Throwing money at a problem is no way to fix it.
If the current stimulus goes as planned, this is exactly what will be done, again.
It will cause a temporary recovery, fuel market instability, and eventually the economy will revert to the collapse which the package was masking.
We should be more conscious of how this money is being spent and how we will know it is working.
I’ve come up with an investment plan for the $140 billion that is expected to be distributed that should yield some more salient and permanent returns.
Distributions:
- Increase the Benefits to Veterans
Costs are continually rising and the war rolls on. Increasing benefits on all fronts of the veteran’s package will increase access to college educations and small business starts as well as counterbalance the negative effects of the long term campaign.
- Challenge CEO’s
By providing tax benefits to companies that give raises to more than 2/3’s of their entire company that is beyond the inflation rate would counteract the continual decrease in real wages that has been occurring for the last decade while increasing real per capita income.
- Invest in Small Business
Investing in the foundation of small businesses is always a wise move in economic downturns. Because of the economic throttling, the markets favors buyers, and new businesses can actually get a greater purchasing advantage by buying at this time so long as they have the capital to do so and sustain a moderate profitability. The more small businesses we have, the better the probability that some successful business will emerge and stabilize, creating more jobs.
- Build a McBiodiesel Infrastructure
The US has all of the makings of a strong Biodiesel infrastructure; distribution locations, fuel sources, and potential users in need. Biodiesel fuel can be made from a plethora of sources including used cooking oil. It just so happens that the biggest users of cooking oil are fast food restaurants like McDonalds and Wendy’s. Coincidentally, these fast food chains span the nation, many co-located with traditional gas stations along major national hauling routes. The biggest users of gas are national haulers and shippers. By partnering fast food chains with biodiesel entrepreneurs we can rapidly establish a bio-diesel chain along major shipping routes. By partnering major shippers and haulers with these chains, the US could initiate a lasting and self-perpetuating infrastructure requiring little federal investment. The results could be a massive reduction in fuel costs, improved air quality, and decreased dependence on foreign oil.
Enforcements:
- Punish Weak Lending Practices
The idea of speeding tickets is to prevent accidents before they happen. The same can be done for weak lending practices which fuel massive collapse.
- Enforce National Health and Safety Regulations on Imports
Did you know that the majority of products made in China aren’t regulated the same way as those made in the US? Recall the lead paint recalls of last year. To reduce the risk to the general public, the government should enforce the same regulations on all products no matter their origin. If the country we import from does not have a regulatory agency that is parallel to something we have in the US, their products should be tested on the docks to prevent them from infecting our supply lines. This will have an obvious cost impact, but that can easily be resolved with a “user fee” on all of those tested items. This will not only reduce health risks, but increase our visibility as to the cost of these regulations.
- Partner with Mexico
With an unemployment rate of 4.5% it’s very hard to argue that illegal immigrants are taking American jobs. However, I believe in enforcing current laws regarding hiring illegal immigrants. Such enforcement will go a long way in reducing the tide of those immigrants. The bigger problem, however, is where these immigrants are coming from, not where they are going to. It may actually be cheaper to help stimulate native economic growth in the countries hemorrhaging their citizens to reduce the motivation to cross the border.
2 Comments:
I think you present some very credible ideas. Unfortunately, the skeptic in me doesn't think that our big-business-friendly Congress would ever do much of any of this. Well, they might do the first one because it's an election year. Otherwise:
#2 - This is a great idea, but it would certainly upset the balance of wages in most large companies. My guess is that Congress would write this as "2/3 of all paid income", not "2/3 of all employees". That way, the top brass can give themselves 50% bonuses and only need to give a smidge out to the rest.
#3 - This has been overdue for years, but with the latest bankruptcy laws, it makes it even harder to try to start a new business.
#4 - Willie Nelson would be proud, or angry that you're taking away his business. A corollary to this would be the expansion of the diesel automobile market. Honda has plans to introduce their Civic & Accord diesels next year, but that's not enough. Half of the cars sold in Europe are diesels. Car manufacturers need to get over their own stupidity and sell diesels over here, as there's a significant market (especially when factoring in biodiesel fuel sources).
#5 - Wrist slaps won't hurt. Congress and/or the President needs to come down with a sledge hammer on these lenders. Also, the housing market needs to have a reality check in its current prices. Sure, that will screw a lot of people that have bought houses over the past five or ten years, but the market needs to be reset. Too many Old Man Potter's and not enough George Bailey's out there, if you ask me.
#6 - Hey, maybe this will give an incentive for folks like Wal-Mart to start selling American-made goods again. Making people aware of why crap from China is (a) crap and (b) cheap is a good way to boost our own manufacturing base again.
#7 - This is kind of like the War on Drugs. Instead of doling out prevention, we're dumping out "cure" with no end in sight. For problems such as these, the important thing is to determine why there's a problem in the first place. Whether it's because people live in despondency and want the outlet of drugs or they live in despondency and want the outlet of hope (of a better life in America), we have an obligation to fix the despondency part of the equation. Certainly, there's a certain segment of society out there that don't want to change, but I hope that if given the chance, most would take it.
-cjc
True, true,
#3 - I thought the bankruptcy changes actually made it harder for individuals to declare bankruptcy not companies. Their risk relative to those laws would be dependent on what kind of company one formed.
#4 - Hey, man. I'm trying to be half realistic. . .I'm not that well versed in what kind of fed. regs. there are for lending, but they are seemingly not well defined. Let's get some definition first.
#7 - Well, I clearly didn't say how that would happen because I have no idea. We need to figure out how to turn off the tap not put buckets under the pipe (which is all that immigration enforcement really does).
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