Then, last Wednesday, I elaborated upon 10 changes that needed to be immediately enacted.
It is said that confidence is contagious and so is the lack of confidence. And these days, this statement applies directly to our Representatives' rancor and overall behavior over the past month in Washington, D.C.Doug Kass writes daily for RealMoney Silver , a premium bundle service from TheStreet.com. For a free trial to RealMoney Silver and exclusive access to Mr. Kass's daily trading diary, please click here.
A domestic economic recovery on a slow trajectory path is exposed to policy mistakes and external shocks (e.g., geopolitical, oil spike, etc.). It is now clear that confidence has been sufficiently eroded, in part, by the Washington circus -- and this has, in part, served to undermine growth and has jeopardized our equity markets.
I have written extensively about investors' consternation toward our country's politicians. Over the past few weeks, in "My 'Fast Money Halftime Report' Recap" and "Partisanship Trumps Progress," I have described the potential headwinds to economic growth and stock market appreciation instilled by the lack of confidence (on the part of businesses and consumers) caused by the ineptitude and bitterness in the latest debate over the debt ceiling and budget issues.
Indeed, back in late 2010, my surprise list for 2011 included two surprises on the manner in which partisan politics would inhibit economic growth and limit the upside to equities.So, if I were king of the forest, here are 10 changes I would immediately enact:
- Establish term limits for all our representatives.
- Limit government spending. Set a specific limitation on the annual gains in spending to be less than the increase in consumer price index.
- Develop a comprehensive jobs plan.
- Fix housing. Over 15 million homeowners are underwater with their mortgages, the shadow inventory of unsold homes is a drag on a housing recovery, and we must find a way to find a way to reemploy over 2 million former housing-related workers. We need a Marshall Plan for housing. I would suggest that the Obama administration reach out to the two most knowledgeable and smartest guys in the residential real estate markets, Eli Broad and Bob Toll. I would have them all meet in a locked room with Fed Chairman Ben Bernanke, Treasury Secretary Geithner and President Obama (and his economic team).
- Raise taxes on the rich. Put a three-year income tax surcharge (of 10% to 15%) on incomes above $500,000.
- Create a health care czar and tackle our health care industry's delivery and costs.
- Mean test entitlements, freeze entitlement payouts and gradually increase the social security retirement age to 70 years old.
- Exit Afghanistan and Iraq immediately. More effectively rationalize the defense budget and provide returning soldiers full tuition to vocational schools and colleges as they have sacrificed much.
- Build infrastructure. Set up an infrastructure bank, and place the money saved on defense into a massive build-out and improvement of the U.S. infrastructure base.
- Create energy self-sufficiency. Develop a comprehensive plan designed to rapidly develop all of our energy resources.