The Economy: How About Fixing the Real Problem?

Let's see, the American economy is in trouble because we spent a lot of money we didn't have, what should we do? I know, let's spend more money we don't have! Republicans, Democrats, retailers, the Federal Reserve, they all agree. It seems like everyone in this country has taken a stupid pill.

To put it in terms of your household. You see a lot of equity in your home, you borrow a bunch of money against it, you spend the money, now its all gone. What do you do? If you were in the leadship class of the U.S., you have a ready answer, you simply borrow more money against your house. Eventually, you don't own your house anymore. Our leaders don't seem to be concerned, after all, they will be long out of power and writing books about how stupid we all were by then. The leaders of the rest of the world don't quite see it this way, many, like the EU, must balance their budgets and don't have the option of massively paying off the electorate. Those without a rebate check blocking their view can see a little more clearly. But, we say, we need some way to stimulate the economy. Being an election year, I guess the politicians are going to rush to show the concern they haven't been showing as we've been approaching this iceberg.

If government must intervene then, how about stimulating the economy by helping to fix the problem that got us into this malise to begin with? No, not the subprime mess, that's a problem for borrowers and particularly lenders, who lent the money with little equity backing it up. What got us into this malaise is that too much of our money is going overseas, in particular for energy. How about stimulating industries that will ultimately reduce our dependence of foreign oil?

Here are some suggestions:

1) Reduce public transportation fares, immediately. Reduce them to where they are cheaper than buying the corresponding amount of gasoline. Expand availability as quickly as feasible. Reduce fares on Amtrak significantly, say 75% or so, to stimulate travel spending. An added benefit: maybe some retirees will turn the heat off in their northern homes and spend some time in Florida. Hey candidates, isn't that a state you would like some brownie points in?

2) Enact significant tax rebates for everyone buying a car that gets 40 MPG or better, regardless of what technology is used to get it there.

3) Enact significant tax rebates for home energy saving, much of our furnace and window industry to domestic. Make these upgrades pay themselves off with a year or two, make it a no brainer.

Of course, there are many other worthy projects that can boost our economy, reduce our trade imbalance, help our security and environment. Choosing these projects wisely and objectively, perhaps based on a straight correlation to net energy savings, would be a welcome change in the country.

What can you do? Tell your congressman that instead of a rebate, you want your public transportation costs reduced, you want Uncle Sam to buy you a new American made furnace, you want a tax credit for moving closer to the office. Let's get creative folks!