Restoring the economy: what the federal government can do

The first thing that should be noted is the so called stimulus package passed by the House this week is a political sham. It is not a stimulus package. As the details are examined, it is a left wing political payoff package. It is short on tax cuts and infrastructure spending, and it should be scrapped. If the federal government is hellbent on spending over a trillion dollars, Voting under the Influence offers another way.

First, to help those most in need, eliminate the payroll taxes for two years. That gives the working men and women more money in their pockets and helps the businesses who employ them keep them on the payroll. The relief to both would be dramatic and immediate. The money would hit the economy directly without the government middle man involved.

Second, to shore up investments, there should be an immediate elimination of the capital gains tax for two years. Keep income tax rates where they are. Those who have the money to invest will sink their money into investing in tax free endeavors that could shore up business investment and the markets. Frankly, part of the reason that we are in the situation we are in is that we seem to punish via taxes those who make capital investmetns that can spur the economy. It makes no sense. Give Americans the incentive to invest their money and watch things grow.

Third, the government spending aspect of the stimulus package needs to be strictly limited to legitimate infrastructure projects. There is little debate that America's roads, bridges, major sewer and water systems, and even some key buildings need an overhaul. Fine. It is good to do that, as long as the money designated for that is just for that. There should be no provisions for political pet projects or to make unions get more dues. Frankly, we live in times that just can not afford that sort of political luxery. We compete with the world now economically, and the rest of the world is not burdened by our politically laden burdens such as bloated labor unions wanting their dues.

Of course, there are various state governments who want money to bail themselves out of their binds. The federal government should deny such. It should issue them funds strictly for infastructure matters in block grant fashion, and that is that. If a state chooses to devote its resources to paying for some matter that does not have anything concrete to do with the general commerce and security of the United States, so be it. However, the other states in the union should not be required to pay for that choice.

The last matter is perhaps the least to be expected. The Democrats in Congress and the Obama Admininstration need to put the brakes on their pro labor union measures. Of course, Obama and the Democrats and the unions will go on about they look out for the working man and woman. That is a bunch of bunk. What modern unions do is look after themselves, often charging union dues that are about as big as Uncle Sam's cut from a paycheck. Further, they deter competiveness in American business. They will tell you it is all about higher salaries and benefits. That is not true. Businesses like Toyota pay higher than union wages in their plants just to keep the unions out. Why? Because, beyond salaries, unions often asks for cuts and for rules that making competing in the global economy of today impossible. VUI will write more about the shocking nature of pro-union stands of Obama, but for now, we simply state it is hampering American business from being competitive and shipping jobs overseas.

In short, the stimulus package we are being asked to embrace or face to wrath of being against Obama is no stimulus package. His acts as President so far are not those of a President who wants business to succeed. The above ideas are suggestions of another way. There are more. One thing is for sure, as Herbert Hoover once proved, government spending and punishing business will not work in these sort of times.