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business newsAn Everyman's Guide to a Better America
Simple questions and basic truths.
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Contrary to the panic offered by the doom and gloom crowd, there are simple, easy solutions to what ails us. The solution is not to print more money, or allow interest rates to be artificially low forever. Just take a look at the 40-plus percent yield on short term Greek notes if you are curious how that experiment ultimately ends.
We need only do three things: ask the correct questions, provide full and complete information, and then allow the market to clear. Let me elaborate on each point.
The right question is not if Ben Bernanke move forward with QE3 (did anybody notice that QE1 and QE2 were failures?), or whether Paul Krugman is correct when he states there should be “far greater” stimulus (he is off the mark). The right question is this: What do we want our government to do, what do we not want it to do, and how are we going to pay for it?
What are the basic services the government should provide?
Should every citizen have health care?
How much should they pay for it?
How about education?
Infrastructure?
Defense and the military?
Basic survival (i.e. food and shelter) for our least fortunate?
How about providing regulations, law, and security for the people?
We certainly do all those things now. Do we do a good enough job?
The above items, to me, are most important, and are what a government focus on. But the country as a whole should debate and decide how much of each we can afford and the best manner to accomplish them. In well run companies, does the CEO spend hundreds of millions of dollars to go on a goodwill trip? I’m not picking on President Obama -- he is no different than others on this score -- but what does it say about the value of our dollar if we can spend $100 million on a three day trip when we are flat broke?
As to what a government should not do, ask yourself why it operates in the postal business (USPS). Or the railroad business (Amtrak). Or why we guarantee over a trillion dollars of student loans (entire for-profit education sector). Or provide subsidies and direct investment to money-losing concepts in an attempt to deal with the environment (solar industry, ethanol industry).
Lastly, is it healthy that the government backs over 95% of the mortgages in this country? (Fannie, Freddie... yes, they are still there!) I am not stating that these industries should not exist -- not by a long shot. I am saying that our government has wandered far off the reservation by becoming the key player in all these areas.
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