Calls for a Second Stimulus Package
Amidst the wreckage of the first stimulus package, which passed this February, we are already hearing whispers and rumors about a second stimulus package, including Warren Buffet and Nancy Pelosi's guarded support for such a measure.
Instead of writing a redundant essay with arguments against a second stimulus package (which would simply rehash the same arguments I made in a Feb 1st essay entitled "Economic Folly: 7 Reasons The Stimulus Package Will Be Bad For America"), I have put together a cool, quirky, and totally effective alternative stimulus package.
If it's a second stimulus package they want, then they should pass this one. You can call it "A Conservative Stimulus Package." On second thought- the whole drug legalization part might not make it so popular among traditional conservatives. Better call it "A Libertarian Stimulus Package." I'd also be happy with something like "A Totally Awesome Stimulus Package."
Here it is:
1. Legalize Marijuana and Industrial Hemp
That's right. Repeal Federal Laws that prohibit the production, possession, and use of cannabis and industrial hemp. Many states would be emboldened to follow suit. This would integrate one of America's number one cash crops into its legal economic system, create an untold number of jobs, increase tax revenue, and sharply decrease government expenses related to the interdiction of marijuana and incarceration of offenders.
CNN's Jack Cafferty quotes a senior Harvard economist who estimates that "we spend $44 billion a year fighting the war on drugs. He says if they were legal, governments would realize about $33 billion a year in tax revenue. Net swing of $77 billion." And remember, that's just the net gain on the government's balance sheet- that's the icing on top of all the economic growth and job creation that legalization would allow to happen.
Have a problem with that Mr. President? Madame Speaker? Insert all the scary, santimonious fearmongering about how jobs are being lost and we absolutely must act here --> [ ]. Wasn't that convincing? Now get your people to start drafting the bill!
2. Normalize Trade With Cuba
When President Obama reached out to Cuban leaders at the "Summit of the Americas" this April and lifted travel restrictions on Americans with families in Cuba, Fidel and Raul Castro criticized him by saying that he hadn't gone far enough. Cuba is clearly interested in opening up economic relations and would respond favorably to a repeal of the U.S. embargo- and lifting it would be a major boon to the American economy.
Just think of what it would do for cigar retail alone. Then imagine the kind of lucrative contracts hotel chains and construction companies would score to help turn Cuba into the tourist paradise it once was, and should be, and could be again! And consider what an end to the embargo would do for America's struggling airline industry.
They say that obesity-related conditions create a huge drag on the economy and the rising price of health care: In addition to lifting the embargo, the U.S. should end all import quotas on sugar cane from the Caribbean. Almost overnight, this would radically change how we sweeten our food and help put an end to the high-fructose corn syrup cartel that has fattened its wallets by fattening American children for years.
Mr. Obama is hesitant to lift the embargo however, arguing that "The Cuban people aren’t free and that’s our lodestone, our north star when it comes to our policy in Cuba." Okay- so as long as the Cuban people aren't free, the only rational course of action is to restict the travel, trade, and production of U.S. citizens and thereby make us less free too? Not to mention less wealthy and prosperous? Not to mention that the embargo makes Cuba even less free?
Trading with the Cuban people does not endorse their government's shortcomings- it undermines and subverts their government's shortcomings. If we had been trading with Cuba all along these past couple decades, enough of them might be using Twitter right now to elect a different president. I'm only half-joking.
3. Drill in ANWR and Offshore
According to the U.S. Geological Survey's mean estimate, there are 10.4 billion barrels of crude oil and natural gas in the Arctic National Wildlife Refuge. Oil prices are pretty volatile, so let's just pick a nice round number and say that at $50/barrel that means we are not even touching $520,000,000,000 worth of oil just sitting there waiting for us to get to it!
That's right, this number: $520,000,000,000. If oil is running at $100/barrel, then it's twice that amount and more than one trillion dollars, this number: $1,040,000,000,000. Yeah. That's a whole stimulus package worth of money that could be in the economy, but it's not because of the porcupine caribou. I haven't even mentioned, by the way, all the oil waiting for us in offshore reserves on several American coastlines.
There is no rational justification for keeping that much wealth out of the hands of the American people who are struggling and losing jobs at a dizzying pace, for the sake of a plot of land no bigger than the Dulles Airport in a wildlife refuge the size of South Carolina.
4. Auction Government Assets- Like the USPS
The government should also sell off a lot of its assets for fast cash now and permanent reductions in annual expenses. For instance, two lawmakers in Minnesota "are asking the state's legislature to consider a proposal that would sell to private firms the Minneapolis-St. Paul International Airport, along with other state property and programs, in an effort to bring in roughly $6 billion or more."
It's a brilliant idea. The Federal government should sell off its mismanaged assets that lose money and don't create value for the American people. This will give it an instant shot of cash to pump back into the economy (in the form of lower taxes, not corporate bailouts!) while creating value for the private companies that purchase these assets. It will also save on the future yearly costs of maintaining them.
A good place to start would be selling the U.S. Postal Service. In order to provide us an increasingly low-quality, poorly-managed, inefficient, and unneeded service, Americans pay billions every year to fuel and maintain the USPS fleet of over 250,000 vehicles, its huge staff (it's the third largest employer in the US), infrastructure, and operations costs.
"Mail service is becoming slower, more expensive, and less reliable. The United States Postal Service (U.S.P.S.) is probably the worst managed and one of the least honest corporations in America." These words were written in a Cato Institute policy analysis in 1985! How much truer do these words ring in the Internet age and as the USPS continues to lose market share to FedEx, UPS, and electronic communication?
5. Privatize Social Security
The net present value of privatizing Social Security is estimated to be as much as $20,000,000,000,000. The historical data on countries that have privatized their government run pension-systems promises us great reward if we follow their example. When Chile made this revolutionary reform to its own government pension system in 1980, the results after 15 years were exemplary:
Pensions in the new private system already are 50 to 100 percent higher--depending on whether they are old-age, disability, or survivor pensions--than they were in the pay-as-you-go system. The resources administered by the private pension funds amount to $25 billion, or around 40 percent of GNP as of 1995.
By improving the functioning of both the capital and the labor markets, pension privatization has been one of the key reforms that has pushed the growth rate of the economy upwards from the historical 3 percent a year to 6.5 percent on average during the last 12 years. It is also a fact that the Chilean savings rate has increased to 27 percent of GNP and the unemployment rate has decreased to 5.0 percent since the reform was undertaken.
Congress should give workers the option to put their money in their own, personal, private account. They'll have the assurance that the government can't spend their money. They'll also have the opportunity to grow their savings by investing it and they'll be fuelling economic growth in the process, injecting productive capital into the economy.
6. Radically Reduce Federal Spending
The US government spent more in 2008 alone than it did during the entire 19th century! Even worse, if the US Federal government cut its 2009 budget by the amount of spending it did during the entire 19th century- it would barely even make a dent.
Current spending levels are simply outrageous. There can be no wonder that the US economy has struggled under the weight of so much debt and withered from the starvation of so much confiscated capital. Congress needs to cut taxes, but in order to do so, it must drastically reduce spending!
How do we get government spending reasonable again? A good start would be to cap Federal spending at a level from a previous year. For instance, Federal spending in 2011 is presently estimated at $3,623,000,000,000.
Congress should act to cap Federal spending at say, 2005 levels, spending no more than $2,472,200,000,000. Remember 2005? That wasn't very long ago at all. It wasn't so bad, right? The whole world didn't fall apart because we weren't spending the amount we're spending today, right?
Yet by capping spending at that level, we would eliminate over a trillion dollars in government waste- effectively creating a trillion dollar stimulus every year, year after year after year (if we continue to keep spending down, that is). What will have to get cut to make this happen?
To begin with, all corporate welfare. There is no reason whatsoever that government should ever take money from taxpayers and give it to corporations and businesses. No more bailouts, no more corporate handouts, no more arguments. Period.
We would also have to start eliminating waste from all the departments and agencies in the executive branch. Frankly, we should begin phasing some of them out entirely because they are unnecessary and/or unconstitutional elements of our Federal government, among these: The Departments of Education, Energy, and Homeland Security.
We should also slim down the Department of Health and Human Services by reforming our entitlement system the way America did in the 1990s through a bipartisan act of a Republican Congress and Democrat Administration. Last of all, the Department of Defense is guilty of a lot of wasteful spending and needs to have its budget cut too.
7. Pass Measures To Prevent Future Economic Meltdowns
After digging ourselves out of this hole, we need to make sure we don't ever fall into it again. A balanced budget amendment to the Constitution would help. An audit of the Federal Reserve would be a step in the right direction. A bill requiring Congressmen to read legislation before voting for it would help keep government slim and sane. These would all be good starts.
Pass a stimulus bill with the above provisions- and I bet you a big fat wad of Federal Reserve Notes that the U.S. economy would start to absolutely boom in no time. So what are you waiting for? Take this message to the streets and be sure to e-mail this article to your Representatives in Congress!