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  • We can stimulate the economy without extra debt or inflation

    Posted by TM Lutas on August 6th, 2011 (All posts by )

    How to stimulate the economy without inflating the currency or borrowing any more money.

    Step 1:
    Assemble all requests for federal permits.

    Step 2:
    Sign them for final approval (as in if they’re interim permits, they are approved for final status as if all other interim applications had been filed and been approved as well). Use auto pens if needed.

    That’s it, no step 3 required.

    There is now, and always is, a backlog of projects that have funding, are ready to go, and only wait the approval of the various administrative arms that they have complied with this or that regulation. If those projects go forward, the economy will be in better shape. So why not just sign the permits, let construction proceed, and mitigate the bad decisions on the back end when the economy has recovered?

    Just to make things clear, there are 51 executives in the USA who can do this. The President would likely have the biggest effect but certainly governors would be able to do this on their own as well.


    4 Responses to “We can stimulate the economy without extra debt or inflation”

    1. david foster Says:

      How far would you carry this? Would it include, for example, airworthiness certificates for new models of airplane?

    2. Robert Schwartz Says:

      Not while the Men in Black Robes run amok. As I always say: “Not until the last lawyer is strangled with the entrails of the last environmentalist”.

    3. TMLutas Says:

      David Foster – I was thinking more along the lines of the resource extraction permits that are being held up due to green interference. You raise a good point. Since I think that private bodies like UL do an outstanding job of not holding back innovation while the FAA is in dire need of serious reform for exactly that problem, yes, aircraft certs would be on the table, if not in the same “let ‘er rip” way that resource extraction permits using proven technology should be speeded on their way.

      The FAA here is providing a service for the traveling public and the insurance industry. If you were to simply sign the paper, the information would still need to be gathered before the planes became insurable and thus salable. The implementation here would be in a reasonably quick switch over to a commercialized solution, probably bringing in the insurers, people who have a balanced interest in both wanting something else to charge premiums for but also something is not going to generate too many payouts.

      Expanding out from the core resource extraction permit problem, there are likely going to have to be adjustments where an orderly transition requires a bit more sophisticated approach. The principle remains the same.

      Robert Schwartz – The judiciary neither has the resources, the expertise, nor often the interest in interfering when the executive makes a ruling. You’re right that some of the economic gains would be rolled out by the plaintiff’s bar and the black robe crowd. That’s ok, because they’re not going to stop them all. In fact, the courts have ruled already that the Obama administration is illegally running a permit ban on offshore oil drilling. It’s unlikely that the courts would reverse themselves on that point. Just stopping the illegal oil drilling ban would make the initiative worthwhile. Who knows what other economic progress would be shaken loose by this initiative that would make it an even better idea?

      Forcing the anti-economic activity brigade to go to the courts would also be an exercise of stripping the mask. Real organizations would be on record to kill real projects with real jobs and there would be political consequences for doing so. This is the very reason the greens want control of the administrative machinery. They can kill projects they don’t like without leaving fingerprints all over the process and it can be done cheaply on the government’s dime.

    4. onparkstreet Says:

      Will this really work, TM? Interesting post.

      People are really hurting because of the job creation.

      What do you all think of the following?:

      It was actually Secretary of the Navy Knox who suggested the crazy acquisition scheme to George Washington. Few Americans realize that the first debt stimulus plan of the United States was for shipbuilding, indeed I doubt most Americans realize that spending government money on shipbuilding is the most common form of government stimulus you will find throughout our nations history – including most recently in the 1930s and the 1980s.

      George Washington was unknowingly practicing classical Keynesian economics when, in order to gain the maximum level of support by the Congress, the President informed Congress that the Navy would build six frigates in six different shipyards in six different states. The early economy of the United States was one of massive debt and high unemployment. The nation was taking in limited tax revenue and intended to spend it on the Navy to the maximum benefit of the economy. The President and Secretary Knox both understood the economic benefits of shipbuilding; an industry that came with a dedicated supply chain, and George Washington understood the distributed approach would be appealing to Congress. Ironically, while the inefficient government spending did stimulate the economy, that same inefficiency was also a primary feature of the nations first shipbuilding program.

      I don’t know anything about these topics.

      – Madhu

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