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:'
Second Way to Fix The Economy
· Cut federal spending—The federal government has been a spending binge. These politicians don’t seem to care how much they spend or what they spend it on. And let’s not forget the bureaucrats in Washington, the career government workers, who seem to have this sense of entitlement to spend the taxpayers’ money. Just last week, the scandal at the General Services Administration came to light where the agency spent something like $800,000 on a trip to Las Vegas. It’s disgusting! This is our tax money and they’re spending it like it’s water. We need massive cuts in federal spending, no question about it. It is ridiculous that any politician says it will take a decade to balance the federal budget or cut the budget deficit. We know what spending was like back in 2000. Let’s revert to those levels immediately. Yes, a lot of departments will suffer, but that’s just the way it is. Every department in the federal government has gotten bloated over the last decade. Trim the fat from the budgets. Stop pork barrel projects. Some departments and programmes may even need to be eliminated in order to get the budget back to a level comparable to 2000 and to accommodate for the increase in spending for Homeland Security, but as I’ve discussed before this isn’t a bad thing. We need fundamental restructuring and downsizing of the federal government.
Federal spending to stimulate the economy only artificially props up the economy in the short term. If it’s deficit spending, we’re only hurting ourselves by increasing government borrowing and passing on the debt to future generations and ensuring future tax increases. There always comes the day when you have to pay the piper. We can’t escape it. Ultimately, what’s going to happen with runaway spending at the federal level is higher interest rates to attract lenders to buy the Treasuries and higher taxes to pay for the debt. Has anyone heard what’s going on in Europe right now, particularly Greece, Spain, Portugal, Italy and so on? Their government’s embarked on massive spending programmes in the past and now they’re at the tipping point. It can happen here. We have to stop the runaway spending sooner rather than later. It’s disingenuous for any politician to say we can’t balance the budget in less than a decade. All that’s lacking is the willpower to make the difficult decisions necessary to bring the budget back to more manageable levels.
If you want to read #1: Lower Taxes, click http://www.diggercartwright.com/Blog/Entry/7-ways-to-fix-the-economy-1-lower-taxes .