[RandallNeighbour]

BTW, here's something a friend of mine (John Pate, Austin TX) wrote up recently FWIW.

7 (Fairly) Painless Things to Help our Economy

Let’s face it, Americas hate anything unpleasant even if it is good for us. We eat what is bad for us and consequently we are overweight. Then we join the gym but then stop showing up after a few weeks. We set a budget but don’t follow it. Most of us have a half a dozen projects around the house that are undone. We have good intentions but until we have a crisis-- we don’t change. It’s just too painful.

Today, our economy is showing the results of undisciplined governmental spending, zero down home loans, off-shoring jobs, and poor education of our kids. Fixing these problems will not be fast or easy. And, they will require discipline and a probable lowering of our lifestyles. The folks know this and are not willing to give up their goodies. How much were UAW willing to give up to keep GM and Chrysler afloat? That’s right, not enough to keep them out of bankruptcy and if not for the governmental bailout they would have let them go under. What about Social Security? With almost 80 million Baby Boomers who started retiring this year we will run through our surplus funds by 2038 according to the Social Security Boards of Trustee’s 2009 report. Seems like the AARP should be calling for changes but no, they tell us to “Ignore the fear-mongering...” They know their members won’t accept the pain of change. Our government knows we headed towards a train wreck economy and put together a bipartisan deficit commission. However, the committee rejected their own final report when only 11 of their 18 members voted for it to be formally adopted. And on-and-on with every special interest group arguing that their precious program can’t accept even the smallest spending cut. Even spending freeze is called a “cut” when the planed-for increases in spending are threatened.

Obviously, not enough our fellow citizens or politicians see our spending, deficits, or slow economy as large enough of a problem to accept the pain of the cuts. And, yes the cuts will be painful. Therefore, my proposal is to take actions today that can help the economy without throwing people out of work or causing a significant decline in our standard of living. These changes won’t be enough to turn around the economy or deal with our root causes of our deficit. However, they will help get the economy heading in the right direction and who knows, perhaps we can grow our way out of this Great Recession.

1. Ban Earmark Spending. ~$16 billion a year. Does Alaska really need another bridge to nowhere? Will West Virginia benefit from another memorial to Robert Bird? The answer is clearly no. Besides having a corroding effect on our democracy it is a complete waste of money that wouldn’t be spent if it weren’t “free”. This very proposal was recently rejected by the Senate but bring it up again now that the new Congress has been sworn into office.

2. Phase out Farm Subsidies. ~$180 billion a year in direct and indirect subsidies. Put into place during the Great Depression, this is one of those programs that won’t go away. But do we really need to subsidize tobacco farmers? Why should 75% of the subsidies go to giant industrial farms owned by multi-billion dollar corporations? It is time to end this money waster, especially while prices for agricultural products are reaching record highs.

No convinced? Take a look at our Iowa-driven pork barrel project to turn corn into ethanol. Corn is up 65% in prices since June of this year. The US government has already provided $6B in subsidies to keep an uncompetitive fuel from being abandoned. To make matters worse these subsidies are project to go up as much as 10x higher in the next few years. Ethanol cost $10 a gallon and also offers lower fuel mileage which means not only do we subsidize the corn, but then have to pay more at the pump to have it added to our gasoline. Cut out the subsidies to corporations now and then phase them out to smaller farms over the next 10 years. This will allow the farms to adjust their planting to better reflect the actual demand of consumers.

3. Freeze hiring on Federal employees. During this Great Recession government has continued to hire and our tax dollars are now supporting an additional 80,000 employees. While the private sector has cut back millions of workers our government with a $14 trillion dollar deficit somehow feels it can afford to keep adding on employees. When governmental budgets are cut back, and they will be eventually, these folks will be shoved not so gently to the curb because we just can’t afford them.

4. Repeal Sarbanes Oxley. In 2002 on the heels of the Enron accounting fraud Congress passed this little gem of a bill. Maintaining compliance is estimated to cost corporations up to 3-4% of their bottom lines. The costs are so high many foreign corporations on the NYSE delisted and went back home to Europe or their countries of origin. With this thorough level of bookkeeping we obviously have eliminated fraud and malfeasance, right? Sure, if you are willing to overlook HealthSouth (2003), Nortel (2003), Chiquita (2004), AIG (2004), Lehman (2010), not to mention Freddie Mac and Fannie May. The costs are high for large corporations but where this regulation really hurts is for small corporations that don’t have a small army of accountants. These corporations do not go public and thus cannot tap funds from the stock market to expand and hire because of paperwork. Obama recently said he wanted to get rid of unnecessary government regulations that slow economic growth. Well, here’s a fat ball down the middle of the plate Mr. President.

5. Reduce taxes rates of repatriated corporate profits. It is estimated that American corporations are sitting on $1 trillion dollars of profits made by their overseas subsidiaries. American corporations are keeping this money overseas to avoid paying US taxes after already paying foreign taxes. Keep it overseas and pay no additional taxes. Repatriate your profits and give up as much as 35% in taxes to Uncle Sam. Yet this money could help fuel investments, research and development or hiring in America. Why not reduce taxes, even if temporarily, to allow these corporations to bring home this money? After all, getting 10% of a trillion is better than 35% of nothing.

6. Open up energy exploration in ANWAR and the West and East coasts of the US. We really do not know exactly how much oil is available in these areas since drilling has been restricted so long that geologists haven’t bothered to look with the latest technolgies. However, the amounts of oil are though to be enormous. The USGS estimated in 1998 that between 5.7 and 16.0 billion barrels of recoverable crude oil and natural gas liquids are in ANWAR alone. The restricted areas off the coasts of the US are thought to have similar oil reserves. To obtain any significant amount of oil would take at least 5 years but the oil companies would have to hire tens of thousands of workers now to start this process. As an example of the jobs impact the recent executive order to stop all new exploration in the Gulf is estimated to have resulted in 20,000 jobs lost and impacted the pay of hundred of thousands of oil and gas employees as less equipment and services were used. The added bonus is every barrel of oil obtained domestically is a barrel we are not importing from the Middle East. And, looking at what is going on in Egypt, Tunisia, Jordan, and other countries it is clear that this is not a dependable part of the world to base your economic well-being.

7. Eliminate employee FICA tax on people who choose to keep working after they reach 65. It’s unfair to keep charging Social Security taxes on people when they have paid in for a lifetime. And, after turning so many 401k’s into 201k’s, a lot of older workers are finding they need to work later in life than previously planned. The good news is by incenting workers to stay employed later in life, these folks are less likely to need to tap Medicaid or other types of welfare payments. A good percentage of these folks will also continue to receive health insurance from their employer instead of the government. Let’s incent them to keep working by boosting their take-home pay and allow our senior citizens to better enjoy their golden years.