The Treasure Department and promoting economic growth while continuing reforms of the financial system
The Department of the Treasury has a critical function for our country not the least of which is the Internal Revenue Service but this entity is much more. This organization like other government entities has goals and objectives to accomplish as part of their responsibilities given to them by Congress. This is exhibited by the goal which is the topic of this article. The overall mission of the treasury department is provided below:
“Maintain a strong economy and create economic and job opportunities by promoting the conditions that enable economic growth and stability at home and abroad, strengthen national security by combating threats and protecting the integrity of the financial system, and manage the U.S. Government’s finances and resources effectively.”
The economic growth and stability identified in this goal is an objective to be accomplished over the next several years along with reforms of the financial system. Reforming the financial system is not limited to the IRS though some changes to our tax structure needs to be made. This is the function of Congress but this entity can make some suggestions whether or not they have is unknown. Congress and executive departments like the treasury department need to interact more than they should and not be combative. The relationship should be one of cooperation to work together for the good of the country not their individual political party. This goal is broadly stated and with such language there needs to be some clarity in how this department aims to accomplish this objective. To begin one of the objectives under this goal is to promote savings and increased access to credit and affordable housing options.
There are four distinct strategies beginning with “Develop a sustainable housing finance system that meets the needs of a diverse population of borrowers, including long-term reform of the mortgage finance system and the smooth wind-down of Fannie Mae and Freddie Mac “
The first of the sub elements of promoting domestic growth is not clearly understood in relation to the objective of this goal identified above. While it does identify a financial aspect with regards to promoting savings the question to be asked is how is this department involved in increasing access to credit and affordable housing options. Regulations may be a part of this aspect but getting involved in the housing sector of the economy seems to be a misplaced objective with regards to the overall mission of this entity.
To accomplish this first sub element of this goal there needs to be criteria for measuring success and I am happy to say that such criteria is in place which speaks well for this department. Along with contributing treasury programs such as domestic finance, economic policy, the Bureau of the Fiscal Service and the Community Development Financial Institutions Fund the evaluation takes place. This involves such things affordable housing units created including real estate construction and rehabilitation along with loans/investments by Community development financial institutions.
The second sub element refers to winding down emergency financial crisis response programs. I understand this aspect to some extent with regards to the financial issues of the past but while winding down the aspects of the programs involved need to remain in place. Our financial crisis is not over with regards to our growing deficit and this department needs to be prepared to take what action it has the authority to take. Granted Congress is involved with this aspect but this department would be involved in implementing any actions passed by Congress.
In conjunction with Domestic Finance and the Office of Financial Stability which I had never heard of before work together to address TARP funds to measure how much is distributed during the financial crises and how much was returned to the government. Regarding TARP funds the real story as to how they were used is not known. There have been comments on both sides but the appearance of the results or lack of them.
Another element of this overall goal is to “complete implementation of financial regulatory reform initiatives, continue monitoring capital markets, and address threats to stability.” In support of this requirement there are several organizations which are listed below:
Office of the Comptroller of the Currency
Financial Stability Oversight Council
Office of Financial Research
Federal Insurance Office
Activity surrounding this goal is the implementation of the Dodd-Frank rules which has been a matter of discussion in recent weeks in Congress. Additionally activity must take place to coordinate and evaluate financial regulatory policy which should take place whether this goal is in place or not as part of this departments overall mission. A critical element is the requirement to monitor regulatory and market developments at the local, national and international levels to mitigate potential threats to our financial stability. The increasing deficit should definitely be a part of this monitoring activity. This requirement along with other requirements will have an impact on whether this organization accomplishes the overall mission. Actions by the treasury department can and does impact the trust and security of our currency. .
The last sub element of the goal to promote economic growth and stability while continuing reforms of the financial system is to: “facilitate commerce by providing trusted and secure U.S. currency, products, and services to the public.” Trust is a big part of any government function at all levels and recently this trust has greatly been reduced based on the lack of transparency and the need for departments and agencies to not overstep their authority in relation to their mission. Organizations contributing to this sub element are:
Office of the Comptroller of the Currency
Alcohol and Tobacco Tax and Trade Bureau
Bureau of Engraving and Printing
The evaluation process is much like the rest under the topic of this goal. The key to any evaluation process and the objectives of conducting them is that they need to be completed. Having goals and objectives are fine but if they are never addressed or implemented they are not work the paper or time to create them. The treasury department always seems to have issues in the news especially the IRS but as mentioned early in this article this entity is about much more than just the IRS. The actions of this department along with other programs and organizations have a profound impact on our economy. The elements of this particular goal address a basic need for the country. Promoting economic growth is desperately needed in relation to our economic situation. This department and this one goal along with the activities defined under it will not accomplish this task by itself. It will take the contributing organizations along with Congress to develop an environment where economic growth can flourish. It is time Congress, organizations and programs evaluate what has worked and what has failed to create this environment. Congress has been at least in the past all about implementing the same decisions/actions which have failed to accomplish their objectives while ignoring the actions that have had a positive impact. It has been all about political policy rather than the needs of the country. This needs to change.
Financial system reforms are desperately needed to change to create an environment where there are incentives for businesses to flourish and want to expand without being penalized or regulated to death.
While there needs to be some protections in place to protect consumers they should not be at the level they are today. Our tax structure needs to change along with other financial programs to make it not only more efficient but instill integrity principles. It is understood there are good individuals who work for the government as with any organization but government entities need to be more about helping the country not operating imposing a political philosophy which has a negative impact on individuals and businesses across the country.