The President is set to push forward another “job creation” plan. His reasoning, it will help America to avoid another recession. Unfortunately, most people would say that they’ve not gotten past the first recession.
This idea that we need to create more new jobs as the answer to getting America out of the economic calamity that has befallen the nation is simply false. Job creation isn’t the main problem. Therefore, spending more money we don’t have will not have any impact. The best strategy is to put into place social policies that allow almost 80 million baby boomers to retire and exit the job market over the next decade. The problem then becomes one of enough workers instead of enough jobs.
Most baby boomers prior to the collapse of the housing bubble would probably say they were ready for retirement. The collapse of the housing market sent their home values plunging and changed that plan. A new jobs bill won’t restore their home values; a major source of investment that many use as retirement income.
Baby boomers who saved for retirement have watched the value of their nest eggs dwindle to only about 50% what it was only 5 or 10 years ago. Recent policies from the Federal Reserve have served only to reduce the buying power of those nest eggs. This means that baby boomers who thought they had enough for retirement must now continue to work. A new jobs bill won’t restore the lost value of the dollar.
The current political rhetoric is focused on major reforms of Social Security and Medicare. These programs are major sources of retirement for aging Americans. Baby boomers are now faced with the possibility that it will be reduced, or worst yet, non-existent for their retirement. Subsequently, those who would retire have no choice but to continue to work. A new jobs bill won’t ensure Social Security and Medicare’s survival.
If we’re going to spend another 500 billion dollars of taxpayer money, let’s do it retrofitting 100 million American homes to run off of solar power starting with baby boomers who will hit retirement age over the next 5 years. This will be major source of income for boomers who could sell excess energy back to the energy companies. It would drive up home values. It would immediately improve building and construction in the housing market. It would create jobs.
Change these bad fiscal and monetary policies. No more quantitative easing. Raise interest rates. Reduce the money supply. In short, restore the value of the U.S. dollar.
Unfortunately, baby boomers are going to have to pay for retirement even when they are retired. To save and fund Social Security and Medicare over the next decade, we have to change our tax structure. Retired baby boomers won’t be working, so simply funding these through income taxes just won’t do it. A new tax structure that is based on consumption, such as the Fair Tax, is the only way to accomplish this feat. This necessarily mandates a constitutional amendment that taxes collected must be used for the purpose of funding domestic needs with Social Security and Medicare receiving priority.
Problem solved. It’s simple. It’s elegant. It’s smart. Washington, you may not have come up with it, but please don’t let that stop you.
Dr. Gary W. Griffin is the author the new book, “Inert America: Crossroad to the Future.” He can be reached at email@example.com for comments and questions.