Policy Fixes For the Current Economy, in Twenty Minutes

A little past four today a college student friend from summer camp asked me for my ideas on how to fix the current economy—in time to go into a project due in a 4:30 class! The following whirlwind exchange ensued. Readers might find it entertaining. I’m going to post it verbatim, and I’ll be interested to see if I agree with all I said in such a hurry:

Hey Howie. I heard your teaching a class in money and banking. I need to ask a professor what they think in 250 words or more what policy fixes are needed to fix the current economy. I had dinner with Vinny last night and he told me you were. If you don’t have time before 430 don’t worry. i can ask another teacher. But i would like to hear your thoughts.

Also where can i buy your book

very interested

Scott. It’s great to hear from you. Call me on my office phone … if you would like to. I’d love to talk. The book is available on Amazon. _Free Our Markets, A Citizens’ Guide to Essential Economics_. If you email me at hbaetjer at verizon.net I can email you back with a PDF of my chapter and appendix on money, in case that might be good for your project.

Thanks Howie! That would be great. I can’t talk till later tonight. I will email you. If you could just write a quick paragraph about what policy fixes. Im supposed to put it in quatations in my final project but that PDF would be awesome too

I had dinner with Vin last night and he said that you are teaching money banking at Towson that’s awesome. I love the class

Geez, Scott; there are so many policy fixes needed! Here goes: In general, follow Adam Smith’s dictum that “Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”

Do you want policy fixes with respect to just money and banking, or policy fixes for the economy in general?

policy fixes for the economy in general.

I know there’s a lot. You could probably go on for days

In general: radically to reduce spending is the key. The politicians and bureaucrats cannot spend the money, and thereby direct the resources, in as beneficial ways as can the general public.

Next, take off all the restrictions (called “regulations”) on voluntary interaction among people. John Allison, former CEO of BB&T bank for many years, says that given the choice between having the bank free of regulations and free of taxes, he would unhesitatingly take freedom from regulations, as they are the most costly and punishing. Sarbanes-Oxley, Dodd-Frank, the Consumer Financial Protection Bureau, restrictions on payday loans–all that should go. Let WalMart open a bank if they wish. Generally allow freedom of contract and freedom of exchange.

Back to spending: We spend the most on Social Security, Medicare, and Medicaid. If you want to consider policy fixes that would do the most good, even if they are not politically feasible as of 2014, then definitely privatize Social Security–let out anyone who’ll give up all his or her benefits in exchange for paying no more taxes. I don’t know which of the many proposals for paying off those who choose to remain in the system, but there are many. Sell off the gold in Fort Knox; sell off federally-owned land in the West, levy some one-time taxes.

Thank you so much. I’ll get back to you later tonight. i have class from 4:30 to 7.

Okay. Good luck in class.

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