Economy & Budget

10 Steps to Fix the U.S. Financial Crisis

Fixing our national financial problem is simple and straight forward.  The next time you feel depressed or are surrounded by “progressives” (Marxists in wolves’ clothing) pull out this article and take solace.

There’s still time to save the Union from bankruptcy and collapse.

Here’s how to restore America to greatness, increase our wealth and personal well-being, and once again become the inspiration to the world’s downtrodden.

The problem is simple.  All wealth comes from the private sector: people working together to produce products and services in the free marketplace for other people to buy. 

Meanwhile, government, at all levels, is an ever-increasing drain on this productivity. 

“The Welfare State is based on promises.  All over the world, it is facing bankruptcy.  But the voters believe in the promises, and the politicians dare not tell the truth”  (Gary North).

The Welfare State takes money away from Peter to pays some of it to Paul.  In the process, vast amounts of money flow through its hands.  So it employs an army of bureaucrats to process the paperwork and “regulate” the corruption “government money” naturally creates. 

This taking is not voluntary, which encourages Peter to lobby his politicians to “get a break” on his taxes, or to be given a preference in work or to be “earmarked” to receive some pork (money) for his benefit.  This process of enforced taking away and arbitrary giving back is corrosive.  Ultimately it corrupts everyone in society.

As time goes by, the government passes laws to make these legal kickbacks permanent. 

Then people band together to create bigger lobbies to take more for themselves at the expense of others. 

They form labor unions.  These are monopoly cartels of producers; the workers are the producers, the companies are the consumers.  (Just follow the money: the consumer always pays the producer, not the other way around).  They form farming cartels which get paid not to grow food.  They form corporations which create “natural monopolies” which are awarded government licenses to prevent others from competing against them.

The government always passes laws to protect special-interest producers at the expense of the hapless consumers.  The producers have more organized money to buy the government’s attention.

So to break this vicious circle, you have to break the money drug flowing through the government’s hands.  Our founders got it right:  good government is small government.

With that in mind, here are Ten Steps to fix our financial problem in 2011:

1. Cut taxes across the board.  Set a straight 18% for all income tax for everyone who earns money: people and companies.  Sales taxes are uniform.  So should be taxes.
2. Cut all bloated government agency spending across the board by 18%.  That would take us back to the early-Bush era, for a start.
3. Close all unnecessary and state-level duplicated agencies such as Education, EPA, Energy, HHS, Commerce, etc.  That would unwind the government to the days of Richard Nixon.
4. Cancel all unexpended but previously-authorized pork spending and “stimulus” bills.
5. Sell off government financing entities such as Freddie Mac, Fannie Mae, FHA, etc. to private enterprise.  Get politics out of our money.
6. Sell off government holdings in GM, Chrysler, other nationalized companies.
7. Sell off TVA, the USPS, and the dozens of other corporations to private enterprise, including US massive ownership in land, buildings, holdings. 
8. Bring back manufacturing and heavy industry to the US by eliminating laws, regulations & policies that encourage American companies to flee abroad.
9. Stop the government from borrowing money to pay its bills except, perhaps, in real national emergencies such as declared wars. 
10. Become energy independent.  Expedite building one hundred new high-efficiency 4th-generation nuclear power plants throughout the country to replace the 50-year-old plants now in existence.  Remove restrictions from the energy companies to allow them to tap into our own abundant natural resources – especially gas and oil – sitting locked up on our home soil.

These 10 steps could be started on February 1, 2011, after the new non-Democrat dominated Congress is sworn in.  Most could be well along by the end of next year.  The stock market will soar as entrepreneurs large and small come out of their bunkers to again create new jobs and new wealth.  Knowing that arbitrary, fickle and ever-changing government regulations are being reduced will create instant stability on Main Street.

By then, we’ll be ready to tackle the hidden monster. 

The next thing to do is to restore the honesty and integrity of the financial community and our money supply.  It’s now held hostage to a cabal of high-paid bureaucrats masquerading as “wise men”.

The mess was started back in 1913 when the Federal Reserve was invented to create a Ponzi scheme for the dollar.

The result: today’s dollars are merely electronic printing press creations which can be instantly produced at the government’s demand.  And there’s nothing in the bank vaults to back them up.   Even our checking and savings accounts only have $1 in physical bank cash to back up every $10 we think we have. 

By creating funny money and free-wheeling “credit” (another word for debt), we’ve created the illusion of wealth. 

Break up the giant banking-investment banking cartels, including the Federal Reserve board’s monopoly on issuing money.  Separate the banks from the “investment banks (gambling casinos).  Abolish make-believe so-called “financial derivatives” which destabilize rather than stabilize the system and make for a pirate’s paradise of playthings.

Restore the backing of the US dollar from “full faith and credit of the US” (whatever that now means) to real asset backing.  Perhaps that means gold, perhaps something else, like a legal claim to specific tax receipts written into new Treasury bond issues.  That would encourage real fiscal responsibility. 

I’d pay good money for a T-bill backed up by the income tax receipts of just the US Federal Government bureaucrats working inside the beltway in Washington, DC.  That would be a hot issue.  Maybe the interest rate would even be negative. 

Arthur Laffer and Stephen Moore, in their new book Return to Prosperity, lay out their own strategy which includes some of these common-sense suggestions along with others to show how America can get back to where we were a few decades ago, before the rot began to set in. 

The Laffer Curve should receive the Nobel Prize in common-sense economics.  In essence, it says that there are two tax rates where the government’s income goes to zero:  0% and 100%.  At 0%, it’s obvious.  At 100%, the worker keeps no money and starves to death so the government’s income becomes 100% of nothing.   

Unfortunately, the DNA of socialists prevents them from understanding this kindergarten concept.  Their eyes glaze over.  This is the only possible reason why they are incapable of comprehending the fact that lowering taxes removes the breaks on private-sector productivity, and thus increases both income and taxes. 

After fixing our broken government spending and broken government-manipulating financial system, then we can tackle the really important things.  Like bringing back step-by-step the Bill of Rights of the US Constitution.  Starting with the 10th Amendment:  “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”

Especially to the People.

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