CapitalistMarks

Fiscal policy to the forefront.

Posted on 21. Feb, 2010 by scott in economic daydreaming

Anyway you slice it (the economic ‘loaf’) we need a renewed focus on fiscal policy.

Too many politicians and far too many economists have been wearing monetary policy blinders for the last year or so.  They do seem to be working.  but that isn’t enough today.

Sure interest rates are too low, sure there is no more expansionism the FED can do right now, and sure the ‘quants’ have been spending far too much time at their computers modeling what future rate policy will do for/against economic growth.

We all pretty much get that.

But, what about the current White House administration whose present worries seem  limited to the problem with employment?  I think they are leaning too much on the FED’s liberal current views of expansion.  They need to act unilaterally.

The problem is that with so much apathy in the White House (apathy to real action in their own front yard that is) no one is paying any attention to the mood of small businesses and hopeful entrepreneurs.

Why?  Doesn’t take a bunch of polls to tell us that most Americans in those two categories are cautious . . .  and that they are cautious due to lack of direction in terms of fiscal policy.

Anyone with a payroll knows that employment and business taxes are too big of a burden right now.

Uncertainty regarding the administration’s views on the subject are restricting growth (particularly in all-important employment).

What to do?

Announce soon, as in this week Mr. President, that the former administration’s tax cuts are going to be allowed new life rather than an early death.  Don’t let those tax cuts die President Obama.

Too many of the potential ‘hirers’ in the economy are waiting–even though they see obvious signs of economic growth–waiting to hire, waiting to expand, waiting to add to inventories, waiting to take a flyer an new products focused at the consumer.

You, Mr. President can change all that.

Continuing (and maybe adding to) the Bush tax cuts would very likely calm the nerves of businesspersons (nearly half of them are women afterall) and consumer (more than half) alike.

Take a flyer on American intelligence and ingenuity President Obama.  I am pretty sure that if you took such action, we would see a surge in the economy and in stock markets within a few weeks (at most).

I’m ready to pile back on and a bunch of others will be too–if you calm our fears of imminent tax hikes.

thanks to flickr’s wonderlane for the photo

Tags: bush tax cuts, business confidence, consumer confidence, employment, entrepreneurs, no tax hikes, President Obama, small businesses, unemployment