The Top 10 Fixes to Our Country

I went through what I consider to be the big, fundamental problems that are literally putting our country at risk, and I ended up with 10 suggestions:

1. Allow companies to fail
2. Balance the budget responsibly
3. Implement the FairTax or similar plan (must be simple)
4. Increase domestic energy production responsibly
5. Restore a free market in health care
6. Fix Social Security
7. Restore local government
8. Allow our military to do its job
9. Impose term limits on Congress
10. Eliminate the two-party stranglehold on our country

I go over each of these below.

Allow Companies to Fail

There is no company that is too big to fail. Contrary to what Obama suggests, FDIC banks are allowed to fail; the government simply guarantees the deposits up to a defined limit after the bank fails. This is a desirable policy for a bank where people want a safe storage of money; but it makes no sense for an investment firm where the whole intent of the firm is to invest its money and put it at risk. If a systematic failure starts to occur, we must allow it to play itself out – which means those who made unwise investments (regardless to how popular they may have been) are punished and those who were wise are rewarded. Any firm that is considered to be “too big to fail” would have to be heavily regulated (government controlled) and would have an unfair competitive advantage against smaller firms during the hardest times. It would force small firms out of the market and result in a quasi-nationalized industry, which has never been a good thing.

Balanced the Budget Responsibly

We need a sensible balanced budget amendment. Keynes took a valid concept and abused it. If the government is forced to cut spending during a recession, it only makes the recession worse - that part he got right. However, Congress (and by extension, the American public) has proven that it is not mature enough to run a profit during the good years. This Congress has extended the irresponsible behavior and can not even put limits on its spending when times are bad! Thus, we need an amendment that will force us to be more responsible. The budget should be kept balanced within certain parameters. For example, when unemployment spikes, a deficit would be allowed, but when unemployment is low, a surplus would be required. The exact details would have to be worked out.

Implement the FairTax or Similar Plan

The tax policy is currently used as a political tool to reward favored constituencies. These individual rewards grow over time and result in a tax code that is impossible to understand or explain in full. The only reasonable way forward at this point is a complete rewrite from scratch – anything short of this would result in an even more complicated code by the time it got out of committee.

The new tax system should be designed to make America more competitive in the global economy. One of the biggest problems with the current tax code is that it penalizes our corporations due to a ruling by the WTO that does not allow our corporate taxes to be reimbursed on exports while most other countries do not have corporate income taxes and are able to reimburse their VAT. The result is an extra expense on our exports.

Another problem is that we tax income rather than wealth. This allows the truly wealthy to keep their wealth while making it difficult for workers to become wealthy. This works directly against the American Dream.

In order to overcome these problems, we should adopt a consumption tax (e.g., FairTax, VAT, etc.). This will eliminate the US corporate tax penalty while also taxing people based on their standard of living.

Increase Domestic Energy Production Responsibly

We are too dependent upon other nations to supply us with energy; yet we still refuse to fully develop our own resources, despite the fact that we could do this while being much more environmentally friendly than the our current energy suppliers are.

We need to become more self-sufficient in the energy market. In the short-term, this means drilling (off-shore, ANWAR, etc.) and we should therefore eliminate the artificial barriers that are raised to prevent this. However, we must realize that this will consume a limited resource. Therefore, we must also create market incentives to promote other solutions. The key is to provide the market incentives directly to the individual so that they can make the wisest use of the money (as opposed to allowing a politician decide which favored industry should be rewarded). We must ensure that the individual receives a fair benefit regardless of the type of decision that is made; for example, energy efficiency and energy conservation are valid alternatives even though these measures do not necessarily require individuals to purchase any product. Thus, the key is to return the money to the individual; if they decrease their consumption, they will reap the benefits financially.

The governmental policies should be limited to penalizing those items that cause real, tangible problems (e.g., dependency on foreign oil), not picking one preferred solution against another. Further, the government should eliminate the unnecessary restrictions on all energy production and return the tax to the people by lower taxes elsewhere.

Restore the Free Market in Health Care

Health care costs continue to grow, but most seem to ignore the fundamental reason for the increase in cost. Most of these additional costs are due to advances in technology, procedures, and drugs. Yes, these advances save lives – but then again, as Americans, we too often become more lazy and offset these advances with a less healthy lifestyle. Further, Americans increasingly view these expensive technologies as a right because they are so unaccustomed to paying for them directly.

We need to establish policies that allow the individual to realize the real cost of health insurance. Having to purchase individual health insurance was the best thing that I ever did for my health. It brought home the fact that having a high cholesterol level statistically means that I am at significantly higher risk for complications than someone who does not suffer from this problem. This became a wake up call for me to get into better health so that 1) I don’t have a heart attack, and 2) I can hopefully lower my cholesterol so that I can realize lower insurance premiums. A major factor related to our poor health is that people do not realize the full cost of being out of shape.

We need to eliminate the incentive for corporations to provide health insurance. Each individual family should pay for their own insurance so that they are more realistic in purchasing the right level of insurance. We should also make sure that the industry offers a level of insurance that only covers the 1970’s level of coverage; yes, this would mean that some services and drugs would not be covered, but it would allow virtually everyone to have a basic level of coverage without forcing innovators to give away their inventions.

Fix Social Security

The Social Security system is going bankrupt. We need to consider develop a solution that retains the key benefits of social security while making it financially feasible.

The main philosophy behind Social Security is that it is a self funded insurance program. I would call it life insurance, but that term has already been taken to mean the opposite (i.e., we’ll pay you if you die). So perhaps we should call Social Security, “death insurance,” in other words, it pays you as long as you live.

One of the problems with an individual buying “death insurance” is that it requires the insurance company to be very stable over the long term, which we have discovered is not always the case. Thus, that the government would either need to heavily regulate and insure this market or to nationalize it altogether (as it is now). Of course, we are also discovering that when you put the government in charge, you can’t trust it either. Thus, we need legislation that the “death insurance” premiums should not be used for other government accounts. Any significant surplus should be put into a long-term safe asset such as gold.

But of course, even if the entire surplus had been put into gold, we would still be facing a shortfall. We need to realize that Social Security was never meant to be a 10-20 year retirement program. We need to respect the value of the program. None of us knows exactly how long we might live, thus this type of “death insurance” is desirable. In addition, the program is designed to be (mostly) a self-funded program; you only get benefits out if you have paid into the system. We can debate the specifics, but the bottom line is that we need to cut benefits by 30%, raise premiums by 43%, or some combination of the two.

Restore Local Government

We should eliminate federal funding for areas such as police, education, local roads, food assistance, etc. These services are best provided by a government that is close to its people - not politicians that are beholden to special interests and who make their living by pitting one constituency against another. Local governments can tax and raise their own money for these issues and We The People will then be able to hold our local politicians more accountable for their actions. We need to remove power from Washington and give it back to the local government.

Allow Our Military to Do Its Job

The management of our military has become too political. It is not hard to identify the problems in our military. Everyone knows that our troops are tired (so we need more troops) and that political vested interests have kept funding for outdated weapons systems and forces new weapons systems to be developed in plants that are scattered about the country in order to get enough votes in Congress. Strange how everything comes back to the people that we elect and who stay there for 30+ years. We must eliminate these entrenched vested interests. The Congress should only be allowed to define the military budget at the highest levels and we should entrust the career military to properly equip our army. We must also increase military pay so that we attract and retain enough qualified personnel (and then maintain an adequate reserve once peace is restored).

Impose Term Limits on Congress

As discussed above, our politicians have become too entrenched, too powerful, too corrupt, and too partisan. They all claim to be bi-partisan while continually making statements to split the country into two groups. The politicians are too out of touch to even know the affect that they are having on us. Representatives should be limited to 4 terms (8 years, same as the President). Senators should be limited to two terms (12 years). This would allow a desired level of stability in the government without effectively turning these people into royals with permanent seats.

Eliminate the Two-party Stranglehold on Our Country

The problem is not the Electoral College, could you imagine what a nationwide recount would have been like in either 200 or 2004? A state-by-state election is HIGHLY desirable even in today’s day and age.

The problem is the two-party system. Why is there a two-party system? Because 1) the Constitution says that if the Electoral College does not define a clear winner, the Congress gets to decide, and 2) the two mainstream parties have entrenched themselves by ensuring that the federal government funds the primary process. As a result, of these two policies, most serious candidates run for the nominations of one of the two parties. The final election then becomes between these two parties and any third party is viewed as a potential spoiler. This view of third party candidates then solidifies the two primary parties further. It is a vicious cycle.

The solution is to eliminate the primary system (that no one seems to like anyway) and to develop a new process. The new process should entail a lengthy vetting of the candidates in a manner that will engage the country to think about the issues; however, this should take place in a single forum - not Democrats in one yard and Republicans in another. We are all Americans and we should all be electing our President together.

My proposal would be something along the line of a down-select process. The first round of voting (a year in advance?), anyone meeting minimum conditions could run. In order to continue to the second round, you would have to be in the top 8 candidates. The second round of voting (March?) would then result in 4 candidates. The third round of voting (July?) among four candidates would result in the final two candidates. The final election would then be in November. Once again, the details would have to be worked out - the key concept is that all candidates would be running against everyone the entire election. The result is that candidates are much more likely to build their own constituencies rather than relying upon the entrenched definitions of the Republican and Democratic Parties.

I would love to hear your thoughts on these proposals...