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5 Ways the Next President Can Fix the Economy

May 19, 2008 RSS Feed Print

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"How the Next President Should Fix the Economy" is the current cover story at Time magazine. I think I can briefly sum up the 3,000-word story, written by Justin Fox, thusly: This election is a biggie for the economy. Insecure Americans want higher taxes and more regulation. Government should spend more on infrastructure to combat income inequality. Get rid of the Bush tax cuts even if it weakens the economy. Raise energy taxes. Increase regulation on Wall Street. Nationalize healthcare, pretty much.

This article may well be prophetic. But it is supposed to be prescriptive. How does any of that stuff make the economy more productive and competitive? About the only idea presented in the whole story that might have a positive growth impact is getting rid of the mortgage interest deduction. Now here are five ideas that both liberals and conservatives might agree on that also could actually improve economic growth by embracing the American model of capitalism that's working wonders the world over:

1) Eliminate corporate income taxes, especially if you are also going to hit companies with all these energy taxes.

2) Get companies out of the business of providing healthcare benefits.

3) Index Social Security benefits to inflation, and extend the retirement age, allowing a big cut in payroll taxes for the middle class.

4) Create government-funded "innovation prizes" for key technology challenges.

5) Give universities incentives to create more science geeks, and offer grad students free-floating fellowships to choose whatever field they see as the best market match for their skills.

I think it is also worth noting what Diana Farrell of the McKinsey Global Institute told me is the best way to make America more productive and competitive. The real key, as Farrell puts it, is "creating maximum competitive intensity" to force companies to constantly innovate—whether through new technology or business models or management processes—to keep ahead of rivals. And when competitors respond, those innovations get spread.

"Europe is innovative, but that innovation doesn't get diffused throughout various sectors," she says. For instance, hypermarkets like Wal-Mart have long been frowned upon in France and restricted via zoning requirements. Likewise, free trade—or as Farrell puts it, "exposure to global best practices"—is critical to fostering innovation of all sorts. Globalization forces U.S. companies to innovate or die—and in the process raises our standard of living. Something to think about before we start undoing a quarter century of deregulation and tossing up new barriers to trade.

Tags:: capitalism,; 2008 presidential election,; economy,; President

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The economy is a mess right now. Increasing minimum wage isn't going to solve any problems. It's called checks and balances. If we raise minimum wage the products and services are going to have to go up. Now everyone is overpaying on products and services because the company owners have to incorperate that increase into their products. This hits them double because now the products they were getting at a lower price are now higher so their solution is to outsource. It is cheaper to buy products from China and Japan because they get paid dollars a day to make the things we get paid hundreds. Even if we make a better quality product it's easier to pay .10 cents a part instead of .95 cents in the US. We need to put higher taxes on imports and give incentives to companies that spend within the United States.
Pull our troops out of the Afganistan and Iraq it's a lost cause. We will never see the trillions of dollars we have spent to try and make them a civilized. Build up our security in the states to keep the terrorist and illegal immigrants out.
Tax the for profit schools at a higher tax rate. They are taking advantage of the governments grants to low income families. We need to cut the BS out of schools to. The average person spends close to $70,000 to get a degree. $20,000 these are spent on elective classes that are manditory. I'm sorry tell me how underwater basket weaving or classes similar are going to help me in criminal justice or any other degree? We need to focus our attention to streamlining educating our nation. The state dept just spent $70,000 on president Obama's book. that is $70,000 that we could have used to update outdated books in our school systems.
We are barrowing money from China. Really come on we might as well be communist ourselves we are supporting it! We need to focus on the United States and not what is going on in the world. We have to have our hands in everyone's business. War has way of the United States since this country was born. We have been constantly at war.
Focus our attention more on renewable resouces for energy. Cut our dependance on oil. We have a nation full of smart people that have figured out ways to create fuel from some of the basic of things. Maybe we need to force ourselves to think green. look at other countries and what they pay for a gallon of gasoline. anywhere from $5-10 a gallon. In the past 10 years we have began to focus on fuel efficency. Other countries have been doing it longer because they can't afford to have a 20mpg vehicle.
Anyone that is on government assistance needs to be drug tested. this will eliminate millions of dollars spent on people that are taking advantage of a system that is supposed to be a temporary solution. Forcing them to get off their lazy buts and fill the jobs that are there that nobody wants. If they are on assistance they should have to do some sort of community service. It shouldn't be freefare.

Gregg of NY 3:09PM October 30, 2011

Look at the following:
http://asktahir.blogspot.com/2011/09/political-program.html
That plan should fix everything alright.

Tahir of MA 8:47AM October 07, 2011

Fixing the US Economy
Fixing the US and World Economy is easy. All it will take to get the job done is one word…. “CONFIDENCE”
To achieve Confidence, takes Shared-Pain. The real problem with shared-pain is, few State, Federal Government, Municipal and Union employees are willing to share any type of pain.
Who said…. “We will continue to Dance until the Music Stops”. (Oh yah, it was the Greedy) Translated, this means that those in the corporate and government world will continue to pillage middle-income American’s, for their personal gain, until the last dollar has been sucked out of every American Taxpayer.
People are really getting tired of all the excesses of Government and Big Business. Corporate is not as bad as Government since, as an example a large bank overpays it’s executives’’ we can simply switch to another bank or credit union. Now, if this bank starts loosing business and the Government bails them out, then that’s just Stealing from American’s to reward their Greed. (Oh yeah, that already happened)
What President Obama has to do is present a “Plan that Makes Sense”. So far, he has made NO sense, just driving us deeper into debt.
Once we are Confident that we are on the right path, the following will happen:
The Stock market will rise.
Businesses will hire.
Houses will be purchased.
Tax revenue will increase and the National Debt will decrease.
Our economy will grow, etc., etc.
WHAT NEEDS TO BE DONE IS TO PRESENT AT LEAST 1 OF THE FOLLOWING:
1. Stop making negative comments like raising taxes, retirement age or cutting programs like Social Security. This just “Scares the hell out of everyone and shows how direction-less our Government really is!”
2. Immediately REVISE all benefit programs including pensions, bonuses and healthcare for all State, Federal, Municipal Government and Union employees. Include anyone that feeds off the American Taxpayer.
3. Retirement starts at 65, with early retirement and reduced benefits at 62. No exceptions. If you want or need to retire earlier, use your personal savings.
4. Pensions are replaced with a 401k-type plan, like the rest of America. We are saving for our own future and trying to pay government pensions at the same time. This is crushing the American people by making us pay YOUR retirement with our tax dollars. (Note: if you don’t raise taxes, you have to increase the debt to cover these ever increasing commitments)
5. Healthcare is purchased through a cost sharing group-plan, national health program or HMO, similar to the private sector, until you are 65 and eligible for the Medicare type programs. (Note: If all Government employees have to rely on Medicare & Medicaid, the future of these programs would be a lot brighter)
6. Stop throwing around billions and trillions in cash like it’s yours and stop printing more money. If your not familiar with the term “Fiscal Responsibility”, it’s time to look for another job. Every Official needs to be asked before he/she is elected, “Do you personally balance your household check-book or does your spouse? Are you committed to keeping your credit cards paid off monthly?” A “NO” to either of these means no election.
7. Everyone pays taxes. The 48-50% of the US adult population that are not currently paying need to have at least a 2-5% flat tax taken out of their income, from what-ever source, to contribute to the state & federal revenue. If it’s a welfare check, social security, unemployment, etc., it doesn’t matter, everyone contributes something to help pay for schools, roads, national security, etc. Remember the saying, “Ask not what your country can do for you, ask what you can do for your Country”.
8. Stop targeting middle-income American’s! This group of taxpayers is footing the bill for everything it seems. Every one is targeting this group and trying to rape as much cash out of them as they can. I heard that we are also in for a large increase in our insurance premiums soon!
9. Taxing the Rich will not bail us out, as the Rich do not have enough money to do so. But they do need to pay their share, remember Shared-Pain? If middle-income folks are paying 25% and the Rich are paying 18%, then this has to be adjusted. (Note: We could cut middle-income folks back down to 18% instead of raising the Rich, ha!)
10. Get America back to work. Cut Unemployment benefits back to 13 weeks. If an extension is “really merited”, then 26 weeks can be used, but not more than once every 3 years.
11. Limit Welfare and Food Stamps. There’s so much abuse hear that it has become a way of life for many. Benefit payments to single parents will be limited to 2 children and capped after a certain number of years, or the child achieves a certain age.
12. Incentives and entitlements are to be given to married couples with children, as long as they stay together. A hard working family with both spouses working should be praised, not penalized.
13. Get State & Government Payrolls back in line. As an example, Teachers, Fireman and other groups may have been underpaid years ago, but this is no longer true. In some cases, state and government employees are paid twice as much for the same job in the private sector. Their payroll & retirement benefits need to be scaled back to match the private sector, no better, no worse. If any government employee’s salary has increased in the last 3-5 years, while holding a similar position, the their salary must be cut back to where it was 4 years ago, minimum cut being at least 10%. No exceptions. We just don’t have the resources to pay those increases. Remember, our retired citizens are on their 3rd year w/o any SS cost-of-living increase, while their taxes, medical, insurance, etc., have escalated.
14. The big problem is that government salaries continue to ratchet up and up and up, whether or not the economy is thriving or in a recession. As an example: A small businessman is doing $100,000 a year in 2004. 5 years later, he’s now doing $200,000. He gives himself a raise, hires a helper and buys a new truck. In 2009, and as a result of the recession, his business drops back to $100,000. He has to cut his salary and get his finances in-line by letting go of his employee and selling the truck. “THIS IS WHAT THE GOVERNMENT NEEDS TO DO”. It’s called living within your means. Instead, they keep ratcheting up the spending and entitlements to the point of where we are today.
Every department in the Government needs to be challenged to operate with-in their budgets. We pay these department heads a very good salary to manage. If they cannot, they need to seek other means of employment.
SUMMARY:
If anyone in our Government, President on down, has the “guts” to pursue just one of the above areas, you’ll see the Confidence return almost overnight.

Rick of CT 4:00PM September 08, 2011

5 Ways the Next President Can Fix the Economy

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