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Brent Budowsky

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Save the Nation From Economic Collapse

Posted: 08/04/11 01:53 PM ET

The gathering storm of a recession for the nation and a depression for tens of millions of our neighbors threatens America with the danger of a lost decade of crushing economic pain. President Obama and Congress can save the nation from this fate by reaching a new agreement to lower the deficit and create jobs by Labor Day.

The president and congressional leaders should bring a new player to sit at this jobs-and-deficit table on behalf of all who love and serve the nation. That player should be one of the most respected nonpartisan leaders of our generation: former Secretary of State and Chairman of the Joint Chiefs of Staff Colin Powell.

Including Powell in this negotiation would add the powerful moral force of his experience, integrity, stature and good faith when he asks all parties in Washington to come together for our country at a time of devastating economic hardship, dangerous economic crisis and destructive political divisions.

If a jobs-and-deficit deal is finalized by Labor Day:

  1. The outpouring of public support and increase in consumer and business confidence would be instant, dramatic and lasting;
  2. The GDP would rise, employment would grow and the deficit would shrink because of new budget savings and because every 1 percent increase in the GDP lowers the deficit by3 trillion over 10 years; and
  3. Rating agencies and global investors would enthusiastically return the USA to unquestioned AAA status.

It is not hard to develop a balanced plan that virtually every serious fiscal expert believes is needed. Modest new revenue and modest new entitlement reforms that ask those who have the most to contribute just a little bit, coupled with modest new domestic and defense spending cuts, could surpass the spending targets without imposing more pain on those who suffer.

A short-term jobs boost including one-time jobs-and-housing tax credits and infrastructure spending, along with fiscal soundness, would save the nation from more painful recession and financial crisis.

If the president and congressional leaders seek this clear and achievable goal by Labor Day, they will receive an avalanche of public and business support to get this done. Any partisan or ideologue who prefers business as usual would pay a punishing price.

In my column last week, "Washington vs. America," I praised advertising executive Roy Spence and his book It's Not What You Sell, It's What You Stand For, as well as his view that America needs a unity of national purpose.

America could use some Reagans and Kennedys. We could also use some Don Drapers, from the great TV show Mad Men: business leaders who step up for America.

I propose Obama, Speaker of the House John Boehner (R-Ohio), Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.) and House Minority Leader Nancy Pelosi (D-Calif.) jointly host a patriotic summit of CEOs. The price of admission to this exclusive club of economic patriots would be to announce at this event that they are hiring more American workers.

These CEOs would win the enthusiasm and pride of their employees, the respect and appreciation of their communities and the loyalty and dollars of their customers, who would believe in these companies because these companies believe in them, their families, their future and their country.

Thomas Jefferson and John Adams were called the North and South poles of the birth of our nation. If recent days embody the polar extreme of policy failure and public outrage, the polar opposite of high patriotism, new prosperity and public acclaim is easy to envision and well within reach.

The public will further loathe our leaders if they spend the next four months the way they spent the last four weeks. Everyone knows the issues. Let's save the nation from the punishment of economic crash, the pain of recession without end and the poison of politics as usual. Let's do this deal by Labor Day.

This column was originally published at The Hill.

 
 
 
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05:01 PM on 08/05/2011
To save the nation from a collapse the first step is to teach people the sense of Nationalism with out corporative-materialism.
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HUFFPOST SUPER USER
gerald4
licensed mechanical and electrical engineer
04:34 PM on 08/05/2011
If an individual businessmen in your nation built a factory to build widgets and then sell some of these widgets to people outside of your country and collect foreign currency from outside of your country, then your country (family, island, and/or nation) becomes more wealthy, and more of that privately generated NATIONAL WEALTH can be SKIMMED OFF as taxes to fund pork barrel projects, fund payrolls, military payrolls, or be able to pay off your federal government debts.

US government administrations of both major political parties have created "Free Trade" legislation killed and eaten that golden goose that laid those golden eggs (created new wealth), won WWII, and created the abundant lifestyle that US citizens enjoyed for a couple of decades after WWII until the US government de-emphasized science, technical, engineering and mathematical (STEM) educations.

The US government created free trade treaties that economically required that US business utilize foreign labor, environmental regulations and electrical costs.

Yes, this is oversimplified, but the principal of accumulation of wealth (creating marketable things with value) is basic.

Future wars might also be industrial wars where the nation with the most wealth creating industrial manufacturing production will win the economic war!

And non-wealth producing nations like the USA might destroy their own economies with (deficit) government spending which will impoverish all US citizens.

There are almost no islands in the world that do not have trade with parties outside of their politically controlled borders (or their island).
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HUFFPOST SUPER USER
gerald4
licensed mechanical and electrical engineer
04:02 PM on 08/05/2011
The USA is losing the Economic War! The USA must re-industrialize in order to again begin to generate new additional NATIONAL WEALTH, or the USA will become a third world nation of mostly unemployed starving beggars after the US government spending deficit destroys the purchasing power of the US dollar.

The US International Trade Deficit must be corrected by any means possible in order to generate more NATIONAL WEALTH! This is the basic structural economic foundation problem that will destroy the US economic miracle because title to US located assets are leaving the USA to pay for the things that we import.

Brazil, Pakistan, India, China and other industrialized countries are net creators of National Wealth and the USA is a net consumer (destroyer) of National Wealth.

The USA has lost the World Technology Leadership! The USA must change the emphasis of our education systems back to science, technology, engineering and mathematics (STEM) instead of useless topics if the USA wants to ever re-industrialize to compete in the world with US technology compared to the superior technology that is available in foreign nations.
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gerald4
licensed mechanical and electrical engineer
04:09 PM on 08/05/2011
The USA needs to re-industrialize and then stop buying consumer things from the industrious foreigners and stop paying these foreigners with US dollars to manufacture the imported products that we consume.

We need for US citizens work to produce (most/more of) the things that we consume, create more privately held NATIONAL WEALTH by making things, and that NATIONAL WEALTH would then be available to be taxed in order to pay for growing US government expenses that are in excess of our federal tax collections.

Instead of creating privately held NATIONAL WEALTH that could be subjected to taxation to raise money for government expenses, the USA is printing and selling freshly printed paper US Treasury Bonds (that have no value and are not redeemable for gold) to generate money for government expenses when government expenses are greater than tax revenues.

Since these US Treasury bonds have NO VALUE, the US government is allowing these freshly printed paper US Treasury Bonds, Dollars and other Securities to be redeemed for title to (corporations that own) privately owned businesses, factories, casinos, hotels, farms, land, ports, refineries, forests, ports, breweries, distilleries, and other privately owned NATIONAL WEALTH and other assets located in the USA that were created by previous US generations prior to de-industrialization instead of redeeming these freshly printed paper US Treasury Bonds with gold.
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HUFFPOST SUPER USER
gerald4
licensed mechanical and electrical engineer
04:28 PM on 08/05/2011
After foreigners own everything of value in the USA, then the US government will then not be able to sell any more freshly printed paper US Treasury Bonds to those foreigners to get US dollars back from these foreign manufacturers in order to pay for our US government expenses (bureaucratic payrolls, military payrolls, government contracts, wars, welfare, unemployment, infrastructure expansion, etc.) and/or to pay for more imported consumer products.

At this time the purchasing power of the US dollar will approach zero and the US economy will self destruct, and the USA will resemble something similar to Somalia.
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gerald4
licensed mechanical and electrical engineer
03:58 PM on 08/05/2011
Those manufacturing jobs relocated to foreign countries are gone forever, until the US congress repeals the US "Free Trade" laws.

I believe that President Obama should lead the US congress to create new legislation that will repeal all of the "Free Trade" laws, environmental laws, national healthcare, unemployment insurance extensions, and other anti-business laws that were created during the past 20 years by almost all of the elected Democratic and Republican members of the US congress and then approved and administered by every past president during that time. Those "FREE TRADE" laws did away with our import taxes on foreign made products that ALLOWED, CAUSED, and ECONOMICALLY REQUIRED that our factories to fire their US employees and then to take advantage of the extremely lower labor and the extremely lower environmental manufacturing costs in foreign countries in order to meet the US consumer demand for the absolutely lowest possible prices.

Only repeal of the "Free Trade" laws, environmental laws and other anti-business laws that caused US businesses to move their US factories and the associated jobs for US citizens to overseas locations and lay off all of the US employees in order to take advantage of lower labor, lower energy and lower environmental compliance costs available in foreign countries might bring those jobs back to the USA.

This might be too late, because it will also take years to rebuild our STEM educated human manufacturing technology base that was also destroyed along with our industrial base.
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gerald4
licensed mechanical and electrical engineer
02:15 PM on 08/05/2011
What if the US government borrows a lot of money from individuals and governments in the wealth creating industrial nations and then spends that borrowed money on green jobs, renewable energy, infrastructure renewal, welfare, unemployment, social security, national healthcare, police, firemen, school teachers, wars and similar non wealth creating expenditures such as taxpayer supported government activities?

ONLY THE NATIONAL SOVEREIGN DEBT WILL INCREASE.

US manufacturing companies are hamstrung with more expensive labor costs, more expensive electrical energy costs, health care payroll tax costs, unemployment payroll tax costs, social security and medical care payroll tax costs, environmental manufacturing costs, fringe (holiday and vacation) benefit payroll costs, OSHA compliance payroll costs, union labor work rules, anti-business laws, and general anti-business attitudes that make manufacturing products in the USA many many times more costly than manufacturing the same product in almost any other foreign country.

US manufacturing businesses must therefore take advantage of the US FREE TRADE TREATIES created by the US Congress and then offshore US jobs and/or import the products (including parts and sub assemblies for assembly in the USA) in order to meet the US consumer's demand for the absolutely lowest possible price for each product, without the US manufacturing business going bankrupt!
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gerald4
licensed mechanical and electrical engineer
03:53 PM on 08/05/2011
All of this "Free Trade Legislation" was not in the interest of the blue collar working citizens of the USA, so why did our elected congressmen create all of these "Free Trade Legislation" laws?

Do you think that maybe the foreign product manufacturers that export consumer products to the USA might have paid US lobbyists to spend hundreds of thousands of dollars on wine, food, women, song, vacations, cash, sexual services, corporate jobs for the (unemployable) children/wives/girlfriends of enough of the US senators and US congressmen (and their congressional aids who actually control the members of congress) plus campaign contributions to entice (bribe) enough of our Republican and Democratic US Congressmen and Senators for the past 20 years to create all of these various "FREE TRADE LEGISLATION" to ratify various trade treaties that allowed, caused, and ECONOMICALLY REQUIRED our businesses to take advantage of the lower labor costs, lower electrical energy costs, lower business taxes, lower payroll taxes to pay for health care costs, lower unemployment insurance costs, lower environmental manufacturing costs and other anti-business costs that are not required in various foreign countries with less anti-business laws that are applicable to businesses in the USA?

How do you think that US Government environmental damage liability limits, pharmaceutical liability limits, product liability limits, tax exemption loopholes, agricultural subsidies, and other laws benefiting only a few people were created by our elected US congress and US senate, and then enforced by our elected presidents and appointed bureaucrats?
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HUFFPOST SUPER USER
gerald4
licensed mechanical and electrical engineer
01:18 PM on 08/05/2011
Mr. Budowosky, you said' "The price of admission to this exclusive club of economic patriots would be to announce at this event that they are hiring more American workers."

Are you dreaming or intoxicated? This will never happen.

The USA needs more profitable private sector businesses, Industrious individual businessmen, and profitable corporations because they are and always have been the MAIN source of REAL JOBS for US citizens (to create wealth for other citizens) so that real national wealth can be accumulated in the USA so that a portion of that new wealth can be SKIMMED OFF or FORCIBLY TAKEN as taxes by various federal, state, county, municipal, school district and other various government taxing authorities to pay for various levels of Government Bureaucratic Employee Payrolls, pay for various government contracts, and mainly to pay off any bonds when they become due at maturity.

Profitable private sector businesses, industrious individual businessmen, and corporations are and always have been the MAIN (maybe the only) sources of PERMANENT JOBS for US citizens that create real national wealth for the USA that can make a net increase of NATIONAL WEALTH for the USA that will be available for being taken as taxes to pay for government expenses.
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HUFFPOST SUPER USER
gerald4
licensed mechanical and electrical engineer
02:20 PM on 08/05/2011
The US Federal Government must somehow create incentive for businesses to re-create the industries that previously created additional new NATIONAL WEALTH so that the US government could collect more taxes from these businesses and their employees to pay for US government expenses without destroying the US economy with federal government deficit spending.

US citizens have already spent a lot of the NATIONAL WEALTH created and accumulated by previous generations of US citizens to pay for imported products made in foreign countries and for US Federal Government Expenses that were in excess of the taxes collected.

There is essentially no more gold in Ft. Knox and the US will soon run out of title to privately owned businesses, factories, casinos, hotels, farms, land, ports, breweries, refineries, forests, ports, breweries, refineries, and other privately owned assets located in the USA that were created by previous US generations that foreigners are willing to buy with (redeem for) the freshly printed US Dollars and freshly printed US Treasury Bonds they got (earned obtained) by manufacturing things for US consumers.

The USA should use the proceeds from the remaining existing wealth located in the USA to create new NATIONAL WEALTH, not cash in the existing assets to live without working to re-create any new NATIONAL WEALTH!

If there is an increase in demand for US consumer products, then those products sold to US citizens will be made in foreign countries to meet US consumer's demand for the lowest possible price for the consumer's purchase!
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englishman545
English Born, Brooklyn Raised
06:54 PM on 08/05/2011
What we should do is eliminate the Senate and Congress, (Big savings there) after we develop a computer program with the complete Constitution and Bill of Rights.

All requests and laws to be considered would be run through this computer which would also have all information on the nations spending and income, the computer would print a report for the President to consider.

This way we would only have 2 lobbyists, Microsoft and Apple.
07:18 AM on 08/05/2011
We already have one guy with zero experience or track record in governing or fixing economic issues. Why not bring in another one like Powell?
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mrpotatohead
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06:52 PM on 08/05/2011
There's no single person who can fix greed at this scale - and that is both the governing and economic problem we have in front of us.
12:53 AM on 08/05/2011
Y'all are whistlin' Dixie! Didnt you see what happened today? The 500 point loss is going to look like a party over the next few days. My guess is that the Dow will be off 1200 points tomorrow. The Depression that was stemmed by the grossly inflationary TARP and Recovery Act is coming home to roost. There is no stopping it now. Putin was right... America has become parasitic. Tomorrow and all of next week could easily be the next phase of economic Armaggedon people.
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02:22 PM on 08/05/2011
Yes, the massive losses in response to the debt ceiling fiasco that caused instability, fear, tremors and loss of faith amongst investors, and for that matter most rational Americans.
12:50 AM on 08/05/2011
That's it...? LOL That's your plan...? Colin Powell to the rescue...?

You must excuse my cynicism, and my sarcasm...but that is the most myopic NON-SOLUTION that I might have ever heard. It's akin to calling in Mighty Mouse to fight against cyber attacks. It's the stuff of fantasy. I fear that you know so little about the immense economic dilemma that this country faces that you would suggest such a short-sighted explication for its remedy. It's no wonder we're in such a mess. When ignorance is perpetuated with further flights of fancy when real solutions are needed, I continually fear for the future of this dear country and its people.
09:14 PM on 08/04/2011
Hilarious. Everyone in DC wants to find a way for the federal government to stay in command of the economy. They like all the power centralized in DC. So things like work visas are never discussed. It's just assumed that the federal government must be in the job of importing labor. And it's assumed that more free trades will somehow magically start creating jobs rather than offshoring jobs.

It's up to us to educate ourselves. Start by reading up on H-1b work visa fraud. If our government is still issuing work visas at this point that should make it perfectly clear that both parties are totally corrupt.
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mrpotatohead
auto micro-bio: OFF
06:55 PM on 08/05/2011
Let's not be mistaken. There are many corporations all over that would like the federal government to stay in command of the economy. The politicians and corporate leaders are eating at the same table.
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OneManRoaring
Tech specialist, former educator & active citizen!
07:29 PM on 08/04/2011
The plan proposed above requires that we have representatives who are statesmen and stateswomen and not politicians. It is the same old quote by Einstein: "Insanity: doing the same thing over and over again and expecting different results..."

Support Fairness and the Common Good in Government­. Follow One Man Roaring on Twitter: http://twitter.com/omroaring
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laura r
06:50 PM on 08/04/2011
They could do what you are talking about, but it will not happen. Congress is working for the lobbyist now.

What the lobbyist wants is not going to turn this country around. You know the quality of congress has drop when you hear that, Mr. Sessions missed his swearing into oath because he was meeting with a lobbyist.
He took his Oath the next day at the taxpayer's expense.

A disposition to preserve, and an ability to improve, taken together, would be my standard of a statesman.
Edmund Burke
09:58 PM on 08/04/2011
It's about time the "Middle Class" hired their own army of lobbyists.
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laura r
10:34 PM on 08/04/2011
Yes, indeed we need an army of lobbyist working for the 70% of consumer (middle class).
Consumer demand is 70% of the economy---the uber rich are not the " job Creator" when the middle class does not have the money to spend.

They need to go back to the Ford model of econonics---- He paid his workers more so, they could buy his cars---It worked.
06:38 PM on 08/04/2011
Powell is libral in his leanings; how about Judge Napolitano for the Consitutional point of view?
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genboomxer
Don't believe everything you think.
06:08 PM on 08/04/2011
Here's the problem I see with this plan -

Multinational and Financial CEOs do not care about the United States of America as a country. They do not believe in society.

They believe in consumers and profit from any source regardless of its effects on society.

Period.

Unless they have skin in the game (regulations to curb greed) they will do as they please.
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laura r
06:53 PM on 08/04/2011
So true. Even are founding father understood the nature of merchants( corporations).

Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains.
Thomas Jefferson
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genboomxer
Don't believe everything you think.
11:21 AM on 08/05/2011
Thanks and fanned for and excellent and apt quote.
05:13 PM on 08/04/2011
this is what the republicans want especialy those the are followers of freidman ayn ryan. It has all the making of disaster capitilism a crisis and an oportunity have a fire sale on the people assets. Now for the republicans to give enough votes for a jobs bill they will want all social programs cut deeper and in shorter amount of time! They will want all worker rules reduced workmans comp reduction in osha and fda, shorter time for unemployment benefits and most of all the elimination of unions. They see an opportunity to have the great labor grab of this century It truly is a time for a third party bernie can you hear us, can you hear us bernie we have been had we have been had by smooth criminals