[Swiftwater Gazette] Money

[Brad Haslett]

Here is the "money quote" -

" All this massive spending and borrowing is killing us."

Yup, we're gonna relive the late 70's again, complete with a
disruption in the oil supply soon enough. We're way beyond "politics
as usual", liberals versus conservatives, Democrats v Republicans.  No
sane and rational person can explain how we're going to pay off the
debt without massive inflation. There aren't enough "rich" to do it
alone without crippling the economy. Obama's redistribution plan will
work about as well as all redistribution plans have throughout
history.  American capital is running scared and who in their right
mind wants to hold dollars?  The Chinese "done broke the code". They
are better off buying US assets rather than debt.  Hummmmmmmer.

Brad

---------------------

Friday, October 09, 2009

Save the Greenback, Mr. President   [Larry Kudlow]

We know that gold is soaring. And we know the dollar is slumping. But,
did you know that year-to-date, while the S&P 500 is up 18 percent — a
great showing, no doubt — gold is up even more? The precious metal is
up 21 percent. In other words, measured in true, gold-backed
purchasing power, stocks have really done nothing this year. Zip. It
is most disappointing.

I try to be optimistic about better earnings, a stock-market rally,
and economic recovery. And I’m sticking to my guns. But what we’re
seeing right now is pretty darn close to what we witnessed in the
1970s — the rise in gold and inflation really cuts into the stock
market.

So what’s the way out?

Well for starters, we need a stable dollar to stop inflationary
pressures. And we also need lower tax rates to spur the economy, help
it grow, and reduce unemployment. I’ve been calling this the
Mundell-Laffer supply-side solution, after Nobel Prize–winning
economist Robert Mundell and my mentor, former Reagan advisor Arthur
Laffer. It was put to work with great success nearly 30 years ago to
stop stagflation. It also launched a 20-year bull-market recovery.

Put simply, the Mundell-Laffer model exercises monetary restraint to
save the dollar — and low marginal tax rates for economic-growth
incentives that benefit investors, risk takers, small businesses, and
workers. Right now, for therapy, the Fed should begin moving excess
cash from the economy, and they should raise their target rate. Take a
page from the Reserve Bank of Australia’s playbook and move rates
higher.

In addition, the Treasury ought to get out there and buy these
unwanted dollars in the marketplace. Just go out there and bid for
them. And they need to stop printing so much debt from Congress. All
this massive spending and borrowing is killing us. We need to be
slashing tax rates on large and small businesses. There’s just no
better place to begin job creation. And leave the Bush tax cuts in
place, for heaven’s sake.

This supply-side shock therapy would save the dollar. And it would put
real long-term torque into the recovery.

We’re supposed to be in an era of post-partisanship. So in this
spirit, I’d like to respectfully ask President Obama and his economic
team to give this plan a try. It worked for JFK. It also worked for
Bill Clinton and Ronald Reagan. It can work for you as well.

The time has come to save the greenback and grow the economy, sir.