How to Fix Our Economy

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We're battered and bloodied and hanging on the ropes for survival as a result of the current financial crisis. Alas, nothing we've tried so far has helped all that much in protecting us from the barrage of devastating body blows.

We've bailed out Bear Stearns, Fannie Mae (NYSE: FNM  ) , Freddie Mac (NYSE: FRE  ) , and AIG (NYSE: AIG  ) , and that didn't bring much relief. The Fed has cut interest rates several times, and that hasn’t been terribly effective either. We even stood aside and let Lehman Brothers go bankrupt. And that really, really didn't go very well.

Despite all of this activity, credit markets remain clogged and equity markets are being gutted -- some blue-chip companies like UnitedHealth Group (NYSE: UNH  ) , Alcoa (NYSE: AA  ) , General Motors (NYSE: GM  ) , and Merck (NYSE: MRK  ) have seen their share prices decline by more than 50 percentage points so far this year. On Tuesday, Oct. 14, the government detailed a promising plan to inject $250 billion into America’s banks, but much more needs to be done. Over the past few weeks, economists have put forward some bold new ideas for getting us out of this mess. Let's consider what they have to say.

The dismal science strikes back
Among the economists making the rounds lately have been recent Nobel laureate Paul Krugman and Nouriel Roubini -- whose prescient forecasting of this catastrophe has earned him the nickname "Dr. Doom." Here are three policy prescriptions that have been put forward by these and other economists:

  1. Recapitalize the banks.
  2. Stabilize the housing market.
  3. Increase aggregate demand.

An overall strategy that pursues all three of these aims simultaneously might be most effective, according to some economists. Unfortunately, the gathering global recession will only make it harder to make headway on all of these fronts at once.

Bailout 2.0
Many economists recognized early on that we needed to recapitalize our banks. Under this approach, the government injects cash directly into the banks in return for an equity stake in these institutions. To many commentators, this seemed to be preferable to the aim of the original bailout plan, which was to buy up toxic assets. Treasury Secretary Henry Paulson has finally been won over to the policy of “sticking capital into the banks,” as evidenced by the new rescue plan that was announced last week.

It is hoped that this policy will eventually unclog the credit markets, though it's likely that a lot more than $250 billion will be needed for this. And there are worries that the banks will hoard the cash, thereby undermining the intent of the program.

Getting our housing in order
The current financial crisis started as a result of the collapse of the housing bubble, and it's unlikely to be resolved until the housing market stabilizes. Roubini has called for “a temporary freeze on all foreclosures,” a policy which Sen. Barack Obama also supports. For his part, Sen. John McCain wants the U.S. Treasury to help refinance troubled mortgages.

Addressing the housing problem directly makes perfect sense according to Luigi Zingales, an economist from the University of Chicago. In his Plan B, he notes that “if homeowners continue to default and walk away from their houses, the banking sector will continue to bleed and additional equity infusions will be needed.” Zingales proposes that Congress pass a law that allows eligible homeowners to renegotiate their contracts with lenders. His argument is very compelling, though one wonders about the daunting logistics of implementing such a policy.

Full-on Keynesianism
The final strategy to be considered hearkens back to John Maynard Keynes, who felt that increased government spending was necessary to pick up the slack in aggregate demand caused by a depression. Both Roubini and Krugman propose that generous public spending on infrastructure projects, unemployment benefits, and tax cuts to lower-income households should be implemented to counteract the deflationary pressures of a global recession. According to Krugman, we need to spend boldly and not worry about the deficit at the present time.

Keynes once suggested that it would be a good thing in recessionary times for the government to bury bank notes, and then let the private sector literally dig them up. He added that it would be preferable to build useful things, but that buried money would be better than nothing. And at a time of record deficits and a mounting national debt, the call for additional government spending might meet stiff resistance from voters and politicians in the coming months.

Will any of this work?
There are a lot of great ideas out there, but so far there is very little reason for optimism. Any solution will require a lot of trial and error, and every citizen will be required to evaluate the latest theories being floated by the economists. There's no need for ordinary folks to be intimidated by all that learning, though. Ben Bernanke, who has been at the wheel as this bus veered into the ditch, was a scholar of the Great Depression before becoming the chairman of the Fed. How's that for irony?

Have some better ideas? Add them to the comments box below.

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John Reeves does not own shares in any of the companies mentioned. UnitedHealth Group is a Motley Fool Inside Value and a Motley Fool Stock Advisor pick. The Fool owns shares of UnitedHealth Group. Our disclosure policy's favorite economic policy of all time was the “WIN” button.

Read/Post Comments (25) | Recommend This Article (18)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 20, 2008, at 5:01 PM, mlaursen wrote:

    Really, the solution for a nation so in debt that it is bumping up against the limits of having its traditional borrowers say no, is to spend a bunch more?

  • Report this Comment On October 20, 2008, at 7:53 PM, SbElectric wrote:

    I would like to see that personal advertisement like from sayborgtrader be not included in this discussion or comments space. Let us abide by the spirit intended for this space. Thank you.

  • Report this Comment On October 21, 2008, at 10:03 AM, glenvar wrote:

    Any kind of bailout in order to work needs to be a "bottom up" rather than a "top down". The Paulson plan was simply a bailout of Goldman Sachs and other large institutions which had gotten caught in their own web. It has had and will have no benefit to the man in the street. It will recapitalize institutions that would have otherwise failed. You have to spend the same dollars in a more logical manner and recapitalize the man in the street in order for him to be able to pay for the loans that are choking the institutions. If he is the beneficiary rather than just the payee, we may make it through this in less time. He will pay his bills which would recapitalize the very same institutions. As it now stands the money put in the hands of the largest will not go down the food chain.

  • Report this Comment On October 21, 2008, at 11:22 AM, YooperFool wrote:

    I found this 14-point plan...I'm not an economist...but some of this rings true to me...what do you Fools think?

  • Report this Comment On October 21, 2008, at 3:29 PM, liberty41 wrote:

    How to fix our economy?


    For anyone over the age of 6, please read this:

    You cannot invest when the rules keep changing. You never know how those rule changes will affect your stocks or bonds.

    What if they do what they talked about last week - freeze the markets totally. No trading allowed until they rebuild the whole society. How much do you think your money will be worth if that happens?

    Read this for heaven's sake:

  • Report this Comment On October 21, 2008, at 4:19 PM, Brettze wrote:


  • Report this Comment On October 22, 2008, at 3:22 AM, foolfighter2 wrote:

    We need to fix the housing market rationally and without providing free housing to the people who got us in this mess. The price of the homes need to drop drastically because the price of houses are artificially too high and only people who can afford the homes should buy them. Because the banks are hiking up mortgage rates and not even giving out loans at all, the government should give an additional tax incentive to new home buyers, not flippers and provide fixed rate house refinancing to the people who already have homes at 5%. Prolonging and propping up home prices will only make the mess messier causing a Tsunami of foreclosures that is eventually going to come anyways. We need to lance the wound and fix the problem because it will infect everything else. We can not bail out home owners who put no money down, have no equity, and never had any money to pay for the home in the first place.

  • Report this Comment On October 22, 2008, at 8:55 PM, rocket75ht wrote:

    I think Paulson and Fuld be forced to buy all toxic assets and then sent to debtors' prison until they pay off the debts. In the mean time foreclose and burn down those houses. Why should deadbeats get their homes while I have paid a mortgage for 27 years. This is horse S+H+I+T that cheaters are rewarded while honest workers bear the cost. I rather rebuild after the great crash that let the undeserving get anything.

  • Report this Comment On October 24, 2008, at 7:47 AM, ragingcapitalist wrote:

    So the financial markets followed Congress's dictum to lend money to people who had absolutely no chance to pay it back. Wall Street then packaged and sold this junk to "sophisticated investors". Now the Fool is advocating letting the same financial illiterates recapitalize the markets with borrowed money that the United States, which also has no way of paying these borrowed funds back unless the Fed gets the printing presses churning out worthless dollars.

    What is needed is a sound tax policy and Americans rediscovering a few things, first we need to produce real tangible products that can be exported, second become more frugal and start saving money. For years we were told America's problem was that we have a negative savings rate. Now we are being told we can beat the downturn by spending our way out of it using borrowed dollars.

    I hate to say it but I believe the Motley Fool is in favor of these misguided bailouts so just so their stock predictions don't go south and their track record looks better.

  • Report this Comment On November 16, 2008, at 1:25 PM, bernie510510 wrote:

    Consumerism is the answer:

    Alert: We are now in a Consumption Crisis. We need your help.

    Who: U.S. and World citizens are at risk

    What: Consumption Crisis - Too many of us have stopped spending and it's leading to more problems

    When: We can turn the tide December 6th and 7th

    Where: Support the movement and start buying again

    Why: We can't depend on our Government to save us. It's up to us! This shopping experiment will prove that we are the economy and we do have the power to improve our situation

  • Report this Comment On November 25, 2008, at 6:13 PM, mcamel wrote:

    You want the economy back on track, give all taxpayers $200,000 dollars. Now before everyone starts yelling, it will cost a whole lot less than 700 billion, and most the money will do good immediately. Some will pay off mortgages leaving them with lots of disposable income to spend in stores, eating establishments, buy cars etc., others can refinance their mortgages down to something they can afford serving two purposes, it will get a lot of bad paper off the bank books because people will be able to afford the payments and second it will give these same people some extra money to spend in stores. You will have some that will go out and blow the money carelessly, they will lose their houses; you can't save everyone, but it is not a total loss, those individuals that blow the money buying cars, shopping at stores or anything else put the money directly to where its needed and not just given to the big bankers and corporations that don't give a hoot about the people, just their bottom lines. The government thinks we are all a bunch of idiots.

  • Report this Comment On November 29, 2008, at 7:39 AM, ecoquest wrote:

    Hey, I'm no economist but it makes perfect sense to me to fix the root of the problem. If that means protecting banks with an infusion of cash, then that's fine, as long as banks are required to lower the principle and interest rate of houses sold through sub-prime loans which is one of the root causes. Many of those people were likely unaware of what they were getting into. They likely never expected gas, food, and everything to increase as fast as they did on top of interest rate increases and wage stagnation. They were psyched into buying over valued homes because sub-prime caused a glut of houses sold which superficially raised the prices and perceived values.

    If you're not going to lower the principle and interest rate on sub-prime houses, then give buyers a few thousand of their equity back so they can find housing elsewhere and let the banks sell the houses for what they are worth on the market now. Hey, you've given them enough money. Time for them to make sacrifices. Instead of letting the banks decide who to loan money to, let the government make housing loans so banks won't hoard the money or give it away to CEO's!

    The government should take on all credit card debt at 6% interest since their bad laws and mismanagement allowed gas prices to rise without regulation of Wall Street speculation which drove up prices 2 fold and allowed big oil to make fuel out of the food supply, driving up everyone's living cost which pushed them into bad debt.

    They should make a law that credit card companies can't increase your interest rate when you get another credit card or miss less than 2 payments in 2 consecutive months within 1 year. The limit of interest should be 15%. The limit of late fee or over the limit should be $15 max! When missing a payment or over the limit, the minimum due can be no more than double the interest rate plus the penalty amount! That way people can continue to pay their debt and buy products and you don't have a bunch of rich people making profits off of them like parasites, sitting on mounds of money, bringing the economy to a halt! The credit card industry is scandalous and so are the congress people who let them do it to America!

  • Report this Comment On November 29, 2008, at 8:28 AM, ecoquest wrote:

    I forgot to say that spending money on our infrastructure, green energy, and such, is very smart. It's money that keeps on giving and it starts giving quickly because the people doing the building will spend the money. It will create more jobs as it flows up through the system. We should clearly see that Trickle Down Economics and Free Market is a myth that destroys the economy.

    If you consistently take enough money off the top by taxation of top earners to create jobs at the bottom, this mess wouldn't have happened in the first place. Instead, we let those at the top outsource our jobs and not enough quality jobs were created to replace them to support the tax needs of government and people of America. We got foolishly fixate on cutting taxes when the taxes you save ain't worth the services given up!

    We should make it against the law to not have full employment with a living wage. We can always give green cards as needed. It beats paying taxes to lock people up because they can't find a decent job and turn to crime! It's criminal to keep less than enough, jobs with living wages, to put every able American to work in them, just to keep wages low. When have you every heard of full employment?! That's because supply and demand require there be unemployment to keep wages low! Otherwise, wages would be sky high under this system. Therefore, full employment would require wage control! It's not that hard. It would require a nationwide network to monitor labor needs and costs. People sucking up the big profits our economy creates through cheap labor and all labor should be taxed enough to keep people in living wage jobs! There is a good chance their profits would be greater and more consistent!

    I'm all for a vote every year for congress. That way you don't keep people in there screwing us over for 2 and 4 years. The common man is not being represented!

  • Report this Comment On December 06, 2008, at 11:06 PM, SteilacoomJoe wrote:

    The only way to fix the economy is by using us, the consumers to fix it. Not giving billions to those who helped create this situation and now hoping they have learned their lesson. The soldiers in this economic war are consumers and mortgage holders. If every mortgage holder were allowed to refi at 3.99%, it would save $300-$500 per loan, every month, for years. Money that would be used for paying down debt, buying cars, and investing. Housing prices would immediately stabilize.

    Foreclosures would drop tremendously. Every loan would be backed by property that would no longer be losing value every month. Does this idea need fine tuning? Of course it does. But it is the answer!

  • Report this Comment On December 06, 2008, at 11:09 PM, SteilacoomJoe wrote:

    In addition, re my above comments..All loans would be underwritten by government programs...Fannie or Freddie.

  • Report this Comment On January 27, 2009, at 3:01 PM, PNeeraj wrote:

    This is a good article. But try to read this

    Soem of you may agree and some of you may disagree but what talks about is the reality

  • Report this Comment On January 29, 2009, at 1:42 AM, ClickHere25 wrote:

    I think this article is very clear about what needs to be done and it is correct. I think that there is to much fear from people about the recapitalizing of banks and thinking of Socialism, well we have to be ready to say that we do need government interaction. In the US we usually use Monetary Policy( Basically lowering interest rates) which can spur economic growth and will not lead to massive inflation. We have experianced a Liquidity Trap which basically means that we can lower interest rates all we want and GDP won't grow. So our only option is the use of Fiscal Policy( either a Change in the tax rate or government spending). We can use Fiscal policy to recapitalize the banks which will bring back confidence to the banking system ( The gov. money will decrease the risk of investing, which could increase the amount of capital the bank can raise) I am a personal believer in getting stake in the company to provide the proper managment to banks in tough times. Sometimes the goals of the bank and the goals of the Gov. can be different and have bad results. We repealed the Glass-Steagall Act (which implemented a lot of banking regulation after the depression) which has made the banking system a lot more efficient but much less trasparent and has allowed poor banking managment take over. We need to bring bank better thought out regulation that leads to transparent and efficient banking. Housing was the next major point and this is a very important aspect of the fix. People keep a majority of their wealth in their home and people have lost that wealth and that has changed their perspective on many things including consumption. I don't support a freeze because that is not fair to people paying their motgage, however letting people rework their mortgages to a better price keeps people in their homes and banks keep getting money. I think that when we fix housing we can start to rebuild. Finally increasing Aggregate Demand is essential for recession recovery. However we are still feeling parts of the Liquidity Trap, the Federal Funds Rate( the interest rate that banks charge each other for short term loans to cover the Researve Requirement) is set at 0-.25% meaning that we really can't cut the rate to stimulate the economy so we must still use Fiscal Policy. This includes fixing our infrastructure(roads, Bridges, electrical grids...), Tax cuts for low income people( people with low incomes, as a percent of their income spend more than people of higher incomes, middle to upper class people will save more) and lending money to private industries for their investment in new capital that will create new jobs. However we need to be careful about Fiscal Policy because it can lead to things like Hyperinflation and Stagflation many years down the road. I feel that these scenarios are avoidable but need strict oversight. If we end up in Stagflation the only option is to go back into recession to fix things. We need an Economic Stimulas plan, we just need to be careful about unintended consequences. It is true that we need not worry about our defecit until we recover because recovery is most important. However you feel about the stimulas plan, it is needed. One person talks about outsourcing. Outsourcing is very good because it allows countries that have the advantage in production due to some factors, say low wages in China due to massive supply in labor. This allows them to make goods that they can sell for cheap here in the states, they make money and we get cheap products. The problem that outsourcing creates is that it takes US jobs but Americans don't respond to the change. In my opinion we have lost our competativeness in some markets due to many factors including high labor costs and lousy managment ( SUV's and now high MPG vehicles in the auto industry). If we can make our auto companies more competative we can bring more jobs back to America. Outsourcing is ok if we aren't the very best producers of a good, but it is bad if we don't adapt to new market conditions to either re-educate the workforce or regain our competativness.

  • Report this Comment On March 02, 2009, at 10:50 AM, oneemsguy wrote:

    Scrap FICO; take the credit score out of the lending criteria; Fix the United States Economy.

    I have listened attentively to public and private leaders across the nation as they talk about how to fix the economy. Some experts say the U.S. economy is in unchartered waters. I say; we can continue to move forward with conventional economic measures that fundamentally work in ideal situations, or we can step back, look at the real economic problems of American citizens subjectively, and find a solution that will really work and work now.

    Here is my solution.

    Scrap FICO; take the credit score out of the lending decision criteria, and make it possible for common American citizens to borrow money again. Currently, under conventional lending practices, banks or lending institutions consider 4 basic criteria while making a loan decision. Credit score, debt to income ratio, ability to repay the debt, securities and reserves or collateral offered to offset the loan.

    If we scrap FICO; take the credit score out of the lending criteria and make it possible for the working American citizen to borrow money again, our economy will improve at all levels.

    Here is an example: A Family has a home in an option arm, the family has been missing payments on the home and foreclosure is impending. American politicians will not touch this scenario. Ha. It seems that because of the inability to relate to common Americans truly in need, politicians generally cannot solve this homeowner problem. Politicians address this scenario with the impotent comment; “we cannot reward bad decisions by homeowners”. This is an amazing side step in rationale since we've bailed out Bear Stearns, Fannie Mae (NYSE: FNM), Freddie Mac (NYSE: FRE), and AIG (NYSE: AIG), in spite of their bad business decisions. So I say; lose the line against helping common citizens who are in need; “we cannot reward bad behavior”, or go get my tax money back from the banks and auto makers. With that said, assuming this example American has a job; he could go to a local bank and overcome the only thing standing in the way for reorganizing and recovering; which is his unacceptable credit score, and then, hopefully, the citizen could get a loan to fit his needs.

    Consider this; if you are having financial stress, as millions of Americans are, and if you think politicians or private leaders are going to help you, you are probably wrong. Most politicians cannot relate to American family and individual financial problems. Politicians usually have not been laid off; Senator John McCain has 17 houses. Politicians generally listen to people, and they respond to people who are not in financial despair. Listen closely to the news media comments and commentators and ask yourself; is this person really representing me? Is this person in touch with my situation? Are they losing their home? Of course they are not. They also have a probably have high credit score. They are also the person standing on the courthouse lawn buying your home foreclosure at 10% of its real value. Watch how politicians carefully state how they are going to help American families in need. They have the idea right; they will firmly say; “we need to get lending started again!” Then they qualify the comment with the condition; “for creditworthy Americans”. Again; ha. Let me clarify. The American family who is in financial trouble, and is about to lose their home, will be exempt from the politician’s plan. Hmm. After all, if any borrower is having difficulty making house payments, that borrower will have a dramatic reduction in their credit score. So whom exactly is the politician helping in their efforts? The people who have a high credit score? People who do not really need the help? Come on! Where is the voice of the people in need?

    Another example would be an American Individual who has lost employment, and is headed for financial trouble. Well, consider the employment source. If the individual is a contractor, work will spring up immediately if people can borrow. If the individual is a factory worker demand for goods will increase immediately if people can reorganize by borrowing. Employment is tied directly to this lending convenience and expediency.

    Critics of scrap FICO and credit score will say, we cannot afford to forgive all of the bad debt. No one said eliminate the debt. We already have collection practices occurring and that will continue. Americans don’t need forgiveness of debt to fix the economy. Americans in trouble need to be able to borrow based on sound evaluation of securities and collateral and ability to pay. Just scrap the conventional credit score. Take it out of the lending decision criteria. Doing so will go a long way toward fixing the U.S. economy.

    Surely, if lending institutions have the ability to repossess and foreclose on property for failure to pay, they can be calculate the risk of a loan and loan a safe amount of money, based on criteria other than credit score.

    I know this idea is from “outside the box”. Freezing foreclosures, bailing out auto makers, banks and insurance companies are all ideas that stem from thinking “outside the box”.

    Carl Campbell

    57 West Maple

    Fair Grove Missouri 65648

  • Report this Comment On March 07, 2009, at 5:08 PM, dimestop wrote:

    2 moves to SAVE THE ECONOMY "QUICKLY!"

    1. YOU CAN THROW A "TRILLION" PLUS DOLLARS AT THE PROBLEM...which the gov't has already shown their prepared to do... arguing about it in Congress over what Green Project and How TAKES TOO LONG...they'll be wrangling and cutting pork deals for the next 2 years before anything gets built (like those Windmills, etc.) So...


    "RIGHT NOW!"

    a. infrastructure spending will not SOLVE THE PROBLEM IN TIME... white collar workers laid off in Vegas or South Carolina ARE NOT SUDDENLY GONNA BE retrained as WINDMILL MECHANICS!

    b. here's out to GET MONEY WHERE IT'S NEEDED FAST:

    ...A HUGE SPECIAL TAX everybody gets back 50% (just a number to illustrate) IMMEDIATELY!


    LIKE YOU CAN SPEND 20% ON A CAR OR HAVE THE OPTION OF SPENDING 20% ON HOME REPAIR... 30% ON RETAIL LIKE AT TARGET...A CERTAIN PERCENTAGE CAN GO TOWARD YOUR MORTGAGE, some to paydown your credit cards (not in one lump sum) get the idea roughly...





    B. THIS STEMS JOB LOSS AT LOTS OF SMALL BIZ THAT WON'T SEE RETURNS FROM INFRASTRUCTURE SPENDING before they go, bankrupt, layoff their workforce, or won't get much bang out of infrastructure spending anyway.

    C. the gov't is GOING TO "PRINT MONEY" (with the Fed, etc. ANYWAY!)

    so the GOV'T NEVER RUNS OUT OF MONEY ANYWAY! ...they just print what they need, which they are already doing.


    I know NIAGARA FALLS IS PRETTY...but we're in DEEP "SH.T!"

    joint venture with Canada...USE ALL OF NIAGARA FALLS TO GENERATE POWER...see all that water flowing over UNUSED...




    much of the power for the whole NorthEast comes from A SMALL QUANTITY OF THE WATER GOING OVER THOSE FALLS...

    think BIG O'bama...


  • Report this Comment On March 19, 2009, at 7:46 PM, poeticalmath wrote:

    1. Recapitalize the banks.

    2. Stabilize the housing market.

    3. Increase aggregate demand.

    I feel like this isnt the problem. They are in a bad situation because people are in a bind and cant afford they bills. So instead of helping the people get out debt, to smooth things out on there bumpy road to live the american dream, they bail out the people that are already living the dream, instead of the people waking up day in and day out breaking they backs. For the people, by the people........... come on people, where did we go wrong?

  • Report this Comment On October 01, 2009, at 4:29 PM, varun2756 wrote:

    Hi everyone,

    I am just an average guy and I am not economist either. I still think that we can recover in US of A. The main core of the problem is unemployment in this country. If people have jobs, they would have money. If they have money they go and buy products. If they buy products they money starts rolling. Because once the products are getting sold small businesses can order more inventory. More orders means more jobs. You get the picture. A jump start to economy.

    Now, How to create jobs?

    This sounds stupid but if you are not gonna curse me by saying here we go another money spending wise guy idea, then hear me out. As I said I am no economist. I call this Varun's stimulation package. :) This is whats involved. I am just coming up with random numbers so don't yell at me please.

    Lets say we come up with this new A Trillion Dollar package. Now we are doing a survey of how much unemployment rate is in each State. Then we share 75% of that package money to all the state per their unemployment numbers. Now government tells SMALL BUSINESSES that who ever they hire this year or next year, whatever they pay their employee they will get may be 50%-60% of that money back in Tax Return. That gives employers a safety net that they are getting help with no total loss. If they can afford right now instead of hiring one person they will hire two people or more who knows.

    If any MAJOR BUSINESSES want a part of that package government comes up with a stipulation stating they will have to come up and apply with a plan which invest certain % of fund to be invested in the USA only. Creating more jobs. Or they wont get the funds or Tax Benefits.

    This should give a big kick to jump start the economy.

    Oh, and I think cash for clunkers was a big mistake. Because now people who did not have loans due to old paid cars, now they have loans. Instead of avoiding loans which now people cant afford to pay is going to be more in debt. They did exactly opposite of what they where promising not to do, was to avoid creating bad loans.

    I have more ideas to jump start the economy but I don't want to bore you with it. Thanks for bearing with my bad grammar and spelling mistakes.

  • Report this Comment On October 02, 2009, at 7:22 PM, marklg1 wrote:

    First, we have to Identify where everything went wrong: Removal of the Glass Steagall act of 1933.

    When you let Bankers, Investors and Insurers work under the same roof, bad things happens. Did we not learn anything from 1929? History has repeated itself.

    This economy is the exact same thing that caused the Great Depression. Bankers, Investors and insurers caused a falsely, over inflated stock market.

    Does the housing market ring any bells?

    We removed any safety net we have when the Glass Steagall act was thrown out the door. And for what? So Travelers insurance could buy Citi bank? Yes!

    This was all done durring the Clinton years.

    Second, rebuild world wide finance confidence in the USA finance systems. This will not happen until the the 3 finance industries (Bankers, Investors and Insurers) are still in bed together. We have seen the creative financing that they come up with. No one in the world is willing to invest in a system that is unregulated, corrupt, know for making bad loans with our and everyone Else's money, and allowed to do anything they want to do including stealing everyone in the worlds money. I know I will not invest.

    Untill the WORLD has confidence in our system, we continue the downward spiral to another depression.

    Third, bring back industry, how? Lower corporate tax rates. The USA has the most complicated tax code in the world,(if not it sure seems like it) and almost the highest corporate tax rates in the world. But many corporations pay no tax due to the complexity of the tax codes. If taxes are lowered and tax codes simplified, industry will come back putting people to work.

    A flat tax or a fair tax (the fair tax is a sales tax on purchases only with no income tax with holdings) will put more money in the peoples pockets to spend creating more manufacturing and more jobs.

    Repeal NAFTA and CAFTA.

    Other countries are avaiding the import tax by just simply shipping to Mexico with far less import tax and flooding the US market. This is why American manufactures simply outsource to this countries. They DO! It needs to stop! It will stop with a fair tax plan and the repeal of NAFTA & CAFTA.

    Close the boarders. There as many criminal entries (illegal aliens) as laid off workers in the USA.

    American wealth was built on manufacturing a good solid product. Now all we do is buy other counties products from pencils to alliances.

    The USA can not maintain financial stability by continuing to buy and sell services and money.

    And last, Control and reduce government spending, bail outs, give away programs, corruptness, special interest projects and more.

    If the economy were as it should be, give away programs would not be needed.

  • Report this Comment On December 18, 2010, at 12:54 AM, redrob1959 wrote:

    I can't believe after N.Y and other states started .5 cent bottle or can deposit, 20 yrs. latter every state in the USA dose not enforce this concept. It would be a 5 to 10 fold positive result on the economy. Jobs for countless people. Starting with people in the stores that deal with the returns, the people that pick-up from the stores. So forth and so in.To say nothing ABOUT CUTTING TRASH IN LANDFILLS BY WHO KNOWS WHAT. (SAY SOMETHING) TO (SOMEONE) There is no reason to put enough plastic bottles in landfills to go around the earth three times every year or is it every month.


  • Report this Comment On December 05, 2011, at 5:37 PM, boston1945 wrote:

    first all underwater homes need to be put

    back on dry land

    balance budget federal govt

    end entilements/phase out

    reduce military budget gradually

    reduce government empolyment by nutriion

    tax business on it's use of public services not

    on income

    combine goverment agencies

    alter foreign aid based on need/interest

    allow states to provide for themselves

    stop government regulations that should be

    control by the state/mandates

    the goverment has 18 enumerated power

    make them abide by them.

    we don't need handouts/what can you do for

    your country? says it all

    the free ride is over/over spending is over

    we no longer borrow from ourselves we are

    borrowing from our enemies

    free up oi/gasl drilling and make new nucular plants

    invest in real eco-science projects

    invest in education for all ages in all fields

    prevent fraud and program abuse

    fix our tax system because its unfair to poor

    and rich alike the rich can handle it better

    every body else suffers

    limit congress terms senate 6 yrs house 6 yrs

    pay expenses only, insider trading illegal for


  • Report this Comment On December 05, 2011, at 6:08 PM, rodnog wrote:

    Wow, with this many people who know exactly how to fix the US economy, i'm surprised it's still broken!

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