Bill Clinton says he has the prescription for what ails our economy. The former President, who during his administration created over 20 million jobs and had record-high, historic employment rates, says he believes he knows what the US economy needs to get itself back on track again.
Unlocking The Sideline Money
First and foremost, believes the ex-President, the administration and the Congress must come to some sort of agreement that will unleash the huge amount of investment capital currently sitting on the sidelines. There are estimates that as much as $2 trillion dollars, maybe more, is currently sitting in what are known as direct deposit accounts. These are the same as checking accounts. The money is sitting there, most believe, because there is so much uncertainty in the markets, and both the administration and the Congress have not shown the leadership needed to unleash these investments, to give confidence to these investors that they should go ahead and invest their money into the markets. Not only is there $2 trillion currently being held back, but there is also around $20 trillion in potential loan money just sitting there gathering dust. On top of it all, it is believed there is another $2 trillion in corporate funds not in play either. This is the money that if it were to be put in play would stave off any chance of a US recession. But the trick is, how do we get it in play?
Mortgage Crisis Hangover
Clinton believes step 2 is to expedite the problem of the home mortgage crisis and get it cleaned up once and for all. This would bring back the desire for businesses to borrow capital, to expand their enterprises, and even make consumers more eager to spend. Clinton believes bringing resolution to the years-old mortgage crisis would free up capital and restore confidence with the American public. Clinton believes the steps that were taken in the S&L Crisis would work equally well here, just flush out the debt as quickly as possible so the markets can get moving again.
Clinton’s third remedy is to bring back manufacturing to the United States. Bringing back manufacturing means bringing back jobs, and lots of them. The United States needs to focus on exports, our trade imbalance is way out of whack. The focus needs to be on manufacturing, but manufacturing for the future, green industries like solar and wind power, jobs for the long term. Not only would such industries provide jobs for Americans now, but by getting off foreign oil there would be hundreds of billions of dollars kept in the United States every year, money that now goes overseas. This approach is both a win for the short term and for the long term.
Clinton believes that the home mortgage crisis is not just a matter of financial bookkeeping. It’s a matter of personal pride, he believes, that when people are in a home where the value is less than the mortgage, it only serves to make them depressed as well. He believes these people should be able to write down these loans. He doesn’t believe that dumping these houses on the market is doing anyone any good. It only serves to further depress an already suffering housing market.
Tax Reform Needed
Clinton also believes that massive tax reform is needed, just like back in the 1980’s. One of the biggest changes he believes is in how the government treats money made by US corporations overseas. We’re the only country in the world that still taxes companies for money they made overseas. Such a change in policy could bring back trillions to the US economy.
Clinton believes, as do others, that the financial woes we are in right now are all man-made, self-inflicted wounds. But just like we imposed these upon ourselves, we can cast them aside as well.