If you could fix just one thing that is wrong with our economy, what would it be?
And your solution to fix the problem would become a new law.
The basic problem is debt and derivatives market. Government must stop these products and stop banks in playing these products. These are the basic problems which are not at addressed at all. Mortgage problem which started the crisis is just because of these products, no one wants to talk about it. These products are the problems and must be stopped then only over the time economy will heal and start moving.
Taxation is another issue, no expenditure on interest payment should be tax deductible. This is one of the reason of more and more loan is taken. This should be stopped.
Create funds for mortgages and enterprise loans so that business people can start to borrow to expand their enterprises. I would also suppress high interest rates so that borrowers pay less interest on their loans for at least the next 25 years.
Any lender must retain ownership of any loan they issue for a period of not less than five years. Thereafter, they must retain ownership of not less than 51% of said loan.
That would end the type of reckless loans written during the housing bubble, and put some brakes on the offloading of bad debt. The main thing is to hold people--all people, not just regular Joes--responsible for their decisions. You borrow money you can't pay back, you lose your house. You lend money to someone who can't hope to pay it back, you're out the amount you lent him. No bailouts.
2/3 majority in both houses of Congress before taxes could be raised.
Getting the gov't to stop subsidizing markets like Fannie and Freddie would be a good start. These types of interventions create massive market dislocations and price distortions. Unfortunately that is only one area of gov't social engineering that causes price distortions.
The tax code needs to be completely scrapped and rebuilt. It currently punishes success as you work your way up the ladder of success which is a deterent to capital formation. While at the same time it encourages the creation of debt through deductions. It should be precisely the opposite. 70,000 pages of tax law is not necessary in any way shape or form.
And when business entities are poorly managed, they need to be permitted to fail. Markets cannot work through dislocations and function properly if the gov't uses every crisis as a means to quasi nationalize industries for the sake of making politicians look like heros. They end up doing more harm then good in the long run. Free markets must allow failure as a consequence of poor management.
There would be no need for a new law on the first one because Social Security (who cannot afford to pay their own bills right now) along with SSD need an overhaul as to the system and the way it works. Instead of 4 different agencies within SS to get SSD there would be one. If using their doctors for clarification there would be no need for teams of field investigators who only gather paperwork and doctors who never even see the client. Those receiving SSD would not have to wait 2 yrs for Medicare, allowing some the medical attention needed to go back to work and above all they would not need an attorney to get it and just prolong the process.
Small business loans, mortgages, student loans, etc. would cater to U.S. citizens opposed to those guaranteed by the government for those here on visas. There would be no laws that prohibit volunteers from feeding the homeless on the street while there are laws protecting animals from being homeless.
The justice system would be revamped prohibiting plea bargains where the minimum sentence was not part of the bargain.
Political elections would not allow commercials, only debates where all answers given must either have a full documented plan for their program, or proof of what they are alleging.
Doctors would have to make a percentage of their patients on Medicaid, and NO ONE would be without health insurance left to suffer or die when there was medical treatment that could stop it.
Government subsidized and tax programs would be subject to public votes, prohibiting Congress from holding a grudge. Political leaders would have a cap on expense accounts and audited. .
That would be a good start for now.
What I would like to see would be a program similar to the New Deal era WPA or CCC. These were programs which provided employment to unemployed workers on various infrastructure and conservation projects. The decay of our infrastructure and environment are so far along now that we compare in many respects to third world nations. It's a national shame, or would be if it were more widely realised how poorly we compare to the rest of the civilized world. Persistent unemployment is certainly the biggest problem in our economy. It would seem the most rational thing in the world to allow these two problems to solve each other. It could be funded very lavishly by the long-proposed Tobin tax, a .5% tax on currency exchange transactions, which would be paid almost entirely by the top .1% of the population in tems of income. Incidentally, this would also yield more than adequate revenue to finance a first-world standard national health care system. Alternatively, these public works projects might also be funded by decomissioning a single carrier battlegroup. This may lessen our security somewhat, but it would still leave us with five times as many as the rest of the world combined.
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