Thursday, January 08, 2009
How to Fix the Economy 101
OK, all the politicos have their dumb ass ideas, so now it's my turn. You want to turn this economy around? Well, here's my short list of things to do to that end:
1. Give us back the tax deduction for interest paid on credit cards and major purchases. Heaven knows the credit debt of the citizens of this fair country is staggering...it will take us all more than a day or two to dig out of the holes we are in. Giving us back that tax deduction is one very small way to help us move toward financial health again. Let our credit debt help us just a little.
2. Make it worth our while to save - Part I. The current rate of return on savings accounts nationwide is less than 1%. Do you really think that gives us any incentive whatsoever to save our money?! The rate on certificates of deposit isn't all that much better, either. The financial institutions of this country need to understand that not giving us a decent rate of return on savings keeps us from putting money in their institutions, which in turn means they don't have as much money to loan back out. Essentially, keeping the savings interest rate so ridiculously depressed winds up shooting our financial institutions in the foot, so to speak.
3. Make it worth our while to save - Part 2. Give us a tax break on all money we do put into savings. If the financial institutions won't give us a decent rate of return, maybe a good tax break on all money in savings will provide some incentive for us to become savers again.
4. Don't give us any more "stimulus payments." The last one went almost exclusively to paying bills and buying gas and groceries. We are all in bad enough shape that we are not going to be using such stimulus payments for buying cars or boats or taking vacations. The only economic stimulus such payments are going to lead to is keeping gas stations, grocery stores, utility companies, and possibly a few mortgage companies in business.
5. Loosen up the flow of credit, especially to companies wanting to expand and/or stay afloat, and to companies involved in alternative energy creation. And, in addition....
6. Give tax breaks to all new companies, all companies that expand, and all companies involved in alternative energy creation. You don't have to give away the farm, as it were, but make it worthwhile for companies to try to grow.
7. Find out what the hell happened to that $700 billion bailout package. Leave it to our government to toss ungodly amounts of money at the financial institutions and not bother to track it. All of that money needs to be accounted for, and if any of it is misused (as we KNOW it has been), I want people held accountable. The pervasive culture of unaccountability and overt excess we constantly witness in our financial institutions and markets MUST come to an end once and for all.
8. Re-regulate! The deregulation that began in the Reagan era and continued until now has to come to an end. It is painfully apparent that deregulation doesn't work. We've had decades of no one watching the shop and rampant looting happening...end it NOW. Put tight regulation and oversight on all our financial markets and institutions, for a start. Then we can talk about re-regulating utilities, etc. But let's get some oversight going on the financial world ASAP, please.
9. End obscenely excessive salaries, bonuses, and golden parachutes for all CEOs. The culture of greed that has been created in the past two decades is unacceptable and must end now. For all companies that continue this practice, there should be huge tax penalties for the company and for the folks on the receiving end. All those greedy, unethical CEOs should have to pay up.
10. For the immediate future, freeze all senator and representative salaries. Many companies, institutions, and governments in this country are having to freeze salaries and hiring in efforts to stay afloat in this crisis. Having our elected officials get raises on a regular basis during this economic crisis sure as hell sends the wrong message (sorta like the old "do as I say, not as I do" nugget). All you folks in Washington DC need to man up and take in the bank account just like the rest of us.
We can and will get through this mess, little ones, but not without a whole lot of change happening. It'll be painful in the short term, but will work itself out in the long run. I don't know about you, but I'm willing to suffer through the pain to help ensure a solid future for my children and grandchildren.
We all need to remember that "the needs of the many outweigh the needs of the one."