Posted by
American Southerner on Wednesday, August 12, 2009 2:11:09 PM
No matter what side of the political spectrum someone comes from, it has become increasingly obvious that there are two basic notions behind every voting American: No one likes high taxes and everyone knows the economy could use some help. Based on that idea, I have complied a list of what I believe would be both short and long-term economic stimuli. Granted, this is not an exhaustive list of solutions, nor can I personally claim credit for them; they are simply being relayed by a concerned American. Also, some of these may not be classified as economic matters upon first glance, but I assure you, they all have great potential in the economic sphere.
1) Return lending freedoms to banks. When the federal government began to tell banks to lend to customers who should never have been eligible for the amount they received, then banks lost a great deal of freedom to compete amongst themselves and determine fair rates for everyone. Even though many will deny it, far too many homeowners received loans in amounts that they knew they would never be able to repay, but banks lent the money because they didn’t want the federal monkey on their backs and drooled over the possibility of receiving a lot of interest. So while some of the blame may rest with greedy bankers, the government should not have had so much oversight in the whole matter. Release banks and loan providers from the stranglehold of political favors and the opportunity for foreclosures to decrease and home values increase becomes even better as the market begins to function more like it should.
2) Cut businesses loose that have repaid bailout funds. TARP was originally designed as a loan to help financial institutions through a rough spot (much of it due to toxic assets and bad loans as mentioned above). And while the monstrosity should not have been passed in the first place, it has now become a problem for institutions that have received funds as many wish to repay those funds. Some did not even want the money but were forced to accept it; they are now at the mercy of bureaucrats trying to tell them how to run their business because they accepted money with a billion strings attached. Let the companies who can repay the bailout funds and completely release them from all the accompanying regulations and oversight. If they continue to have issues and can’t stay afloat, let them go under. The American taxpayer should not have to fund the mistakes of others; there should be no such thing as a business “too big to fail”.
3) Lower the federal minimum wage and give more control to the states. Where in the world did the idea for a “living wage” come from? The federal government should not be in the business of setting a wage floor; every time they do, it causes businesses to freeze wages, suspend hiring, or lay off workers (especially the businesses that politicians claim a minimum wage increase will help the most). What politicians seem to forget is that in the American economy (free from so many regulations like this one), if a company is not paying comparable wages for an employee, that employee has the freedom to either demand a raise from their employer or leave and find another one who will pay them better. It is a system that can operate independent of a high minimum wage, and does not force employers to have to raise all wages to compensate for a floor and then subsequently cut their workforce. Additionally, if a minimum wage is so important, let each state better determine their own amount. Different states have different needs and different standards of living; give them the freedom to determine a wage floor (if any) for their citizens without the heavy hand of the federal government.
4) Ban by law all federal pork spending. Most of the economic stimulus bill passed at the beginning of the year was not even stimulus – it was funding for thousands of pet projects in congressional districts that does not help the country as a whole. A law should be passed that bans this kind of ridiculous spending from our federal government. If a state or local community wants a project like this bad enough, they can temporarily raise taxes or create special funding without the need to take it from the U.S. Congress. Of course, when a local politician begs for more tax money for a public project, we all know how that usually goes down (because we don’t want to keep shelling out more and more in taxes!). No wonder then that our federal representatives engage in so much pork spending; they can use it to take credit for something in their district and use that as a re-election campaign. Take that power away from them and it immediately helps our economy by trimming wasteful spending.
5) Enact term limits for all elected representatives. If we can limit our president to two terms, why can’t we limit our representatives? Career politicians are a barrier to long-term economic policy solutions because they tailor policy that benefits their elite status above all else; they want to stay in power as long as possible. The concerns of the people that elected them – especially when it comes to taxes and economic policy – go right out the window; all they care about is our vote, not what we really want. Limit the time that a politician can stay in Washington and it’s almost certain that better economic policy will begin to emerge.
6) Give more ability to local law enforcement to enforce immigration laws. Even though many illegal aliens in the country perform low-wage jobs, they also send a great deal of that money back out of the country. But even more important than that, many are paid under the table or in cash and hence avoid income taxes. When they fail to pay their taxes, it further shifts the burden to responsible citizens, decreases tax revenues, and increases government expenditures. Such a practice continues in part because local law enforcement officers must send lawbreaking aliens to federal agencies for deportation; many avoid deportation simply by being caught up in all the red tape and the bureaucracy. Give local law enforcement more ability to enforce federal law and more rapidly remove aliens from the country and watch what happens to the inflow and outflow of tax dollars from law-abiding citizens.
7) Eliminate the federal Department of Education. It has only been in the last few decades that education has become another federal oversight. Local schools are entangled year after year by federal regulations that force them to spend unnecessary funds. States and especially local communities should be turned loose from the noose of a federal agency that receives nearly 70 billion or our tax dollars annually to try and squeeze every school system nationwide into the same mold (No Child Left Behind is not working). Let local schools better determine how to spend tax dollars apart from the federal government; a lot of waste could be eliminated (especially in administrative costs) and the schools would be better off for it.
8) Make school vouchers available to everyone. If there’s one thing government beurocrats are more afraid of then eliminating federal funding for schools, it’s losing tax dollars to a private school. Yet on the flipside, many parents are infuriated that they pay thousands of dollars year after year for public school education whether their children make use of it or not (and many who do send their children to public schools would rather not). Give parents the freedom to use their school tax dollars to help fund a private education and very quickly public school boards will find ways to make their schools more economically and academically viable (because they’ll be competing against the private schools). Then watch the economy be stimulated as parents are given a choice on how to spend their money and public schools begin to eliminate waste and more student expenditures.
9) Revamp the tax code and tax collection. A tax code that is over 60,000 pages long and growing every year is an outrageous waste of tax money and a burden on the citizenry. While no one enjoys paying taxes, we also know that they are a necessary part of life. It just becomes frustrating to pay that necessity when there is a tax code with so many deductions and loopholes, the average citizen wastes many days out of their year simply trying to make sure their tax returns are correct. Plus, the majority of taxes is income-based and can therefore be avoided by illegal aliens, cash-only operations, or criminals. Also, when there is an economic downturn and wages are reduced or eliminated by people losing jobs, tax revenues naturally go down and the federal government then feels the need to raise or revise taxes on those who are paying, and the tax situation becomes even more convoluted. A long-term stimulus to the economy is to completely overhaul the tax collection system by simplifying how taxes are collected, eliminating so many loopholes (which are typically more politically than economically motivated), and not punishing one particular group over another. This could be accomplished by an across-the-board flat tax. Unfortunately if such a tax was income-based, many of the same problems with the current system would still linger. However, if such a tax was expenditure-based rather than income-based, it would be even more stimulating to the economy. Citizens could keep what they earn and pay taxes only when they buy something; investments in savings and other activities punished by the current tax system would greatly increase. Revenues to the government would be up because let’s face it, people enjoy spending money and spend it now even after taxes are taken out of their paycheck. It would also force tax cheats and dodgers to pay taxes, bringing in even more revenue to the government. Finally, it would stimulate businesses that would no longer be burdened by taxes woven into employee paychecks and could finally lower prices on their goods and services without having to cover the burden of so many taxes currently built into those prices.
10) Amend the Constitution to enact permanent economic change. An overhaul of the tax collection system and term limits on our representatives are positive, long-term steps to returning our economy to prosperity, but such radical changes require a method to permanently keep our lawmakers in check. This would bring about the need to make two important amendments to the United States Constitution. The first would be an amendment enacting term limits on representatives. The second would be an amendment to repeal the 16th amendment which allows the government to levy income taxes. Until the government is prohibited by the highest law in the land from dipping into our paychecks, we cannot enact long-lasting tax reform.
Again, this list of ideas to help our economy is not a complete list of solutions. I only hope it will help people think about how many possible solutions there are to bring about economic prosperity in the hands of the citizenry of the United States while reducing the burden of the federal government to itself and upon us.