How to avoid Recession and Fix the economy

Yesterday, financial markets across the world sent a message that economic recession is more than a possibility, but a probability. European Debt, three weeks of fighting over how to handle our deficit with no permanent resolution, and a slew of bad economic numbers, created the environment to invite this level of capitulation. While I don't believe the situation is as dire as the market is pricing in, it should be of concern to everyone. Here's my recipe to fix the whole mess.

1: Simplify the tax code. 

I've heard many ideas from a flat tax to national sales tax that all claim to lower the tax rate and raise revenues at the same time.

2: Invest in infrastructure.

Investing in infrastructure temporarily creates jobs and boost our country's productivity and communication. That stimulates spending and improves business productivity. Bottom line, every time we've improved and advanced infrastructure, the economy has boomed. 

3: Buy all the excess new-home inventory.

This is the key. This would jump start the construction industry and increase home prices which is how we turn the economy around. I would mortgage the properties to the public at the same rates the central bank lends money right now which is basically zero. 

4: Invest in small businesses. 

This is where innovation and new jobs come from. Most of the manufacturing jobs aren't coming back, that's just a fact. This is the best way to create new jobs and industry. Lend to small business at low rates.

5: Repair entitlement programs and reduce the deficit.

At this point I think we all know this needs to happen but cutting spending will certainly hurt the economy. This makes QE3 necessary in my opinion. 

Corporate earnings are healthy and we're bound to hit soft patches in a recovery. This isn't the end of the world.