I heard Hillary’s “fix” for the slowdown in the economy. It is a recipe for disaster! She is suggesting freezing interest rates on private loans, promising bailouts, and rebates, to name a few proposals of hers. Rebates don’t work, long term reduction of taxes does. Politicians that try to target government money toward certain industries is a very, very, dangerous endeavor.
The best thing for the politicians to do is nothing, when it comes to the banking industry. People decided to borrow money to buy homes. Some spent the last 7 years buying and flipping properties. Each time making more money. Do we now ask for the money back that was made when times were good? How do we discern the risk takers and people that profited from the huge equity increases over the past few years from the people that made bad financial decisions? We can’t and shouldn’t. If the banking industry determines that making adjustments to loans is a good business practice, they will. It is not the governments place.
The best thing the congress and president can do for the economy is to propose a top marginal tax rate reduction to 20% for the highest tax brackets. At least make the Bush tax cuts permanent to bring confidence to the markets that taxes will not be raised when they are scheduled to go back to their original higher rates in 2009.
When the politicians start talking stimulus get ready for disaster in the economy. These weak kneed politicians are so economically ignorant that they don’t care what the impact of their proposals are, as long as it looks like they are doing something. Make the tax cuts permanent, or reduce the marginal rates even more; that is all we need from you. Otherwise shut up!