The Ignoramus (c) deficit reduction plan

Ignoramus's patented (and late in coming) deficit reduction plan, it will turn your deficit into a surplus with a few easy* steps over a few short years!


Step 1: Eliminate natural resource and agricultural subsidies:
The US Budget allocates a value in excess of 30 billions dollars, to no purpose whatsoever. It allows the continuation environmentally unsustainable practices in terms of water, land and oil consumption, and lowering food prices such that, many crops traditionally grown in the poverty stricken developing world, such maize or rice, are too expensive to sell in local markets because subsidized food stuffs are much cheaper. Also because of ethanol, corn has become much in demand despite the vast superiority of other methods (IE algae and sugar cane) of producing it.
 In addition subsidies to Oil and Coal development and research over the same time period (any time period since 1974) are more than double those for clean energy resources. Also subsidized road construction and construction of other infrastructure specifically to entice companies to regions where it is uneconomical, and furthermore hugely damaging to the environment where they are.
(note I am a fan of big business)


Step 2: Modernize the education system, complete with merit pay and a better standardized testing system.
Education should be such that the best teachers as judged by the powers that be, receive the highest pay. The pay partly (only    partly) reflect the result of the standardized testing system.  The new testing system should be marked against an index of the class marks over the year and the class type (be it honours or otherwise). Also history in addition to English, Math and Sciences should be tested. An effective incentive based education system is essential to the country's continuing economic and fiscal success, and provides a better voting populace. As an added benefit, it helps to create a more flexible labour market. 


Step 3: Lower Business taxes for small and Large Business
Business Taxes for small and large skill orientated enterprises are far too high to be competitive in export markets. Assuming the Trade deficit is desired to be lower, tradable goods (be they manufactured or otherwise produced, IE Software or Financial products) need to be cheaper, how the lack of competitiveness in current products resides not, as is often claimed with currency manipulation or other practices employed by other countries but with the products themselves. The overpricing, and sometimes low quality are the reasons for this, and again an effective education system and labour market are key to helping these.
But taxes due to politics, are far higher on business in your nation than in most others, eg Canada. 
Small business startups, often trumpeted as the main source of job creation, are far less likely to survive when there earnings are taxed to non existence at the beginning.


Step 4: Raise Taxes on all fossil fuels (significantly)
Energy taxes need to be much increased in order to promote the kind of safety from fossil fuel price change and energy independence that is desired at the present time in your nation. It also will reduce carbon emissions which are the cause of one of the most significant problems you are likely to face this century (Note the recent occurrences in Alabama). It also reduces the need for road maintenance and imports from other countries (them being more expensive as a result of increased transportation costs), increasing the need for domestic production. While, in the short term, there will be pain, it will be far exceeded by the benefits incurred.


Step 5: Cut Social security, or raise income tax.
Its pretty simple, do one or the other, perhaps a bit of both.


Step 6: Eliminate mortgage expense deductibility 
The american dream shows a world where everyone owns their own home (traditionally a single family detached home). Sadly this is a falsehood, and even if it were finacially attainable it is unsustainable environmentally and uneconomical (in terms of infrastructure construction, transportation expense to the homeowner, potential losses on the value of the house as you have so recently seen in places such as Ireland, Spain, the USA and the UAE as a direct result of over inflation of home prices). In the twenty first century far too much emphasis is still placed on home ownership. Reducing the affordability of housing may seem like an ignorant move, it does much to increase the flexibility of the labour market, and increasing home price stability. 


Step 7: Follow all of the above steps
All of them. Its tough medicine, but it works over the long term, furthermore after a while, additional benefits accrued by these actions will be noted. Lower National debt is of course the obvious one, but also, lowering debt service costs because of decreasing interest rates caused by improving investor sentiments. 






*but not politically acceptable

Canadian economic policy

Why are the Conservatives thought of as good economic management?


I find it quite disturbing that many people within this nation are so short sighted as to attribute Canada's relative lack of economic malaise to the current government.This plainly demonstrates a lack of insight on the part of the persons who proclaim this view. They point to Canada's current position with a relatively low National debt and a small(ish) deficit and in addition, strong GDP growth.
There are a multitude of actual reasons for this and here are a few. 
Our country ran a surplus paying down debt and after that did not immediately fall into deficit as the taxes enabling this (which also helped to slow growth to a more stable level and withdraw from a boom full of excess). When the country did step into deficit because of the recession, it lessened the impact because the amount of money needed to pay current debt was much lower than would be the case otherwise.
Our banking system did not implode like the US system, because of limits on securitization and on predatory mortgage lending practices (in addition to other more specialized regulation). However, there was still a significant collapse in the Canadian financial industry, this being the crash of Asset Backed Commercial Paper securities.
In coming out of the recent recession Canada's growth has been strong, and while this partly due to the current government's much vaunted stimulus package, the real reasons lie elsewhere. Huge consumption fueling an unstable household debt load, this spurred on by low interest rates and Canadian economic stability kick started the struggling retail sector. Banks having retained ample capital, while becoming more cautious, were loaning at near prerecessionary volumes soon after. Raw materials demand, notably within the petroleum industry, had fallen far below accurate valuations of their worth and they rose quickly. In addition, resurgent Manufacturing industries began to ramp up production. Construction in China and India in Particular, had an insatiable appetite for construction materials.