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Be specific.What would you have done differently to stimulate the economy that would have been more effective?

The auto industry in the US has been retained and jobs remain here in the US for Ford, Chrysler and GM as a result of the bailouts that have since been repaid. Our economy is showing continued slow improvement with jobs being added since 2009. Without giving general answers, what would you have done differently? And how can you demonstrate that it would have been more effective than what has occurred over the past 3 years?

Asked By: Scott - 1/7/2012
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Haha teacherfrog was completly wrong on every one of his ideas. The war does not cost anywhere near a trillion dollars a year. The total for Iraq was roughly a trillion. The government actually made a small amount of money compared to what was originally lent out so unless you are stating that you would raise taxes it makes no sense. Lastly a by making a stronger Dollar would make it even cheaper to outsource to countries such as China. With all this I won't even comment on how you have no idea what or how the FED operates and thus have no clue whether they have done damage or not.

As for the question at hand. While there was some small things that were not handled well for the most part a lot of good has been done in response to the downturn. While it feels nice to say we should have let the banks fail and so on, in reality things would have been much much worse if these bailouts and even a stimulus of some sort had not happened. The government acted wisely in providing liquidity and containing fear relatively well. I do think if it was done over again doing more to salvage Lehman Brothers would have helped some.

Much of what was done and what has been done is to stabilize the economy and the credit markets. The automatic stabilizers that kicked in were vital to preventing a collapse but have also lead to a increased annual deficit. The higher deficit ia absolutely necceasary but the problem lies in that most people have no idea that the federal government is a currency issuer whereas you and I are currency users and are completely different especially in regards to debt. The powers that be originally diagnosed the recession was caused by a banking crisis. This was mearly a symptom of the underlying cause being a balance sheet recession. Specifially in the household sector where the average household had their debt to income ratio up to 136?n 2007. It is currently at 100?nd needs to fall below 85?or the economy to have organic growth which will allow government support to fall away. If the powers that be had seen this from the begining it would have possibly changed some action plans. Having a full payroll tax holiday sooner would be effectively targeted and would habe increased aggregate demand faster by hitting the most amount of people possible as well as eneabling household to tackle their debtload much faster especially at a time when the propensity to save is so high.

I personally would have liked to see the stimulus package to have been much more focused. The large chunk on several years of payroll tax holiday, length determined by economic growth and household debt to income ratio and phased back to original levels slowely. Another large section of stimulus to be for major infrastructure projects, subsidizing the state funds used on projects. The funds transfered to states could have been raised even more as it proved counterproductive for states to butcher budgets in order to balance when the economy can least afford it and delays the recovery. Lastly I would have absolutely loved seeing a national goal set to become energy independent in 15-20 years. The US can do it but just need that to be the goal and go do it. Not just with green energy but oil, natural gas, nuclear, and coal. This would help our nation in a job basis as well as a national deficit basis which would help as most don't understand how this works. Being energy indepenent also is a matter of national independence and security. This is what I am speaking of on how other do not understand our national debt issues. The federal government must run an annual deficit equal to the national trade deficit with any higher deficit equaling the private sector savings rate. Not sufficient deficit will equal GDP contraction especially after last time where the debt was transfered to the household sector as the federal government ran into surplus in the late ninetiea and lead us to this point.
Answered By: kyle - 1/7/2012
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I would have used all of the bail-out money that was given to Bankers, Wall Street, and the Auto industry to create jobs upgrading and repairing the infrastructure all over the U.S. Have you taken a look at most of the highways and bridges across the country? They are abysmal. AND.. I'd have made extra sure none of the money was used to provide jobs, or any other benefits, to i****************s. I'd have allowed Bankers/Wall Street/Auto makers to fail. They deserved to. Free interprise is about learning from your mistakes. Big Business was bailed out of the mess that they, themselves created (based on their greed). They sorely needed to learn that lesson. But... Dingleberry bailed them right out of their own sewerage... Not smart.
Answered By: Geri42 - 1/7/2012
Instead of bailouts I would have given a complete income tax holiday for the amount of all the bank and auto bailouts.

Second, I would have brought the troops home from around the world and saved almost a trillion dollars a year. The result would be a strong dollar and more investment by private business in our country rather than China.

I would also audit the Federal Reserve Bank. They have been up to no good.
Source(s):
Austrian Economics
Answered By: teacherfrog52 - 1/7/2012
The way proposed by the IMF in every financial crisis,and based on these experiences it worked.Austerity program, shut down the bankrupt financial institutes and companies, new rehabilitation plan including new foreign investment, separation of the non-performing loans, repayment the debts by bringing assets on sale by auction.The crisis county has to restructure its own economy and aim at more efficiency with foreign investors,including good governance, new technology,new fund,new vision and perspectives.It has worked in the case of Asian crisis in 1997. It should also work with the US.
Answered By: Anjaree - 1/7/2012
US has been flooded with e********y so they lost vision about value.
I am not sure but if unemployment benefits are closed, then start immediately, because we are going to close down many a sick units. No bail-out charity. Next in line are last rulers' pets ie tax beneficiaries , they will shut the shops because now we shall return to upto 70?ax regime.
As we have discovered and we are honest to our findings, the root cause is gambling by banks since 1995 which govt. overlooked in greed of revenue.Every financial instt. irrespective of size , shall have one govt. EMPLOYEE on board whose duty is to monitor the bank DAILY.
I have read your details with sheer disappointment - appears you are convinced that democracy is a rule by the cars - for the cars- of the cars. If they cannot make cars selling at prices worth paying wages and 70?axes , let them go home.Automation has made american labor force half-skilled so they can be employed anywhere.
The textbook version of " wealth of nations" is 3 centuries old written when world was not industrialized and was fit for feudal society.... very crookedly new world political and economic powers were sponsoring those views because it retained feudal structure of human society.That has now been given a new name called capitalism.
Thorough enquiry of economic geniuses will be conducted and most of them will be banned from media and universities. State will not accept that it has been taken over by traders when soldiers have to defend it against enemies. Therefore throwaway phrases like ecomonic growth, job creation, free market, opportunity, fair competition shall no more be used to brainwash all from teens to grandpas.
No man in receipt of payments from private firm shall be allowed to criticize govt. policies and the hero-villain drama of 2-party democracy shall be reduced to a 1- party reality and no one is prohibited from taking the party membership.
To remind you, this is not communism or marxism or bolshevism or whatever it was ... this is plain sanity.....and in case some of you are tempted to search roots in Mein kamf, go ahead - i have not yet read it..
Answered By: Mukesch Kaley - 1/7/2012
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