Plan to Rescue the Economy From the Government
1) Get Rid of the Federal Reserve
No one is smart enough to manage the economy. It is simply too large. It is comprised of too many transactions each day. Every time the Federal Reserve attempts to “fix it” they miss the mark. Recoveries take longer and are much more severe, just like in the 1930s. The Federal Reserve caused the Great Depression and Fed Chairman Ban Bernanke admitted it.
Paper currency can go to zero value. The last time we had a Great Depression, our money was backed by gold. This time it is backed only by the credit and faith in the United States Government. That should scare the hell out of you.
Interest should cost what it costs in the free market. We should let different commodities compete to be used as money (gold and silver will likely win). With a stable currency, there will be a very gradual decrease in prices over time due to improvements in production efficiencies. The Fed has kept interest rates artificially low for a very long time and this also contributed greatly to the housing bubble of 2008.
Booms and busts have actually been worse since we have had the Federal Reserve. Expanding the stock of money (including credit) fools businesses into making investments that are over-extended, and a bust always follows.
Recommended reading: The Case Against the Fed by Murray Rothbard.
2) Cut the Corporate Tax Rate to 0%
The exodus of businesses will cease and we will actually increase the number of companies locating here.
Taxes on business are really just a hidden tax. The business always passes it on to the final consumer.
3) Cut Federal Spending to $850 Billion/yr and Immediately Balance the Budget
$ 250 Billion for national defense + $ 600 Billion for interest on the debt.
Cut all taxes such that the government takes in only $850 Billion per year.
Government borrowing is a huge demand for money. This starves businesses of needed funds.
Government spending is always less productive than that which could have been employed in the free market.
Phase out Medicare, Medicaid, and Social Security; their unfunded liabilities total over 50 Trillion U.S. Dollars! This will obviously bankrupt us. We survived before we had these programs and we will do it again.
Other exciting features of the plan:
– Not one penny of taxpayers’ money goes for any bailouts.
– Not one penny of taxpayers’ money goes to ACORN or other organizations that spread Marxist theology.
4) Sell Off Fannie Mae and Freddie Mac
These government-chartered firms are the root cause for the housing bubble of 2008. They never should have been created in the first place.
They are nothing more than a large garbage disposal for risky loans, set up as a way to get lower income people into homes they could not afford. These government entities were making huge campaign contributions to members of Congress. This is insane!
Making taxpayers liable for risky home loans is unconscionable.
5) Eliminate the SEC, the CRA, Sarbanes-Oxley, and Other Erroneous Legislation
Using the Community Reinvestment Act (CRA), the federal government coerced banks into making risky loans: banks had to have a good “CRA score” to get permission to make acquisitions and form mergers.
Overreaching legislation in the wake of Enron’s collapse actually ran businesses overseas.
Get the government completely out of finance. It has shown it does more harm than good.
America’s Great Depression
by Murray Rothbard
This is an amazing “step by misstep” description of how the federal government and the federal reserve turned what would have been a mild recession into a great depression. Unbelievable, but history may repeat itself as many of these same sorry actions are being repeated today.