I’m going to start the year off with what I think is my most creative contribution to economic thought — the idea of changing the tax laws on personal retirement plans so they can be used to stimulate growth.
I hope my suggestion becomes unnecessary in 2014 because the economy suddenly and miraculously takes off on its own, creating so many jobs that the millions of people will be able to find work.
But we’ve been waiting for this to happen for five years. Half a decade!
And despite all the crossed fingers and rosy predictions on Wall Street and in Washington, we might have to admit something we don’t want to — the US economy is broken, not just bent.
I won’t be so conceited as to think my idea will fix all our problems. But I do know this: Unless people start — as the cliché goes — thinking outside the box, we might be burying this economy in a box before long.
Let’s start by looking at the bright side.
If you follow this sort of stuff, you already know that the gross domestic product (GDP) rose at a reasonable 4.1 percent annualized rate in the third quarter of 2013.
That followed a paltry annualized gain of 1.1 percent in the second quarter and very modest 2.5 percent in the first three months of the year.
But since this is a new year on the calendar, let’s get back to the bright side — that 4.1 percent gain in the third quarter of 2013 — which shocked everyone because it came at the same time the government was shut down for weeks.
Could the gain have been caused merely by the fact that the Commerce Department had to guess at a lot of numbers because its workers were on furlough? Or the fact that inventories at companies increased dramatically? Or because health-care spending rose as ObamaCare loomed?
In other words, was the 4.1 percent gain just another fluke?
If you look back over the history of the past five years, you’ll notice decent quarterly GDP gains, but little follow-through. The economy, for instance, grew 4.9 percent in the fourth quarter of 2011, but it slowed to 3.7 percent, 1.2 percent and 2.8 percent annualized gains in subsequent quarters.
The 3.9 percent gain in the fourth quarter of 2009 was followed by 1.6 percent growth in the next quarter. We’ve been blessed by single quarters of decent growth that then peter out. And companies won’t go on a hiring spree because things got better for just a three-month period.
What are some signs the economy is broken? Well, it’s not responding the way it should to tried-and-true stimulus. Washington, it turns out, has no available weapons — and is already $17 trillion in debt.
And with interest rates rising — the 10-year bond rose to 3.036 percent Tuesday — don’t expect Washington to borrow more to stoke the economy.
With fiscal policy DOA, the Federal Reserve is the only weapon left. And it has not only fired all its conventional weaponry, but has also nuked us with quantitative easing.
QE might have been the savior when the economy was contracting in 2008, but since then all it has done is shift wealth from the saver class to the wealthier speculator class. And as the GDP numbers show, QE hasn’t given much of a lift to the economy, although it has been a godsend to the stock market.
So what can we do?
I am suggesting restricted retirement funds — IRAs, Keoghs, 401(k)s — be allowed to roam around a little.
At the very least, people could be allowed to use some of the trillions of dollars in these accounts to purchase real estate — a first or second home, a condo in the country, a place for the kids.
The housing industry has been one of the bright spots in the economy, but that’s mostly because big investors have taken speculative positions in residential real estate.
When the pros decide to dump real estate, that bubble will also burst.
People could also be permitted to use retirement funds for other purposes — buy a boat or a car, pay for tuition, medical expenses, clothes for the kids. Hell, you can allow the purchase of peanut butter and jelly if the nut and fruit industries got in a jam. (Sorry, I couldn’t help that pun.)
The amount of withdrawals could be limited to, say, 5 percent or 10 percent of what an individual has accumulated.
And it would be taxed to some extent, so Washington would accrue revenue from this idea. The tax rate, in fact, should change according to how much of this retirement money Washington would like to get into the economy.
If Washington wants to soak the economy with retirement-account liquidity, it could bring the tax rate all the way down to zero.
While the tax rate is negotiable, one thing isn’t. There would be no 10 percent early-withdrawal penalty.
Otherwise, this is a blank slate, so the rules can be anything we want.
And someday when the economy is growing too quickly, this idea can be put into reverse to slow things down. Allow people to put more money into retirement plans so they reduce spending.
That’ll put the brakes on the economy more gently than the usual method of raising interest rates and cutting government spending.
As I said, I hope this will all be unnecessary. But if the economy continues the pattern of the last five years, that 4.1 percent growth in the third quarter isn’t going to continue.
And someone had better start coming up with another plan real soon. john.crudele@nypost.com