Simple Solutions to US Problems

With housing in a tailspin and many wondering how the US should get out of its economic quagmire, the answer is as obvious as ever. The country has pulled tens of millions out of poverty by allowing free market capitalism to allow entrepreneurs to prosper. 99% of all useful inventions on the planet have come from the private sector and watching politicians talk about a summer of recovery when unemployment is at disastrous levels would be funny if it wasn’t so sad.

The free market didn’t create the housing mess, government entities such as Fannie Mae and Freddie Mac were government vehicles used to push housing on people who were not economically viable candidates to own homes.

Sure eventually Wall Street got into the game but without the government artificially inflating prices and supporting them, this mess could not have ever been as bad as it was.

Bush took credit when home ownership in this country improved and so did Clinton but Barney Frank was the chief architect of the housing Armageddon.

Before you blindly trust any politician with your future, take a look at the video below where he says he never pushed home ownership when an earlier video from 2006 shows he was warned of a housing bubble and discounted the idea as he said he would continue to push for home ownership.

Bottom line is this man is a liar – the worst type of liar that there is on the earth and I don’t care what party he is from. In part because of Barney Frank millions of my fellow citizens are out of work and have lost homes.

All this while Obama continues to spout in speech after speech about how the failed policies of the past are the fault of George Bush.

Thankfully the American people are smart enough to figure out they are being deceived which is why believe it or not, Bush is ahead of Obama in popularity in key districts. Think about this for a moment, Barrack Obama is the most articulate person many of us have ever heard and our most inarticulate president is actually more popular.

 

The answer to our problems are very simple but painful. Here they are:

  • The last ten years have seen a run up in construction and related retail activity in the US which offset massive job loss – employment has moved to China, India, The Philippines and elsewhere.
  • We effectively masked this job loss the last decade by cheerleading real estate as an investment which does not go down.
  • As a result of the crash, we are left with a population of unemployed who don’t want to work in jobs that are beneath them.
  • Rather than implore these people to get back to work by cutting unemployment benefits, the Obama administration has pursued a policy of allowing illegal immigrants to flow into the country and indirectly promising them citizenship.
  • As a result, remaining jobs are being filled by immigrants and it should be mentioned that without low-cost immigrant labor, companies competing internationally would be crushed which would be an even more devastating blow to the US economy.
  • Home prices and other prices need to reset lower to be in line with China and we need to find a way to slowly deflate them (actually they seem to be doing this on their own) so someone earning a more modest wage can afford to purchase a home without resorting to taxpayer assistance or loans with teaser rates which will cause more housing bubbles in the future.
  • China is keeping a close reign on its currency and it needs to allow it to increase in value – if it goes too far too fast though, you won’t be able to afford anything in Wal-Mart which would also be disastrous for a consumption-based economy.
  • The US government is too large to be effective at virtually anything. Even our military which is one of the best in the world is bogged down because of the size of government and is ineffective.
  • Yet the government keeps doing more and adding departments – as if that somehow will make them more competent.
  • Most consumers are saving more and spending less, the government has done the opposite and to gain favor with unions who funnel money back to his campaign, Obama has massively increased the size of the government who often join unions and has pushed legislation which favors union shops in government contracts. This in turn increases costs for all tax payers making companies less efficient when it comes to global competition. This in turn means less jobs.
  • Just as our households are leaner and meaner the federal government needs to cut about 50% of its spending including military spending. Of course not all at once but you can’t recover from a massive recession with decreased revenues by hiring more federal workers. And what are these people doing that wasn’t being done a few years ago. Are we hiring for the sake of hiring? Is this the way to compete with other countries?
  • Like many I was thrilled to see a minority president elected because I thought it would help build bridges in the country and moreover encourage all minorities as they see that anyone in America can make it to the top.
  • I expected Obama to bring the nation together and moreover I expected him to tell minorities about the importance of the family (minority parents are far more likely to have children outside of marriage) and explain the direct link between being a single parent and being in poverty. The reality is you are 6 times more likely to live in poverty if you are a single parent – this is a staggering statistic.
  • And the reality is if more and more of our youth spend their time scrounging for food they aren’t focusing on learning to compete effectively in a global employment market.
  • Obama is uniquely qualified to take these issues on but has refused to do so and as the clock ticks he has done his best to increase taxes on the wealthy and demonize the successful in the medical, insurance, financial and oil industries.
  • What the President needs to know is that the wealthy do things two things with their money; spend it and invest it.
  • In both cases, jobs are created.
  • In other words, the more money which comes out of the private sector – especially from the wealthy and is siphoned off to pay off special interest by politicians, the less jobs are created.
  • The most important point to remember is that poor people don’t every ever ever create jobs.
  • China and India understand business and many of my international customers tell me frequently that the US seems to have no cohesive economic policy.
  • I disagree as it seems our economic policy is directed at increasing taxes, fees and uncertainty on small business owners and those people who hire in the US.
  • The democratic agenda seems geared to ensuring there are a handful of very high paying union jobs while the rest of the country is out of work.
  • The ideas
    here are not complicated and I have found that the people who generally disagree have never had to make a payroll or worry about the employment of people who work for them.
  • We have a tremendous system of democracy and freedom in the US and are the envy of the world for this and many other reasons.
  • But when you are facing a crisis of job creation the people to listen to are the ones who create jobs for a living and not the professors who have no experience managing a budget.

So these are my ideas and I create jobs for a living – I’d love to hear your views on the matter.

  • Peter Radizeski
    August 24, 2010 at 5:07 pm

    What confuses me is that everyone keeps saying that he is taxing the wealthy. Um, less than 5% of the people control about 90% of the wealth in the US. These same 5% control everything including about 95% of the politicians. So if we are taxing the rich, they let it happen. Nothing pro-taxpayer has occurred in years.
    The solution is to stop giving any tax dollars to large business. Period. Period. Fund economic dev by helping the 5 million small businesses in America do business. All job growth comes from SMB. Not from Fortune5000. SMB needs access to educated employee pools, bank credit or capital, and to get gov’t out of its way.
    Warren Buffett has said that giving him tax relief did not help the economy.
    And again: the powerful create the rules and the laws. Read Too Big to Fail or The Big Short. If they are getting taxed, you better believe I will be getting the bill for it later.
    I agree with you about government is way too big. And the wars are costing us dollars and lives now — and many dollars later in long-term effect of the war on our soldiers, economy and the Mid-East.

  • Rich Tehrani
    August 24, 2010 at 9:14 pm

     
    Yes, the people at the top control a lot but many of them are for more tax and they believe that redistribution of wealth reduces civil unrest. The very wealthy people I know who are for democratic policies either feel guilty that they are so fortunate or they believe that giving money to the less fortunate is the answer.
    I believe in the equal and fair distribution of opportunity and I would rather take the poor and allow those who want to work hard to become the next generation of multi-millionaires.
    As the wealthy invest and they always do, their money creates opportunities for others. Whether it is a realtor who sells homes or the boat salesman or the gas station attendant, they make money because the wealthy people purchase and/or invest.
    Warren Buffet is an investor and the more money he has, the more he invests and the more people invest, the better the country does. This of course assumes he invests a great deal of money in the US and he currently does.
    Moreover, I am told repeatedly by my international customers that they don’t want to set up a company in the US and hire Americans because they can set up companies in other countries and pay less corporate tax. Our tax rates on corporations is very very high.
    The reality is also that large companies are able to outsource more easily – Apple hires one person in the US for every ten it employs in China. Small businesses aren’t generally able to do this. So yes, small businesses are the answer to our employment and economic problems.
    The challenge is we need to start successful businesses at 2-3x the normal rate in a global economic environment which is soft and full of competition from countries we didn’t go up against a decade and a half ago.
    The only way to achieve this goal is to lower the taxes substantially on small business owners.
    I don’t care how smart our president is and even the fact that he has zero business experience is not important. What everyone needs to know is that the government – can’t invest and grow the economy better than free markets which allow the smartest and most adaptable to excel. Business speed increases by orders of magnitude each decade and to think you can predict how to most efficiently invest capital via debates in Congress or the Oval Office is pure lunacy.
    We have an awesome system in the US and people the world-over want to come to the US to find a job and be part of capitalism.
    I just can’t understand how 234 years of history need to be thrown out the window as we are fundamentally transformed according to the president.
     

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