Knight Kiplinger is the editor in chief of Kiplinger’s Personal Finance magazine and Kiplinger.com, and in the November issue, he has published an editorial that gets to the core of what must be done to adapt to today’s economic reality. A link to the online edition of the article was sent to me by a publicity agent, but despite thism I wanted to share it with readers.
Kiplinger, the individual, has nothing to lose by making bold statements about the economy, unlike our presidential candidates who have to worry about alienating voters. The editor in chief does report to the board of directors of the publishing company, so I’m sure he couldn’t fly too far off the handle. Appropriately, the editorial is fitting the rest of the publication.
First, he lists America’s eight toughest economic problems, summarized here:
- Overconsumption and undersaving by individuals and the federal government
- Soaring old-age entitlements
- Addiction to fossil fuels
- Dependence on imported oil
- An overly ambitious foreign policy of promoting democracy by forcible regime change
- Failing public schools and inadequate vocational training
- Uneven access to health care
- A broken immigration system
Kiplinger goes on to provide solutions, both governmental and private, for these issues. Some of these solutions may be controversial. For example. here’s what the article proposes to reduce federal spending.
Voters should insist that Congress begin reducing the federal budget deficit, starting first with spending restraint. Tax hikes could come later–but only if proved to be needed.
My nominees for frozen or gradually reduced federal spending: military hardware; a wide array of subsidies to business, especially energy and agriculture; and health care for the elderly and poor (not less care, but more efficiently delivered).
My candidates for higher federal spending: support for elementary and secondary education, basic scientific research, and infrastructure (bridges, airports, harbors and parks).
The article contains a number of interesting suggestions for improving the economy and the quality of living in the United States. Read the article, A New Economic Agenda.
Published or updated October 8, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.
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{ 5 comments… read them below or add one }
I do not think he left anything off the list. However, what about trying to get the government to stop taxing our savings. This is a joke. I think is we worked towards that end, we would see some real savings in the U.S. again. Thank you very much for taking the time to post this.
Great editorial. Couldn’t agree more with Kiplinger.
I would add growing wealth inequality to that list. It leads to a lot of social and economic problems and helps explain #6 (schools) and #7 (health care) above. The idea of trickle-down economics doesn’t work and we often find that some of the wealthiest become the greediest. Those are the people that are not about to create jobs that provide decent salaries and benefits. Instead, they like to accumulate more wealth. That’s why some of the executives give themselves huge salary increases and golden parachutes while laying people off. There’s no reason why capital gains for a wealthy person should be taxed at a lower rate than income for a lower middle class person. And wealthier people can utilize more tax loopholes anyway.
Mr Kiplinger’s comments might have been made by any dull-normal person on the street. Monday morning quarterbacking is pretty easy stuff. What some readers may not know is that Knight Kiplinger authored a book published in 1998 entitled “World Boom Ahead- why business and consumers will prosper”.
All of these problems listed were in plain view 10 years ago, ( with the possible exception of no. 5, and the seeds of that were sown with the Carter Doctrine, and maybe earlier) and long before that in many cases…why was he not able to forsee anything of our present situation?
Solution to the economic crisis
1) Suspend all Federal taxes for one year. Phase them back in over the succeeding years. Use an inflation trigger of 5% or more to start reinstatement earlier if needed. Advantages – a) No new bureaucracy needed. The mechanism is already in place. b) the impact will be immediate because people will see a signicant increase in their paychecks immediately. This will lead to increased spending which will jumpstart the economy. This will create jobs and decrease unemployment. The additional money will also help people pay their mortgages.
2) Issue “Hope Bonds (they would be like war bonds). People who buy the bonds will receive a guaranteed return on the bonds, say 4%. The proceeds of the bonds would be used to buy up bad bank debt at the rate of a penny on the dollar. Advantages – people will have a safe and secure investment, and banks will be able to unload bad loans. Why a penny on the dollar? Since no one wants them, I gave a them a value of just over zero.
How will we pay for this? The US government has already demonstrated a desire to go in debt to solve this problem. The loss of approx 2.3 trillion in revenue will match the amounts mentioned in programs now, but the results of this program will be immediate