7 Ways to Fix the Economy

Anyone with half a brain can see that the U.S. economy is in a malaise. It’s just muddling along.

Unemployment is still high. Economic growth is low. Prices are rising for goods and services (just think

gas prices and food prices). Job creation is low (people you know that have been unemployed are still

unemployed). Small businesses are still struggling to survive given decreased demand and tight credit.

The real estate market is in the tank; house prices are still falling and foreclosures are likely to spike

this year. The banks are still in trouble, despite what the Fed says and does. Federal budget deficits

continue to be the norm, requiring additional increased in the national debt. There’s still a risk to the

U.S. economy from the economic crises in Greece, Portugal, Spain, Italy and so on. All of these factors

paint a pretty bleak picture for the health of the economy.

I wholeheartedly believe that the U.S. economy is on the brink of a double dip recession. I would even

argue that the current environment is still recessionary even if it doesn’t meet the technical definition

of a recession. I suspect if you’re one of the millions of Americans struggling right now you’d probably

agree with that. If you’re doing well, you probably haven’t been impacted too much or noticed what

everyone else is going through. Sadly, it’s a situation of those that have a job prosper while those who

don’t have a job suffer, which on a side note is a sad reflection on President Obama’s class warfare

strategy that is attempting to divide this country. While we may not be able to stop the economy from

slipping back into a recession in the short term, we can take some actions to fix the economy for the mid

and long term horizons. I think there are seven actions that need to be taken to get the economy back

on track:
To read the first two way, follow the links below:


#1 - Lower Taxes

#2 - Cut Federal Spending

#3 - Abolish minimum wage

In case you haven’t noticed, manufacturing in America is dying a slow

death. Look at the textile industry in the South, for example. Why did the textile manufacturers

close up? They couldn’t compete with manufacturers in low wage countries like Mexico and

China. We will never be able to compete with low wage countries as long as we have price

controls in place when it comes to labor. If manufacturers want to compete, we need to abolish

the minimum wage. Manufacturers can offer jobs at two dollars an hour as opposed to eight

dollars an hour. That would help to start narrowing the competitive gap between low wage

producers and those here in America. Hell, we allow waitresses to work for $2.15 an hour plus

tips. Why shouldn’t employers be allowed to offer jobs to anyone at that rate?

Of course, I’m also against collective bargaining when it comes to wages as well. Unions have

been some of the worst offenders when it comes to labor markets. Why are the U.S. auto

companies so uncompetitive against foreign manufacturers? Labor costs. So, I guess I’m not

just picking on the minimum wage but I’m focusing on artificially created wages for labor.

Now, I’ve heard this argument for a long time that an abolition of the minimum wage would

hurt the worker. Look, there was a time in life when I had to work two jobs. If that’s what it

takes for people to survive, so be it. There’s nothing wrong with hard work. And guess what,

if you don’t want to work for a low wage, you can simply say ‘No.’ Why do you think there

aren’t ushers in the movie theaters anymore? Minimum wage. Why don’t we have full service

gas stations? Minimum wage. Doormen? Minimum wage. Why are call centers in India?

Minimum wage.

Here’s the reality. The minimum wage costs the economy thousands of jobs; any good

economist will tell you that. The minimum wage prevents businesses from being competitive.

The minimum wage gives companies a reason to outsource jobs. The minimum wage causes

businesses to find ways to automate, mechanize, or otherwise eliminate positions. It’s not very

palatable, but the benefits far outweigh the negatives of this. Abolish the minimum wage, the

economy will create jobs in untold numbers, and ultimately, the market will set wages. 



~ Digger