Nabloid’s Economic Policies: Good Economic Policies Result in a Healthy Environment for Investing

November 10th, 2008

After all the talk about Obama, I thought I’d switch a bit and focus on what I’d do. This is a simple list of economic policies that COULD be helpful. If I was President (or an adviser), I would look into the following. That doesn’t mean I’d implement them, or even know how to properly implement them (they’d be hard), but you get the point. I’d look into all these economic policies and see what could be reasonably be done to help the world create “fair trade”. Ultimately, these would make the economic situation better and our investments would follow!

1. Leave taxes alone, do not raise or lower at the moment, until the budget has been balanced and the country becomes debt free. Then look at lower tax rates once government has balanced its budget and repaid ALL loans. A tax freeze would give some stability to the economy.
2. Cut government spending on non-vital items. Infrastructure, health, education, social programs, and defence are vital. That said, government spending, once the budget is balanced, should never increase faster than the rate of inflation!
3. All government spending should be re-examined and scrutinized. We need to increase the efficiency of our spending. We should also make it easier for companies to bid on government contracts and make details of contracts PUBLIC (unless it’s classified information). We have to cut spending to balance the budget.
4. Introduce regulations on banks - similar to Canadian regulations, that enforce strict lending requirements. If you can’t afford a mortgage, you won’t be qualifying for one, and you therefore can’t be tricked into getting one. This protects consumers in the long run. Consumers have been using debt too loosely and spending it too easily. Many of the US competitiveness problems have been hidden by loose spending made possible by increasing debts.
5. Trade: This is the hardest to deal with. The trade imbalance shows that the US economy is unsustainable. We need to balance the trade deficit. To do this we must look at the very root of our trade agreements. We must not allow free trade between the US and countries that harbour an unfair advantage that has nothing to do with core efficiencies and capitalistic competition. For example, in order to get a “free trade agreement”, a nation should have similar labour laws to protect it’s citizens’ standard of living, including minimum wages and some social benefits for citizens to fall back on. That nation should also not employ the use of currency manipulation to gain a favourable, but unfair, advantage over American companies. Child labour should also be frowned upon. (This is so hard to do, maybe we shouldn’t touch it!)
6. Free trade should not be granted with countries that purposefully manipulate their currency to gain an unfair trade advantage, which has nothing to do with free competition. (This is so hard to do, maybe we shouldn’t touch it!)
7. For those countries that do not have basic labour laws to protect their citizens or manipulate currency in their favour (or both), a tariff should be put on any items coming from that country. The tariff should vary from country to country, and should be just enough to level the playing field after taking into account the wage differentials, social and currency differentials. The tariffs imposed should not be overly hard or punitive on a country. It’s purpose is the level the playing field, not completely hurt or shut-off America from doing trade with that nation. Free trade should be replaced with FAIR Trade. This works both ways. For countries that America has an unfair advantage on (if there is one!), we should allow them to impose a small tariff to level the playing field. The tariffs on all nations should be examined every quarter, and adjusted to keep “fair trade” moving forward. Eventually, with enough pressure from Washington, we would hope more countries gain “free trade” with the United States by implementing similar basic standards of living. (This is so hard to do, maybe we shouldn’t touch it!)
8. Foreign Ownership Rules: This should vary from country to country, depending on the agreement they have in place with the US. A particular nation should should also allow American businesses/citizens to invest freely in their nation if that nations corporations or citizens wish to have the same opportunity in America. Reciprocity. If they allow us to invest in their country, they can invest in ours. If they restrict certain investments, we should reciprocate. Do unto others as you’d have them do unto you. It’s only fair.
9. Sovereign wealth funds should be banned from owning property and companies within the US.
10. All schools from K-12 should have some basic money management and economic courses to help people manage their personal finances. The entire economy would be stronger if each citizen had some more financial knowledge.
11. Science, Math and Technology should be the corner stones of the education system. Right now schools spend too much time on theory and not enough time on practical experiments and real world situations and solutions. We need kids to see and do things that are interesting to stay interested in these subjects - They’ve been presented in a very boring way. We need a generation to embrace these subjects and become world leaders in them to maintain prosperity.
12. All government surpluses should go toward paying down debt. Each year, the money saved on interest payments can be spent on new programs and be considered increased spending. The beauty of this is that it technically isn’t increased government spending (the government is still spending the same amount) as it is just diverting some money that used to go to useless interest payments to something useful!
13. Never promise new spending. Instead promise to change the way government spends what it has.
14. 401k’s and Roth IRA’s should have a stated fixed tax rate that they will pay when funds are withdrawn - We want to eliminate any future government from increasing the taxes on these assets dramatically - If you think the tax rate is going to go up dramatically in the future, you won’t bother (rightfully so) to defer taxes in savings programs like these.
15. Start a massive program to open up the Space Frontier economically. We will need to create new ways to get to space efficiently - This is vital to world security and peace. Our goal should be to create a colony on the moon, with our eyes set to other planets as well for small colonies – and to mine some of these planets for valuable resources.
16. Open up Space by getting rid of any regulation that prevents regular folks and businesses from launching into space. Provide incentives to companies that do research and manufacturing of things to get us to Space and on any business buying these items. Incentives should be used - I don’t want government to pick and choose companies that will become leaders in space, but to encourage the entire economy to compete and get us there with massive incentives for consumers and businesses buying any such technology. We need something really dramatic while still not picking and choosing winners… let the economy decide who wins, we just want to encourage the economy to shift its focus to space and sustainable energy instead of war and oil.
17. Provide massive incentives to people purchasing alternative energy (including new vehicles that make use of alternative energy). Ethanol and bio-diesel should be considered alternatives as should solar, wind, wave, geothermal, fusion, etc, etc, etc). This may help us balance the trade deficit!
18. Alter accredited investor rules that prevent regular folks from investing in local businesses and communities. Regular folks should be allowed to gain access to this type of investment, but the company should still have to prove it’s no scam with some easy regulations to protect investors. I just don’t agree with NOT allowing investors to invest in an entire area of OUR OWN economy!

In other words, I would modify the Free Fair Trade Agreement with Mexico. The current agreement forces (Yes, forces) American companies to lay off Americans with high wages and send the jobs down to Mexico so the company can exploit workers with much lower standards of living and little in the way of benefits, or it can’t compete with foreign companies and will go out of business. A race to the bottom is not what we wanted the Free Trade Agreement to start; It was intended to help the rest of the world industrialize and increase their standard of living while still maintaining our standard of living. I believe technology will be the key to increasing the standard of living for all.

Our economic policies aren’t working. On one hand we have Democrats telling us we need to increase governments ability to “spread the wealth” with high taxes and MORE government spending. On the other hand we have the Republicans that want to give out tax cuts like it’s water, with the belief that we will grow our way to balanced budgets… Yet even they promise more spending and bigger governments (They really aren’t conservative anymore…). Both parties seem to be doing the same thing: Spending too much and favouring bail-outs. We must freeze taxes. Cut government spending to just the bare essentials. Fix trade balances by re-examining which countries have a sweet deal with the US, and make it so it’s a fair deal. Pay down government debt. Then lower taxes. Meanwhile, we need to change focus on the economy from Wall Street to the real economy and start shifting toward the future economy; Space and Alternative Energy (and all the technologies that come with both of those!).

Ultimately, the two major focuses should be on creating an environment where alternative energy and Space are the focus of the world. We want to change the entire focus of the planet from warring with each other over disagreements, to looking forward to new frontiers of Space and the technology that comes with it. Living sustainable in space would require technologies that would help many 3rd world nations as well, such as growing technology and alternative energy that is sustainable. We must look forward; It’s the only direction we can go.

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