Smith School Undergrads Challenge Nation’s Leaders with Deficit Reduction Plan
While Occupy Wall Street has attracted growing numbers of college students with
encampments emerging on several campuses, its economic-reform motive has prompted
a radically different action by undergrads in a Robert H. Smith School of Business
finance class at the University of Maryland.
The resulting 'New' New Deal: A Pragmatic Approach for Stabilizing an Ailing
Economy is a 15-page white paper to reduce the near $15 trillion federal
deficit.
Spending cuts "with a scalpel" and determined with "empathy and fairness," plus
a "simplified" tax system focused on repatriating lost U.S. tax revenue help frame
the plan its developers say would trim $500 billion yearly from the largest national
deficit in the history of the world.
About 60 students from twin sections of adjunct professor Joe Rinaldi’s Futures,
Options and Derivatives course contributed to the semester-long project, which was
finalized by seniors Seth Rabinovitz, David Kigel, James Fayal, Christina Goffe,
Michael Sue, Jacob Asquino, Gabriel Girma and Brittany Ursini – the credited authors.
The work has attracted
national coverage by Reuters
and the students have aggressively promoted the plan to national opinion leaders,
the congressional Super Committee, GOP presidential candidates, members of Congress
and President Obama.
Rabinovitz and Goffe attended the Nov. 22 GOP presidential debate in Washington
where they pitched and handed the paper to the likes of Newt Gingrich, MSNBC host
Chris Matthews and several CNN representatives.
No novelty, the paper has passed the scrutiny of advisers from Barron’s magazine,
and Millan Mulraine, senior U.S. macro strategist at TD Securities, described the
plan, in the Reuters story, as “a valiant effort” and “emblematic of the discussion
that is going on nationally over the kitchen table across the country.”
"For policymakers, this paper is detailed, plausible and significantly represents
the next generation's idea for reducing the deficit," said Rinaldi, also a managing
partner, CIO and financial advisor with Quantum Financial Advisors in Washington.
“I am certain that a good portion of it can be used as a guide to get our fiscal
house in order.”
The plan calls for "many minor adjustments" and avoids "radical" tax hikes and
spending cuts, which have contracting effects on the economy. The Smith School students
say their plan addresses social changes of recent decades and also would boost the
economy and grow jobs.
Some of the details are:
- A national energy policy based on the T. Boone Pickens plan emphasizing domestic
energy production to reduce reliance on foreign oil and offering a tax credit for
firms that switch to natural gas tractor-trailers or buses
- Pension reform via streamlining public service pensions with the private sector
and raising the minimum retirement age by two years.
- Entitlement reform based on a $1 million per year income threshold for social
security benefits for that year.
- Placing a moratorium on all Dodd-Frank and Sarbanes-Oxley regulation and healthcare
reform yet to be implemented to allow small businesses to prosper.
The plan also covers military and prison reform, and mortgage market standardization.
Moreover, the student authors wrote: “These adjustments will represent a paradigm
shift towards efficiency among programs and values that have become static relics
of former eras. The American society, dynamic by nature, is not synonymous with
the America of prior decades and federal policy should keep pace with this discrepancy.”
Rinaldi said he is proud of the students’ initiative and dedication to the project.
“The students decided to take the higher road and use their pens instead of protesting,”
he said. “They want to take this opportunity to assist our politicians in defining
the massive paradigm shift that our economy and our culture will undergo.”
The entire proposal can be read online.
