Consider this situation:
A farmer with more than enough land is not planting enough crops to stay afloat. He has one year and a small amount of cash to turn this around. His farm buildings are in need of repair. Should he invest his limited capital in buying more seed and planting more crops or should he paint the barn? No one argues that that the barns should not be preserved and painted. But the question is: Who will own the farm with the nice barns next year? Feeding the economic motor is obviously the first priority. If the farmer buys more seed and can move things into the black, he has a chance. In a financial crisis, simply finding ways to keep busy or to be useful is not only insufficient but may well divert resources from what could turn the crisis around. More efficient approaches must be identified and adopted. Here is a proposal: There are some US industries, US companies, US products and services that pay far more wages to registered US citizens per dollar sales than do others. There are also some US industries, US companies, US products and services that can demonstrate that their ongoing R&D and expansion activities have significant potential of resulting in future on-shore operations that could be expected to pay substantially more wages to registered US citizens per dollar sales than do most other businesses. These US industries, US companies, and US products and services can be identified and selected for direct stimulus at the consumer level (see below). Let’s focus on restricting our stimulus infusions to well placed, high-leverage “rifle-shot” stimulus. Let’s prime the pump by pouring water into pumps – not into the ground. Selective "Negative Sales Tax":
Suppose the country instituted a very substantial "negative sales tax" (or government sponsored discounts) for specific products produced or offered by selected qualifying US vendors. A consumer buying products specifically supported by this program will be granted a substantial government financed discount at the point of sale. In this way all funding would go to consumers at the time of their purchases – not to businesses. This process would generate substantial employment increases in the near term and yield immediate consumer relief using the very same economic machinery this country desperately needs to revive. By focusing this selective stimulus solely on the country's crucial or most promising areas, we will achieve far more bang for the buck. By adjusting the list of qualifying vendors/products/services and the “negative sales tax” rates as we go, we can fine-tune the stimulus strategically and put the nation back to work. Perhaps most important, at the end of the day this stimulus will not have artificially distorted our industrial base because it will have been distributed by buying decisions made by consumers (for example no government expenditures would occur if consumers rejected a product and no sales occured). Poor products and services would still fail as they should. With the reins in the hands of consumers and stimulus concentrated where it will do the most good, our on-shore activity will be far more likely to experience a sustained recovery before stimulus resources are exhausted.
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