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Six Steps Toward Fixing the US Economy

Personally, I have never been so worried about the future of our nation, with my primary areas of concern falling into 3 categories: Our economy, our foreign relations, and our own moral decay. This blog entry is focused on our economy, including underlying causes such as corruption and inappropriate influences affecting national legislation.

The American economy is weak by any historical standard. Almost 13 million Americans are unable to find work. 13 million; just think about that more a moment. 13 million Americans are unable to find work to feed and clothe themselves, not to mention save money for retirement or buy Christmas presents for their kids. 13 million of our relatives, friends, and neighbors. The national employment level, though substantially under-reported because of all the people who have given up looking, and the others who – although they need full-time employment – can only find part-time work, remains at more than 8% even 3 years after the “recovery” following America’s most recent recession.

Also, the United States has 312 million residents and 106 million of those residents live in households where one or more persons are receiving US Government financial assistance of one kind or another. Doing simple math, this tells us that more than one third of us are getting help from the Government. Almost 9 million Americans are currently on disability insurance. Almost 48 million of us are on food stamps. Again, 48 million people – about 15% of us. That means that 15% of us can’t even afford to buy food! (http://www.billoreilly.com/video?chartID=556#play

In addition, the US Census Bureau this week reported that 46.2 million Americans remain in poverty – a level that continues to hover at 15%, or roughly 46.2 million Americans. If you add up the population of the 10 largest cities in the United States, the poor are still more than twice their combined population.

 Furthermore, America’s national debt – the level of indebtedness we are passing on to our children and grandchildren – has now surpassed $16 trillion. That is a tax burden that has now passed $51,000 per person. Essentially, we have signed the names of each of our children and grandchildren to $51,000 mortgages and then spent the money – and they will have to pay that money in taxes along with whatever additional debt we incur and whatever debt they incur – on top of what would have been their normal tax rates. It’s like everyone starts out in life with a student loan for $51,000 but is never allowed to attend college, but they have to pay off the loan anyway.

Liberals and Conservatives present two starkly different approaches to resolving this problem. Liberals (basically the Democrat party) approach the problem through massive spending on public works projects and redistribution of money from higher income individuals and businesses to individuals and businesses with lower income levels. This philosophy was underscored by presidential candidate Barack Obama in 2008, when he told a small plumbing business owner (later dubbed “Joe the Plumber” by media pundits) that because his business was clearing over $250,000 a year in sales, he should be “sharing the wealth” by paying higher tax rates, ostensibly enabling Government to give that money to others. Conservatives address the problem by lowering income tax rates – usually across the board, but often especially for businesses, in order to encourage expansion and hiring. They also typically favor the reduction of governmental regulations around everything from trade to environmental protection, in order to further encourage industries like manufacturing and petroleum production – again, with the goal of increased employment. 

Unfortunately for America, in recent years it has become clear that neither Liberals nor Conservatives can effectively execute their strategies. In general, it is because both sides push their approaches too far. When Conservatives are in control, they deregulate to such an extent that American lending institutions implement corrupt and unsound lending policies and fraudulent accounting practices. (Lehman Brothers is a prominent example.) When Liberals are empowered, they spend recklessly and impoverish the nation and our progeny. (The examples here are legion, with the most obvious manifestation being debacles like Solyndra, and the US National debt expansion under the Obama Administration.) They impose regulations that often increase cost and make products / businesses uncompetitive, and sometimes attempt to impose regulations for purposes of “political correctness” such as requiring the awarding of government contracts minority owned contractors, even when those businesses would otherwise not be competitive in bidding.

Part of the challenge that political leaders face when coming into office is that radical steps must be taken to compensate for the prior years of poor decision making on the part of their predecessors. In order to correct our course of expanding national indebtedness, for example, simply balancing our budget going forward will not be enough. Massive spending cuts will have to be made, far beyond what would have been required 6 to 10 years ago, if we want to avoid burdening our children and grandchildren with these debts. In essence, newly elected or appointed politicians must over-correct, resulting in accusations of unfairness, unwillingness to compromise, and extremism. It makes the politician unpopular, and in many cases, unable to garner the support required to make the corrections needed for recovery. 

That is the situation we find ourselves in today. The sins of the past (in both Conservative and Liberal administrations) have left us with a massive level of national debt, chronic and high unemployment levels, a spending profile that is unsustainable, public welfare programs that are certain to reach insolvency within a decade unless action is taken to trim them or adequately fund them, and a tax code that is neither fair nor effective. 

Ideally, both sides (Liberals and Conservatives) would come together and compromise on a solution that would take aggressive near-term step such as deep spending cuts, and sound long term stabilizing steps such as constitutionally requiring a balanced Federal budget and restructuring the tax codes around a flat 17% individual income tax rate with no exemptions and no tax returns to file. 

But the level of leadership required to execute an effective recovery strategy has not been visible in America in a very long time, and the bureaucracy that has grown up around Congressional and Senate activity makes it almost impossible. Lobbying, special interests, political action committees, and other influencers of our “representatives” make clear-headed and unbiased decisions almost unheard of today. No one votes in support of the common good these days – they vote in a manner that supports their political party (which draws financial support for re-election), their highest campaign contributors (which supports their both their ability to remain in office and often their personal wealth), and their individual constituents (which garners them votes in future elections.) As is clear with both the incumbent and the challenger in this year’s Presidential race, politician’s positions on everything from government-sponsored health insurance to abortion rights change as often as the weather in favor of political expediency.

So what could change all this? What could break the deadlock in Washington, restore principle-based, moral, and unselfish behavior on the part of our elected and appointed officials? Here are 6 ideas:

  1. A single, 5-year term for all US Presidents and Vice Presidents with no repeat occupants of those offices.
  2. Two year term limits on all congressional and senate seats, with no repeat senators or congresspeople. Nor retirement benefits for congresspeople or senators.
  3. All members of the Congress, Senate, and members of the Administration – including the President – required to participate in the same health care benefits, vacation benefits, leave benefits, and payroll tax structures as the rest of US government employees. 
  4. A constitutionally mandated balanced budget.
  5. No contributions legally permitted, other than individual contributions, to US Government campaigns for the Presidency the US Congress, or the US Senate. A personal contribution ceiling of $100,000, and all campaign contributions made a matter of public record.
  6. All Political Action Committees (PACs) of all types (including “super-PACS”) made illegal.

 

What do you think? Have some ideas of your own you’re willing to share?

 

 

 

7 Responses to “Six Steps Toward Fixing the US Economy”

  1. Marie Luft says:

    Good job !! Awesome !! I’m not sure if anything would get done with only a 2 year term because of the initial length of time of getting into the job, but I do think you are on the right track. The rest of the points I agree with, entirely. !!

  2. Marie Luft says:

    Oh, one more thing … you might want to throw out the lobbying system as well.

  3. Bill Kral says:

    Hello Bill: I agree with most all you have said with a few reservations. I don’t like term limits, although I see why one may think they are needed because we can never seem to vote an incumbent out of office. But shame on us and because of this I am against limiting my prerogative of voting for the candidate I feel that is best qualified. The age old argument that we do have term limits and it is called an election is an old argument but one that I think still holds water.
    The second one regards the balanced budget. I believe that in most all years that should be the law but there must be provisions for emergencies, disasters and/or wars. But there must be provisions in the law to require paying down whatever debt is amassed in this time of emergency for the debt to be repaid in full, i.e. NLT say 5 years so the generation responsible for incurring the debt is also the one required to repay the debt.
    Glad to have discovered your blog and that you are now safely back in America.

    • Bill: Thank you so much for your very thoughtful comments! I have missed your insights these last years! I am glad to be back on US soil again too. It’s been a year now since i returned home from Afghanistan, and I’m surprised how quickly it has gone. I will invite you along the next time Wayne and Jiom and I get together for dinner – it would be great to chat with you again. Please feel free to look back through old posts on my blog and comment on any of them – I’d love to hear your thoughts!

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