Can a Deeply Unserious America Fix Its Economy?

 In the teeth of the Depression, Treasury secretary Andrew Mellon famously told President Herbert Hoover to "liquidate labor, liquidate stocks, and liquidate real estate"-in other words, to resist bailing out any industry through state intervention. This was a tough sell even in those days, and Hoover succumbed to politics.

In 2011, Paul Krugman predicted that "Mellon-style liquidationism is now the official doctrine of the G.O.P."

• Fast-forward to 2022, and it's hard to imagine Janet Yellen calling for liquidation or telling Americans to improve their moral fiber
• The mythology of austerity persists, that a stingy federal Treasury and reticent central bank don't intervene enough in economic crises
• A serious political discussion at the federal level would center on existential structural problems of war and peace, debt and the dollar, and entitlements
• But these issues can be addressed only by real austerity and real pain

Steps necessary to build a real economy

• A wholesale adoption of laissez-faire economic doctrine by national politicians
• Immediate deep tax and regulatory reductions
• Sharp reductions in government spending at every level
• Rigorous entitlement cuts
• rigorous defense spending cuts of at least 50 percent, combined with a radically reduced US military footprint overseas

Stimulus packages include: cessation of new debt issuance by the US Treasury

• cessation of active monetary policy by the Federal Reserve Bank
• a radical reduction in the Fed's balance sheet by letting existing Treasurys mature and roll off
• an entirely hands-off approach allowing the US dollar to float freely relative to other currencies and commodities

An express policy against bailouts or subsidies of any kind to any industry or company, regardless of the severity of an economic downturn

• End the use of unemployment subsidies to individuals
• Eliminate price ceilings or floors on prices, wages, and profits
• Immediately sell of federal land and other assets to reduce debt service obligations

This, ladies and gentlemen, is what a real program of austerity looks like.

• The best path forward is at the state and local levels, attempting to build regional economies with less fragility in the face of the warring, borrowing, spending, and devaluing mania of Uncle Sam.

https://mises.org/wire/can-deeply-unserious-america-fix-its-economy