The primary problem that the American economy faces is inflation. Though the likes of Daniel Gross rarely mention it, this nation has wrongly accepted 4% annual inflation as desirable (or, acceptable). But, in reality, 4% annual inflation has meant that the growth in the consumer price index has outgrown wages for the last 35 years. Since Nixon took us off of the Gold Standard in 1971, the amount of currency in circulation has grown by 400%, far more than the growth in GDP would have required. That money has been used to fund everything from needless wars to failed social programs, and has finally weakened the dollar, contributed to a negative savings rate, helped create both the mortgage crisis and the explosion of oil prices, and is creating a new problem that we'll be hearing about in a few years: the rate at which 401k participants are borrowing against their retirement funds doubled between 2005 and 2007 (because wages aren't keeping up with inflation).

The next president could, but won't, have tremendous impact on the long term health of our economy by bringing the Fed and it's monetary policy in line. Forcing a more reasonable inflation target on the Fed of 2% or less, coupled with a balanced budget Amenment and specific goals for the reduction of the (no longer publically reported) M3 money supply would bring an era of fiscal responsibility to the American economy which would allow for strong growth to support future generations.

Why won't they? A war on inflation means a war on easy money. $150 billion stimulous packages? Not possible if one is worried about printing money willy-nilly. $50 billion increases to the GI bill? Same. $350 billion to bail-out banks and home-buyers? Nope. Hundreds of millions a month in Iraq? No way. Obama's plan to take another 10% of the population off of the income tax rolls? Certianly not.

Politicians can't both buy votes, and create a healthy economy. Bettery to buy votes, and hope for a spurt in which economic growth hides flawed fundementals (as happened in the 1990s) than to offerfiscal responsibility and lose and election.

I am.

I agree, BTW, with your post... but the simple fact is that the last time we had a president facing this kind of economic mess (energy crisis, rampant inflation, massive and growing deficits, etc...) was Carter.

He first booted out Burns, who actually caused a lot of the problems (trying to prop up Nixon), and replaced him with Miller. Miller moved, but not fast enough... so Carter replaced him with Volcker - who was probably the best and most viscious Fed chairmen in history.

Volcker crushed the economy to force inflation back under control.

At the same time, Carter was calling for massive investments in alternatives to try to assert national energy independence, and he simultaneusly trimmed the deficit spending at an incredible rate, and actually cut overall government spending in real terms... all while increasing the budget for the military by 5% above inflation...

...

I don't know if you're a fan of Carter, but if you are... that would make you one of very, very few.

People tend to remember the economy going south, not the mitigating circumstances... Volcker crushed the economy to help strengthen it long-term, but the people only noted the economy crashed, and cursed Carter for it...

When the economy rebounded on a strong foundation (when Volcker cut the interest rate by ~8 points in 1983-1984), Reagan recieved the praise.. while everyone cursed Carter.

You are asking a leader to step forward and saddle him/her self to the path that Carter took... to the inevitable same fate...

That is asking a lot. (I agree with you... but it is still asking A LOT).

I honestly don't know much about the Carter administration (I was born in 1978). But, there's no doubt at all that to fix the problems facing the economy would almost neccessarily mean a period of pain. Balancing the budget and reigning in the fed means sucking hundreds-of-billions out of the system, cuting programs, cutting the military, and making credit harder to come by. It's very likely that fixing the problem would lead to the worst recession that most living people have ever seen. I'm really not sure I'd personally have the balls to do the right thing if I was in that situation -- you'd go down as the biggest political failure of all time.

Who wants to be the the one to lose his house or not get his kids a great education for the good of the future economic conditions of the country? Even if he knows that it's all for the good, he ain't gonna like it.

I'm not.

BUT

The TLC was enthroned by Carter. The crown prince was Zbig. TLC created the Globalist mania that still dominates ALL politics. Most really big money interests are in TLC and gung-ho for it.

BO's policies sound a lot like Carter's. Jimmuh and Zbig are still right in there, pitching their BS. They basically can't understand why they aren't universally loved and adored.

BO with his "Enron Loophole" position has put himself into a Carter-soundalike-mode. He insists (like Carter and W too) that he knows the problem and its solution; but nothing good is happening in response.

The Carter people are right in there expecting BO to front for them. It looks like that's what will happen. They are the Globalists with the "left-wing-masks."

And don't mix them up with Soros. He, at least, is an authentic leftwinger.

"They" want you to think that the USA economy is being held hostage and will be killed if you don't convert to Globalism.

It's simply a way to keep you quiet.

All that's necessary is:

A USA VAT tax

Higher interest rates at least over inflation

Higher margin requirements on commodities

Higher interest rates on commodities loans (very risky)

Tariffs against all goods with ANY parts made in countries with wages under $5 an hour

Inspection of imports for toxicity

A public health system for all Americans who want it -- tax paid

Genuine investment of the SS Trust Fund

A MASSIVE project on energy

Until that yields results, a ban on cars over 125 HP

Setting taxes in aggregate to reach at least 97% of last year's expenditures for everything including wars.

There will be NO pain.

As long as politicians are hired and fired by the public, no-one in the government would have the stones to do what you're reccomending since the near-term deflation would only be good for those with most of their net worth in cash savings and U.S. Treasury Bonds. Anyone who's either heavily leveraged (which is at least 90% of the "middle class" these days in addition to the U.S. Government) or has the bulk of thier savings/net worth invested in any sort of asset class such as real estate, stocks, or commodities (which is the bulk of those who aren't in significant debt and would include the bulk of the retirement savings of the boomers) would face a lot of trouble as result of this deflation, while the non-leveraged poor (if there are any of those left after years of subprime lending) would see little benefit since their consumpion level is low enough that even when prices did eventually come down the gain in purchasing power would be pretty limited.

Meanwhile, the rising dollar would make it harder and harder for any sort of economic policy to keep domestic products competitive or slow down the outsourcing of jobs while simultaneously hindering what few U.S. manufacturers profit significantly from exports (mostly tech and aerospace, although GM's foreign sales have recently become a bigger and bigger part of their business), meaning an acceleration in the decline of domestic manufaturing jobs along with crippling the "new economy", and everyone with consumer debt would find themselves repaying those debts with dollars more valuable than the ones they borrowed and any gains in purchasing power would likely be swallowed up in tax hikes required to cover the skyrocketing costs of servicing the debt of the U.S. government (forget about fixing SS or any fantasies of single-payer health care).

Eventually this would pass, and the economy would adjust to the new environment, but the first decade or so would make the 1930's look like the mid 1990's by comparison.

So all I know about Carter is what I've read from recent history books.

That said, he honestly seemed to make every decision based on what he thought was best long-term, so I have a great respect for his administration. (as far as I can tell, each president has at his disposal the military that the previous president left him... so the botched military efforts can't be thrown entirely in Carter's lap if Ford and Nixon left him a completely depleted military... though I will say he wasn't the best military CIC).

But thinking long-term does require sacrifice in the short term... When things were doing well, that should have been the time. We squandered that... wasted on war and profiteering for the rich...

Now things suck, and we're still going to have to make sacrifices to straighten things out. I think Obama is striving to figure out how to help the future by making as few sacrifices now as possible... His energy initiative is a good start, but I think everyone knows it won't be enough. He seems to know what's good for the future but just isn't either ballsy or heartless enough to go all the way...

I think McCain isn't thinking of the future at all... leveraging the present to try to go back and win Vietnam... for no gain. He's sacrificing the present for the past, and the future is completely forgotten. It's sad, I once volunteered time and energy for his campaign (in 2000, before he sold out and started becoming senile).

Until you mentioned Obama as a solution. Obama, if you want to vote for him, is just a choice for history rather than one for fiscal responsibility. If you want to say that you voted for the first real black contender, then go ahead, but if you want to say that you voted for the next FDR, then you're hurtin' this election.

Obama's literature is a litany of new spending proposals to the tune of around $900 billion (it's my own math...), not to mention the fact that he's just as commited to continuing the war in Iraq as McCain is (so, hundreds of billions more). He puts forth nothing that indicates he even understands the concept of fiscal responsibility, and it's wrong of you to assert that he does (dishonest at least).

Now, I'm not saying that McCain is a fiscal conservative; I don't believe he is. For me, this election is about minimizing the damage and I've yet to decide which candidate is best for that.

That more or less is a perfect way to view this election.

I do believe we will withdraw from Iraq (finally), and that alone over-balances every other spending proposal that Obama has. The health-care plan is opt-in, pay more IF you opt-in... and it saves a fortune in bullshit waste expense, so the net cost to government is only ~100 billion/year...

THAT is the big one. The second biggest expense is the alternative energy program... which I think is ~27 years overdue.

Otherwise, it is a definite litany of new spending bills... but nothing that actually COSTS a great deal. (A few hundred million here, a billion there... and pretty soon we've added up to about 1 month of Iraq occupation... er... nothing).

He actually is willing to increase taxes some on the wealthy... and though he's promising to cut the tax burden for the middle class, the net effect of his tax program will be overall greater government revenue.

So, he's actually spending less than McCain (by a LOT, since McCain wants to keep spending 200+billion/year in Iraq for decades), while at the same time giving a net INCREASE in taxes (while McCain is net DECREASING taxes)...

I didn't intend to put Obama forward as the model of fiscal soundness... I'm saying he seems to be attempting to walk a fine line between future responsibility (fairly small spending increases, large reduction in costs by getting out of Iraq, small net increase in government revenue...), and trying to appease everyone NOW.

In my perspective, that is INFINITELY better than McCain, who is promising to cut earmarks (total expense reduction: 0 dollars) while promising an across-the-board tax cut focusing on the investor class, with no balancing increase in revenue... and it seems like he's going to "fight the good fight" until every Muslim is dead... (~500,000 down; 1,000,000,000 to go!).

Tundrayeti:

I do believe we will withdraw from Iraq (finally), and that alone over-balances every other spending proposal that Obama has. The health-care plan is opt-in, pay more IF you opt-in... and it saves a fortune in bullshit waste expense, so the net cost to government is only ~100 billion/year...

Begininning with an admission that I haven't seen the "details" of the plan in question, history and personal experience have convinced me thoroughly that the probability of anything run by the federal government saving "a fortune in bullshit waste expense" is somewhere south of 0.000001 (and that's being optimistic).

Government involvement typically reduces "waste" by one of two ways, either spending 125% of the amount of waste on oversight activities (and imposing a matching cost on whoever they're overseeing in the form of time and resources expended on certifying compliance to the overseers), or just institutionalizing what was previously considered "waste" and prohibiting its elimination from the process (but on paper eliminating the "waste" as it's now been re-classified as a vital expenditure). As the former method only reduces the waste expense by 50-75% while adding 250% more expense into the process, the latter method is actually the more efficient outcome, which is why it's rarely implemented.

First, I have no idea why you think a massive government program such as Social Medicine could ever save money. There's no reason to believe that, unless you've seen something to prove otherwise, which I'd read. The fact is, proponents of national health care won't even be honest about the numbers of uninsured. 40 million without insurance? Sure. The question is, how many could afford it and chose not to? Half of them? Three quarters? Ten percent? Makes a huge difference. If we've got 2% of the population without insurance because they really can't afford it, then give it to them. Why cover 300 million people because 2 million couldn't afford insurance? Makes no sense, and it will be massively expensive.

As for the rest, I think you're reading into Obama's plans things that you want rather than what he actually says he'll do. He says he'll stay in Iraq, you say he'll leave. You say he'll offset spending with tax increases on the rich, but his tax increases on the rich will be offset by tax reductions on corporations in the form of new deductions for "new businesses", which of course will mean shell companies set up by conglomerates to hide profits.

Meanwhile, McCain has committed himself not only to cutting out earmarks, which has not only an economic impact, but earmarks also stain the entire political process and create an environment where only the wealthy are able to gain sway, and in return they get Federal money for major projects, often with little real benefit to voters of a particular district (do to tax financing and so-forth that robs locals of sales tax revenue). Beyond that, though, McCain has committed himself to cutting the size of the government by 20% (a start, I guess, given Bush's 30% increase!).

The investor class is most of us, by the way. There are no pensions any more, so if the middle class hopes to retire, ever, then we'd better protect our investments.

Well, first off, I think Soros is an authentic profiteer. His talk is designed to make him loveable, not to show the way to the light. Carter, I think, was a good man who found himself opposed by both major parties. He did as much as he could under the circumstances. The Tri-Lateral Commission is not some powerful agency consectated by the UN or the World Bank or the EU or the Gang of Five. It is a study group, plain and simple, and its opinions are given equal weight with those of The Economist or Newsweek, or any other opinion molder. Just forget about the TLC, they are noise in the system.

I don't know what Obama's true feelings are. I know that ready what he has written makes me fearful because he believes in the Big Guy in the Sky who runs the whole show, and presumably also the Big Guy's ability to work miracles, which is, in my opinion, absurd. Given that, I think his practical side will be committed to avoiding the position that Carter found himself in where both majors parties worked actively against him. HIs committment will be to avoid angering the power brokers of the Democratic Party, since they will be the majority party for the foreseeable future. Thus, what he can accomplish will be limited by what that group will put up with. I wish he could do a lot more, but it ain't going to happen.

Please excuse:

Typing consectated for consecrated.

Typing ready for reading.

Drinking too much of a nice California wine named "Menage a Trois" before I posted.

I am. I always felt that the guy got "boned by circumstance". God knows he did about the best anyone could have done with that mess, and got kicked in the teeth for his efforts too.

I'm voting Obama, because he at least likes and understands the constitution.

Seriously.