarding any real or perceived flaws in North America, Europe or the world. Globally we are facing serious challenges that require effective solutions to be found as a united world.The hegemonic behemoth that is struggling to retain global stability has become a basket case in international politics. If America can not or will not perform triage on itself and undertake radical surgery, the multi-polar world will rapidly correct this and place it in a hospice.

John Coffey, retired Foreign Affairs Officer at the US State Department points out about Strategic Vision: America and the Crisis of Global Power by Zbigniew Brzezinski:  Brzezinski highlights greater significance to the nation’s domestic problems such as a crushing national debt; a financial system driven by self-destructive greed; widening inequality; decaying infrastructure; a citizenry ignorant of the world; and a gridlocked political system.

May the captains of industry and global governors guide, protect and direct towards a sustainable future with…

  Truth, Trust & Transparency.

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The Asian Century (Part Two)

Red Dragon Rising

  China 1 China 3

Prior to trying to formulate an informed opinion on China’s role in the first half of the 21st Century, a brief review of the make up of the current leadership of the P.R.C. related to global strategic defence, specifically the South China Seas region would assist the reader. The P.R.C. President and Premier are Xi Jinping and Li Keqiang. Their roles are head of state and head of government and the leadership is commonly referred to as the Xi Li team. The Minister for Defence is Chang Wanquan. These three men will be responsible for the continued global positioning of the P.R.C. during Q1 of the 21st Century.

China B

Xi Jinping is one of the three wise men (Mao & Deng are the other two) and he is focused upon positioning China for Q2 of the 21st Century with domestic and international foundations that have been constructed or are being constructed by China. With his quasi-Maoist values he is changing China. He has gained more power than his predecessors with a strong power base in the P.L.A. He is the key figure of the Fifth-Generation leadership in this renaissance period or golden age of the P.R.C.

Xi is changing the growth mode and improving quality and efficiency at the center, the economy will be driven by consumption, investment and exports instead of only by investment and exports. China will shift from relying on secondary industries alone to reliance on the primary, secondary and tertiary industries, turning away from resource consumption and toward technological progress through innovation. With the 13th five year plan (2016 – 2020) Xi is driving the industrialisation, informatisation, urbanisation and agricultural modernisation. The weakest link is agriculture which Xi is transforming agricultural development with agricultural technology innovation.

China C

Li Keqiang is the driving force behind China’s positive efforts to promote political reforms such as decentralization of government and the positioning of government to be efficient and streamlined to meet the needs during this transitional phase stage two of China’s global dominance, stage one being the one that Deng Xiaoping implemented. China’s economic development is now in the transitional period from export driven to domestic demand and makes up the other component of the Li leadership, and that is of development.

China D

Chang Wanquan was born 1949 in Nanyang City, Henan Province,
home of ancient strategist, Zhuge Liang. Rise to power possible from President Hu Jintao (2003-2013) and anit-terrorism background. Writings and speeches demonstrate support for President Hu’s “scientific development” effort, Confucian in nature, and a heavy emphasis on training. Partly due to his leadership background in military technology, including the manned space program, Chang has been a strong advocate of rapid modernization in PLA military equipment and of the integration of a combined operations supreme command, with an emphasis on better operational coordination among the army, navy, land forces, and missile forces in warfare.

Chang has had direct influence in the continued pursuit of China’s space programe via the Second Artillery Corps which is the strategic ballistic missile force of the PLA, and it maintains China’s nuclear arsenal. The ultimate end goal is to move away from the S.A.C. control of the space progame, have an independent organization that will still have a collaborative role with the military. Hainan Island (space programe and a Deep Blue for the Navy and physical location of GhostNet) is a critical geographical location for both military and space operations.

Whilst a single decision-maker does not decide upon military strategies, policies, and weapons development, Chang is part of the apex in the decision making process. Chang is diverse in his roles and is involved in various military and space related activities. He was the commander of the manned space mission named Shenzhou VII. Chang advocates certain strategies such as the importance of Shih in Chinese military strategy. “Instead of using military force to subjugate another society or to defeat an enemy’s army, Shih operates to convince an opponent to yield without battle.

Whilst Chang is Minister for defence and the P.R.C. military strength is increasing along with a space programe, Chinese preference for psychological warfare over weaponry and firepower, victory without fighting, nonviolent stratagems, and deception still exists in the 21st Century. China’s ancient and modern history has demonstrations of great violence; however, Chinese rhetoric today promotes peace in the world and a defensive posture. Chang has made statements that whilst pursuing peace the P.R.C. will defend it’s assets with force.
Chang’s birthplace Henan Province is historically significant because it is the “cradle” of Chinese civilization due to its proximity to the Yellow River.However, maybe more importantly, many in Nanyang City consider it the home to the greatest military strategist and public official during the Three Kingdoms Period, Zhuge Liang (181-234 AD). Zhuge Liang often quoted Confucius and reflected an undercurrent of Taoist thought in his attitudes toward life and work, and stressed the importance of military preparedness, training, and the need for strong allies as consultants.

Chang joined the P.L.A. in 1968 and has risen through the ranks with various roles such as and not limited to: Chief-of-Staff of the 140th Division, 47th Field Army, Division Commander of the 61st Division of the 21st Group Army, Director of the General Armament Department, Director of the Campaign Teaching and Research Office at the National Defense University. Chang’s credentials are not technical; instead, he is a trainer. His role is likely not the technical management of the latest weapon systems in the PLA arsenal, but instead, is to make the P.L.A. qualified to operate in an “informationalized” environment with high-technology equipment.

Chang’s rhetoric often is close to that of Zhuge. In his published article “Ancient Thought of Military Management in China and Its Inspiration” is said to be a work designed to revitalize Confucian teachings and thinking. Chang understands why the P.R.C. has used force against its neighbors at least 12 times since 1949 and why in 1950, Mao committed his people to fight the United States, not because of any threat to China’s survival but to resist U.S. expansion on China’s periphery. China’s culture developed its own world order and attitudes toward warfare over nearly three millennia and through its history of survival, evolution, domestic conflicts, and defenses against foreign aggressions, China’s distinctive culture has shaped and limited strategic choices and profoundly influenced China’s interactions with other states.

Chang may not fully understand the complex nature of China’s strategic rival, the U.S.A. but he has much to draw upon to drive the military and space programes, and protect the P.R.C. through the 21st Century. He is a vital part of the P.R.C. triangle, Xi – Li – Chang.

China’s long history has seen evidence of both a defensive and offensive culture. Additionally, the writings of Sun Tzu and others offer a method of statecraft that is secretive and deceptive.
Many analysts do not understand the motivations, priorities, and perspectives of Chinese decision-makers, especially regarding China’s space programe. The programe has a duality – it is for defence as much as it is for economics.

China’s strategic culture has converged around Tao three additional
important ideas that emerged from prehistoric Confucian thought and belief:
Shih, Hsing, and Li. Any analysis of China’s strategic culture and uses of force must begin with an understanding of these four faces of Chinese
Shih-strategy. The defining theme in Sun Tzu’s The Art of Warfare, the essence of Shih was the dynamic power that emerged in the combination of men’s hearts, military weapons, and natural conditions.

Shih-strategy, which converged Shih along three broad dimensions of warfare: the people, the context, and the enemy. Shih-strategy concentrated the power of the people in the soldiers and their weapons. The power of context appeared in opportunity, timing, and logistics. The enemy’s power lay in the relative skill, competence, and will of the opposing force.

Hsing as a military term is described as the deployment and employment of forces. Hsing is explicitly the tangible, visible, and determinate shape of physical strength and Hsing is static.

Li refers to self-interest or material gain and carries a definite priority for the present. arising from materialistic thought and theory, Li-strategy does not recognize intangible human factors as important elements of power. Instead it focuses on visible, material assets and enemy forces

Sun Tzu’s famous metaphor is a strategic message that the method of draining the water was more important than the amount of water behind the dam.

The Asian Century ( Part One)

th 1

The Asian Century

EXORDIA

The most prudent way of looking at the future of the human race is to look back at our history. The fiscal year is divided by quarters and this is how the last century will be divided for historical purposes and for this brief review of where we have been, where we are at and where we are going as a global village in the 21st Century. The 20th Century began with some issues that were left over from the previous century and had influence upon the political tensions within Europe. The world population was approximately 1.6 billion in 1900 and would almost double in sixty years (just over three billion in 1960) and would double again in fifty years (over six billion in 2010).

Over thousands of years the human race has been involved in conflict and it is but human nature to create or to destroy. One of the most appropriate people to quote here is Thomas Hobbes who states – The condition of man… is a condition of war of everyone against everyone. And so one must understand the human condition being one that is best explained as the welfare of man is in a state of eternal conflict. It would be advisable for the reader to give serious consideration to reading the following works.
The Social Contract – (Du contrat social ou Principes du droit politique; 1762) written by Jean Jacques Rousseau and Thomas Hobbes’ Leviathan (1651) to obtain insight into this century.

The reader will be influenced by specific data that is external to this information. To endeavour to formulate an independent unbiased and informed opinion on the 21st Century, merely look at the facts that have been presented.

20th Century Conflict

The last century had four quarters of conflict and is known as one hundred years of war. The First World War was in Q1 and the Second World War in Q2. The third quarter (Q3) was the Korean War and then the Vietnam War and finally in Q4 the world experienced The Gulf War. Below is a more detailed account of our human history and war in the 20th Century.
1898-1901 Boxer Rebellion
1899-1902 Boer War
1904-1905 Russo-Japanese War
1910-1920 Mexican Revolution
1912-1913 First and Second Balkan Wars
1914-1918 World War I
1915-1918 Armenian Genocide
1917 Russian Revolution
1918-1921 Russian Civil War
1919-1921 Irish War of Independence
1927-1937 Chinese Civil War
1933-1945 Holocaust
1935-1936 Second Italo-Abyssinian War (also known as the Second Italo-Ethiopian War or the Abyssinian War)
1936-1939 Spanish Civil War
1939-1945 World War II
1945-1990 Cold War
1946-1949 Chinese Civil War resumes
1946-1954 First Indochina War (also known as the French Indochina War)
1948 Israel War of Independence (also known as the Arab-Israeli War)
1950-1953 Korean War
1954-1962 French-Algerian War
1955-1972 First Sudanese Civil War
1956 Suez Crisis
1959 Cuban Revolution
1959-1973 Vietnam War
1967 Six-Day War
1979-1989 Soviet-Afghan War
1980-1988 Iran-Iraq War
1990-1991 Persian Gulf War
1991-1995 Third Balkan War
1994 Rwandan Genocide

21st Century

The current world population is just over 7.3 billion and there are various implications that are associated with this figure. The world population has never doubled in such a short period – (1960 – 3 billion to 2010 – 6.75 billion) and there are environmental, social, economic and political consequences from the increasing global population. There are two ways that an individual will react to threat, fight or flight and humans embrace gradual change with comfort and immediate change with discomfort. The current world dynamics are very complex and complicated with no easy quick fix solution to the challenges that we face during this century. It would be naive for the reader to assume that the human race will find peace and love this century.

There are three sources of global tension which are economic, political and religious. The economic tensions could be as simple as internal sovereign debt related issues, unemployment, lack of natural resources or as complex as climate change or the percentage of debt to gross domestic product and the servicing of that debt. The political tension could be due to lack of resources, climate change or one of various other economic related issues. The religious tension between groups such as Jews, Muslims, Christians or Muslims and even Muslims amongst themselves
(Sunni, Shia or Alawite Muslims) creates challenges that effect both regional and global stability.

Global conflict is surrounded by certain factors such as and no limited to extreme weather events; failure of national governance; state collapse or crisis; unemployment or underemployment; natural catastrophes; failure of climate change adaptation; water crises; data fraud or theft; and cyber-attacks. Other factors to consider when evaluating possible conflict are the following – water crises; the spread of infectious diseases; weapons of mass destruction; interstate conflict; failure of climate-change adaptation; energy price shocks; a breakdown in critical information infrastructure; fiscal crises; unemployment or underemployment; and biodiversity loss and ecosystem collapse.
Along with foreign policy mistakes the USA has made other mistakes since the end of the Cold War such as underestimating China.
There are several reasons why the East China and South China Seas are of concern to the West and the East. The ongoing tensions between China, Japan, Malaysia, Philippines, United States and Vietnam has political and economic challenges that requires a solution.
China has been drilling for oil and gas for several years in an area of sea with known reserves (the newly discovered gas field, dubbed Lingshui 17-2, is located 150 kilometers south of Hainan Island).
China’s rapidly growing interest in deepwater drilling represents a convergence of two of China’s major strategic interests: protecting its claims to much of the South China Sea and reducing China’s growing reliance on imported energy.

Another interesting aspect to the tension in the South China Seas is the progress that China has made with its space program on what is referred to as China’s Hawaii (Hainan Island). The space launch centre is completed and the fourth of such facilities. The island also has military capability with naval resources. China has stated that they expect to have a man on the moon by 2017 and Mars by 2021 both of which are possible achievements. China has been on the moon since 2013 (China’s Chang’e 3 moon lander and its Yutu rover touched down on the moon Saturday (Dec. 14) at about 8:11 a.m. EST (1311 GMT). It is the first soft-landing on the moon by any spacecraft in 37 years.

Currently the Helium 3 (3He) reserves on the moon are estimated to be 2469000 tons – http://www.lpi.usra.edu/meetings/lpsc2007/pdf/2175.pdf .
The current estimate is that one ton has a potential worth of 3 billion dollars. Approximately 25tons could power the USA for one year. Helium 3 could be used in future fusion power plants (currently we use fission power plants).

http://www.explainingthefuture.com/helium3.html

The current trajectory that the human race is on is one that has challenges that we have not experienced before, and whilst that can be argued regarding our history and that we have had great challenges before, these future challenges are most serious in complexity and in the outcome. This fist quarter of the twenty first century is merely one where the foundations are being laid in the transition between the West and the East. China could well be mining Helium 3 in the early part of Q2 of the 21st Century and positioning itself to be the dominant political and economic leader for the second half of the century.
The USA is most concerned about REE – Rare Earth Elements or rare earth metals and alloys that contain them are used in many devices that people use every day such as computer memory, DVDs, rechargeable batteries, cell phones, catalytic converters, magnets, fluorescent lighting and much more. During the past twenty years, there has been an explosion in demand for many items that require rare earth metals. Twenty years ago there were very few cell phones in use, but the number has risen to over 7 billion in use today. The use of rare earth elements in computers has grown almost as fast as cell phones.

Rare earth elements play an essential role in our national defense. The military uses night-vision goggles, precision-guided weapons, communications equipment, GPS equipment, batteries and other defense electronics. These give the United States military an enormous advantage. Rare earth metals are key ingredients for making the very hard alloys used in armored vehicles and projectiles that shatter upon impact. Substitutes can be used for rare earth elements in some defense applications; however, those substitutes are usually not as effective and that diminishes military superiority.

China began producing notable amounts of rare earth oxides in the early 1980s and became the world’s leading producer in the early 1990s. Through the 1990s and early 2000s, China steadily strengthened its hold on the world’s rare earth oxide market. They were selling rare earths at such low prices that the Mountain Pass Mine and many others throughout the world were unable to compete and stopped operation.

Chinese companies have been purchasing rare earth resources in other countries. In 2009 China Non-Ferrous Metal Mining Company bought a majority stake in Lynas Corporation, an Australian company that has one of the highest outputs of rare earth elements outside of China. They also purchased the Baluba Mine in Zambia. Mines in Australia began producing rare earth oxides in 2011. In 2012 and 2013 they were supplying about 2% to 3% of world production. In 2012, the Mountain Pass Mine came back into production and the United States produced about 4% of the world’s rare earth elements in 2013. India has been producing about 3% of the world’s supply for the past decade. Indonesia, Russia, Nigeria, North Korea, Malaysia, and Vietnam are minor producers.
If a single country controls almost all of the production and makes a firm decision not to export, then the entire supply of a commodity can be quickly cut off. That is a dangerous situation when new sources of supply take so long to develop. The demand for REE will remain as the middle class require consumer products that contain these elements. The global demand for automobiles, consumer electronics, energy-efficient lighting, and catalysts is expected to rise rapidly over the next decade. Rare earth magnet demand is expected to increase, as is the demand for rechargeable batteries. New developments in medical technology are expected to increase the use of surgical lasers, magnetic resonance imaging, and positron emission tomography scintillation detectors.

From the information presented regarding REE the reader can make the assumption that there will be economic pressure placed upon certain countries that could exacerbate tensions between the West & the East. Never before has the human race experienced the challenges that we are facing today that will remain throughout the rest of the 21st Century. China has had three men of great significance and we shall call them the three wise men. They are 1) Mao Zedong 2) Deng Xiaoping 3) Xi Jinping – and these three men are why China is what it is today. Mao set about creating foundations which Deng then built upon and where Xi is transforming China today and preparing it for tomorrow.
There are other men that have had an influence on China such as and not limited to the following – Qin Shi Huang (221-210 B.C.) – Kublai Khan (1279-1294) – Sun Yat-sen (1912) and two great tacticians and strategists – Zhuge Liang (181–234) and Sun Tzu (544–496 BC). The Republic of China began on January 1, 1912 and in 1949 Mao proclaimed the People’s Republic of China.

The reader can make their own conclusions about the future from this information.

Camp David USA Tax Reform

Dave Camp

Offers Revamp of Tax Code

If the United States of America continues walking down this garden path, they will surely run out of breadcrumbs to return back to their origins of freedom, liberty & fraternity. 

The delightful garden of wealth and prosperity with the secure hedges and windbreaks of elm, oak and pine and where capitalism reigned supreme, will be behind them as the forest ahead is a thick and perilous maze where the rights enjoyed by many will be surrendered to a few. 

The complexities and challenges ahead will require a unique adroit dexterity in  leadership and good governance from those who have the aptitude and ability to live between vision and reality, to firstly identify the real challenges, to secondly source the effective solutions and to lastly implement the same.

When I lived in New York (2005-2009) I remember hearing on a daily basis God Bless America…now all I hear in an echoed call is

God Save America

BY DAVID LIGHTMAN AND KEVIN G. HALL

MCCLATCHY WASHINGTON BUREAU

WASHINGTON — The chairman of the Republican-led House of Representatives’ tax-writing panel proposed on Wednesday the first complete overhaul of the nation’s tax code since 1986, a plan that both political parties are likely to debate throughout this election year.

Chances are the effort will go nowhere in this Congress, a point conceded even by Republican leaders. But the 979-page blueprint, which includes collapsing individual tax brackets to 10 and 25 percent for virtually all taxable income and lowering corporate tax rates, allows both parties to argue that they’re champions of a simpler, fairer tax code.

Both sides recognize that the public is eager for a more understandable and sensible tax code. The issue also presents an opportunity for both parties to talk in reasonable terms about a big issue, the kind of dialogue often missing in ongoing debates about immigration, federal debt limits and spending cuts.

“This legislation does not reflect ideas solely advanced by Democrats or ideas solely advanced by Republicans,” said Rep. Dave Camp, R-Mich., the chairman of the House Ways and Means Committee Chairman and the author of the proposal.

The plan, he said, “recognizes that everyone is a part of this effort and can benefit when we have a code that is simpler and fairer.”

The White House found the plan a “constructive, specific proposal” that should trigger dialogue about how to proceed, said spokesman Josh Earnest. He cited several reasons for optimism, notably loophole closings and using revenue for infrastructure improvements.

The top Democrat on the Ways and Means Committee offered a similar view.

“Chairman Camp’s tax reform proposal opens up a discussion that Democrats have wanted to engage in on a bipartisan basis,” said Rep. Sander Levin, D-Mich.

The Senate’s top Democratic and Republican tax writers issued a join statement that said, “We look forward to working with members in both chambers and on both sides of the aisle to move the conversation forward.” Republicans saw promise in using the plan to counter Democratic criticism that Republicans are too extreme and too partisan.

The Camp plan would narrow the seven current tax brackets into two. Individuals who earn less than $37,400 a year would pay a 10 percent tax rate on taxable income, as would joint filers with income below $74,800. Everyone else would pay a 25 percent rate.

In a bid to entice Democrats, who insist on higher taxes on the wealthy, the plan would have a 10 percent surcharge on individuals with adjustable gross incomes above $400,000 and joint filers above $450,000. It also would reduce how much mortgage interest could be deducted from taxable income for home loans of more than $500,000, and end the ability to deduct state and local taxes from a federal return.

The proposal would cut the corporate tax rate to 25 percent from 35 percent.

 

It would return the tax rate on capital gains, now at 20 percent, to the rate of ordinary income, which for most Americans would become 25 percent. But about 40 percent of capital gains and dividends could be excluded from taxation under the proposal.

Senate Minority Leader Mitch McConnell, R-Ky., said Tuesday that the plan had “no hope” of passing this year, while House Speaker John Boehner, R-Ohio, was equally glum.

Boehner did favor the idea of collapsing tax brackets.

“To bring down rates, you clean out a lot of the garbage that’s in there and the special interest issues that are in there. And so I think we ought to have a real conversation about this, and this is the beginning of that conversation,” he said.

 

Interest groups reacted quickly to the Camp plan. The Private Equity Growth Capital Council, which represents well-heeled private-equity firms, criticized the proposal, which calls for rolling back tax law that allows the managers of these firms to have their earnings taxed not as wages but at the lower rate of investment income.

“It is so disappointing that Chairman Camp chose to single out private equity, real estate and venture capital investment by exacting a 40 percent tax increase that will discourage new investment,” the council said.

 

The proposed revamp also would change the way high-income earners can save for retirement. It would restrict them to Roth-style retirement accounts that use after-tax income – as opposed to pretax income, as is the case for the conventional 401(k) retirement plans held by many working Americans.

This change would affect 5 percent of the workforce, Camp said, and involves those who set aside more than $8,750 a year in tax-deferred accounts such as 401(k) plans and individual retirement accounts.

There’s less to that idea than there appears, cautioned Len Burman, a nationally recognized tax expert who’s a professor at Syracuse University.

“At best it’s just a timing gimmick. It’s a shift in the timing of revenue. It looks like we collect more right now, but we’re giving up more in the future,” he said.

That’s because conventional retirement accounts are taxed upon withdrawal in retirement, when there’s a large pot of money because of compounding gains. Roth IRAs involve after-tax income, sort of paying future taxes up front. They’re used to shelter income and lower estate taxes because they can be left alone and passed on to beneficiaries such as children after the account holder dies.

“Roths are really advantageous for super wealthy people, who are the people I have the fewest concerns about when it comes to retirement savings,” said Burman.

Lesley Clark contributed to this article.