Enjoy this guest post from an anonymous (for employment reasons) PD regular:

Each politician has an answer to our economic woes that attempts to lay out their own philosophy and set themselves apart from the crowd. President Obama is trying to create a program that will save his own job in 2012, while the Republican candidates are trying to contrast themselves with both their competitors and the current occupant of 1600 Pennsylvania Ave.

Some refuse to spend a penny more on government programs, others want to raise taxes to pay for their programs, still others abjectly refuse to raise anything that looks like a tax. All of this tinkering is well and good, but with the partisan divide in Washington and throughout the country, the country needs a vision of where it is going, not what they are wearing enroute. The details obviously must follow, but they mean nothing if leadership does not spell out the direction overall.

Here is what I would preach as a vision, with some simple fixes to get us going. The rest of the details can be handled after the initial steps and direction are laid out.


Stability.
Literally hundreds of businesses are floundering , holding back cash from the market place, unsure of what their future obligations will be due to regulations in flux, proposed tax code changes, interest rates and inflation. Bringing stability to the market place will be the biggest benefit for companies and individuals trying to decide what they can afford in the future.

1. Place a 5 year moratorium on new regulations. Right or wrong, the country has survived with what we have now (and less). US Industry will not kill thousands of people in the next few years if we don’t enact the literally thousands of regulations being written and re-written. Many would like to see the death of already-enacted regulations, the changes of others, but business right now will benefit from the stability of the ‘known.’

2. Change the mandate of the Fed back to only monetary stability, and not job creation. Fluctuations in the interest rates and the rapid increases in the money supply may help in the short term for lending power/availability, but the long-term inflation risks hurt. Cheap money is not always good money.

3. Freeze the tax code for 5 years. I hate it as it is. Many people either want it more progressive or less, less complicated, or changed completely in how we collect revenue for the government operating costs. 5 years is not the perfect answer, but it gives business a chance to plan, outlay expenses, and invest in a longer-term strategy. The fear of waiting 5 years for a politician is the lost chance to craft it in their favor, but that will have to wait. They can instead spend time building a tax code that is not driven by the immediate elections, and that makes more sense.

Live within our means. Short-term debt is often necessary, expected, and an effective way to run the financial aspects of the government. The current and planned obligations of the federal government, however, are reaching a crippling level. The talk of draconian cuts are political show for now, but soon will be very real as we risk defaulting on our obligations and failing at the most basic responsibilities of government–defense and legal protection of its citizens under the law.

1. End baseline budgeting. The biggest mathematical sham sold to the American public, baseline budgeting assumes an increase in government spending that far exceeds inflation, or realistic increases in the cost of the programs. Simply zeroizing growth in government programs, and forcing every program to fight for even inflationary increases, would rein in a large percentage of the projected deficits.

2. Truly put social security in a ‘lock box.’ Restore to people the trust that Social Security is not in fact a Ponzi Scheme, instead of what it has definitely become. This would force the rest of the government to more fully live within its means, instead of raiding money from a program that is already bleeding red.

3. Cap our ‘donations’ to the United Nations as a percentage of our GDP in comparison to the rest of the world, and do not allow standard government increases in costs while the rest of the world suffers in recession. We have given up our land, paid most of the bills, and received few benefits from an organization that legitimizes thugs in suits. Its time those thugs pay their portion of the bill.

There are a million other requirements to address our economic instability and governmental growth, but the country first has to overlook its differences and get moving in the right direction. Republicans are never going to agree to a tax hike, and Democrats are never going to agree to a disintegration of the Environmental Protection Agency. But sane Americans of any political ilk recognize that the status quo is killing us, and will never solve our current woes. The short-term answer lies in stability and a reasonable approach to shoring up the faith we all put in the dollar and that we should have in our government’s ability to provide us basic services.

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