Market Overview

Presidential Candidate Gary Johnson Will Save Economy From Collapse


Is there a better rationale for electing a Presidential candidate than "He will save us from certain doom?" The economy is teetering on the edge, bleeding dollars faster than the federal reserve can print them. The debt grows by the minute and it's pretty clear that the U.S. lacks the means, let alone the willpower, to ever pay that debt down with anything resembling a 2011 dollar.

In an interview with Benzinga Radio, Republican Gary Johnson said that this does not need to be our fate. In fact, his entire presidential campaign is centered on the idea that we can fix the economy and solve the debt crisis by returning the country to simple, time-tested market-centered approaches to government.

"This country should be about creating a level playing field for all of us to access the American dream. If you're willing to work hard and innovate, anybody in this country can get ahead."

And yet, it's pretty clear to Johnson hat the America of 2011 is one where government actively picks the winners and losers in society, either intentionally or not, and manages to muck up the marketplace wherever it interferes. They even manage to botch simple things like regulating banks after bank malfeasance led to the economic meltdown of the last three years.

"I don't know if it was ever really an issue of regulation or new regulation as much as government picking winners and losers, taking your and my money to bail out Wall Street, having made poor decisions that should have been rewarded with failure as opposed to being allowed to continue," Johnson said on Benzinga Radio.

"If we had allowed banks to fail, the downturn would have been steeper, but that we would have had the fire sale, and as a result of the fire sale, the market would have stepped up and there would have been a purchase price at some point. But we never had the fire sale and because of that, I think we have a real estate malaise that, without a collapse, may take ten years to correct," he added.

"We never let the free markets work. We had free markets on the way up and communism on the way down. Let capitalism work, not cronyism."

The same goes true for the general economy and the massive, $14 trillion federal debt.

"I find myself outraged over the fact that we're bankrupt. I think the biggest issue facing this country right now is that we're on the verge of a financial collapse. It's going to be the bond market that collapses because there is no repaying $14 trillion in debt given a $1.65 trillion deficit this year," Johnson said.

"We need to balance the budget and i am proposing a balanced budget for the year 2013." That's right. Johnson would balance the budget his very first year in office. How? By cutting 43% off the top, including the Defense Department, Medicare and Medicaid.

While ending three seemingly endless wars is an obvious place to save money, Medicare and Medicaid are much more politically popular. How can Johnson cut from those budgets while not triggering a health crisis or an outright riot in the country? By following the Constitution and returning the power to the states.

Johnson's plan takes the money spent on those health programs, cuts it by 43%, and hands it back to the states — with no strings attached — to provide health care for the elderly and needy in each state. As the 1990s saw with welfare reform, state-level innovation can provide examples of success that other states can copy, with savings in the billions, as states rethink how best to provide care (rather than blindly live tied to a particular ideology).

The other part of Johnson's health plan is more innovative than even that plan. He asks the simple question of why the two parties seem stuck on choosing between government-paid care and insurance-paid care.

Why not, he wonders, eliminate both impediments and allow the free market to best handle health care?

"The notion that we have insurance to cover ourselves for ongoing medical procedures flies in the face of cost-effectiveness. It would be analogous to having grocery insurance. We don't buy grocery insurance because, number one, why would anyone sell us grocery insurance? And if we had it, you'd go to the grocery store and there wouldn't even be prices advertised, because you and I wouldn't pay for groceries, grocery insurance would. Why would we buy ground round when we could buy filets?" Johnson said.

A free market solution would have individuals pay for simple, routine care (such as doctor checkups) and buy individual insurance for catastrophic coverage (things like cancer, heart attacks, and such). That would reduce costs and allow American companies, who currently eat the cost of health care, to compete world-wide with companies who do not shoulder that burden.

Johnson also sees a simplified tax code, based on consumption (think: national sales tax, instead of income tax) and an end to corporate income taxation — turning America back into what he calls "the only place to start-up, grow, and nurture business." This, along with balancing the budget, will set America back on the path of fiscal sanity. Doing what Obama or Romney want would only continue the country down the path of doom.

"The collapse that is coming is a collapse in the bond market. No one has an appetite for our debt, given the inability to repay $14 trillion in debt because of ongoing deficits. We have to balance the federal budget. That sets the stage for hundreds of years of further prosperity if we don't get back to where we've gotten today," Johnson said.

"I believe that balancing the budget is something we can do...but we need to do it. We've got to do it now. It's going to be extremely difficult to do, but it is never going to get easier to do."

Be sure to check out the full audio of the conversation here: Republican presidential candidate Gary Johnson discusses the economy, health care, financial regulatory reform

Subscribe to the new Benzinga Attention podcast feed in iTunes: Benzinga Attention

Posted-In: Benzinga Radio Gary JohnsonNews Politics Media General Best of Benzinga


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