13 Ways to Save the Economy
Regardless of the recent election results, the country still needs to move forward…and new ideas are needed. After a great deal of thought and reading, here are some ideas I’ve had. Maybe you have others. But whatever new ideas you have that are real world solutions – and not pie-in-the-sky dreams – I urge you write them down and send them to Congress.
So, here are my thoughts:
1- Regarding the extension of the tax cuts, recent data shows that working Americans’ incomes only gained, on average, approximately $300 from 1998 through 2008 while the top 1% income grew more than 20% over the same time period. Income inequality is greater now than at any time since the the income tax was enacted. Essentially, American workers now receive the same wages, in inflation adjusted dollars, that they did in 1976 while the top 1% saw their income grow to a level in which they now own nearly 50% of the nation’s wealthy.
So, the Bush tax cuts must be ended for the uber wealthy as studies show that this extreme concentration of wealth at the top does nothing to stimulate job growth or investment in the productive business. The mass concentration of wealth at the top income bracket is a financial drag on the economy.
However, given the numbers of productive and innovative small and new businesses that are sole proprietor businesses, the tax debate could be changed. For example, those independent proprietors earning up to $220k/$250k, taxes could stay the same for a specified number of years until the economy recovers and/or an overhaul of the tax system is completely revised; for those earning up to $500k or a million, their taxes would increase by 1 or 2%; for those earning over a million, the tax reduction would be eliminated. In other words, change the conversation by adding more tax brackets to help small/new businesses grow.
2 – Require, as a part of the current tax debate, a bi-partisan committee or commission to study and recommend a complete overhaul of the entire tax system. I know Pres. Obama has his commission’s study available for review and the largely ignored Wyden-Judd bill exists, but Congress has not bought into any of these plans or ideas. Nevertheless, the entire tax code needs to be revised and cleaned up to make the US more globally competitive as well as make it easier to comply with. In addition, small and new businesses need a cleaner, more competitive tax code that encourages innovation as well as research and development.
3- Push the elimination, as part of the tax discussion, the numerous automatic tax payer subsidies amounting to over $500 billion/year to highly profitable, legacy industries and corporations to reduce the deficit. The federal government should no longer be subsidizing, at tax payer expense, old, highly profitable industries, such as big oil, mining, and agribusiness, at the expense of new industries.
Creative destruction cannot occur to bring on new industry and technology when the taxpayer, through tax policy, supports old industries.
4- Stop or prevent the defunding of cost control measures in the health care legislation. Health care in total is 17% of GDP – or $1 trillion each year and growing. Health care costs continue to rise between 2 to 3% more than inflation.
That’s much higher than anywhere else in developed countries which spend on average approximately 7% of GDP on health care. These higher costs are not just unsustainable, they are harming our businesses and preventing job creation. Costs must be decreased on companies, employees, and retirees.
Unlike the GOP mantra of a “government take over of health care,” the new bill actually appears to put the responsibility on the buyer to seek out the best, most affordable plan available in the marketplace. Nevertheless, cost containment must be a priority as more and more baby boomers retire to prevent a fiscal melt down of the federal budget…and when more people know the actual costs, they are more likely to make better, more fiscally responsible choices.
5- Continue to push for solid financial industry reforms that protect investors, consumers, and the public from the depredations of an out of control Wall St. trading environment. To roll back the recently enacted reforms, although not perfect, would leave communities and families open to the same speculation that caused so much harm to the world economy and drove millions of Americans into homelessness and financial ruin. The rules need to be simple, strong and effective to control the worst of human “animal spirits.”
While greed and “me first” attitudes can never be legislated out of existence, it can be moderated. It’s not too late to curb the most harmful, excessive effects of Wall St speculation…and to rapidly force the clean up bank balance sheets. I am absolutely in favor of the Volker Rule, and it should unequivocally be the law of the banking land as well as having the majority of derivatives sold on an open, transparent market and an independent consumer protection agency that enables consumers to make wise decisions.
6- While I truly believe global warming (more accurately called globally wierding) exists, given the NASA photos, especially within the last two to 5 years, of the Arctic and Antarctic Oceans and Glacier meltdowns throughout the world as well as the scientifically documented changes in ocean, reef and sea life, it still remains difficult to change the opinions of non-believers, especially of those whose livelihoods depend upon legacy energy industries. So, I recommend changing the conversation from Global Warming to energy independence and security and jobs-producing innovation just as China has done.
AEI and Brookings joined together to put forth recently a very impressive and workable solution to “climate wierding.”
7- Push for an innovation investment bank, along the lines of DARPA, that would be free of Congressional earmarks and pressure in order to invest in innovative technologies, research and development, and provide funding for the technology and jobs of the 21st Century…and along with that funding, set up a funding mechanism that encourages and partners with industry to retrain employees, a la Germany, to meet the employment demands of the future.
8- Break the back of teacher union demands to protect burned out or incompetent teachers. We need only the best and brightest teachers of our children in order for them to compete with Germany, Singapore, Hong Kong, China, and India in the 21st Century.
Our children can’t achieve that level of global competition unless the system changes overall to encourage children to stretch their imaginations, abilities, logical, analytical and problem solving thinking. A 60% national high school graduation rate is just not acceptable. A 30% college graduation rate is no longer acceptable.
The dynamics must change across the board in order for our children to effectively compete in a global economy. Period; end of story. As a nation, we must do better for our children and grandchildren even if it means overriding the teachers’ unions.
9- Invest in our children’s educations by providing them with the latest technology and multi-media. As the world grows closer through the internet and technology, students need to learn how to use it to develop their future creative innovative abilities as well as develop their abilities to discern truth from fiction. Imagination, problem-solving creativity, analytical skills, and the vast array of upcoming – or ongoing – solid expert written and sourced material online will help our children discern not only the truth from fiction but encourage them to use their imaginative problem solving skills.
10- Assisting in the development a new, safe funding mechanisms for public employees to reduce huge implicit taxpayer demands in state budgets. Think CalPers and what that means for all Californians. There has to be a better, safer investment way than the current speculative model.
12 – Using the German model, develop private-public partnerships to prevent layoffs and increase retraining of employees. Instead of layoffs and massive unemployment insurance, use the German model to developing a program whereby employers keep everyone employed part time.
Rather than lay their workers off, employers, using the same unemployment insurance, maintain their employees with unemployment insurance payments going to the companies to pay for the the difference between part time and full time salaries. In other words, the government makes up the difference between part time and full time employee salaries instead of unemployment compensation.
By revising the system to encourage companies to maintain their workforce, both the company and the workers – as we’re now seeing in the competitive level skill set of the US workforce and that of Germany – are greatly enhanced when workers are continually employed even at a part time status.
However, union and non-union workers alike must be required to complete classes to upgrade their skills to meet current marketplace and technology demands. If the worker refuses, they will be fired…no ifs, ands or buts, regardless of union membership.
13 – Support election funding mechanisms such as the Fair Elections Now Amendment and a clean Disclose Act to eliminate the unfair and blind influence of unknown entities attempting to buy or unduly influence our elections. In the late 18th Century when the Constitution was written, the US did not have corporations per se…and revolted against the 18th Century model of corporate political influence in England and the Americas.
The Constitution states one person per one vote. It says nothing about a legally fictional entity having the status of a citizen. The Citizens United vs FCC case is a perversion of the intent of the founders and the Constitution which allows a non-human to use its vast financial resources to affect the messaging and conclusion of an election to that entity’s benefit.
Nearly 90% of American voters disagree with the SCOTUS CU decision. An equivalent number find the current election financing model both broken and leading to overwhelming opinion that Congress is corrupt.
The party which addresses these issues in the next election which have a greater chance of winning the next election. This election was not just about voter discontent over high unemployment and economy, it was a vote against the perceived notion that Congress is corrupt.