There's been a lot of talk about the economy lately, mainly because we're seeing the economy riding the world's biggest and most expensive roller coaster. Everybody seems to have an opinion on how to make the economy hum again, but it's the usual Band-Aids on a gushing chest wound. After the big bailout attempt yesterday, it became clear to me that government doesn't have the answers, so let me try my hand at it.
1) Go back on the gold standard, at least temporarily. Yeah, this is something conservatives always seem to trot out, but this time it may actually work. Right now, our paper money is backed by two things: what we say it's worth, and what others are willing to say it's worth. Now that our word isn't as good as gold anymore, it's time to consider backing our money with gold like we used to do. There will be a period of adjustment to get used to the idea, but it will be temporary and it will lead to a far stronger economy.
2) Repeal the Community Reinvestment Act. This may have been a good idea at one time, but the way it's been expanded and twisted makes it completely unworkable in today's economy. Repeal it and let banks and mortgage companies go back to doing business the way it should be done. And, yes, that means there might be low-income people who can't afford housing. Here's a news flash for you. If they are low-income, there might be a reason, like making bad choices that made them low-income in the first place. Throwing money they can't repay at them so they can get into a house they'll never afford is counterproductive, like Affirmative Action or letting Democrats write housing laws.
3) Arrest, prosecute, heavily fine, and incarcerate those responsible for the subprime mortgage situation. A draconian move? Probably, but given what we know already, it's clear that the longer people like Franklin Raines and Jamie Gorelick are out in public, the closer they get to escaping the fate they truly deserve. And don't think Congress-critters are exempt from this. Any Representative or Senator that had a hand in the passage and defense of the Community Reinvestment Act gets the same treatment. As far as fines go, I'm going to be lenient. Let's say the guilty parties pay back...oh, double what they got from perpetrating one of the biggest con game in American history. And that's if I'm being nice. Get me torqued off like I was yesterday...let's just say the words "worse than an IRS audit" come to mind.
4) Make the Bush tax cuts permanent...and make them deeper. This is the first part of a two-part solution that Congress can enact tomorrow. No matter what some might tell you, the real driving force in our economy is the people. Without people buying and selling products and services, there is no economy. To improve the economy, give people more of their money back that gets stolen via taxes. That requires the Bush tax cuts to be made permanent, and then increase them. That means government will have to do with less, which means...
5) Make real cuts in government spending. When we overextend our budgets, we can't print more money or demand more in taxes from our neighbors. When Congress overextends its budgets, they can. That stops under my plan. Every bit of spending on anything from paper clips to figher planes will be scrutinized and anything unnecessary gets cut. And if Congress doesn't like it, guess what? I'm cutting Congressional salaries, too.
6) Work on alternate fuel sources while opening up more drilling. No, I'm not becoming Al Gore. My idea will actually work and work well. Cutting our dependence in foreign oil will keep less of our money going overseas to people who hate us, but love our money and desire for oil. The short term answer is more drilling and keeping the oil in country. While that's going on, give incentives for companies to develop alternate fuel sources. Fire up the industrial powerhouse that is the United States and we will find ourselves stronger and wealthier than ever before.
7) Recreate manufacturing in America. This is vital to sustaining any economic momentum we create by enacting any if not all of my suggestions. We've been doing far too much importing in the past few decades, and this has created trade imbalances because foreign countries love to stick us with tariffs. What's the best way to avoid that? Start making stuff ourselves again! Sure, we'll have to put up with a learning curve for a while, but the results if we stick with it will be well worth it.
Seven common sense ways to fire up the economic engine and fix our economy.
Which means nobody in Washington will be willing to enact any of them.