by John Young
We’ve launched a lot of very appropriate criticism of the October Bailout plan and the new bailout plan currently before Congress. Obviously, our economy is tanking and something needs to be done. But the mere fact that action is required doesn’t mean we should act in haste only to repent at leisure. A solid understanding of both economics and the underpinnings of the current crisis as revealed here at Western Voices World News yields far better proposals.
1) [uAdopt the Fair Tax immediately.[/u
We have been calling for this for some time. It replaces the current income tax with a national consumption tax while rebating the tax that would be paid on necessities up to the poverty level to all families monthly. The Fair Tax would immediately take a $233 Billion compliance burden off of the backs of individuals and businesses. http://www.fairtax.org/PDF/MacroeconomicAnalysisofFairTax.pdf have determined that real wages would increase by 10.3% in the first year and the GDP would increase by 1.7%, 8.7% and 11.8% more under the Fair Tax than under the current system in years 1, 5 and 10 respectively.
2) [u of that is sent back overseas.
Illegal immigration is a cost we cannot afford to bear. Rather than mass deportations we can levy harsh fines against businesses who employ illegals — on the order of $10k per illegal immigrant per day employed. So called “sanctuary cities” that actively thwart immigration enforcement will be ineligible for federal aid for education, police, roads, or anything else. Any college that gives preferential rates to illegal immigrants will lose its accreditation.
Just these two steps alone would put $320Billion back into the economy annually without causing people to pay higher taxes, running up government debt, or decreasing services. And it wouldn’t be a one-time deal. That money would be there every year, year after year, giving us a long-term economic boost without a dime in taxes being required.
3) [uRepeal NAFTA and GATT[/u.
Not only are NAFTA and GATT so morally repugnant that even otherwise insane people like Al Sharpton realize they should be repealed; but NAFTA and GATT have collectively caused the destruction of over 3,000 American businesses. In rural American alone between 1997 and 2003 http://www.carseyinstitute.unh.edu/publications/PB_displacedworkers_06.pdf caused the permanent loss of 1.5 Million jobs. The indirect economic destruction is undoubtedly far greater and something we can ill-afford.
We need to repeal the enabling legislation and repudiate the associated treaties.
4)[uDo a Break-Up of Banks instead of a Bail-Out[/u
Our Finance, Insurance and Real Estate sector (FIRE) concentrates wealth without creating it and disproportionately affects our legislative process. Such accumulations of power are a direct threat to the democratic process and incredibly wasteful. Already, banking conglomerates have cost taxpayers nearly a Trillion dollars in direct costs; but their indirect costs in terms of restraint of trade and other issues are much higher.
There are dozens of well-run regional banks in this country that are perfectly solvent. Instead of bailing out a Citibank, it would have been cheaper to buy it out for its market capitalization of $16B, and then distribute it among the regional banks. A sound economy demands a distribution rather than conglomeration of wealth and power.
So here are some positive things our Congress can do to put America’s economy back on the right path.