The Economic Recovery Plan

There's been a lot of talk about how to regain some of the wealth and prosperity that have been lost and not as yet recovered in the United States. The federal government in its current form will never be able to do what it takes to enact a recovery, mostly because the politicians in congress only desire to represent about 20% of the American populace, on a good day. I've thought of some reforms that should cause the economy of the United States to grow again, get people spending, and reduce unemployment. Some of these are fairly extreme and I will not present those in this blag post. The proposals that I present here are the ones that I believe a majority of Americans could agree with that would also easily jump start the economy. Now, without further ado, allow me to introduce The Hands' Economic Recovery Plan, or THERP, if you will.

1. Enact banking reform that would forgive mortgage debt. Believe it or not, this is not the first time that economic recession and stagnation have been spurred by a boom and bust in the housing market. It happened in Japan in the early '90s. The economic woes continued for over a decade until the Japanese government enacted laws that remitted mortgage debt. Without this reform in the US, individuals and families would be prevented from spending on things other than their mortgages or moving when job opportunities present themselves. The economic stagnation we currently observe could continue almost into perpetuity with no change to the system. Banking reform won't happen under the current government system because bankers lose in this situation and most Republican politicians either are bankers or have very close ties to them.
2. Deport the illegal immigrants. Until any American can walk into Mexico/Guatemala/Honduras/etc. without any paperwork and demand jobs, government-paid healthcare and welfare, everything being printed in English, and the ability to accuse citizens of being racists when they point out that we're a leech on their society, I refuse to grant the same privileges to their citizens. Any child who's been granted American citizenship would be welcome to stay, however, his or her illegally present parents would not. They can either take the children back to their home country or give them up and we'll find them a nice home with Americans. Immigration reform won't happen because illegal immigration wins votes for Democrats and improves the bottom line for the C-level executives to whom the Republicans bow down.
3. Enact corporate tax reform. Basically, any wealth gained by corporations that came from goods and services produced and sold completely in the United States would be tax-free. However, corporations would be taxed on wealth gained from foreign income, foreign component parts used in American-produced goods, and imports at a rate slightly above the current effective corporate rate. This would give corporations incentive to create jobs in the United States instead of China, India, Mexico, etc. This reform won't happen because Republican politicians won't support anything that might ruffle the feathers of the top 2% of income earners.
4. Enact income tax reform. More specifically, I would enact unearned income tax reform. Paul the Apostle wrote in one of his letters to Timothy that, "The love of money is the root of all evil." In the contemporary western world, we have become obsessed with the notion that we can just "invest" money and make a living doing it. We desire to get something for nothing so badly that we are willing to ruin ourselves and everyone else around us to make it happen. I would tax unearned income (i.e. dividends, profit sharing, capital gains, etc.) at a rate at least as high as that for earned income. The goal of this reform would be to incentivize people to actually do something to try to earn a living, while still making some cautious investments. Once again, the Republican politicians' steadfast loyalty to the top 2% of income earners is to blame for the impossibility of this reform.
5. Enact property tax reform. Educators and other liberals would howl and moan, but in order to stabilize the housing market, we need taxation to not be based on property value. As sad as it might be, part of our economic plight is due to state and local tax rates being higher than they have ever been before. State and local governments would have to make due with less money than they currently take in. These governments could go a long way just cutting welfare and pork, but in the end, changes would have to be made to the education system. I won't be expounding on my thoughts on education reform in this post because this subject deserves more than just a token mention. Look forward to another post on this topic sometime soon. This tax reform won't happen because liberals have used the scare tactic, 'Think of the children,' at any mention of property tax/education reform, when we could undoubtedly give our children the same education for a better value.
6. Enact banking/investment tax reform. Basically, I would tax banks based on the riskiness of their investments. For corporate stocks, this would be easy, because investment bankers calculate a term, β, that essentially represents risk of such an investment. For futures, it would be even easier. The tax rate on futures would be inversely proportional to the proportion of the future value paid upfront. For example, if a bank put 3% down on an oil future, their tax rate on that future would be 97%. This would annihilate the profits of prospectors who pick up futures and deflect the costs by not actually putting up any money down upfront, drastically reducing the speculation in the market. For any other investment, it would take pages and pages of tax code to assess the risk of investments for taxation purposes. Mortgage-backed securities would also be made illegal, the sale of which would be punishable by death. Again, the top 2% of income earners would be upset about this reform, keeping them from ever happening.
   
7. Cut entitlements. The burgeoning budget deficit of the federal government is another dead weight on the US economy. Cutting entitlements would be key to reducing the deficit and the biggest of these in my sights would be growth in Medicare, not Medicare itself, but its growth. Limiting Medicare growth by itself could almost bring the US to fiscal solvency by 2015. Providers of care (to a certain degree) and, to a greater degree, of prescription drugs and specialty treatments would need to undergo reform in order to keep the costs paid by the American government low. These cuts won't come to fruition because Democrats use entitlements as one of their biggest selling points in elections.
8. Cut defense spending. Along the same lines as entitlements, the federal government could almost reach solvency by cutting defense spending. Cuts would have to come to expensive military research projects like new cruise missiles, fighter jets, and stealth ships. At this point in history, the United States is largely fighting guerrillas who live in caves. In all honesty, the military hardly needs a $1 billion cruise missile to take them out. Also, tactics of war would have to be employed in order to actually conquer enemies and get troops home in a timely manner. War is dirty, unsafe, and emotionally depraved; anyone who thinks otherwise should get over themselves. The blame for this one falls on both sides of the aisle. Republicans refuse to give up pricey research projects while Democrats (and the liberal media) refuse to allow war to actually take place for the long-term safety of both troops and the American people.
   

All of the reforms that I have mentioned above would have winners and losers. However, the purpose of a government is largely to balance the winners and losers of various reforms in a manner that best ameliorates total human suffering. In many cases, the losers in the scenarios above have been winners big enough and for long enough that they have amassed fabulous wealth and have begun to exercise the power that comes with that wealth over the remainder of the population. This phenomenon has become the greatest cause of our social and economic woes as citizens of the United States. The reforms that I have mentioned would go a long way to fulfill the purpose of a government and ameliorate the total human suffering in this country.

As you can imagine, neither I nor any one individual is in a position of supreme power over the United States and its allies. However, I do believe that the reforms, which I have mentioned herein are in the best interest of the people of the United States with whom the power of government is supposed to reside. Now, go inundate your congressperson with commentary on how worthless and filthy of a swine he or she really is. ;D