Economics
"For every problem there is a solution which is simple, obvious, and wrong."
- Albert Einstein
It seems everyone has opinions about the current state of the economy. I'm certainly no exception. In keeping with my opening quote, here are my suggestions.
None of this has anything to do with the "crisis", by the way. I don't presume to sufficient expertise to deal with that. But the crisis won't last forever, and there will still be several underlying problems.
The U.S. balance of payments is seriously negative. In that the Constitution gives Congress the power to lay duties on imports and exports, I suggest it do so. Specifically, Congress should establish a uniform duty on all imports, and a formula for the Customs Service to use in making periodic adjustments to that duty's rate, for the sole purpose of reducing demand for foreign goods. The duty should rise gradually over time, until the balance of payments becomes neutral, then be adjusted as needed to keep the status quo.
Note that this doesn't prevent imports; it only makes them more expensive. That way, the things we actually need will still be imported; other stuff, not so much.
The U.S. government's finances are seriously out of control. The import duty (above) will help with that, but we need a Constitutional amendment to prohibit Federal outlays in excess of income. Since predicting the current year's income is inherently error-prone, the prohibition should be measured against the previous fiscal year's income...a known quantity. Also, we need to phrase the amendment to include so-called "off budget" items.
Social Security is a major problem. We need to start increasing the retirement age, gradually. I estimate an increase of four months per year would do the job. This would give people a reasonable amount of time to adapt to the change, add some man-years of productivity, and reduce some man-years of benefits, extending the viability of the system until, eventually, no one lived long enough to collect. Then we shut it down gracefully.
The U.S. dollar isn't stable. That would be helped to some degree by implementing my other suggestions, but we also need to stop inflating the currency. In the past, the best way to do that was to base the currency on a durable and valuable commodity; i.e., gold. Maybe a gold-based currency isn't the way to go this time, but we need to devise some mechanism to guarantee that a dollar next year will have the same value as a dollar today.
- Albert Einstein
It seems everyone has opinions about the current state of the economy. I'm certainly no exception. In keeping with my opening quote, here are my suggestions.
None of this has anything to do with the "crisis", by the way. I don't presume to sufficient expertise to deal with that. But the crisis won't last forever, and there will still be several underlying problems.
The U.S. balance of payments is seriously negative. In that the Constitution gives Congress the power to lay duties on imports and exports, I suggest it do so. Specifically, Congress should establish a uniform duty on all imports, and a formula for the Customs Service to use in making periodic adjustments to that duty's rate, for the sole purpose of reducing demand for foreign goods. The duty should rise gradually over time, until the balance of payments becomes neutral, then be adjusted as needed to keep the status quo.
Note that this doesn't prevent imports; it only makes them more expensive. That way, the things we actually need will still be imported; other stuff, not so much.
The U.S. government's finances are seriously out of control. The import duty (above) will help with that, but we need a Constitutional amendment to prohibit Federal outlays in excess of income. Since predicting the current year's income is inherently error-prone, the prohibition should be measured against the previous fiscal year's income...a known quantity. Also, we need to phrase the amendment to include so-called "off budget" items.
Social Security is a major problem. We need to start increasing the retirement age, gradually. I estimate an increase of four months per year would do the job. This would give people a reasonable amount of time to adapt to the change, add some man-years of productivity, and reduce some man-years of benefits, extending the viability of the system until, eventually, no one lived long enough to collect. Then we shut it down gracefully.
The U.S. dollar isn't stable. That would be helped to some degree by implementing my other suggestions, but we also need to stop inflating the currency. In the past, the best way to do that was to base the currency on a durable and valuable commodity; i.e., gold. Maybe a gold-based currency isn't the way to go this time, but we need to devise some mechanism to guarantee that a dollar next year will have the same value as a dollar today.