What now? Parts 2-5
Posted by Euroranger on November 17, 2010
So, last time I said this would be the start of a 5 part discussion on how to fix America. Guess what, you don’t want to read 4 more rambling posts by me on politics and the economy any more than I want to write them. These ARE important issues that do need to be discussed…but they’re not worth 4 more posts here. Just one. This one. In fact, I was considering not doing them at all until I ran across this gem today from the New York Times: How to fix the budget. You’ll need Flash installed on your browser to make this happen but if you do, this is an interesting little exercise for how to go about supposedly fixing the American economy. It’s easy, somewhat explained and has exactly zero chance of ever actually happening. Each one of those 40 proposals would be like World War 3 in Congress so this is all a pipe dream which is sad because this really is an important issue overall. However, just for laughs, go try the NYT piece and post your link in the comments section so we can all compare notes. For fairness, my solution (insofar as this piece would allow MY solution) is here. For conversation’s sake, my solution balance works out as 16% tax increases and 84% spending cuts. Having said that, I’d really need to say two things:
- How accurate are these numbers? They don’t cite their sources in the piece itself and the potential for bias is quite large (especially considering this IS the New York Times whose motto is: “if it’s not news, we’ll make it news”).
- It’s an enormous delusion thinking that anything we could do today about the situation we’d have by 2030 would be effective then. Seriously, think about it a moment. Could anyone in 1990 have foretold the situation we’re in today and accurately produced a budget then that would fit us now? No way in hell. I’d only concentrate on fixing the 2015 shortfall projection. Never, not ever, has a federal projection insofar as money ever come in at what it was projected to be 20 years previously. Trying to manage 2030 today is a freakin’ joke. If we fix 2011, 2012, 2013 and so on…2030 will take care of itself.
So, since I’m gonna deal with the remaining 4 points of my Fix America In Five Easy Steps program, let’s get moving:
2. The Deficit/National Debt – This issue dominates all others because without this being solid, nothing else can happen. This is what generates the money that everything else the government does relies on. How important is this? Well consider this: right now there are around 309 million people in America. The current debt is around $13.7T (that’s T for Trillion). In other words, for every man, woman and child of all ages in the country, the debt per person is a little over $44,000…each. For each taxpayer (because not every citizen is a taxpayer) the number is even worse: $124,000. And these numbers grow by the second. This is an intolerable situation and it has to be brought to a halt. The number one best way to control the debt is to stop incurring new debt. Basically, if you’re in a freakin’ hole: stop digging. To put the debt equation into simple terms, it’s what remains between the difference the federal government brings in in the form of tax revenues and the amount is spends. This year the federal government will bring in around $2.2T in taxes and revenues. However, they’ll spend nearly $3.5T. The difference is the 2010 debt which will be around $1.35T. They (the Federal Treasury) will finance that additional spending that is unfunded by issuing bonds, bills and notes that individuals and other countries purchase. Unfortunately, we’ll pay interest to those who lend us money so that $1.35T for this year will actually turn out to be even more when you add on the interest. So for the simple equation I mentioned above you can only make changes to two places: how much you bring in and how much you spend. That means either raise taxes, cut spending or a combination of the two such that the debt becomes a surplus. You see, it’s not necessary to only get the debt to zero because we’ve run deficits that we need to reduce (pay on). We have a $13.7T debt already…we’re just adding to it with our $1.35T in additional debt this year.
My solution: reduce government spending drastically while fixing the overall tax code. You reduce spending by:
- reducing the federal workforce – The federal workforce has increased 1% per year for the past 10 years while the rest of the economy was busy losing jobs.
- freeze their pay – Did you know that while the rest of us have been enjoying pay freezes and in some cases pay cuts, the average non-military federal worker has gotten pay increases?
- get rid of earmarks – Better still, get rid of the ability to attach riders to bills in Congress (the way almost all earmarks get by). Each bill should be voted on on its own merits. Period. Attaching a bill to fund abortions (for instance) shouldn’t be attached to a bill funding the pay of soldiers in combat and then requiring one vote for both.
- eliminate farm subsidies and slap tariffs on imported farm goods to the level of American farm goods – American farmers are good at what they do but we can’t have a free market economy and subsidize the products at the same time.
- reduce foreign aid – Until our economy is fixed and moving in the right direction, we can’t be giving taxpayer money away. That’s simply stupid.
There are quite a few additional ways to help. One indeed is to fix our broke ass tax system. For decades now the United States has been moving from a producing economy (heavy industry, building things for export, etc) to a service economy (banking, insurance, high technology, etc). This new economy emphasizes spending (you earn a dollar, you spend it, the spent dollar buys something that someone else made which in turn means they have a job, for which they earn a dollar…lather, rinse, repeat as often as possible) but we are still mired in a tax system that taxes production and leaves taxation of spending relatively untouched. What we need is a system by which income taxes are greatly reduced or eliminated altogether and a federal sales tax is instituted along with a minimal flat taxation rate on income. Even in a down economy like we have now, people still need lights, food, water. They still buy clothes, cars, TVs and such. Much of that buying isn’t for American goods though so currently we’re not getting the benefit of taxing the companies that produced those goods…but if we instituted a national sales tax that was collected when they sold their goods here in our never satisfied buyer economy…well, that’d be a whole lot of revenue. That scheme is helped along by reducing income taxes so the people have more to spend…which would raise sales tax revenues. It would also help to eliminate tax loopholes for the wealthy (which the left in this country has an immense class warfare level hate for) because the wealthy buy expensive things. You can reduce the sales tax rates on things like food and the necessities and increase the rate on discretionary and luxury goods. In addition to that, the IRS would be greatly reduced (meaning that that “reduce the federal workforce” idea gets served) reducing the spending doled out to run that federal bureaucracy. One additional benefit: it would mean federal revenues are pegged a lot closer to the experience of the average American household. When times are good, people spend more and the sales tax revenues increase. When times aren’t so good, the government gets to share the pain with us.
3. The Government Itself – I’ve already touched on this somewhat but there is a more fundamental message to be delivered here. The spending cuts and the reduced taxes and the streamlining of the tax system all hint at a fundamental question that needs to be re-asked: what should the role of the federal government be in our country? If you think the rise of the Tea Party movement is a fluke, consider that their main tenets are reducing the size of government, reducing government spending, returning the government to the role defined for the government by the Constitution. Now, I’m not all on board with those notions across all facets of our society but I am with enough of them to recognize that the Tea Partiers are on to something. The spending by the federal government this year for 2010 is going to account for almost 24% of our entire GDP. That is, for each $4 the United States generates this year, the federal government will spend $1. That’s way too much. But what’s worse is that we continue to send the same people back to Washington. This election midterm was all about expressing dissatisfaction with the government was it? Well, we collectively sent 87% of the bozos back to Washington to keep doing what they’ve been doing all along: not much more than screwing the country into the ground.
What this country needs is to completely change the job description for our Congressmen and Senators such that they regard the jobs the way they were originally intended to be: as representatives of the people they represent. To that end, I propose the following changes:
- the pay of representatives and senators be reduced and that such pay is their ONLY income during their term of office
- the forever and ever pension that even one term representatives enjoy should be eliminated completely
- the very generous medical insurance package that Congress (and the president) enjoys should be eliminated and they should be forced to make use of the same medical insurance system their legislation mandates for the rest of us
- for representatives: no meeting with any lobbyist that does not maintain a presence in the district the representative is from. Presence means headquarters, place of employment, etc.
- for senators: no individual meetings with lobbyists period. Instead, a lobbyist hour to be presented on the floor of the Senate for the lobbying interest to present their points of view to the senate as a whole. They do deserve a voice like the people do: their voice however is a distilled voice of a collective…therefore they can be heard in the chamber housing the representatives of the distilled voice of the people
- upgrade the crimes of corruption, bribery and graft to the equivalent of treason/sedition with the equivalent penalties for guilty findings
- establish a spending cap on elections with the combined election proceeds from all candidates pooled and then distributed equally to all candidates – no more “buying” elections
- no running for elected office if you are a convicted felon or have misdemeanor convictions for financial crimes (theft, embezzlement, tax evasion, etc)
- eliminate the (R) and (D) from all ballots – party affiliation should be immaterial to voter selection (if you don’t know the candidates well enough to know their party and what they stand for skip voting for that election)
I’d also throw in there absolutely stringent voter qualification standards that include proof of citizenship, proof of residency and some demonstration that the voter knows something about the candidates’ stated positions on issues. That last one would hit the Democrats harder than other parties but hey, we ought not to have ignorance ruling the day.
4. ObamaCare – It’s about here that I lose the support and respect of those on “the Right”. I’m one of the few on “the right” that believe that we need to do something about health care. Is what Obama did the solution? No and far from it. However, right or wrong, he did something that got Congress’ attention and focused minds on the issue. I believe he completely screwed the pooch on it (as he does most everything he touches) but his intent, while incompetently expressed, was clearly understandable: health care in this country is broken, too damned expensive, not effective enough and needs to change. I have lived in a place with socialized, single-payer medicine and I have to say it didn’t completely suck. It CAN be done properly but none of the examples used by both the left and the right do it correctly anymore.
My solutions for ObamaCare:
- Lift interstate restrictions on policy writing – Increased competition by insurers is necessary to lower premiums.
- Require all insurance companies to pay into a solvency fund – This ensures that if they do not collect sufficient premiums (due to competing) for their claims obligations that the claimants aren’t left holding the bag.
- Eliminate hiring a lawyer on contingency and set up governmental controlled legal aid – If you wish to sue someone you must be able to pay for that action from your own pocket. If you cannot afford a lawyer, you can apply to the state legal aid board for financial assistance (a loan) IF your case has merit.
- Cap awards for malpractice pain and suffering – No amount of money alleviates pain or suffering. Moneys awarded for such are punitive only. If you wish to be punitive to a doctor, suspend or revoke his medical license. Money should be awarded but ridiculous award amounts should be severely curtailed.
- Create a competency score for doctors that is posted prominently in their office/place of work – Just like restaurant inspection scores are posted prominently in restaurants so patrons can see them, doctors should be given a rating compiled by the state medical board rating their effectiveness as a physician per malpractice claims, patient deaths attributable to their care (or lack thereof) and other objective measures of a physician’s quality of practicing medicine.
- DO require mandatory medical insurance – This is one that tends to rankle the right but this is necessary. Indigent care costs are passed on to all of us in the form of higher bills from the providers who have to absorb deadbeats. Require everyone to have insurance (similar to the way everyone who drives has to have automobile insurance). Can’t afford medical insurance? The premium can be deducted from any tax return you might be expecting from the IRS. Not expecting a return and still too poor to afford insurance? You now belong to Medicaid until you earn a certain amount of money. Failure to present proof of insurance relegates you to state health clinics that serve Medicaid only patients.
- Combine Medicaid, Medicare and the VA medical system into a single program. Three government run systems don’t need to exist to serve the same product: medical care. Make sure each is solvent with a lockbox fund that cannot be borrowed against. Period.
- Rather than go to a single payer system, impose strict regulation on standards and performance of the insurers. In addition, all health insurers would be converted to non-profit organizations. Insurance companies, whose sole purpose is to make medical coverage affordable by pooling risk, should not derive a profit from such where people’s physical health is concerned. Other insurance vehicles exist for generating a profit…health insurance shouldn’t be one of them however.
- Allow insurance companies to set premiums that penalize unhealthy behaviors – Do you smoke? Drink to excess? Do drugs? Are you obese? Then expect to pay more for your slovenly habits. We already allow insurers to set premiums by considering hazardous activities…we need to allow them to expand such criteria to unhealthy personal habits. By contrast, do you not smoke/drink/do drugs and are weight/height/gender proportionate? Congrats, your premiums will be less.
Making health insurance mandatory would mean more people would see doctors for preventative care which would lower the overall cost of health care. Curtailing lawsuits would mean medicine would be controlled by doctors again and not by lawyers and insurance companies seeking to reduce exposure to lawsuits by encouraging barrages of tests that aren’t indicated. This one gets almost no support from anyone because it’ll piss off everyone. I’m sure there are other ways to fix health care as well…but ObamaCare ain’t it. It needs to go. We either need a full blast, 100% single-payer system OR we need to enact regulations and legislation to control the forces that are driving healthcare costs up far in excess of inflation. Personally, I’m a lot more comfortable with the second one.
5. Immigration – This one is exceptionally easy because we already have all the laws in place that we need to do an adequate job. In order to do an outstanding job we’d need only a few more things. However, let’s review what we have right this moment. Currently our immigration policy is pretty damned liberal. In 2005, for instance, the United States admitted over 1.1 million legal immigrants and almost 10 million in the 10 years leading up to and including 2005. Right now, there are around 37 million legal immigrants in the United States or about 1 person in 8 (12%). That’s LEGAL immigrants. Our problem, though, isn’t with legal immigration…it’s with illegal immigration. Alongside the 37 million legal immigrants, we have anywhere from 7 to 20 million illegal immigrants with most estimates pegging the number somewhere between 11 million and 12.5 million people. Oddly enough, this past year has seen a rather marked decline in the number of illegals in the United States which is being mostly attributed to the poor economy and lack of jobs.
But let’s think on those numbers a moment. 37 million legal versus say 11 million illegal. 77% of all immigrants are legal, 23% are illegal. Annually, the U.S. legal immigration quota is around 700,000 to 900,000. That is, we grant visas to just less than a million new people per year…and that has produced the 77% portion of all immigrants (legal and illegal) in the United States. With those people we get:
- vetted healthy people who arrive here (mostly) with employable skills who contribute to the country
- around half a million new taxpayers per year because all new visa holders get a social security number and most work and pay taxes
- they tend to be law abiding upstanding citizens because if they’re not, they can be deported
What do we get with illegal immigrants:
- undocumented unknowns who, because they lack legal means to work, tend to work at the lowest end jobs in our economy
- they pay zero income taxes to the government (unscrupulous employers may deduct them but they don’t pay them to the government) which means they don’t pay for the things the government provides
- they use public services (like schools, hospitals, transit, roads) but pay nothing to general fund
- they tend to be associated with increases in crime in the areas where they are more numerous as they don’t fear deportation specific to illegal acts (as they can already be deported for just being here)
So, what’s the solution? Simple:
- Build an impenetrable barrier along our southern border. It’s not racist to acknowledge that the top 4 origin countries for illegal immigrants (Mexico, El Salvador, Guatemala and Honduras) are all south of the border and comprise fully 3/4 of all illegal immigration. Close the southern border and you lop off 3/4 of the problem. This is a no brainer.
- For illegals inside the United States, once the southern border is secure, offer a 6 month period for all illegals to register and receive a temporary work visa for 2 years. They undergo background checks and if they can pass the same stringent measures we have legal immigrants pass, they can apply for permanent immigrant visas after 2 years. If they fail background checks they get deported immediately. If they refuse to register and are caught they get convicted and then deported. The difference is that they will not be allowed to apply for a permanent visa should they have a prior conviction for being in the country illegally.
- Vigorously prosecute any employer found employing illegal immigrants. Make the penalties for such egregiously harsh to the point of prison time or closing businesses.
- Up the rates of immigration across the board so that people who want to come here badly enough can apply, go through the process and come here legally.
Just these four measures would mean we’d reduce crime, increase tax revenues, secure our borders better in this time of war with terrorists and ensure a higher quality of citizen to our country. Wages, especially for labor jobs, would adjust upwards to reflect the relative lack of “cheap” illegal labor and that would likely cause some inflation…but this is a small price to pay for the benefits fixing our immigration situation would provide.
There. Five points for how to fix the country. Do these and the United States will be returned in short order to it’s rightful place as the pre-eminent first world nation we should be. Oh there are myriad other problems to be addressed as well…but with these 5 issues taken care of and out of the way, any remaining issues will/should have a much less harder time getting funded and solved.
My name is Euroranger and I approved this message.