Resurfacing in more ways than One.

David Leonhardt still cannot define the Problem. We don’t need new Roads, We need the Roads that exist to be in better Driving condition. I here propose Congress pass a $50 billion Stimulus Package, each State to get a billion dollars, which can only be used to improve existing Roads within each State. It does not matter whether it is new Bridges, expansion of Roadway, or simple resurfacing; it is all devoted to improvement of Roads. The widespread dispersal of funds would maximize the employment of labor, correct the most pressing Need, and eliminate current desire to Name highways after themselves. The Cash will actually get something done, and there will be more value in the dispersions.

New Cars are building up at the Ports, and creating a congestion at the facilities. This is because Everyone is producing Cars, but no one is buying them. Henry Ford, during the Depression, cut the Price of the Cars dramatically to stimulate Sales. Car companies today will not follow like practice, even as the Stockpile of Cars grow. Congress should pass a law charging $200/month Tax on all Vehicles warehoused over 30 Days; this Tax to be doubled if Production is cut at any Production line to less than 2000/month. This Tax would serve two Purposes: removal of the vast overstock of Vehicles; and an advantage given to Consumers by lowered Transportation Costs. The Tax would mean little Now, when most of the Automakers seemingly destined to enter Bankruptcy, and heavy Sale of Vehicles would bring temporary sources of Revenue; even if the Vehicles were sold below Production Cost. This is an idea far better than the Country turning Socialist.

Here is an article which angers Me. There is only one factor behind the Credit Crisis today, and it is the promise of Bailout Aid. Bankers are all looking forward to vast sums of Cash from Congress and Taxpayers, knowing that this flow of Cash will disappear if they return to natural Banking practice. None of the Banks have significant imbalance currently, but real Greed for federal dollars forestalls natural performance. It is Time for another Tax, one on hoarded Reserves. I would advocate a 2% Tax on questionable Reserves higher than 12% of Deposits, if they cannot justify the greater Reserves to Fed regulators. Readers should understand that the promise of something for nothing is the most corrosive element in the Business world. Federal Bailouts and Stimulus is a two-edged Sword, which can easily defeat the intended purpose if not carefully controlled. lgl