Thursday, July 15, 2010

Congress's Efforts to Tame Growth Are Succeeding

Sorry, but I couldn't resist. Congress is doing such a good job ignoring actual economist's advice on what to do for the economy I almost want to believe it's intentional. What they have to do is easy, as long as they don't mind people hating them for it. Pass real cost control measures for the military and entitlements to make our long run budget prospects look good. Since we're enjoying low interest rates, borrow heavily to prop up the economy through the measures actually being advocated for by economists, aid to states and unemployment insurance. I'd also add a more controversial piece, since we can borrow cheap lay out a real plan to invest in needed infrastructure, such as basic maintenance, high speed rail, a smart grid, and local transit systems, especially light rail. Since I'm on a roll giving a wish list, I'd also suggest reforming the tax system to streamline it, getting rid of virtually all breaks and exemptions, while lowering some headline rates and partially shifting some of the burdern towards consumption and back towards rich indivdiuals rather actual corporate taxes (look at the Swedish model, we don't need that level of taxation but the basic philosophy looks good).

Sure, none of you will get re-elected but you'll all go down in history as the bestest Congress ever. Won't that be worth it?

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