Saturday, August 13, 2011

US must use Reaganomics to save economy---by Shan Saeed

Atten: President Obama----from Shan Saeed
If you are serious about economy, follow Milton Friedman's economic insights and you will see through this crisis.

The only way President Barack Obama and his economic team can solve the US economic woes is to adopt “common-sense” Reaganomics, the policy. Reaganomics would fix any economy that’s in the doldrums. it’s not a magic sauce, it’s common sense. How Obama can do it...Follow these 5 simple steps adopted during Reagan era in 1980's

Step 1

US have got to get rid of all federal taxes in the extreme and replace them with a low-rate flat tax on business net sales, and on personal unadjusted gross income.

Step 2
US must have to have spending restraint. Government spending causes unemployment, it does not cure unemployment. Government spending has never raised the GDP. Its the tax cut that enhances the GDP growth. Empirically proven.

Step 3
US need sound money. Fed Chairman Ben Bernanke is running the least sound monetary policy I’ve ever heard of. Markets dont like uncertainty and chaotic moves. US has increased it money supply by 138.6 % from Sept-2008 from $851 billion to Dec-2010 by 2.03 trillion. Price inflation can be decreased through monetary deflation. This was advocated by Late Nobel Laureate Milton Friedman from Uni. of Chicago, in his book Money Mischief-Episode in monetary history.
I openly admit that I follow Milton Friedman--the greatest Nobel Laureate in Economics of modern epoch along with Prof Gary Becker at Uni. of Chicago, Booth School

Step 4.
US need regulations, but they don’t need those regulations to go beyond the purpose at hand and create collateral damage. The regulatory policies are really way off here.

Step 5.
Lastly US need free trade. Foreigners produce some things better than Americans do and US produce some things better than foreigners. It would be foolish in the extreme if USA didn’t sell them those things US produce better than they do in exchange for those things they produce better than US do.

I think that USA can win its top rating back, but only when economic policies are completely turned around. However, President Barack Obama’s administration’s only economic plan seemed to be to expand government ownership of the means of production.
US have nationalized the health care industry pretty extensively and doing it with home building as well. Obama tried it with the auto industry as well. So Obama Administration have moved very, very deliberately and purposefully toward extending the government ownership of the means of production.

That to me, if you read the tealeaves, is what they are doing. It is not what they are saying they are doing, but that is what they actually are doing. People don’t work to pay taxes, people work to get what they can after taxes. It’s that very private incentive that motivates them to work. If you pay people not to work and tax them if they do work, don’t be surprised if you find a lot of people not working.”

Current economic woes started to form under President George W. Bush but have been made worse by Obama’s policies. There’s a wedge driven between wages paid and wages received and that wedge is the tax/government spending wedge. That wedge has grown dramatically in the last 4 ½ years…under W and a Republican administration and…under Obama. Bipartisan ignorance has led America to this very disastrously desolate state.

Disclaimer: This is just s research piece and not an investment advice. All financial transactions carry a RISK

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