Two controversial ideas for the economy

Bloggers tend to promote debate and controversy, here are two economic ideas foisted upon the blogosphere this morning for your thoughts:

If Exxon Mobile is paying $4,000 a second in taxes, let's reduce their taxes so they have the time and the inclination to explore and drill more domestically. If you've watched the House Republican revolt and the #dontgo oil drilling vote movement, wherein Republicans are demanding the right to vote up or down on more oil drilling, then you know that roughly 66% of the American electorate wants to let oil companies drill offshore.

Economic and markets blogger Porfolio.com talking about Greenspan's ideas and predictions for the economy, with typical ability to twist everything more negative, did compliment Greenspan on a possible solution for housing which involves allowing more immigrants from Mexico ... I would suggest combining this with re-instituting the down payment assistance program that was killed last month by Congress (using no government money, handled by not for profits and sellers of properties)

But the bit of the interview where Paul Kedrosky laughed out loud actually made perfect sense to me.

He did offer one suggestion: "The most effective initiative, though politically difficult, would be a major expansion in quotas for skilled immigrants," he said. The only sustainable way to increase demand for vacant houses is to spur the formation of new households. Admitting more skilled immigrants, who tend to earn enough to buy homes, would accomplish that while paying other dividends to the U.S. economy.

What's wrong with this? Paul's heavy on the sarcasm but light on any substantive criticism:

Awesome. Why wait around for sovereign wealth funds to bail the U.S. out when you can simply invite foreigners in and suggest they buy real estate? Alan's soo-oooo clever.

Greenspan's point is that letting in more skilled foreigners will increase demand for real estate, whether you "suggest" anything to them or not. They'll need somewhere to live, after all, and they'll be perfectly capable of paying their housing costs, whether they rent or buy. Admittedly, this will be more effective for housing prices in LA or Miami than it will for housing prices in Detroit. But it does seem to be a reasonably elegant partial solution to the housing crisis.

There you have it, the two areas where our economy needs the most help ... Gasoline prices need to come back down below $3.00 and housing values need to level off and inventories be reduced. Decrease taxes on Exxon (and allow offshore drilling) and increase the quota of immigrants from Mexico and let us have the Seller Assisted Downpayment Assistance program back.

For more research on offshore drilling proposals

For more research on saving down payment assistance program