What does this administration, or the next one, have to do to get this economy on track for recovery?
That's a good question. Taxes are going up. Non union business are being punished. The new healthcare system may cause chaos like we have never seen before. We have been set on a road to certain insolvency which may make certain companies nervous about expansion or adding debt. I think our financial future as a country has never been in such great concern. That said, if I were to prescribe a recepie for recovery, ehre are a few steps I'd take: 1) Go to a 7% flat tax for all people. No write offs. 2) A balanced budget. Period. 3) Have a 3% national sales tax 100% dedicated to making principle payments on the national debt. 4) Lower the tax rate on investments to 7%, making it more feasible for people to invest in companies, which will hopefully lead to lowering their debt, expending capitol and hiring more workers. 5) Fix Obamacare and Social Security. 6) Look at ways to encourage manufacturing on a small to medium scale to compete with other countries. Maybe to include tariffs... 7) Take the money dedicated for union bailouts and use it for infrastructure improvements that will employ people. 8) Enact real tort reform.
Legalize Marijuana, then tax the shit out if it. Sell it for around $50.00 a pack, with 80% of that going to pay down the national debt.
Drill in Alaska and off shore for oil. Rely more on nuclear power, less reliance on solar and wind. Should be done private sector. Flat Tax + National Sales Tax Secure Borders + Kick out illegals Cut spending. Stupid programs eliminated. Privitize education or allow subsisdies to get away from public school shitholes. Kill the unions. (or at least reform them). Destroy the bureacracy. Give states more power. Smaller governments. No more bailouts. Let the systems fail. People will adjust.
Run the Federal Government's credit cards and checkbooks through the shredder. Either that, or start taking overdraft fees out of the paychecks and pension funds of Congress...
I think the opportunity was passed up when the stimulus package was enacted. For the money they spent, they could have literally started up 32,000 companies with $25M in funding. That's enough to hire between 3.2M and 6.4M people for 5 years, even if those companies never made $.01 in sales. But they would have sales, meaning many of those jobs would be solid. The amount of intellectual capital, in the form of inventions and services would have renewed the nation. The people with jobs wouldn't be foreclosed on, so the housing market wouldn't be anywhere near as bad as it is. The bailout was a mistake. People act like there wouldn't be new banks to replace the big bad ones that failed. But if we're going to spend the money anyway, it should have been spent to buy down mortgages so people wouldn't be upside down and the banks would have gotten the same amount of money in the end. The housing industry is decimated because there's a glut of homes available, not enough credit so people can buy them, and the banks are dropping prices on the foreclosures and short sales killing the values of homes that people are paying their payments in good faith. The housing industry also employed a lot of people, and it won't be looking to rehire those people for years - until the supply of existing homes is roughly exhausted. Here we are, $4T out the window later, and it's more and more difficult to see how spending more money the way we have is going to be possible. Yes, $4T, when you include the $trillions the Fed has loaned to banks that are failing.
Cut defense spending by 15% and use that money to pay down the debt. If anyone fucks with us, use one of our million nukes.
I like this 32,000 company idea of yours, I really do. But I don't think it is very realistic. Look at the SBIR program. It grants $2 billion per year to companies, and struggles to find enough real projects to fund. You are basically proposing to multiply it 400-fold (not so much in the number of companies, but mostly in the size of the grant). Are there enough good ideas worth funding with $25 million? How does the government distinguish between a good idea and a bad idea and someone who just wants the cash? How do you enforce that the money is spent on salaries rather than being pocketed or spent on unrelated projects? Is the public going to stand for a VC rate of success (i.e. most companies blow the $25 million on Aeron chairs and go out of business)? How do you reassure the public that the money was well spent (you know that there are going to be some people here who will insist this is a massive waste of taxpayer money and the end of civilization as we know it)? The answer to a lot of these questions is, you create a new bureaucracy that handles the grants, but the weight of public/bureaucratic expectations reduces the number of entrepreneurs willing to participate, and also extends the timeline for spending the money by a very large amount. In the end, you don't spend it any faster - and probably even slower - than the current stimulus is being spent. The "beauty" of the current stimulus package is that it uses funding mechanisms that the government already knows how to control. The federal goverment is many things, but it is not nimble. I don't necessarily want to defend the bank bailouts, but I don't think that hits the target. The reason for the bank bailouts was to prevent further general economic collapse, not because we'd be all sad and lonely if the big banks went away. barfo
Just employing people has the obvious benefits - the employees and the companies pay taxes and consume/create demand for other goods and services. If the govt. were to fund 32,000 companies, it'd basically be 60 per senator or congressman. Let them pick and choose who gets funded. People would come out of the woodwork with ideas. The beauty of it is that of the 32,000, some will actually become viable and then some. All it takes is a handful of Google type successes and the rest could fail and we win. Obviously the SBIR program is difficult for people to interface with. With 32,000 companies, a lot of peoples' agendas could be explored. Even though I think it's a terrible waste, 1/4th of them (8,000) could be green energy companies and I'd have no overall complaint with the program.
What makes you think congressmen can pick winners? What makes you think *any* of the companies the congress people funded would succeed? Isn't your mantra government=bad? Why can they do this successfully when you think they can't do anything else successfully? And come on, a handful of Google-type successes? How many Google-type successes have there been over the past 20 years? One? And you think your congressman is going to find you one this year? You think his cousin Vinnie has a real good idea? barfo
How many? I tend to follow high tech companies, but there were certainly some on other industries (biotech, for example). If about 30 of the 32,000 companies make it to this size, the $800B is break even: eBay, amazon.com, yahoo!, Blizzard Entertainment, e-trade, AOL, qualcomm, DirecTV, godaddy, verisign, etc. Those are off the top of my head. Go back another 10 years and you can add (off the top of my head): Microsoft, Apple, Oracle, T-Mobile, Sprint, MCI, Intel, Intuit, Adobe, etc.
15% of defense spending won't make a dent. Plus, you are putting people out of work, which diminishes tax revenue. Next idea.
Puts a lot of people out of business, and a lot of soldiers out of work. Fortunately, or unfortunately, I guess.
I started to write a really long response, but the problem is just too big to encapsulate in a single post. Generally, I will just say that the country requires a redefinition of what the role of government should be, both in size and scope. Our current path is unsustainable.
It may but the budget for both wars is out of this world. As of Dec. '09 both wars have costed $1.05 trillion.
Military spending is rather inefficient. Teachers are an example of a much more efficient use of money.
