My Economic Solutions

#1 - Don't bail out lenders.

-Housing prices suck right now... for owners. Not for buyers. Buyers are getting a great deal on a home. They could be getting an even better deal, but sellers aren't willing to drop their prices to the point that the market will allow. Foreclosures aren't being sold. Why? Because banks aren't willing to unload their assets at a loss. Eventually, they will. What will happen when they do? Prices will tank again. Will this be bad? For some. But think about it like this. Let's say you own your own home, and you would have to sell the house at a $20K loss to unload it, which might mean paying $10K out of pocket to your bank. Let's also say that a house that cost $300K in 2006 only costs $200K. If you could pony up the dough, would you take the loss to get yourself into a bigger home at a good price? I would. This doesn't work for everyone, but modest homes are seeing modest drops in price while massive homes are taking massive drops in price. This would create a good scenario for modest homeowners to move into bigger houses, and renters to move into modest houses.

#2 - Let the oil companies drill

Giving oil companies access to oil reserves so they can drill (or scoop, as is the case in shale oil) doesn't hurt anybody. In fact, it helps just about everybody. Even if it doesn't lower gas prices by $.01 it is still good for the economy. These rigs will need to be built, operated, and maintained which means jobs, jobs, and more jobs. Unlike the alternative fuel pipe dreams that only the govenrment is willing to throw money at, oil rigs won't cost the government a dime because oil companies (which have "record profits") will be able to build these rigs, potentially without even borrowing the money.

#3 - Reduce costs by eliminating restrictions

I don't know if you all know this, but there are lots of laws. More often than not, laws create waste. Some of that waste is good. It's good that food growers inpect their food. Laws that protect the consumer are often times pretty good laws. But not all the waste is good waste. In robust economic times, these laws make sense. They don't always make sense when the economy is in the tank. For instance, why do different parts of the country have different requirements for fuel mixtures? Why don't we standardize the mixture so that refineries don't ever have to do line changes. Another, more controversial, example would be minimum wage laws. Nobody wants to be paid minimum wage, but if the trade-off is low-pay vs. no-pay, most people would prefer low-pay.

#4 - Lower taxes, cut spending

In more robust economic times, we can afford to throw money at things that are not very productive. We can afford to tool around with ethanol when times are good. When food prices are skyrocketing, we should probably think about letting people keep the money they make so they can buy groceries. This cuts both ways, however. When times are good, we can afford to spend hundreds of billions of dollars so the Air Force can have new military air-tankers. When times are not so good, we should really think about making due with the ones we have. Do we really need to maintain military bases in Germany anymore? How about we let the Germans take care of themselves? Tightening a budget is not painless, but in tough economic times, it has to be done. If you are a Keynesian and think that the government can spend it's way out of every financial mess, then we can agree to disagree. I believe that government spending directs resources to unproductive enterprises, and when the budget isn't balanced it leads to inflation that robs the dollar of its worth and leads to exaggerated boom-bust cycles. I'm also going to go out on a limb here and say that the problem with the United States of America is NOT that we don't consume enough. As evidenced by the recent credit problems our nation has faced, the problem with the U S of A is that it doesn't save anything.