How do you kick-start an economy that is presently under recession; that will probably last for a minimum of 10 years or longer, and could become a depression if fear really takes hold?
One thing is certain, in a capitalistic society, you must not depend on Governments.
The only thing Governments can do that is positive, and will help, is to reduce taxes and get out of the way.
Money has to start at the bottom (consumer) and work its way up, otherwise any bailouts, infrastructure spending, etc. cannot work. If governments think they can print money, till the “cows come home”, what we will eventually see, is a society built on socialism with no incentive to prosper.
Also, any government intervention will take forever to be put into effect, and the effect will be very negative.
The marketplace needs to act NOW.
So what must happen?
Governments need to reduce or eliminate the following taxes, at least here in Canada.
- Capital Gains – Eliminate immediately. Even make it retro-active. People with money need some incentive to invest. Not paying Capital Gains will put private money to work.
- GST – reduce or eliminate. This highly visible tax, will keep monies in “joe/jane-six-pack’s” pockets.
- Payroll Taxes – Reduce. These taxes are very restrictive when companies are thinking of hiring. E.I. has a huge surplus that is doing little and can really help to stimulate hiring.
- Income tax. – Reduce, especially for lower income people. They WILL spend it if you leave it in their pocket.
- There are lots of other stupid, cost ineffective taxes that the government must get rid of. They cost money to administer and provide little or no benefit to society other than keeping civil servants employed.
Governments must also get rid of useless self-serving departments. Do not want to offend anyone here but I’m sure we all know which departments I am talking about.
As I see it, something along these lines will stimulate the market, probably reduce or even eliminate any thought of a government deficit, stabilize or even increase employment (which will lead to more revenue), and give people a positive attitude.
Good Luck to all!
