Two Things to Fix the Recession

There are two things needed to fix this recession.You should lobby government for the following:

1. fix housing - they need to create the bad bank, get all bad mortgages out of the banking system. This will enable banks to lend again. And then they need to peg 30 yr mortgages at 4 % to strictly qualified buyers. This will increase demand for housing as people trade up or buy their first home. When people buy a new home, they spend more money to fix it up. For others, refinancing a home will put more cash in their pockets to spend or pay off bills. In addition auto loan rates might be reduced. This will go farther to fix detroit than a stupid detroit bailout.

2. They need to significantly cut taxes to increase take home pay for Americans - perhaps for 1 or 2 years. Citizens will spend the money across a broad variety of goods and services thereby benefiting the entire economy. A tax cut provides an immediate stimulus - no need to wait for government to bid out projects and choose vendors, which can take forever.

The problem with the current stimulus is three-fold:

One - they're giving a boatload of money to states. States have huge budget gaps. The federal money will be used to close the gaps. But it will not result in any increase in spending over last year. It cannot possibly create new jobs, just keep existing ones for one more year. We'll be in the same boat one year from now.

Two - governments take forever to spend money on projects. Meanwhile we all suffer.

Three - letting the government pick winners is ridiculous. So if they choose to spend all the money on building highways and bridges - how will that help the 99% of people that don't work in construction related industries? It is an uneven distribution of spending which will not stimulate the broader economy. Centrally managed spending has always been a disaster throughout history - look at all of the failed socialist and communist states - and yet here we are heading in that direction.