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.