How To Strengthen Our Economy

Re News Analysis: Wall St. Sees Silver Lining in Economy by Peter S. Goodman:

The actions of the Federal Reserve, namely, lowering short-term interest rates, are like putting a Band Aid on a deep wound.

The dollar has been falling steadily since the Bush invasion of Iraq. This war has cost us, directly and indirectly, between one and two trillion dollars. Since we are in debt, all of this cost must be borrowed, mostly from our adversaries (China and Arab Muslim nations). Lowering short-term interest rates puts downward pressure on the dollar, making our currency even weaker. Eventually, foreign owners of American securities will get tired of losing money, and cut their losses by selling our securities, causing our markets to crash.

It would be better to make fundamental changes to strengthen our economy. We need higher taxes to stop borrowing money from our adversaries. We need higher interest rates to encourage saving by ordinary Americans. We need to end the costly wars in Iraq and Afghanistan, and bring home our troops. (There are better ways to fight the War on Terror.) We need to expand the production of nuclear (fission) power, in order to reduce our dependence on foreign oil. We need to spend $billions on nuclear fusion R&D.

The higher taxes should come from a more progressive income tax, and from tariffs. The latter means we need to exit from the WTO.

An idiot with a smart plan beats a genius with no plan. Right now, we have no smart plan to strengthen our economy. The plan I propose is tough medicine, but we live in a cruel world. We have no time to waste.