Using the natural wealth of our nation wisely to solve our current money problems (12/2/08)
The natural wealth of this country is (A) our land, (B) our knowledge and (C) the various skills of our people. With proper management, we can produce whatever food and material goods we need many times over. We think it would be a good idea to have complete confidence in (A), (B) and (C) and follow the plan below.
1) Start keeping the government's books with double-entry bookkeeping, keeping track of (a) income / (b) expense / (c) assets and (d) liabilities. That automatically, accurately and sensibly turns "expenditures" into "expenditure / assets" whereby a dollar invested in a worthwhile asset becomes a dollar of assets.
2) Set up depreciation schedules for the wealth produced by the expenditure / assets. That means we will be keeping an accurate account of our assets and overall financial status.
3) Spend government money in the future only on things that will create wealth and provide a 20% return on the expenditure / assets. Most good companies would consider a 20% return very conservative on their investments. There is no reason our country can't get that level of returns.
4) Realize that (A) good health, (B) good education and (C) adequate housing are always worthwhile wealth producers. The government should spend whatever is needed in those three areas. Consider public libraries to be educational facilities.
5) Pass laws that will prohibit mortgage banks from selling off the loans they provide for mortgages. That will insure that the lenders want the loans to succeed and be paid off. It will make sure that the lenders have skin in the game. That should stabilize the future housing markets by removing the temptation to "bundle" mortgages into strange financial instruments. The lenderswill have to learn to live on the interest from their loans. That should not be difficult -- it was always the way things were done in the past.
6) Change the Federal Reserve to "manager / bankers" who will follow rules set down by Congress. Take away the money creating powers which were "farmed out" to the FED in 1913.
7) Follow the Constitution and return the MONEY CREATING power to Congress. That will mean Congress can print whatever money our country needs.
8) The Government should never borrow money --- it has the constitutional power to print whatever money it needs (as do all sovereign nations).
9) Pay off all debts immediately with our newly printed money and never go into debt as a nation again.
10) Embark on a bold program of wealth generation by investing in basic infrastructure to (a) turn seawater into fresh water and (b) build a nationwide system of pipes and pumps so we can (c) deliver the water efficiently wherever it is needed for irrigation, personal and industrial use. At that point, we will probably be able to feed half the world and turn food into various forms of wealth through trade with other countries.
11) Spend whatever is needed for other worthwhile infrastructure repair and creation -- including schools and research facilities.
12) Ignore those that will say that printing money is inflationary. That is nonsense.If the printed money is spent on wealth-producing assets it will be neither inflationary or deflationary within this country. On the world money markets our dollars should seek their natural level of value. If we are efficient -- our dollars will be worth much. If we are laggards, our money will be worth little. We should not be afraid of international wealth-producing competition.
Martin R. Carbone 12/2/08
Please send us comments, suggestions and criticism on the program laid out above
