To fix the U.S. economy, here are our solutions, based on the rock-solid economic philosophy of Austrian economist Ludwig von Mises over that of Great Britain’s John Maynard Keynes:

• Stop the force-feeding of credit into our economy via the stimulus spending and other programs, such as “Cash for Clunkers.”

• Stop inflating U.S. currency.

• Instead of encouraging consumption, encourage saving and the repayment of debt.

• Let all the lame businesses fail, with no bailouts.

• Shrink government at all levels.

We must remove the distortions or the U.S. will inevitably fall from a progessively higher mound of debt.
Left alone, interest rates will adjust to the point where only the amount of credit that would be used is voluntarily supplied and demanded. But when credit is force-fed beyond that, bad things start to happen.

History shows government-imposed expansion of bank credit distorts one’s “time preferences” — an individual’s desire for saving versus consumption.

Alas, with interest rates at zero, the presses rolling off dollars as never before, and an evidently Keynsian government, we are reverting to a Big Government path that always has failed everywhere in the past.

As a result, the U.S. economic system is increasingly riddled with uncertainties, turning an otherwise resilient economy into a brittle one.