While I did not support Barack Obama, I wish him luck dealing with the current economic recession. However, I believe both administrations are on the wrong track.
Throwing billions of taxpayer dollars at targeted sectors of the economy will not work. Government can only consume wealth, not create it. Wealth is created only by the private sector.
If liquidity is the answer, there is another solution. A Texas congressman has proposed a tax holiday for two months. I propose that the period be extended to six months. No income taxes, payroll taxes, corporate taxes or capital gains taxes would be collected.
All wage and salary earners (this includes most small-business people) would receive their entire incomes to do with as they wish. The cost would be about the same to the federal treasury as the current and proposed bailouts.
American consumers would thus do the targeting rather than the government. In addition, they might discover how much income goes to taxes and become supporters of the Fair Tax.
The government, and particularly Congress, is responsible for the existing economic conditions. Why should we trust the government to fix it? In fact, there should be members of Congress and executives of Fanny Mae and Freddie Mac who should be indicted (another topic).
The government should take two additional actions:
1. Immediately freeze all spending and salaries at FY 2008 levels, and take steps to reduce the size of government (except the Armed Forces) by 10 percent, through natural attrition.
2. Spend more on the Armed Forces.
These actions would have a positive impact on the economy, restore confidence and follow Obama's emphasis on building the economy from the bottom up.
Peyton E. Cook
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