Economic Solutions - November 2008

During the recent worldwide banking panic both Presidential candidates looked completely lost and gave me little confidence that either had the personal knowledge or experience to lead this country out of the current downward economic spiral. And President Bush, despite his Harvard MBA, was unable to properly explain the situation to the American public.

Our country has worked its way through such down cycles in the past and it will do so again. But the path to that success will be impacted by the other priorities of our next President. Hopefully his advisors will provide the necessary reality check so that most of the promises made on the campaign trail become just a memory of rhetoric rather than a roadblock to recovery.

How can our country get back on track to again lead the world in the creation of prosperity? What should our next President be prepared to do in his first months in office in 2009? While I certainly do not claim to have all of the answers, I hope that many of my suggestions, which are detailed below, find their way into his economic blueprint.

Several years ago a book was published called The Millionaire Next Door. It was based on the success of people from all walks of life who had worked hard, saved wisely, and played by the rules. There are no shortcuts to success. Our next President needs to remind our citizens that those basic principles are the key to our future recovery.

The good news is that America has an opportunity to get back to those basics while also solving another major challenge to our future. And that opportunity is solving our dependence on foreign energy sources. By building more nuclear power plants now, drilling for oil and natural gas in Alaska’s ANWAR sector and off the shores of our continent, by perfecting techniques to extract energy from oil shale, and by increasing our efforts to build affordable and effective solar and wind solutions, we will create millions of new high paying American jobs.

America has also lost thousands of jobs to overseas manufacturers. Our high corporate taxes encourage firms to move their operations elsewhere in the globe where taxes are lower. Imagine how many of our producers would bring their jobs back if they could use the savings from lower taxes to invest in their plants and people rather than paying onerous amounts to our government. I propose the use of tax credits for increased expenditures on facilities and for new net jobs rather than simply lowering tax rates which might not generate similar activity.

Our next President also needs to increase personal savings by eliminating taxes on interest income while keeping capital gains taxes at 15%. Doing so will increase the funds available for banks to loan while continuing to reward investors and entrepreneurs for helping to directly fund businesses. And lastly, the next President needs to eliminate the death tax which limits the savings that parents pass on to their future generations.