Focus Focus Focus

One of the first rules of management is to focus, focus, focus. In the current attempt to upright the economy it seems that the approach is to throw everything and the kitchen sink in all at once. However a simple proposal would be to propose and approve the following:

1. The 2009 Employment Assistance Act: This would increase unemployment, food stamps,Medicaid, SSI and all measures that would provide relief to those going through the current crisis. This is easily packaged and sold and then it should be the first passed.

2. Housing Relief Act of 2009: This is the act which would restructure the current collapsing housing market. It may have a fatal flaw. Namely there really may be a great number of plain frauds out there but let us assume it is manageable. The Act would create a Government Bank to issue 3% mortgages for 40 years and would issue mortgages at the then prevailing market value of the house. The Federal Government would pay the current issuer or holder the difference between the purchase price and the amount under the new mortgage and in turn receive some form of equity in the holder to be determined. The homeowner would then also hold an additional note that they would have to pay back to the Government 50% of their capital gain upon sale of their home up to the amount that the Government covered the excess of the loan for.

3. The National Infrastructure Act of 2009: This is just that, an act to create new infrastructure and repair old. This is for bridges, roads, schools, but NOT broadband as currently structured. It would support broadband by providing a tax incentive of reducing taxes by an amount proportional to the new build in any broadly defined broadband. These Broadband Tax Benefits could be sold to a third party so that the builder could finance the builds.

4. The Healthcare Improvement Act of 2009: This would establish an IETF like entity, even part of NSF or the like, and provide funding for it, as was done with ARPA and the4 Internet, for the express purpose of developing a electronic medical records effort and infrastructure.

5. The Energy Independence Act of 2009: This would focus on the following: (i) the construction of an advanced and expansive power distribution network capable of feeding power from wind and solar sources into the existing network, (ii) the issuance of substantial tax benefits to builders of wind, solar and the like, such benefits which would be sellable and transferable for the purpose of financing the construction.

6. The Tax Incentive Act of 2009: This would be a tax incentive act to motivate spending and investment. It would dramatically reduce both capital gains tax and corporate income tax and it would provide for the reduction of personal income taxes to all making less than $250,000 adjusted gross income. It would eliminate the AMT and also the estate taxes.

7. The Educational Advancement Act of 2009: This would extend Pell Grants but it would also establish a Commission which would seek to reduce the costs of Higher education.

8. The Bank Recovery Act of 2009: This is where we would place the "Bad Bank" structure but give what we would have accomplished above much of this may be reduced.

We have estimated the costs of this (see the Telmarc White Paper on the Stimulus) , the impact on long term inflation and the impact on growth and employment. The results all dramatically exceed what was in HR 1. Furthermore it is sellable, a chunk at a time. It is a shame that no one is listening. It appears as if Pelosi wants to stuff everything in one big bundle, pity!