Reaganomics causes Recessions – Economic Stimulus Needed

Secretary of Treasury Hank “Henry” Paulsen finally acknowledged that the US economy sucks. President Bush meekly accepted that there are mixed signals but the underlying economy remains strong. Perhaps he is talking about the Chinese or other third world economies that supply the 82% of US consumption because he cannot be talking about anywhere in the continental US. President Bush and Hank Paulsen spoke of stimulus packages for the US economy. In the spirit of no crisis is too grave to cut taxes on the rich, Mr. Bush talked about making permanent his tax cuts. Even if this would do anything other than make the rich, richer this would do nothing until 2010 when the current entitlements for the rich expire.

Other programs include bailing out the financial institutions. The push back from the general public was so strong that Countrywide, the poster boy of Corporate Greed and malfeasance, dropped another 30% today to begin trading at bankruptcy levels. In the true spirit of Reaganomics Financial Institutions continue to present vague and misleading information regarding their economic stability. Some institutions, like Countrywide Financial, are falsifying documents in court proceedings to inappropriately participate in the personal bankruptcies a direct result of their immoral practices.

There are stimulus packages that talk about rebates. This package would entail sending a refund check to taxpayers once their IRS return has been filed. While tax reductions are a great thing they would simply be a band-aid solution. This type of intervention is the only one guaranteed to get money into the system immediately but they leave the reasons for the economic problems in place. Unfortunately just the rebate, without further structural changes, will only increase our public debt.

There are stimulus packages that talk about eliminating corporate taxes. Obviously this comes from Corporate America. It does not merit discussion.

How about investing in America?

Inspect our ports for faulty and dangerous products.
Control our borders financing the fence.
Repair our bridges, levies and basic infrastructures.

These are not the superficial quick fix everyone seems to want but they will start America on a path to prosperity instead of the road to the poor house we are currently following. Every operation we undertake must be balanced. We must reduce our debt. We must create economic activity inside the US. We must reign in the power of Corporate America. Finally, we must legislate every aspect of the financial institutions operations. These things will create the greatest economic boom since the 1950s.