How do we fix the American economy? Barry Ritholtz of FusionIQ says “you have to first have a clear eyed look at what’s wrong, whether we’re talking about the economy or the banking system, or now real estate and the mortgages.   If you take a cold, hard honest appraisal and identify what’s wrong, and not look at it through a political lens or ideological lens, but just a straight up, show me the data, fashioning a response ain’t all that complicated.”

Here are Barry’s three big ideas to improve the economy:

1. Take accelerated depreciation and marry it to an employer tax holiday. “You hire anybody new, you get a one year abatement, you don’t have to pay FICA, matching, this or that.  It just makes it that much chapter to hire.”

2.  Give everyone a tax holiday.  “Not for years, maybe six months.  Now, you’re putting that much more money into people’s hands.  All those deductions, they go away.  Yes, it will make the deficit bigger, but you deal with the deficit [later]– I’m fighting off a head cold.  You get  pneumonia,  the doctor tells you “don’t go to the gym, don’t start a diet, just get healthy.”  We’re coming out of  pneumonia, so it’s a little early to worry about the deficit and other things.   It’s an issue you have to deal with — eventually, it’ll kill you…  But you have to get healthy first.”

3.  Deal with the issues of American money stuck overseas.  “We have trillions of dollars overseas in our biggest companies.  The S&P 500 now, the average company gets half or more of their profits from overseas.  People talk about the 35% corporate tax rate, but you and I know nobody pays 35%.  So, if we want to get these guys to bring some cash back to the United States, say, you know what?  The first $50 million you bring over it’s taxed at a 10% rate.  The next $50 million is a 5% rate.  The next $50 million is 2.5%, and the last $50 million is zero.  You’ll bring a trillion dollars back to the United States, a lot of spending, a lot of hiring.  They’re not paying taxes on it over there, you might as well incentivize them to bring it over here.”

Barry is CEO and Director of Equity Research at FusionIQ.  He writes online at the hugely popular The Big Picture blog, and is author of Bailout Nation: How Greed and Easy Money Corrupted Wall Street and Shook the World Economy.