Problems And Solutions #1

So, what next?  I think I mentioned a couple of weeks back that I’d propose some solutions.  And, as I like to say, if you’re complaining about the status quo and not offering a solution, then you are basically just bitching for no good reason.  So I intend to offer a comprehensive solution to what I see as America’s ills, topic by topic, and hopefully get some feedback from the rest of the 9 or so people that stop into the site every day!So, let’s start with the problems that the Administration likes to talk about and I’ll add a few more of my own.

• The Economy/Jobs
• Health Care
• Education
• Energy/Environment
• Immigration
• Free Trade (These are mine)
• Social Security
• Federal Reserve
• Congress (its broken, and it’s a huge problem)
• Income Tax

These are the things that I want to talk about.  So, let’s start here.  Reagan said that “Government is not the solution to our problems, government is the problem”.  History has proven him correct issue after issue, time and time again.  Consequently, most of my proposed solutions are developed from that perspective. 

The Economy/Jobs-

The economic problems that we face, presently, are a direct result of government intervention in the free market system.  The notion that somehow ‘Capitalism has failed us’, and we need to look for alternatives is idiocy, and for one to believe otherwise verges on mental illness.  Our currently watered down version of Capitalism, in spite of government intervention, has provided the world’s highest standard of living to those within our borders, and enormous economic growth to the world in general.  So why are we having such a tough time right now? 

Well, I think one has to realize that most job growth in the U.S., historically, has been in small businesses making the leap to become medium size and large businesses.  At present, it’s pretty easy to start a small business, not that you won’t have to work hard to get it going, but fill out the paper work and you can get started.  The problem arises when you are ready to grow and you need to hire a few people.  I’m not going to name the litany of taxes and liability insurance problems that one faces, but they are numerous.  This is one of the main reasons that small businesses turn to illegal labor.  The bottom line is that the government has created barriers to the growth of small business in terms of taxes, liabilities, fees, and regulations.  They need to be removed.

I remember during the Dole/Kemp run against Clinton where Kemp was talking about establishing ‘Enterprise Zones’ within the nation’s inner cities to foster business growth and job creation – great idea, right?  Lower taxes, fees, and regulations for the inner cities to create jobs!  Well, my question was this – wasn’t the entire country supposed to be an ‘Enterprise Zone’?  If it’s good for the inner cities, then why not for the entire country?

My proposal is to eliminate all taxes, environmental and other regulatory fees, and workmen’s compensation insurance on corporations under 500 employees.  That’s right all of them.  This would strongly encourage the establishment and growth of new businesses.  What’s required for new businesses to be established?  Capital.

I’d propose that all capital gains taxes be eliminated.  A tax on capital is a deterrent to investment.  Wouldn’t all of you class envy folks out there rather see that ‘rich guy’s’ money out in the market place creating a job, rather than sitting in a hedge fund, tax free muni-bond, or a mattress?  Money at work is the only way to spread the wealth around – that’s why we have(or, at least, had) a middle class in this country.  The movement of capital grows revenue to the government.  All other models have been proven false, and do not work.

One note on the bailouts; we have bankruptcy court for failing businesses of all sizes – one law fits all.

Consider that Peter Schiff, of EuroPac, predicted what we are seeing presently.  See the video.  He talks about what’s required for job creation – and its not more government.  He makes a lot of sense.

Now, I realize that the subject of the economy is pretty broad and I’ve only discussed the aspects that pertain to freeing up capital to create jobs and eliminating government interference in those transactions.  Once you realize that government cannot create a real, wealth-creating job; only the private sector economy can do that, the solution really is simple:  less government; more of you and me keeping our money, making transactions and purchase decisions in the private sector.  It’s the inherent efficiency of this process that creates jobs in areas of the economy where they are needed.

Government can only create wealth-consuming jobs, it’s an unsustainable economic model.  They need to get out of the way and the economy will fix itself.  

Initially, I intended for this to be one big post and cover all of these topics at once.  But, as I passed 1500 words for the first two, and admittedly, my own attention span for organizing my random thoughts on all of these issues, I decided that I’d best break this up into a series of individual posts. 

-OMB