If Our Politicians Won’t Do It, We The People Will Have To Do It For Them

I don’t know about you but I’m tired of waiting for our elected officials or even our best and brightest pundits to propose solid concrete plans for getting America back on track. Apart from Rep. Paul Ryan’s Roadmap for America’s Future, which is a start, and Prof. Kotlikoff’s Limited Purpose Banking, which isn’t getting much support I’m hearing no concrete plans.

Then while making my rounds of some of my favorite conservative blogs, I came across something at Conservative Home,USA that gave me a little hope. A young man, who goes by Paul Revere, is writing a three-part series on cutting the cost of government.  You can read Parts I and II here and here. He has identified several hundred billion dollars that could easily be cut from the budget in the short and mid-term. Give them a read. I know that I’ll be going back on Friday to see what more Paul Revere has come up with.

I should have stopped while I was ahead but unfortunately I then read an article at American Thinker that slammed me back in to reality. Monty Pelerin, like most Austrian economic pundits, writes a gloom and doom story of the perilous situation that America is in today. His conclusion is that America is going down for the count. He believes there is no escaping this destiny because our politicians will not do what has to be done. Pelerin isn’t saying anything that other Austrian economic pundits haven’t been saying for a long time. He just happens to do it better than most. Anyone who reads this article should be seriously scared. We should all be scared because he is right. With the President we have and the Senate still controlled by the liberals, our politicians are not going to do what needs to be done and the risk is high that we don’t have until 2012 to act.

So what do we do? Throw up our hands and accept that the America we know has run its course. You know that we are not going to do that. We have to do what the politicians can’t or won’t do. We have to come up with an action plan, which if implemented would turn this country around. Then create a grassroots groundswell of public support that will then gain the support of enough politicians on both sides of the aisle to pass the necessary bills. The groundswell will have to be so big that Obama won’t dare to use his veto.

Sounds like a pipe dream, right? Maybe, but what other option do we have. The clock is ticking and the implosion can happen at any time.

So, Jim, what’s this great plan for turning the country around and how are we going to create the kind of groundswell of public opinion that you’re talking about?

For the moment let’s assume we have a full proof plan for getting the economy going again and for reducing the debt. Creating the groundswell will be hard to say the least. A lot of people’s oxen are going to be gored. As I see it, the only way people will get them on board our train is if we scare the hell out them. Scare the hell out them with the facts of our situation as described by pundits like Pelerin. We’ll have to make people see that the only choices they have are either pay the price of our proposed plan or we and our children and our grandchildren will pay the much, much higher cost. The America we have known will become only a memory. The Tea Parties and other similar conservative groups will have to go out into their communities and sell the plan to the independents and to as many Democrats as possible. If the groundswell is big enough, the politicians will get on board.

The plan to get the economy moving again and to start bringing down the debt must be bold. Maybe even radical. I don’t pretend to have all the answers; but I am willing to put some ideas on the table to get the discussion started. Here is my wish list:

1.) Everybody talks about cost cutting while few if any talk about how to jump-start the economy and increase revenues. My thought is to slash corporate taxes from 35% to 20% or less. At the same time I would want to reign-in the EPA and lighten-up on the regulatory burden  on corporate America. I believe these moves would make America the best business environment in the world. Manufacturing would return and jobs would be created and the IRS would collect more revenue than before.

2.) Implement some variation of Kotlikoffs Limited Purpose Banking idea so that never again would there be a need to bail out a TBTF financial institution. And as a plus, the Dodd-Frank would have nothing to administer.

3.) Clip the wings of the Federal Reserve System. Set-up a government-owned central bank with a board of directors elected by the people. the free market system could be free once again.

4.)Reduce cost of government. I’d like to see the following: A- cut manpower 20% across the board with the exception of the military. B- Close superfluous and redundant agencies. C- Eliminate all government subsidies of any kind. D- Implement all the cost savings identified by young Paul Revere.

5.) Reform Social Security. I have three thoughts on how to reform Social Security, A- Although I would want for employers to continue to pay FICA by the current formula, I would want employees to pay FICA on all earned income. In my opinion it is not right that a person earning $70,000 per year pays 6.5% of their income into FICA while a person who earns $140,000 per year pats 3.25%. Essentially a flat tax. B- The age for eligibility for full benefits should incrementally increased over some period years until a maximum of age 70 or possibly 72.. Remember that when Social Security was originally set-up the age for full benefits was 65 and the average life expectancy was 65. Now the average life expectancy is nearly 80 years. C- In the mid-term and log-term I would like to see Social Security converted to something like a 401-K program. Chile has had such a system for many years and it seems to be working-out fine.

6.) Medicare and Medicade. The only thing that I can suggest in the health care area is to try to bring the cost down. To this end I favor Tort Law reform. tort law is a significant factor , I believe, in the cost of health insurance for the health care industry. In Great Briton,  which has socialized medicine, 9% of their GDP is spent on health care where as in the US 17% of our GDP is spent on health care and we have more doctors per 100,000 of population than in Great Briton. I’m assuming that tort law has a lot to do with  the cost difference.

7.) Energy Independence. Can you imagine the change in world politics if the USA was energy independent? I t can happen. Remove restrictions to oil drilling and gas from deep shale and build more nuclear power plants and move forward on Thorium Reactor technology. In ten to twenty years, America’s oil imports would be zero. 

8.) Last but not least i would like to see repeal of ObamaCare and The Food Safety Modernization Act. These are two costly bureaucratic nightmares.

Of course, someone smarter than I would need to numbers to these ideas and then the Tea Parties and other conservative groups could start doing dog and pony shows in their communities.

I know that some of you are thinking  this old gringo in Venezuela has gone off the deep-end. I haven’t. But America could soon fall over the edge if something drastic isn’t done. Unless some very serious changes are made in the way our government does its business the country can not survive. We don’t know when that would happen so we must assume it could happen soon. And, I agree with Monty Pelerin, Our politicians don’t have the strength of character to do what has to be done. Therefore, We The People will have to do the heavy lifting.

Categories: Uncategorized

14 thoughts on “If Our Politicians Won’t Do It, We The People Will Have To Do It For Them

  1. I like your ideas. Let me elaborate on one if I may.

    Leave the UN and NATO and form a new treaty alliance with our Asian allies, Japan, Australia, Taiwan, South Korea and India. Pull all our troops out of Europe, slightly bolster our troops in Korea and seek new basing in the East with our New Treaty Allies. The rest of the troops not deployed from the leftovers from Europe can be culled from the ranks.

    Leave the UN for obvious reasons, we are the only country that give them teeth as well as most of their funding, yet we are always the ones who seem to get bitten by those teeth.

    NATO was formed as a direct counter to the Warsaw Pact – it is no longer necessary, and in my opinion, barring Britain, Europe doesn’t want us there anymore. Let’s sign a separate treaty with Britain and tell the rest of them to eat crap.

    If the crap is going to go down any time in the future, it will be in the far east. By bolstering our allies and our troops, we secure strategic resources and partners for a future that will see an increasingly militaristic China. Not to mention, it will cut the cost of our military drastically by not having to field so many troops in Europe (a worthless mission nowadays).

  2. That’s a lot to take in, i think the first and possibly the easiest step to take is cutting the size of government.

    I’m not a believer of any gubbmint jump-starting the economy, but your idea is a good start, perhaps frame it as, getting gubbmint out of the way of the economy and the rest will eventually fall into place thanks to the human nature of yearning for a better life.

    I’m not a fan of big corporates as many of them tilt to the left and actually like more government interference as it means keeping competitors out of the market. Slashing taxes is a start but gubbmint needs to tear up all of it’s non-essential regulation that ultimately only screws over small businesses who can’t afford the phalanxes of lawyers and bureaucratic types needed to keep them within gubbmints useless regulations.

  3. Jim, you’ve got to move back! What the heck are you doing in Venezuela? You’re a free market guy in Venezuela… worried about the US? I suppose it does give you a unique perspective on what could happen when the wrong people are in charge…

    The reason I want you back is because I want to line up behind your plan. I’ve posted my thoughts on health care here: http://freemktproject.com/?p=791, which agree with you and expand it a bit. I’m completely with you on supporting Kotlikoff’s Limited Purpose Banking. You know I’m with you on cutting regulation… how many posts have I done on that? I also agree on taxes for corporations.

    The biggest thing we have to do as a nation (oddly, other than the Limited Purpose Banking, it’s the hardest, perhaps more difficult than health care) is reforming Social Security and Medicare. Personally, I was behind Bush’s privatization plan, and I’m behind one now. I believe Ryan even includes it in the Roadmap. This is an area where we have to communicate our proverbial asses off. The demagoguery was insane when Bush proposed it. “Do you want your retirement income left in the hands of Wall Street?” You know, as opposed to the wonderful return you get from the government, which is an IOU that you ultimately have to pay back in some other form, or your kids do. The truth is that there are many examples of both countries and even places in the US where they have opted out of the Social Security system and put contributions into low risk securities (bonds, for example) that not only remained safe, but produce a far better retirement income than Social Security. Furthermore, the money can be passed to heirs. So instead of someone at the Social Security administration licking their chops and cheering when someone dies shortly after they start receiving social security because SS doesn’t have to pay out, the money taken from your check is given to your heirs, with interest. It is entirely possible to wind down social security so those close are given their benefits, but future generations slowly stop paying into this sham of a black hole that is already bankrupt.

    Something must be done with SS. Medicare? If we allow the free market to bring health care prices down (see my post), that system can become a block grant system, where people are given money and the people can actually CHOOSE how to spend it (with the assumption that it must be spent on medical insurance). The key to health care is that it has gone too far away from the market. Third party payers have distanced people from costs and choices. They’ve also distanced medical care providers from it. Regulations have limited options for obtaining care (why can’t a well trained person who is NOT a doctor–perhaps a nurse or medical technician of some sort–open a clinic to provide routine maintenance–check-ups–and routine care–dealing with common illnesses and conditions). Remember, in areas of medicine where the free market is at work–elective surgeries–costs have gone down and technology has improved.

    This is too long for a comment, but you got me on a roll. We need to communicate and educate. Thomas Sowell says that, if people understood basic economic principles, government wouldn’t get away with half the things (or more) that it does.

    Thanks for a great post! Pat

    1. Thanks for your kind words and a brilliant comment. Sowell is right. But that’s no surprise,is it? Disaster is coming and people need to understand why it is coming and why it doesn’t have to come. America has to buck-up and take some strong medicine but if we do we will get better. If we don’t, God help our children and grandchildren and in my case , great grandchildren. So, let’s get this snow ball rolling! Game On!

  4. Getting rid of the cap on the amount that people pay into Social Security, i.e. having people pay on incomes above $106.800, would fix the program for the next 75 years. Then Congress could easily get rid of the Government Pension Offset which prevents mothers from getting their spousal Social Security benefits if they become teacher in 1/3 of this country’s classrooms. Preventing stay-at-home moms from getting any of the Social Security spousal or widow’s benefits if they become a teacher later in life? How is that a family value???

    1. Hi Grammie. Thanks for stopping by. Please come back any time. Your point about women who become teachers was news to me and is a perfect argument for a 401K system similar to what Chile has.
      Thanks again for the comment.

    2. What this points out is how we need government out of the way. When we’re standing there with our hand out, hoping the government will give us back some of the money we were forced to put into a (really non-existent) account, wishing the rules were different, something is wrong. Why does this feel a lot closer to the photos of Russians lining up for bread than it does to a free people making free choices?

      When you leave it to government, you’re going to get some stupid rules. When you leave it to government, you’re going to get favors for favored constituencies. Give us a chance to keep our money, even if we are forced to put X-percentage away for retirement, and there’s limit on how risky the investment can be, and what you’ll get is wealth creation, not having our money sucked into a government black hole shielded from our sight by a wall of lies.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s