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5 Ways to Turn Around the Economy

By: Steve Johnson

4/30/2008 - 50 Comments

Economic conditions continue to weaken across the country, as the financial sector continues to shed jobs and the housing market continues to deflate.

Here are 5 ways to turn around the economy.

1 - Reduce Government Spending: Fed Chairman Ben Bernanke is doing all he can, while congress continues to spend money as if we were not in a recession. Congress needs to cut back on spending drastically. They need to stop talking about how many more bailouts they are going to pass, and start talking about how they are going to cut 20-30% from the budget.

Reference Article: Congress Needs to Take Drastic Action

2- Stop Inflation: I don’t like the idea of a recession, but hyperinflation is worse than a recession. The inflation that is already on deck is likely to consume 8-12% of purchasing power for the next few years. As the presidential election nears, issue number one, two and three are likely to be the economy, jobs and inflation – no matter what anyone does. The Fed needs to change its monetary policy by raising interest rates, stop printing money and stop bailing out banks. They need to allow the free market to run its course and let the banks go bankrupt and the housing prices fall. Letting the free market set the prices of homes, is the quickest way to get the housing market back to a supply/demand equilibrium. 

Reference Article: Hyperinflation by 2010

3- Rebuild Manufacturing Industry: The manufacturing industry has been depleting for decades as cheap China imported products have devastated the sector. We need to rebuild the manufacturing industry so that we can once again become a producing nation, with high exports to pay for our high imports. The current trade deficit trend is simply unsustainable.

Reference Article: The Trade Deficit

4- Teach The Public to Save 10% of their income, budget and stop consumer debt. The America public needs to be told the truth by the president and congress, that we have a declining dollar and a sinking economy with high imports that we can no longer afford.  We need to be honest with the public so that a national campaign can be launched to unite the public with a common cause to turn around the economy. Our economy is a national crisis, as we are losing our status as a superpower. We need every household to participate in an effort to increase our national savings rate, pay down the deficit and reduce spending.

Reference Article: Be Patriotic, Be Stingy

5- Start New Businesses targeting new markets around the world; food, energy, education, medicine, fresh water, etc. We need new businesses to target growing international markets so that we can increase our exports and bring money back into the country. America is the best place in the world to start a business, so we need to promote our entrepreneur spirit to replace the jobs lost by the coming wave of bankruptcies.  We need to create few marketing businesses that market new products in growing nations like China, India and Japan. To promote new business growth, we need to lower business tax – rather than increase it as suggested by presidential candidate Obama.  Reducing taxes will also cause congress to reduce spending, as discussed in step #1.

Reference Article: Blaming Free Market Capitalism

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