cut fed rate to 0.25 inflation through increase in income is best way out, but not gonna happen, but we will see double digit inflation in 2009, anyways
Not just yet, they've got the ability to print money endlessly. They can ultimately buy up the whole country but inflation will be the next problem . . . . They're not too worried about that just yet although they've been posturing for the past 11 months or so . . . .
Announce a program for a sustainable American economy. 1. Go back to a gold backed dollar, backed at $100,000 per oz, use the proceeds to pay off the existing debt, and pass a balanced budget amendment so the debt bubble mistake can't be repeated. 2. Pass a line item veto amendment so the pork that bloats all government spending can be stopped. 3. End the empire. Bring all the troops from the 135 or 137 countries they are in home. The Constitution allows for national defense, not offense or an empire. Defend our borders and reduce defense spending accordingly. 4. Pass an amendment to ban all taxes on income, both personal and corporate to encourage people to work and produce. Replace tax revenues with per BTU taxes on all non-renewable hydrocarbon based fuels and a national sales tax on everything but food, healthcare and shelter, sufficient to balance the budget. Tax consumption, not work or production. 5. Explain to our trading partners the definition of "trade". Explain to them that it isn't a one way street. If need be, create a system of import credits, where a credit is issued for each dollar of exports, and they are needed to import goods from abroad, and then see that they can be traded on an exchange in the open market so that companies or people wanting to import good from abroad can bid for and buy them. The fact that someone has to export to get them will ensure that we have balanced trade in the longer term. We have managed to prove that you can't borrow more everyday forever without it causing huge problems. The need for increasing debt is a function of having debt based currency, and has now proven itself a total failure. The Constitution provided specifically for only gold and silver to be used as money for a reason. We just forgot it.
Rate cuts won't work if the transmission mechanism is broken. Take over any failing bank so that everyone knows if a bank fails the US becomes the counterpartyand convert its purpose from profits for shareholders (who will be written down) to being a conduit for working capital lending.
I agree with most of your proposals -- it would be great if many of these things made it in, notably a BTU-based tax and a consumption tax scheme that's fair to the entire population (I'm sure it's possible). An import credit system (5) would be great, too, although politicians would hate it owing to the fact that it would reduce their ability to debt finance deficits through Asia. So I'm not going to hold my breath, though you might just get my vote in '12, thriftybob
I'm afraid the alternative to balanced trade and balanced budgets is a complete economic collapse as the rest of the world comes to the realization that the dollar is as doomed as the Icelandic Krona, for the same reasons, debt and deficits. $100,000 per oz would be painful, but it would give us a fresh start without having to dump the burden of our gluttony on future generations. Our "trading" partners would also learn the lesson not to manipulate their currencies by buying our debt to gain trade advantages, lest the get the promises debased in the end out of necessity. Maybe we can learn to make things again... If not, we'll need to learn not to consume.
Fed needs to create 'Credit Card Financing Liquidity Facility', hand out a Visa backed by the printing press with no limit to every american, that should hold up consumer spending