This is an open letter to President Obama, or to anyone who has an interest, that offers 10 suggestions concerning our nation’s current economic predicament.
Few Americans will be enamored at these suggestions because they represent a sacrifice that will be somewhat painful, but not nearly as painful as a total breakdown in the economy.
For America to move forward we need instilled a sense of willingness to sacrifice and the confidence that it will work, as opposed to the current demoralizing "gotcha partisanship". The USA can not afford to keep our currency printing presses running overtime without instituting policies that provide some offsetting level of fiscal restraint.
How do we change our country's psyche from "more for me" to one where we are willing to sacrifice for the greater good? The sacrifice must be shared and fair and viewed as necessary for long term security, and a belief that it will help to put the country on a more responsible financial footing for future generations. Perhaps these future generations will then look back upon us as a greatest generation, instead of the generation that frittered away our nation due to debt and greed.
Here are the 10 suggestions of which some would be painful to implement.
The new millennium has not been good for America. Times are different and our country is on a track to economic destruction unless our leaders and we the people begin thinking outside of the typical partisan talking head political box. Whether we like it or not it is going to take major sacrifice. Will it be proactive on our terms or will it be reactive with unknown effects? The objective is to make our sacrifice fair and provide something to all citizens in return, such as economic security even at a less affluent level. The details and percentages are provided only as examples to clarify the concept.
- Reduce all government wages but offer job security. Reduce government wages but offer security in jobs for 5 years. Freeze increases and COLAs for 5 years. All government employees (including local, state and federal – elected officials, bureaucrats, judges, military, teachers , national guard, etc) to have a sliding wage cuts such as 10% of all income under 50K, 15% of income of 50-100K, and 20% of income over 100K. Only military serving in a combat theater would be excluded. The private sector is already in that mode and will follow at all levels.
- Reduce social security and all government pensions with means test. Reduce social security and all government pensions by 5-10%, and freeze all cost of living increases for 5 years. Government pensions have become far more lucrative than those in the private sector and are unfair and they actuarially will break the country.
- Reduce Medicare payouts. Cut hospital, physician and pharmaceutical Medicare payouts by 3% for each of the next 5 years. These are essentially forced price controls to drive down health care costs with the intent of forcing improved efficiency. Provide heath care scorecards on all providers.
- Re-establish the 1950s era inflation adjusted top end marginal tax rates. Increase tax rates to 1950s era levels in yearly increments such as 25%. Inflation adjusted the top marginal tax rate would apply to incomes of over $2.7 Million but incomes above 250K would also face higher taxes. Income taxes on those earning under 250K should either be reduced or remain flat. The wealthy and ultra rich have fared far better than average Americans over the last 25 years and it is time for sacrifice by all. The USA economy under these higher rates in the Eisenhower era thrived and we had a healthy country. http://www.toomuchonline.org/...
- Provide a health/consumption tax on cigarettes and alcohol. Establish a health tax on cigarettes and alcohol such as 25% that would discourage their use and would supplement future health costs expected from the use of these products. Dedicate the revenue to health care and the Medicare trust.
- Mandatory offshore tax haven penalty. Provide a mandatory multi year prison sentence for first time offenders for any individual or corporate officer found guilty of hiding funds and using off shore tax havens. Second offense would be double the incarceration. Provide more aggressive IRS enforcement against tax cheats also.
- Create a USA Recovery Savings Bond. It would offer attractive interest rates such as 4% and be available to only individual USA citizens. It would serve to fund these bailouts and keep the dollar strong. It would encourage secure savings, provide senior citizens with a secure income, and most importantly reduce our debt held by foreign countries. Non-US only citizens purchasing these bonds would forfeit all interest.
- End most foreign aid. Since we would be expecting all Americans to sacrifice, we need to end or drastically reduce all foreign aid, especially the billions sent to more affluent countries such as Israel, Egypt, Jordan.
- Guaranteed unemployment compensation but with work fare. Ensure that jobless benefits will be available and extended for at least 2 years for American citizens. Also provide a basic high deductible health care policy to all to avoid bankruptcy. Recipients of unemployment compensation and other government programs will be required to participate in significant public work projects or participate in retraining. Such a work requirement will ensure that these benefits provide for continued job discipline as well as encouragement to seek out job opportunities.
- Punitive tax on corporations that outsource. Provide strong tax disincentives to all US domiciled corporations that move production and employment outside of the USA. At the same time provide incentives to hire US workers.
And as a PS:
- Hold accountable those responsible for this financial crisis. We must institute a culture and justice system that demands accountability. Unfortunately for America it has become as American as apple pie to hold only the little average person accountable. Accountability for those of power and affluence has generally been missing. Those found criminally guilty must spend major prison time commensurate with the damage they have done to the USA. These crimes are far more serious than those convicted of shop lifting and drug use that usually get sent immediately to prison. These affluent white collar perpetrators need to be punished as a discouragement to future greed.