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Can a Deeply Unserious America Fix Its Economy?
MikeDamone
Member Posts: 37,781
https://mises.org/wire/can-deeply-unserious-america-fix-its-economy
Let’s face it: the US is not a free-market economy because we don’t much believe in markets, despite our lip service. Most Americans, and virtually all political, media, academic, corporate, and banking elites, believe economic intervention (fiscal and monetary stimulus) form the basis of our economy—not production and saving.
So, what would a serious America do to correct our disastrous economic path? This may seem like an academic or rhetorical question, but it’s worth laying out the actual steps necessary to build a real economy rather than a fake one dependent on monetary or fiscal interventionism. As Dr. Mark Thornton recently explained, these steps may be conceptually simple even as they are wildly beyond political imagination today:
a wholesale adoption of laissez-faire economic doctrine by national politicians;
immediate deep tax and regulatory reductions;
immediate sharp reductions in government spending at every level (leaving federal spending well below federal revenue);
rigorous entitlement cuts, using some combination of means testing and raising age eligibility for both Social Security and Medicare;
rigorous defense spending cuts of at least 50 percent, combined with a radically reduced US military footprint overseas;
cessation of new debt issuance by the US Treasury;
cessation of active monetary “policy” by the Federal Reserve Bank, meaning no intervention with respect to the money supply, interest rates, or credit and debt markets (including US Treasurys);
a radical reduction in the Fed’s balance sheet by letting existing Treasurys mature and roll off;
an entirely hands-off approach allowing the US dollar to float freely relative to other currencies and commodities;
an express policy against bailouts or subsidies of any kind to any industry or company, regardless of the severity of an economic downturn;
allowing troubled industries or companies, no matter how big, to fail—through bankruptcy and asset sales; investor losses;
and firing boards, management, and employees when restructuring is possible;
actively encouraging business and individuals to save (through market/floating interest rates);
elimination of any price ceilings or floors on prices, wages, and profits;
elimination of any unemployment subsidies to individuals, along with abolition of minimum wage laws;
and finally,
the immediate sale of federal land and other assets to reduce debt service on the $31 trillion in Treasury obligations and to restore worldwide confidence in the US economy.
Let’s face it: the US is not a free-market economy because we don’t much believe in markets, despite our lip service. Most Americans, and virtually all political, media, academic, corporate, and banking elites, believe economic intervention (fiscal and monetary stimulus) form the basis of our economy—not production and saving.
So, what would a serious America do to correct our disastrous economic path? This may seem like an academic or rhetorical question, but it’s worth laying out the actual steps necessary to build a real economy rather than a fake one dependent on monetary or fiscal interventionism. As Dr. Mark Thornton recently explained, these steps may be conceptually simple even as they are wildly beyond political imagination today:
a wholesale adoption of laissez-faire economic doctrine by national politicians;
immediate deep tax and regulatory reductions;
immediate sharp reductions in government spending at every level (leaving federal spending well below federal revenue);
rigorous entitlement cuts, using some combination of means testing and raising age eligibility for both Social Security and Medicare;
rigorous defense spending cuts of at least 50 percent, combined with a radically reduced US military footprint overseas;
cessation of new debt issuance by the US Treasury;
cessation of active monetary “policy” by the Federal Reserve Bank, meaning no intervention with respect to the money supply, interest rates, or credit and debt markets (including US Treasurys);
a radical reduction in the Fed’s balance sheet by letting existing Treasurys mature and roll off;
an entirely hands-off approach allowing the US dollar to float freely relative to other currencies and commodities;
an express policy against bailouts or subsidies of any kind to any industry or company, regardless of the severity of an economic downturn;
allowing troubled industries or companies, no matter how big, to fail—through bankruptcy and asset sales; investor losses;
and firing boards, management, and employees when restructuring is possible;
actively encouraging business and individuals to save (through market/floating interest rates);
elimination of any price ceilings or floors on prices, wages, and profits;
elimination of any unemployment subsidies to individuals, along with abolition of minimum wage laws;
and finally,
the immediate sale of federal land and other assets to reduce debt service on the $31 trillion in Treasury obligations and to restore worldwide confidence in the US economy.
Comments
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@hhusky said we have no chance of reducing spending so we shouldn't try.
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The only way spending gets cut would be if our economic system totally collapsed. Over 60% of all households now receives more in transfer payment than they pay in taxes. Even among people who call themselves Republicans nobody is calling for the cutting of spending.
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politically impossible, but selling the land to reduce the debt is intriguing
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elimination of any unemployment subsidies to individuals won't fly. it just won't
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That’s the point of the article. No one has the will to do what it takes to fix the economy.DerekJohnson said:elimination of any unemployment subsidies to individuals won't fly. it just won't
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It’s why you never go full welfare state. Can never unravel it.MikeDamone said:
That’s the point of the article. No one has the will to do what it takes to fix the economy.DerekJohnson said:elimination of any unemployment subsidies to individuals won't fly. it just won't
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People have figured out they can vote themselves gifts of the treasury.
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Have you listened to MTG, Steve Bannon, Thomas Massie? Don't say no one.MikeDamone said:
That’s the point of the article. No one has the will to do what it takes to fix the economy.DerekJohnson said:elimination of any unemployment subsidies to individuals won't fly. it just won't
