The obvious ways to begin improving the U.S. economy are for government to rethink immigration policy and stop spending, says CNBC financial journalist Michelle Caruso-Cabrera.
As a fiscal conservative, Caruso-Cabrera says she believes the Tea Party has “done a great job of shifting the dialogue to fiscal issues.”
Americans want a fiscally conservative government, and when politicians are voted into power they need to live up to their campaign vows, according to Caruso-Cabrera, whose book, “You Know I’m Right: More Prosperity, Less Government,” strenuously argues against creating more government hoops that business must jump through in order to make money.
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“To all of the Republicans who are saying that they are fiscal conservatives right now, the only thing I would say is: ‘You better mean it.’” she said.
“Because when you were in power you didn’t mean it … and we fired you," she said.
“Americans want a fiscally conservative government and if that’s your platform … if you get into office, once you’re there, you better stick with it.”
Moreover, the government needs to rethink its policies on welfare programs that encourage illegal immigration and abolish giant government-sponsored entities (GSEs) Fannie Mae and Freddie Mac.
Immigrants help the U.S. economy “tremendously,” says Caruso-Cabrera. “They’re a huge asset to our economy, so I think we should be far more open to immigration,” Caruso-Cabrera tells Newsmax.TV.
The key to immigration, Caruso-Cabrera says, is not having welfare, because “you don’t want people coming here based on our welfare system. You want a self-selection of people who want to work hard, embrace the ideals of America … they’ll help us, they won’t hurt us.”
In addition, Congress should get rid of Fannie Mae and Freddie Mac, who were “the monsters of the housing industry,” government-run entities “that not only didn’t prevent the housing crisis but were in fact its major cause.”
The two GSEs will cost taxpayers some $389 billion, Caruso-Cabrera notes. “The question is … who’s going to pay for this? Is it going to be taxpayers or investors?”
“Fannie and Freddie should just go away,” she says. “Private industry can handle the mortgage industry much better than the government.”
Ronald Reagan and Bill Clinton — her two favorite former presidents — shared many similarities, according to Caruso-Cabrera. The two former presidents “were similar in a lot of ways,” Caruso-Cabrera says.
“Ronald Reagan, when it came to fiscal conservatism, really set the role model of how a president … and Bill Clinton, even though he was a Democrat, you had free trade, welfare reform and a balanced budget.”
Spending levels dropped under both Reagan and Clinton, Caruso-Cabrera notes. “I actually see Bill Clinton as fairly conservative when you look at the results that came out of his presidency.”
People want to point at the private sector as having ruined the economy. “Well, guess what?” Caruso-Cabrera says. “Most of the private sector have already paid us back. Fannie and Freddie? There’s no hope of them paying us back.”
Raising taxes at any time the economy is weak isn’t smart, Caruso- Cabrera points out, adding that if the lame-duck Congress is smart, it won’t raise taxes. “That would be extremely detrimental to the economy,” she says.
However, replacing the dollar with gold as the world’s default currency “denies us flexibility,” says Caruso- Cabrera, even though she understands where Representative Ron Paul is coming from when he makes that suggestion.
“I see the debasement of currencies around the world and it is worrisome, but I’m not convinced we want the lack of flexibility that would be imposed by the gold standard,” she said.
“Generally speaking, I think gridlock is pretty good (for investors),” Caruso-Cabrera says.
“We had gridlock under President Clinton when it came to spending, and that was a tremendous asset because it slowed down government spending.”
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