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Fix The $14 Trillion U.S. Economy and Win $15,000! Um, Thanks?

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The US economy could grow 2.3% this year, according to the IMF. Strategists remind us that this is hardly reason to crow: 4% is the long term trend and 2.5% is the minimum required to support job growth.

Ok then, so what is the best plan to restore more vigorous growth in this country?

John Taylor, the professor of economics at Stanford, has a plan, which he outlined recently in the Wall Street Journal. Arguing that our economic wounds are self-inflicted, the professor says that changing fiscal and monetary policies could make a difference fast.

Specifically, policymakers should lay out a credible plan to reduce spending and stop the debt explosion, he says. Meanwhile, the Fed should lay out a plan for reducing its extraordinarily large balance sheet. In fact, better yet, it would better for economic growth and job creation if the if the Fed's objective was simply “long-run price stability within a clear framework of economic stability” rather than its current dual mandate to strive for stable prices and maximum employment.

Read the whole piece here.

Think you have a better idea about to fix the US economy?

Good news: the Hamilton Project, an economic policy initiative at the Brookings Institution, has launched a prize competition to identify new and innovative thinking about policies to create jobs in the United States and enhance productivity. The winner will receive $15,000. Right. That's $15,000 for fixing a $14 trillion dollar economy. Okay!

Read more about the competition here. For the tip, we thank Greg Mankiw.

POSITION:  No positions in stocks mentioned.