It's time for major surgery. Here are some ideas, including a number that are quite radical - for America.
- Pass a large "stimulus" package that includes infrastructure funding and money for state and local governments
- Nationalize, recapitalize, and sell off the banking system using the "Swedish model"
- Bail out (grant, loan, pre-pack CH11, whatever) the domestic auto industry in a forward-looking manner
- Implement a national single-payer healthcare system
- Equalize the tax rates between labor, capital gains, dividends, and interest
- Regulate everything that acts like a bank (borrows short, lends long) and tamp the leverage ratios way down
- Coordinate a decline of the dollar to an appropriate level relative to JPY and RMB, or force the move if necessary
- Assess a transaction tax in all "markets" at a level that significantly reduces daily churn while not discouraging longer-term investors
- Further disperse the financial sector from the New York metro area, including a relocation of the NASDAQ to Chicago
- Replace the widely evaded corporate income tax with a VAT
- Phase out the mortgage interest deduction and raise the standard deduction instead