I will agree with the basic premise articulated by the federal reserve, as reported by this story, that unless steps are taken, unemployment will remain high, and the "recovery" will remain non-existent.
That is where it ends. I firmly believe that every step articulated in the article is a running step backwards.
Here's what we actually need to do:
1. Cut corporate tax rates to 0%. Sure, set it to phase back in if we must, but not before five years have passed, and cap it at 5%.
2. Cut capital gains tax rates to 0%, for a set period of years, then cap the maximum tax rate at 10% at most. And capital gains taxed as such are exempt from income tax.
3. Cut income tax to 13% across the board. I'd recommend exempting the first $20,000 income from being taxed, and closing all exemptions, rebates, loopholes, and subsidies (yes, that includes corporate welfare and farm welfare.)
4. Cap spending at 40% of taxes gathered, payment of national debt at a further 40%, and put the other 20% back for major disasters, like Hurricane Katrina.
5. STOP QUANTITATIVE EASING, GOVERNMENT PURCHASE OF GOVERNMENT BONDS, PRINTING MONEY, OR WHATEVER YOU WANT TO CALL IT.
6. Cut minimum wage back to $5/hour. Not everyone employed at minimum wage is worth more, and the ones that are don't stay there.
7. Get the government out of the banking, auto manufacturing, lending, education, and insurance businesses. Hell, get the government out of everything except exactly what is spelled out in the United States Constitution.
The first five are the most important. If those five things are done, many of the nation's fiscal problems would resolve themselves.
The absolute worst steps the government can take are any that are not backing away from interfering.
3 hours ago
I'd vote for someone running on that platform, but sadly, I know far too many people who wouldn't, because they refuse to believe that we are heading for any kind of financial disaster, they think we can just either print our way out of problems (by devaluing the dollar, I suppose) or they can just tax the "rich" more....
ReplyDeleteThey're talking about the US going "back" into recession. From where I sit, it doesn't look like we ever LEFT it.
I'd love to pass a law stating that no one can run for election if they don't understand how to live on a budget and stay out of personal consumer debt. I think that would go a long way toward fixing the whole "print money and/or tax the rich" attitude.
DeleteAnd no, we haven't really left the recession. I think that the drought this year is going to just make it worse by driving food prices up (but that's not inflation--it doesn't count in how they figure that). Keep an eye on food prices. Beef is going to drop as people butcher the stock they can't afford to feed, then spike next year when there's no more stock to butcher. Stock up on beef now. Gas will, too,thanks to the ethanol mandate, which is only going to make everything worse.
Yeah, I'm concerned about food costs and also the possibility of reduced availability of some things. I have my emergency food, didn't think I'd have to break into it this soon. Guess it will be lots of beans and rice for me this fall.
DeleteI doubt we'd be much better, were we not planning on doing a stock-up run to Sam's Club as soon as Odysseus gets paid...our freezers are going to be stuffed full of hamburger meat, chicken, and other perishables.
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