How Can Obama Fix the Economy?

People get caught up in ideology and method names rather than analyzing methods, creating hybrids, and finding solutions to the economic problems. One must visualize the economy and understand what the current problems are and what variables need fixing and how to motivate the market and consumers to fix the economy themselves. That is government's job and Obama needs to realize that government is there to motivate people to solve the problems not to solve problems.

Using tax incentives and policies you can fix just about any economy. After all what is the economy? It is simply an exchange of money and goods. Hence, visualize what the economy needs and promote that course of action.

Currently, there is deflation--how do you solve this? Deflation is when every product or services value goes down and so things become cheaper. How do you fix this? Well if all the consumers had money they wouldn't be in such a panic state of making things cheap enough for people to buy.

Jay Leno the other night made an interesting comment (I'm paraphrasing):

That was an interesting find. If everyone had 3,300$ stored away in the bank that they can spend AFTER their essential expenses, people would go out and spend that money, businesses may begin to invest again, things would start selling again and the deflation spiral would stop.

In other words, a tax cut is exactly what the US economy needs right now.

Instead, Obama is talking about spending the money, on what exactly, we don't know. The stimulus package has become a porkulus package--it's like a huge Christmas list for lobbyists and special interest groups by the Democrats.

Didn't Obama campaign on stopping the increase in debt?

Didn't Obama campaign on giving tax cuts to the middle class?

I wonder if he will keep those promises, sure doesn't look like it.

The bailouts for companies aren't helping too much either. You would think they would be helping companies hire more employees and invest money or lend money to consumers. Instead they are helping companies buy each other and give their high ranked employees bonuses.

Obama did do something right: He got angry with the CEOs of a company that was buying a jet.

Although it is great that everyone in America including upper class get tax cuts, giving tax cuts to the super rich like the CEOs of huge companies doesn't usually help. The reason is, they are the type of egotistical people that will save money and more money like as if they are competing to brag about how rich they are. They are not usually the kind of super rich people that will invest heavily (they invest but not all of their money). However, this does not mean all rich businessmen are bad, that they don't invest or that giving them tax cuts doesn't help--it does.

Obama should encourage people to reinvest and restore the confidence of the people. He should not create huge spending programs like FDR, that will only prolong the recession and may create other problems. The Federal Reserve shouldn't massively print money either, that could cause inflation. The government should use its money wisely to entice businesses to hire more and to encourage middle and upper class to invest and consume.

This is how Bush got us out of the 2001 recession which wasn't even felt that badly. He didn't do it because he thought it would be cool to give money to everyone or to increase the debt. He didn't do this because some dogmatic economist told him to; he did it because it was the right thing to do.