Prosperity in a Crisis
The United States needs to recapitalize banks and enact broader tax cuts.
This lack of trust is has bled into the marketplace. The current stimulus "solution" will do little to restore trust and reinvigorate the economy. The American way of life contains the core components of prosperity, and Americans will flourish if given the opportunity. For this reason, the best stimulus would be to recapitalize banks so that businesses can get back to business, and to enact broader tax cuts, which President Obama's chairman of the Council of Economic Advisers, Christina Romer, has said would outperform government spending by a ratio of two to three. Given access to capital and a deeper pool of their own assets, Americans will by their nature resume the path to prosperity. It would be a shame if a euphemistic "stimulus" slowed them down.
William Inboden is Senior Vice President of Legatum Institute, and Ryan Streeter is a Senior Fellow with Legatum Institute. The 2008 Prosperity Index is published in full at www.prosperity.com.