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VIDEOHow You, Mr. President, Can Speed the Recovery
Details of the government's failures thus far and innovative suggestions for getting the economy back on track.
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Dear President Obama:
I'm aware that you're gravely concerned about the economy and the employment situation. Understandably so since your policies of fiscal and monetary stimulus have failed to create economic growth or employment. Yet despite such failures you advocate more of the same remedies in the face of their failure.
On Labor Day you announced new spending of $50 billion on infrastructure construction to create “jobs”. This is in addition to the American Recovery and Reinvestment Act commitment of $499 billion for similar projects. According to your website, recovery.gov, only $296 billion of that amount has been spent, so why do we need more?
Yet the economy is stagnant, if not declining, unemployment is high and going higher, and credit is still largely unavailable to most American businesses even if they were willing to borrow. Homebuyer credits have failed to stop the decline in home prices and Cash for Clunkers has had no lasting effect on the auto or appliance industries.
I suggest that since existing policies have failed to revive the economy, your administration should try something different. I offer you several innovative policies that would actually speed a recovery and lead to higher employment.
The problems that we need to quickly solve are:
- High unemployment
- Declining output
- Credit freeze
- Surplus of housing and commercial real estate
- High private debt load
- High federal debt
Until the economy starts growing again, these problems will persist.
Unless we understand the causes of our problems, solutions aren't easy. Because you place great emphasis on “what works” rather than economic theory, I'll get to the specific issues straightaway.
Here are some guiding principles for “what works”:
1. Economies can repair themselves without a lot of government help. History has proven this time and again.
2. Government interference in the repair process can hinder recovery or even make things worse.
3. Government spending is very inefficient.
4. Individuals can make better choices about what to do with their money than the government.
5. Economic growth only comes from private enterprise. The corollary of this is that the government can only spend money, not make money.
6. Since the government produces nothing, real growth and real jobs can only come from private enterprise.
7. If government spending is inefficient and if economic growth comes only from the private sector, then taking vast amounts of money out of private hands and putting it into government hands will hinder growth.
8. Government spending to revive an economy has failed wherever and whenever it has been tried.
9. More legislation increases uncertainty for businesses, making them reluctant to expand (called “regime uncertainty” in economic terms).
With these time-tested guiding principles in mind, here are some specific policies that you should immediately implement to allow the economy to quickly recover. They will “work”.
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