American fiscal policy is in total disarray. Taxes are too low; spending is too high. Spending should be more stimulative and less for old people. Social Security and Medicare need to be reformed, in particular to be more to incomes, both on the taxing and paying ends. Rich people pay a much smaller amount of their earnings into Social Security and end up getting too much when they retire. Medicare takes care of the elderly, but until the recent health care reform, there was no general program to take care of workers. Congress is totally ignoring this problem. They pat themselves on the back if they cut a million dollars from education or the Pentagon budget.
Meanwhile, the Fed is pursuing a serious monetary policy with no help from Congress. Congress just criticizes the Fed’s quantitative easing program (QE2), while doing nothing itself. If we get out of this recession it will be largely thanks to the Fed. Ironically, the Fed, which is usually seen to be the friend of the big banks, has turned out to be much more of a friend to ordinary people than Congress has.