I appreciate your concern, but you’ve handled yourself well, so no worries.

Soros is… interesting. I don’t agree with his solutions, but I do know that something needs to be done to fix the mess we have now. Enforcement alone could have staved off this collapse; we have the tools and regulations already in place to prevent much of this from happening, but no one acted in a timely manner, or even at all in some cases to stop the meteoric rise. Revamping our system is not necessary, and as he said, would run into constitutional issues.

http://www.ritholtz.com/blog/

I agree with much (but definitely not all) of what Barry Ritholtz says, and I try to follow along there as best as I can, so that might be a good source to add to your feed reader.

Legalize all drugs. Not only will it create a new arm of the economy, but it will increase freedom, lessen the pressure on jails, demilitarize our police forces, and probably lead to innovation in medical drug use. For those who misuse and commit crimes, punish them as the law already allows.

First, let me apologize for the “convincing yourself of something you don’t believe” line. It was meant in the spirit of banter, and honestly, I think you took it that way, but upon further review, it was unncessarily a-holish. You’re arguning in good faith, and I appreciate it. So sorry.

Second,  you’re not a poor debater at all.

Third, I think the capacity issue is truly where we differ, and only time will decide who is right. But I do want to throw out a number I read in a piece by George Soros (yes, yes, I know he’s a bogeyman for the right, but he does know international finance.)

“The size of the problem is even larger than it was in the 1930s. This can be seen from a simple calculation. Total credit outstanding was 160 percent of GDP in 1929, and it rose to 260 percent in 1932 due to the accumulation of debt and the decline of GDP. We entered into the Crash of 2008 at 365 percent, which is bound to rise to 500 percent or more by the time the full effect is felt. And this calculation does not take into account the pervasive use of derivatives, which was absent in the 1930s but immensely complicates the current situation.”

If that’s correct, well…

http://www.huffingtonpost.com/george-soros/a-plan-for-economic-recov_b_166518.html

Read this whole piece. It’s very good and really non-ideological. And let’s get to work legalizing marijuana.

Seriously, I appreciate what a good reader you are and how willing you are to engage in good faith. I don’t ever want to discourage anyone from doing that through my behavior.

I’m feeling the love… good and hard. My inferred lack of conviction comes only from not knowing exactly what to do, not from a lack of conviction on which direction we should take.

Increasing and expanding trade opportunities while reducing the tax burden is hardly equal to reinflating the credit bubble. Nor is international trade driven by our debt, it was hyper-accelerated by recently lowered credit standards, but we will continue to purchase abroad as we always have.

Also, I respectfully but stridently disagree with your views on capacity. We don’t have an overabundance of capacity, we have prices being too high to utilize the capacity. For instance, houses; the fraudulently inflated prices coupled with insurance and tax burdens are keeping people from purchasing homes. As prices have gone down, people are starting to cautiously buy again. This process can be accelerated by slashing property taxes and making home ownership more affordable, creating relief for new and current property owners. There is no such thing as too much capacity for wanted products, only overpricing of those products. Once prices reach an acceptable level, people will buy. Destroying capacity would be like burning grain during a famine because people can’t afford to buy it.

When you have U.S. Treasuries at zero coupled with a very real risk of deflation, all the rules stop applying.

“The world still has plenty of money, people are just more cautious about spending it because they don’t know what the governments are going to do.” There are those who would disagree.

I do however agree wholeheartedly that we should legalize marijuana tomorrow and probably all other drugs.

I understand how heavy spending by the government can induce positive change in employment, but I think we can achieve the same results without incurring massive amounts of debt. I am not alone in this train of thought… and yes, I know it’s a freight deal.

We could reduce or eliminate some tariffs to expand trade, offer large tax incentives to grow business, simplify the tax code while we’re at it, have an income tax-free year, and/or a sales tax-free year. Legalize drugs, now that would stimulate the economy. How about if you start a business you pay 1/2 taxes for 3 years, employ 1-2 people and only pay 1/4 taxes, employ 3 or more people and you’re tax free for 3 years. Basically we should be encouraging job creation and expansion of trade, which has tangible, immediate effects. With the stimulus, we’re trying to stave off the hangover of debt spending by incurring more debt; the “Hair Of The Dog That Bit You” stimulus plan.

It was only last year that people were railing at Bush for having driven us to $10 Trillion in national debt, that $200 Billion on spending in Iraq was outrageous, and a $30 Billion dollar bank failure was incredibly shocking. Now we’re supposed to be gung-ho to add spectacular amounts of debt onto that $10+ Trillion pile? No, we can produce our way out of debt with free trade, a low tax burden, and no fear of the government taking everything because it’s politically correct.

The world still has plenty of money, people are just more cautious about spending it because they don’t know what the governments are going to do. If our government backed off and told us that we’d get more of our own money, and even more money if we create business and jobs, then not only will Americans rise to the challenge, but foreign investors will be eager to plow money into our country because they can make money, and our economy can turn around very quickly.

-Winston Churchill