So what would I do to stimulate the economy out of the recession? I would look for things that would have both an immediate positive impact that are also good for the long-run:
- Legalize drugs and prostitution: Bring the enormous amount of economic activity lost in space back into the legal sector, including all those off-shore bank accounts that would be injected into the banking system.
- Cut every labor regulation I could, including the minimum wage. The unintended consequences of these acts are too well understood for anyone with a good conscience to overlook. Enough is enough, these laws were written for the purpose of racist eugenics and sexism.
- More free trade, especially in agriculture: We should be buying much, much, more food from places like Africa and Asia. We should not be taxing households to pay American farmers not to grow food. Cheaper food and lower taxes mean more income for households.
- Eliminate taxes on businesses, tax household income more broadly at a flat (and preferably low) rate. Businesses either pay out their earnings to households as income or invest it in expanding their business. Taxing household income twice makes no sense. The later part is good for expansion, as is a simpler tax code without a bunch of exemptions. I would settle for a negative income tax at low levels of income, if you must.
- Cut the payroll tax.
- Pick an arbitrarily large number (say, $880 billion) and decide to spend it, with the projects to be determined later. No, No, No. If you are looking for spending stimuli (and plenty believe that can work, even if I don't), you look for projects that are worthy in their own right. Otherwise you are destroying valuable resources.
- Talk about depression and catastrophe every 5 minutes. Former President Bush, I'm looking at you when I say this. It's not great national defense policy, and it is terrible economic policy.
- Nationalize or bailout any firms.