"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."

--Alexis de Tocqueville, Democracy in America

Wednesday, June 15, 2011

Zombies Didn't Scare Me... Until Now!

Here's a ridiculously scary article on the current American economics scene, by "Spengler" in the Asia Times, in which he describes the American economy as a "zombie economy":
We aren't going to have another financial crash. In fact, nothing at all is going to happen. Forecasting the United States economy is about as exciting as predicting next quarter's gross domestic product in 1957 Poland. You want to know what's going to happen, comrade? Read the Five Year Plan. With 40% of US personal income coming from transfer payments, it's almost nostalgic to call it capitalism.

The so-called American economic recovery won't die, because it's undead. It was a zombie to begin with. Equity investors during the past six weeks came to the collective conclusion that the US is not in the early phase of an economic recovery, but in the endless middle of a structural slump...
Ouch!   Can a GOP President turn this around?  Can we move from crony capitalism and quasi-socialism back to an opportunity economy?   Yes.   Will we?   I doubt it.   If I were God for a decade or so, I could get the economy turned around.   Here's what we'd do:

1.  Cut the top income tax rate to 25%.   The government should never take more than a quarter of every dollar you make, period.
2. Cut capital gains tax to 10%.   You've already paid income tax on your savings, why should you pay twice?
3.  Eliminate the estate tax.   You've already paid taxes once or twice, why pay thrice?  This has been an abomination forever and needs to go.
4.  Repeal Obamacare, Dodd-Frank, and every other regulation issued by the Obama administration.  Give every Secretary of every Department the power to immediately repeal any regulations in their areas.   Give them marching orders to repeal 25% of their regulations.
5.  Repeal every subsidy for every industry (sorry Big Ethanol!) and start over.  
6.  Balance the budget, period.   Whatever it takes, whatever we have to cut.
7.  Reform (read:  start over) on Social Security and Medicare.   People are going to have to save for their own retirement and pay for their own health care, just like any other goods or services.   Don't like it?   Who cares?   It's going to happen, either sooner (less painful and more plan-able) or later (catastrophic, blood-in-the-streets).  

That's the program:  low taxes, low regulation, free markets, fiscal sobriety, personal responsibility.   Then stand back and let the prosperity happen.

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