How to Fix the United States [Reader Post]

I ought to make two comments before beginning this set of ideas:

First of all, I entitled this How to Fix the United States, despite the fact that I hate the phrase _____ is broken, whether that is a reference to the economy, healthcare, Congress, or whatever. I despise that phrase because it is overly simplistic and it appears to give carte blanc to the repairing of whatever is broken to the person making this simplistic observation. Just because there are problems with this or that aspect of America, does not mean that we need to tear down all that is there and build it up as brand new, usually according to some far-left ideology which has never provided a reasonable solution for anything ever in the history of mankind.

Secondly, I would expect that either the Republican party or some good conservative candidate will come out with a book with this title, or something similar, prior to the 2012 election (e.g., The Tea Party Solution or The Ten Point Platform for American Success).

There are several assumptions I am going to make: (1) we live in the greatest nation in the history of mankind; and (2) we were founded by men of great character and foresight. Therefore, I do not believe that we need to tear this whole system down and start from scratch; in most cases, that ends up being a Marxist-type solution or a solution which will bring us far more problems than it will solve.

Domestic Policy:

Taxation:

First problem is taxation. We are taxed far too much, and, no matter how much money is collected by the federal government or state governments, those in power will figure out a way to spend more than that.

It is not unusual for your taxes to total over 50% of your income. In fact, since I own several properties, my taxes end up being about 75% of my income. My government takes far more money from me than I actually make.

On the other hand, I know of many people who essentially pay no taxes whatsoever, apart from a meager sales tax and FICA taxes. That is simply unfair.

Should the rich pay higher taxes? Even as a conservative, I can live with that, but there needs to be a clear ceiling.

First of all, and this is going to be quite unpopular, I believe that everyone ought to pay taxes, including those who pick up a welfare check, those who work 10 hours a week at McDonald’s, on up to Bill Gates and Steven Spielberg. However, there needs to be a strict formulation of the highest taxes being no more than 3x (or even 4x or 5x) what the lowest taxes are. So, if Charlie Brown, high school student and part time employee at Jack-in-the-Box pays 5% federal income tax, then the most that we can charge Tiger Woods is 15–25% (depending upon where we land on the multiple). That way, if we vote to raise or lower taxes, everyone then pays higher or lower taxes. That is fair, above board and honest.

When it comes to retirement and/or FICA withholding, and Medicare/Medicaid taxes, we should all pay for this and, as much as possible, pay for our own. If we want to have the biggest hearts in the world and insure that every single person is covered by healthcare, that is fine; let’s see it up-front on our weekly or monthly pay stubs. If we want the government to keep aside a retirement plan for us (Social Security), then let’s see it clearly in our payments to the government. And whenever these entities begin to go broke, then we need to make hard but common sense decisions: our withholding is increased or the end benefits are reduced (e.g., a higher age for those who can get Social Security or Medicare).

Most people invest their money and that ought to be encouraged; some put it into treasury bonds, some into stocks, some into gold, etc. Investment ought to be encouraged, because this is partially how businesses are built up and expanded. Therefore, we ought to have a very competitive rate for capital gains—even as low as 5%. If there needs to be a distinguishing between long-term and short-term capital gains, that is fine; and tax the short-term gains at a higher rate (or at the taxpayer’s normal rate).

Corporate taxes should be no higher than capital gains taxes.

Right now, one of the problems with our economy is, those who make the jobs are being hit with either high corporate taxes or high income taxes. There needs to be a lower tax rate for those who make a lot of money and for those who make some money via capital gains are those who make our economy work. Small business has been hiring most of our workforce as of late, and these small businesses are disproportionately penalized because they file normal 1040 + C form tax returns. So when a president says he is going to tax those who make over $250,000, he is really taxing small business for the most part, which reduces the number of jobs which small businesses produce.

Speaking of taxes, our tax code is an absolute mess. Tax breaks and credits are given to one set of people; and a few years later, these things are called tax loopholes. If we could get rid of the IRS and just have a consumption (sales) tax, that would be my preference. However, if that is not possible, then the number of tax breaks needs to be reduced to as few as possible. These write-offs, for the most part, are simply Congress picking winners and losers; or Congress making paybacks to those who have supported them in the past.

Taxing businesses:

There needs to be more flexibility when it comes to depreciation. If a business wants to deduct all of what they invest, then the government ought to let them do it. If a business wants to depreciate, then they ought to be able to depreciate a little more than they spend, as they are depreciating over a period of time. For instance, anything depreciated for 5 years ought to be depreciated at, say, 110% of value.

I still lean toward a consumption tax only; but if we still have the IRS, it needs to be more business friendly.

Investment vehicles must, ultimately, put money into the hand of some business (and not just into the hand of the business collecting the money); and all investment vehicles needs to be easily explained and understood.

Congressional Spending:

Most people do not mind paying taxes if they believe that their money is being handled responsibly, which describes exactly how Congress does not function today.

Every branch and department of government needs to see an across the board 20% budget reduction the first year; and a 10% budget reduction the second year. Only the military, FBI and CIA would be exempt from these cuts. The Congress or President do not need to micro-manage at this point. The Department of the Interior will now have a budget 20% lower than the previous year, and let them figure it out from there. All Congressmen will see that reduction in their budgets, and they can determine will they lose staff, trips or salary benefits.

Along with this should be a balanced-budget amendment which includes everything except the military. If we run a deficit the size of the military during a difficult time, fine. However, all other spending needs to be reigned in.

There are several departments which have ballooned far beyond where they ought to be. I am not even sure that we need a Department of Agriculture or a Department of Education. Much of these sorts of organizations could stand to see an 80% cut in their budgets.

There are important federal, state and county employees, and there are those which are not all that important. Anytime a state begins to run over-budget, they always threaten to lay off police, teachers and firemen, and then to let the criminals loose out on the streets. Here is what the federal government ought to do, and maybe state governments would follow suit: there are federal workers who know that their job does not really contribute to our country in any meaningful way. All federal workers who can show this and explain it in less than a half page will be fired, given a pension of a half-year’s salary, and sent out in the real world to find real employment. Any individual who blew the whistle, so to speak, on his entire department, would get a half year’s salary, + $20,000 for each employee that this whistle blowing ends up taking off the federal employment rolls.

In any case, all federal employees need to take a reduction in pay; and a reduction in hours, if necessary. Because people are living longer, federal employee benefits need to be reduced as well, and held out there until an employee turns 65 or 67 (or whatever). It makes little sense to allow people to retire with great benefits and salary at age 55. We simply cannot afford this.

Also, all federal employee unions need to be disbanded.

There is a huge amount of money which ends up going out to a variety of organizations, including ACORN, churches, public radio and public television. I don’t know if all of this is in grants or matching grants, but wherever this money is funneled from, it needs to stop, or be drastically reduced.

If a church or religious organization chooses to help out the victims of an emergency situation, that is all well and good; but the federal government should not reimburse them for doing that. If they want to give and participate in helping, that is wonderful; but let them do this on their own contributions.

Every public entity which receives money from the government needs to have its books opened and available online for anyone to view. There should be no transfer of money from one public organization to another. I have heard that there are 200–250 different public organizations (and at least one private organization) tied to ACORN and that money travels from one to another (and that they will not open the books for this private organization). Many of these organization shared the same address in New Orleans, even though there were not enough offices to allow 1 office per organization. This makes no sense. If the federal government gives money to this or that alphabet organization, that money needs to be accounted for in an online budget, and none of it can be allowed to flow into some other organization—particularly not into a private organization.

Separating Government and Business:

Speaking of organizations, there needs to be a clear wall of separation between all organizations and the government. FNMA and FHLMC are two of the largest businesses in the world; their assets put ENRON to shame. They are, essentially, to blame for the mortgage crisis which has led to our economic recessions. Government policies determined which loans this corporations would buy, and what their qualifications would be. At one time, a person had to have an almost spotless background in order for FNMA or FHLMC to buy their home loan; then, over the past 15 or so years, these entities bought loans from people with horrible credit, little or no income, and without the careful background checks which were once an essential part of the mortgage industry. These original standards need to be restored and these companies need to be privatized and, if possible, split up as well. It was the intermingling of governmental policies and quasi-governmental agencies which brought us to the place where we are now. That needs to end.

FHA mortgages (those which are backed by the government, and have been historically stable investments) need to be kept at a certain percentage of the market; e.g., no more than 35% of all mortgages. High requirements for borrowers in terms of stability and credit need to be maintained.

The government needs to get out of GM. If it cannot stand on its own, it needs to be parted out.

No more bailouts. Any company too big to fail needs to be carved up into smaller companies which are not too big to fail.

Additional Congressional Spending:

One of the wonderful things which happened this past year, because of President Obama and because of this Congress is, people are beginning to pay attention to the details of Congress and the kind of wheeling and dealing which has become common-place in Washington. This is not a Republican thing or a Democratic thing; this is a government thing, and most people do not like it. If a bill is not good enough to stand on its merits, we do not want to see various congressmen bribed in order to sign on to the bill. Maybe it is the way things have been done in the past; and we can spend all day blaming the other guys for this; but it needs to stop. If no legislation passes for the next 4 years, that is better than legislation which is riddled with bribes, payoffs and earmarks.

Along these same lines: if Alaska wants a bridge or if New York wants to establish some speciality museum, then let them pay for this out of state funds. Federal funds should no longer pay for any of this stuff, apart from keeping up the interstates.

Unfunded federal mandates need to either be funded or rescinded. Let the states decide.

All of the massive bills just passed this year by Congress need to be rescinded, insofar as possible. Unpaid stimulus money should not be paid out to anything; unspent healthcare money should be frozen and used to pay down the debt. All taxes should be rolled back to the amounts which I suggested at the beginning of this article.

Spending on Education:

Washington D.C. ought to set a precedent by letting $7000 tax dollars follow whatever student to whatever school they want to enroll in. Many private schools can educate a child for that, or very nearly that. A child can take this money and enroll in a public school with a great football program or in a private school with a fantastic arts program. Let parents and children decide where they are going to go. Furthermore, and this is a whole new topic, educational standards need to be lowered, not raised. All children need to be educated, not just those going to college. In most cases, a year of high school practical math and 2 years of English is fine. Give the students a great deal of choice when it comes to their high school curriculum. That is called freedom. This does not mean that there will be no more kids taking Calculus. Kids will continue to take Calculus in high school. What it will insure is, there will no longer need to be a watering down of college prep courses because every child is required to take that course.

In any case, give private schools a lot of latitude in their focus and in their discipline, and let parents and children decide where the child wants to go to school. Public schools where no one goes would obviously need to be shut down or re-opened with a new plan and a new staff. Private schools should be able to set their standards in terms of who they will keep as well. If a school has a zero tolerance policy, then that is their choice; and students can be removed at their discretion.

All federal funding for school lunches and breakfasts needs to be reduced by 20% every single year.

Transparency:

Legislation protocol: Candidate Obama had some wonderful ideas as to what Congress ought to do. Let me expand on one of them: if a bill spends over $1 billion, then it must be posted online for at least 2 weeks before any voting takes place. There needs to be a side-by-side English translation of the legalese for this bill explaining where the money is going to and who are the actual or possible recipients (sometime grants are posted and a variety of organizations can apply for these grants). All amendments offered up need to be posted online for 2 weeks with a side-by-side English translation as well before these amendments can be introduced, debated on and voted on. No more of some Senator bringing in a 400 page amendment and adding it to a bill on one day, and then passing the bill the next. It will slow down Congress, obviously. Nothing wrong with that.

Furthermore, I would like to see the name or names of those who have written these bills; and I would like to see the names of those who propose this or that amendment. When there is a $1 million or higher expenditure in a bill, I want to see some Congressmen’s names next to that expenditure.

Healthcare reform:

Most conservatives can tell you what ought to be done: selling policies across state lines is real competition and would reduce prices; torte reform would also reduce prices. Neither approach is found in either the House or Senate healthcare bill (although they spent months talking about competition).

It is reasonable that government gets some kind of a price break when a doctor or hospital takes on Medicare and Medicaid patients. However, this price break should be no more than 10% off a physician’s normal charges. Underpaying physicians and hospitals means (1) they do not feel guilt about gouging the government; and (2) they have to often charge more for their other customers. Paying doctors more will result in Medicare paying less overall.

I want to add a couple of things: the government needs to overrule the states in one area, and allow high deductible, catastrophic insurance to be available nation-wide, which provides coverage only in a medical catastrophe (e.g., medical treatment which exceeds $10,000 in a year). With nationwide competition, such insurance would cost somewhere between $100–$200/month.

A second thing I would like to see would be clear identification of what each healthcare plan was all about on the first page. Just as movies are rated, insurance companies should have a list of ratings: exclusions, caps, deductibles, etc. should all be clear on the first page of the policy.

Also, Medicare and Medicaid fraud needs to be aggressively pursued by a 3^rd party which works on a commission basis. If the 60 Minute segment on Medicare fraud was somewhat accurate, ferreting it out would not be difficult for professionals to do.

Energy policy:

The biggest problems with solar and wind power are their huge footprints, their inability to create power if the sun is down or the wind is not blowing, and their possible detrimental environmental effects. What we need are more nuclear plants, and what I think is the best approach is the small nuclear plants which are the size of a shed and provide the power or 1000’s of houses (several neighborhoods). Given some of the threats which we face, I think placing neighborhoods on their own electrical grids might be the best way to go. Many neighborhoods receive their water in this way (that is, water is just provided for a single neighborhood from a single source). The miniature nuclear plants can be quickly manufactured and up and running in a very short amount of time.

Judges:

Judge nominees get and up or down vote within 3 months of their being put before Congress.

Foreign Policy:

On the international front, the President ought to attend the next Climate Change conference via tele-conferencing, and thus set a moral precedent.

Those in the armed forces need to be doubled; and we need to establish several bases in Afghanistan and in Iraq (which is on both sides of Iran). This needs to be done quickly and quietly.

The prison at Guantanamo Bay needs to be kept open and those who work there need to be recognized for their hard work. However, the catering to Islam needs to stop.

We also need a coherent, easy-to-understand policy with regards to terrorists and how we will deal with them. In the past, those enemy combatants who were imprisoned, remained behind bars for the entire war and then some of them would be prosecuted. We need to set up a coherent policy, understanding that our war with Islamic fanatics may continue for the next 50–100 years. Eric Holder’s foolish policy that we deal with those who attack domestic targets in a civil courtroom needs to be overturned. In any case, there is no reason for an enemy combatant to ever set foot on American soil, even if they somehow strike in the US.