How to fix America
by Mike Cuneo
Whether you think we are in a recession, depression, contraction, correction, or whatever, the key point is, our economy is headed for a complete and utter collapse in 5-7 years if we don’t act now. Bailing out companies that are built on worthless assets might stave off the trouble for a little while but it can’t fix the root problem. There are a whole host of things we should do as a country to restore our status as the best country on Earth.
1. Get back on a gold standard. This is essential to many of the other ideas, simply because it puts a limit on how much the government can spend (and waste). The government should be run like any other business, and at least attempt to spend within its means. Going to a gold standard would be a solid step in that direction.
2. Phase in the FairTax/phase out the IRS. There are several benefits to doing this. People traveling here from other countries (illegal aliens included) would contribute to our country. So would most, if not all, of the underground economy. Workers earning tips would contribute their fair share. Rich businessmen who shelter their money offshore would contribute. This is the best way to close all tax “loopholes” and to reduce the burden on honest taxpayers. It’s also very transparent, and allows savings and investment to grow faster. Plus it saves compliance costs and could allow us to eliminate the IRS and replace it with a smaller agency in charge of collecting the tax from retailers.
3. End the war on drugs. Clearly all the billions we are spending trying to decrease drug use is not working. People have a strong desire to use chemicals and substances to get high, buzzed, or just escape reality. The suppliers will always be at least a step ahead of regulation. Ending this war on drugs and legalizing them would clean up the streets and it could be treated similarly to cigarettes.
4. Privatize Social Security. People always get this one wrong, claiming that they don’t want to “gamble” with their life savings. The fact is, over a 30 year timeframe the markets have shown great returns. Anyone who can’t survive because their investments have gone down 15% in a year is too heavily invested in risky vehicles. As of now, there is no guarantee that you will get your money back if you pay into the system, so for younger generations, the better option would be simply investing their Social Security money in a simple savings account. The real “gambling” goes on when you allow the government to take your payments and use the money however the hell they see fit, which is what goes on now.
5. Eliminate the Department of Education. Our schools are a joke. We spend billions and the results are horrible. That’s what you get without competition. Funny how the government tries to break up monopolies in the private sector, but can’t survive without being one.
6. Privatize roads/jails/bridges. Our infrastructure is crumbling. We can’t afford to fix it, so maybe we should hand it over to private companies. There’s no sound reason the government builds our roads and bridges and there’s no reason they should manage the jails. All we get is waste.
7. End the Iraq/Afghanistan etc wars. Can someone tell me why we are in these areas, and who we are at war with? There will always be countries that don’t like us, but we can’t afford to just go to war with them for that reason. There’s no credible threat of another 9/11 style attack, and being at war with these countries might actually make us more vulnerable.
8. Get out of the UN. We don’t listen to them anyway, so what’s the point of belonging?
9. Eliminate the Federal Reserve. Clearly, free markets can set interest rates on their own. We don’t need rates set to protect us from inflation, deflation, recession, etc. by anyone except the market itself. When the Fed sets rates based on often faulty assumptions, it distorts the market and the economy as a whole.
10. Allow at least one other party besides Republican and Democrat at the debates. Setting the bar at 15% of the votes is insane. We need some fresh ideas and candidates to be heard. Without exposure, smaller candidates don’t have a chance.
11. Every citizen should be entitled to a report showing where their money goes. Any government spending over, say, $5m should be accounted for and listed on this report. Somewhere along the line we forgot that government works for us, that without OUR money they wouldn’t have any power at all. All the extra money the government would save by adopting the steps above would more than pay for such a report.
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All good stuff, and I would propose one more point. Take the temptation for quick cash out of politics. Lobbyist are still needed to inform the representation, which appear clueless most of the time.
#12- Prohibition on non-person entities (corporations any form) from contributing to Political Campaigns in cash or kind.
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Regarding #6, every county needs to follow Arizona’s Maricopa County Sheriff Joe Arpaio’s sytem!
http://en.wikipedia.org/wiki/Joe_Arpaio
http://www.snopes.com/politics/crime/arpaio.asp
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All the Media Pin Heads keep asking when “we the people” will reinvest in the Market. What have I learned from this whole situation? I am not qualified to determine the value of companies in the stock market. I do not trust the Accounting rules, laws, etc. I do not trust any oversight, I do not trust the media, and I do not trust our government. I will not be putting my money back into the stock market. I will not support Wall Street or the corrupt politicians that receive their funding from this group. I will seek private investments. I have a great income and many investments, mostly real estate which is also shaky, but at least I have a chance of knowing the value of my property. As soon as the House started debating the bailout, I pulled all of my money out of the stock market, and it will not go back. I know my position sounds extreme, however, many people agree with me.
Kendy
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Mr. Hooks,
While your suggestion seems laudable, it would not work. Just as “campaign finance reform” has never worked (and which candidate sponsored that bill?), you cannot prohibit people or businesses from spending their money as they see fit. If you prohibit corporate donations, the money would still get there, but it would take more devious routes, via employees being reimbursed to contribute to campaigns, or some such chicanery. Money and power cannot be extricated from each other. The only answer to money influencing politics would be total transparency: campaigns must list all contributors of more than $1000 on every advertisement, the way car dealers have to list the fine print of their deals on the radio or TV.
Let people be informed. You will never stop the money flow, but you can make the public aware of it.
Does the public know how much money Freddie and Fannie contributed to McBama, or Goldman Sachs, or AIG, etc….? The information is out there, but well hidden. Try:
http://www.opensecrets.org/industries/mems.php?party=A&cycle=2008
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I like rons take on taxes a little better.
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Jails should not be privatized, people jailed by the state are the state’s responsibility. No private organization should have the right to hold a person prisoner. Private jails create perverse incentives for both the jails and the state. Jails lobby for tougher drug laws as harsh drug laws increase their profits. Operating through a proxy allows the state to ignore its responsibility to fair treatment of its prisoners. Responsibilities should not be ignored in the name of cost savings. The cost of jails will drop on its own as drug laws are repealed.
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Marc,
I see where you are coming from, but if we implement the other policies, jails would only be for criminals who commit crimes such as murder, rape, theft, etc. Someone using a party drug who doesn’t commit any other “crimes” won’t be in jail.
However, your point is a valid one. It creates an incentive for jails to make it easier to convict someone for murder or rape. I think we need balancing forces like this though, it’s how the market works. Jails want more criminals to increase profits, but the government (should) want more people on the streets unless it’s necessary to jail them. These opposing forces are where the market clears and we get a better result than we have now.
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I don’t think market forces are the right tools for determining law, especially criminal law. In principle, when deciding laws, I think that all citizens opinions should have equal weight. Market forces weight opinions in proportional to the amount of money a person controls.
I do think that repealing drug laws is sufficient to deal with the root problem, the high cost of jails. It will also allow the justice system more time to better and more thoroughly prosecute violent crimes, and perhaps even white collar crime.
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Marc and Mike,
I think you are both right, but about the wrong solution. Instead of simply throwing criminals in jails to let them rot, we need to put them to work in a way that might possibly benefit them, as well as society. Entrepreneurial enterprises that teach them skills while they are locked up, and use those skills to create profit, are the true free market solution. And the corporations that undertake such could contract with the more productive criminals for early release in exchange for continued employment. A win-win situation for the criminal, the state, the corporation, and society. I am sure that a free market would come up with a myriad of creative ways, which we cannot even imagine today, to rehabilitate criminals by building their strengths in socially beneficial and productive directions.
Instead of seeing them as no value to society, the market would find what value they have and maximize it.
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I totally agree with several points you made:
Yes, The federal reserve should be eliminated, they are not even technically federal as they are not an authentic part of the government, this is a free nation and our businesses and independent banks should be allowed to control our own rates, we don’t need some shadowy entity controlling our money.
Yes, Coinciding with the change above, the IRS should without a doubt be eliminated, the only people who end up paying tax in our country are the ones who work everyday to maintain it, immigrants both legel and illegal, welfare receivers, unemployed, etc. contribute 0, and absorb a lot. A fairtax and/or increased sales tax system would help to even-out and stabalize this.
Yes, The war on drugs and the wars abroad in iraq/afghanistan are all time consuming, pointless, and a complete waste of money. There should be some system(and this is abit much I know) in place that allows people to have at least some control of where there tax money is going. It should not be just give 40% of your pay so the government can decide they want to invade Iran, it’s ludacris. The drug war has been going on since forever, and it’s probably worse than ever, it’s all a big joke.
Yes, There should definitely be more coverage for a third party in debates. This day and age regardless of the brainwashing they might feed you at the end of the day the key members of democratic and republican parties are on the same team and share the same agenda. It’s laughable to think otherwise, they all share in the same international organized chain of command which controls the media and literally blocks out other parties from coverage. The government is NOT dumb contrary to what they may want you to believe, everything they do including what are seemingly “mistakes” are well planned and for a reason. Had they really wanted to control our recession problem they could have done it years earlier, the fact is the current crisis, the bailout being passed and the ultimate goal of CONTROLLING banks and businesses is accomplished. We are being stripped of more liberty and freedom everyday without even knowing it.(well I know it, just wish many more did as well).
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End the war on Drugs? That is certainly dumb.
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Arturo,
why is ending the War on Drugs dumb?
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Maturin,
I do agree with the spirit of your argument, that rehabilitation and restitution create more value than punishment. Locking people up is not an ideal solution to crime. The threat of prison was clearly an insufficient deterrent to stop them from committing the crime. Once there they socialize exclusively with criminals, learning no honest skills valuable outside prison. It is also extremely expensive to keep them in jail. For criminals that are not a danger to others this does not seem beneficial to society.
However, if corporations are profiting off felons and can influence their parole then private institutions will have power over a persons freedom and financial motivation to abuse it. Private individuals demanding labor in exchange for eventual freedom feels too much like bondage. The power to imprison should be restricted to the state.
I am not convinced that corporations are the right instruments to improve prisons. Perhaps I could be convinced by an alternate formulation.
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One point was forgotten although it is the most important one - 100 % reserves. Remember - the fractional reserve banking trick is the sole root of all this central banking (ergo big government) mess. Without strict 100 % reserves requirement, your whole revolution would revert back to central banks and globalism.
Anyway - I’m watching your effort from over the ocean for several months now, and I keep my fingers crossed for you guys. All this Ron Paul movement is the REAL hope for the whole world. That’s America, I guess - being the world’s biggest tyrant and the brightest beacon of hope at the same time
Don’t give up, push on. We in Europe are doing OUR best, but it’s difficult to make our message as powerful as yours is, because here the central banks are not as openly evil as Fed. For example our central bank (I’m from the Czech Republic) is forbidden to directly lend money to the government and the history of its founding is not as colourful as the 100 years struggle between your greatest presidents and the banking trust). And the European corporatism and imperialism is not as severe. So everything is less visible, less painful, more blurred and the public doesn’t give much shit.
And we cannot get help from OUR enlightened representatives and oficials either. We don’t have our Ron Paul. Although - believe it or not - our own president is a supporter of the Austrian School! He knows Dr. Paul (maybe they’re even friends), he invited Dr. Paul to give a lecture on the occassion of publishing the Czech translation of Mises’s Human Action (you can listen to Dr. Paul’s lecture here:
http://gfx.libinst.cz/libinst/pjp06_paul.mp3
yet he never addresses the public and speaks the truth as Dr. Paul does (I suspect he is simply a coward). And what’s worse - the vice chairman of our central bank and one of its Board Members are also great promoters of the Austrian School! High central bank officials! Traitors.
So good luck to you all and keep the good work. We hope your revolution will succeed, for the sake of all of us
Karel
Czech Republic
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Im confused, can someone please explain? Ron Paul keeps claiming that the dollar is going to become worthless, etc. etc. And yet as the economy has collapsed, the dollar has only been getting stronger. WAY stronger than even a few weeks ago. So what’s the deal?
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The devaluation of the Dollar expected by Dr. Paul was, I believe, based on the incorrect assumption that the rest of the Global economies were in good shape as the U.S. economy has its own private meltdown.
The fact is that Euro and Sterling economies have the same maladies as the Dollar - plus the benefits (liabilities) of social programs that make Democrats appear conservative.
Amazed — The moment I had concluded that O-Biden / Mc-Palin was a tossup, and write-in or independent vote is in order, the Obama & Raila Odinga you tube videos found me. If you think W.Ayres as Education secretary is unsettling, take the election by ethnic cleansing Cousin Raila for council on foreign affairs will chill your bones. — No Obama, No Peace! has been telegraphed by James Carvill recently…Kenya voted for Continuity, but Obama helped his Cousin deliver CHANGE to Shariah Law.
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Completely disagree on jails - I mean, if you kill someone and give the jail’s owner a nice bribe, he can let you go. No, that’s out of touch with reality. I don’t know about privatizing Social Security, maybe some minimal form needs to be kept for the poorest of the poor, so that old people could at least survive. The rest of the points are reasonable.
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You guys don´t understand anything about reforms. How do you think you are gonna change anything if you use terms like “Privatize social security”, and “Eliminate the Department of Education”.
Even if your ideas make sense in economic terms, they’ll never be accepted by the mainstream media or the population. And you know why? Because people don´t make decisions based on economics only! Emotions, ethics, solidarity also play an important role. When are you guys gonna understand this simple concept? Didn´t you learn that from the Austrian School of Economics??
Your proposals are a waste of time.
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The gold standard is a bit anachronistic since the commodity is also an artificial store of value - it has relevance only as a luxury item and a few niche industrial applications. The dollar should be based on 1kW of clean, renewable power. Energy is the real currency of today’s world and for the forseeable future, basing currency on clean renewable power would be an incentive to move to energy independence.
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Confused –
Not to debunk you, Dazed, but what you said is incorrect, I think. The fact that the exchange rate with the other countries is better and the dollar is getting stronger while compared to other currencies, doesn’t mean that inflation of the dollar isn’t weakening it significantly. When money is introduced into the economy, as it has been at an unprecidented rate recently, every dollar that existed previously become less valuable, because now there are more of them to go around. It means that no matter where you go, you won’t be able to buy as much with that dollar as you did before. This weakening is what I think Ron was referring to. This video explains this to an extent.
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How Mike, or any Libertarian/Conservative/Classical Liberal can be in favor of the (un)FairTax is beyond me! I have to wonder how many have actually read the proposal rather just than swallowing the propaganda by its slick promoters who use the word “Fair” in such a misleading manner. I include the presidential candidate from the Libertarian Party, and a would-a-been candidate for the Republican nomination this year in the list of the “Dupees”. I hate to say it, but even Dr. Paul’s designated hitter for this year has kind of danced around the issue. (I still plan to find a way to write “Ron Paul” on my ballot.)
First, the “Prebate” aspect makes it look like Government is a benevolent distributor of money from the money tree that grows in the Potomac Basin. Everyone will receive a check from Uncle Sugar every month. How’s that for promoting Socialism?
“Progressive” simply means the productive pay the taxes, the unproductive do not. Want less of something (e.g. production) tax it. Want more of something (e.g. dependency and lassitude) subsidize it.
“Revenue Neutral”. If anyone who believes he is in one of the categories I listed in the first sentence wants the government to have the amount of money to spend in the future that it spends now, he needs to reexamine his political philosophy and start searching other web sites like maybe ACORN, or The Socialist Party, USA.
And the rate. How easy to change 23% to 32%, then 40%. It only takes 51 Senators, 218 Representatives, and 1 president! Think about how well they all listened to the ordinary citizen about the bailout (oh, sorry, the “rescue”)?
Least “Fair” of all, it makes those folks (like myself, I will admit) who paid our bills “in full” start paying all over again. Retirees who paid their Social Security “contributions” all their working lives and paid the Medicare taxes for most of their working lives (post-LBJ) can now start paying all over again with every purchase.
I happen to support consumption taxes. But I only support one where each and every purchase slip carries a tax line for the Federal amount like is generally done for State and Local taxes now. I want everyone to know what all those government “goodies” actually cost! No VAT, not the (un)FairTax, both of which are essentially “hidden” taxes and therefore make it look like the “Filthy Capitalist Pigs” are robbing everyone again.
If the (un)FairTax is the best they can do, I’ll take the current tax code, thank you! Better yet, let’s all compromise and ask to have Dick Armey’s plan reintroduced with a rate-guarantee clause (I know!) included.
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[...] the better. we must decide for ourselves whether we want to be more like Cuba, or more like the United States of America that the Constitution was drafted to govern, the visions of our founding fathers. until then, here [...]
Go Ron!
One possible addition: Make health care capitolistic. Force health care to post prices! Allow users to shop for their health care. Allow competition to work!
This is after all America a capitolistic country isn’t it?
Nationalizing health care may be the only viable option but let us first try Capitolism.
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To ARepentantYankeeLivingInOccupiedAlabama:
Actually I’ve read the FairTax book and the sequel, which answers a lot of questions that people have brought up. I also bought a book that bashed the FairTax plan and read it. And I’m well aware Mises.org opposes this tax as well, since I’ve read at least one article there on the subject. So I know the plan fairly well. Let’s go over your qualms with the FairTax.
1. The Government will be giving out prebate checks to cover the necessities and that’s it. It will be based on some measure where you are defined as at the poverty level or below. So it’s possible to not pay any taxes at all, if you just consume up to the level of poverty. Could promote savings among lower income families, could promote laziness in people hovering around the line, depending on other policies. With other sound policies, the latter would not occur. But to say this is “socialism” is absurd. Every family would get the prebate, so it’s equal, and thus fits the “FairTax” moniker. Again, Bill Gates as well as the local bum would get the same amount. The exact opposite of socialism, because if it was socialistic people would claim that Gates “doesn’t need” the prebate check.
2. You aren’t taxing production at all, you are actually removing the current taxes that hinder production. You are only taxing consumption, and less consumption would actually help our economy long term, until we get our finances in order. Again, other sound policies would help make this a reality.
3. The plan is only revenue neutral because the authors of the plan recognize how hard it’s going to be to implement any change of this magnitude in today’s political climate. They specifically mention this in the book, and state that reducing government spending is a whole different book. And they have a point. Let’s simplify the tax code, then people will come around to the evils of a bigger government. This will come slowly at first, but when combined with other policies (ie sound money, more government control at the state level vs federal, etc) it will catch on very fast.
4. Did you read the FairTax book? It specifically says in the book that the Bill (which I think is stuck in the House) needs a higher than normal majority to pass a rate change. In other words, if this becomes law, the rate can’t just go up with a slight majority. It needs (I think) 75% of the vote (it may have changed since the bill gets updated from time to time). The authors are also very wise here, because they know how poisonous big government can be, and the incentives for it to grow are all too great. They are trying to put a “check” on the power here and return some to the people. More power to them.
5. You aren’t making much sense here. First of all, the FairTax would be exactly like what you are describing when you go into the sales tax example. There would be one, 23% (or 30% depending on how you compute it) tax on all purchases. What do you mean by “pay all over again?” You don’t pay taxes now???
Under a FairTax, your savings won’t be taxed, your capital gains won’t be taxed. your paycheck won’t be taxed, no more added “gas taxes” etc etc. We are in dire need of tax overhaul. If you can’t say for sure how much tax a person pays on an income of $100,000 without going into his marital status, age, occupation, location, how much he has invested, deductions, write offs, etc etc it’s just insane. We need something simple.
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Mike:
Point 1: Socialism relies on the people’s belief that government can do for them what they can not do for themselves. While the (un)FairTax distributes the funds “equally”, it still will reinforce the idea to the vast majority of the people that “The Government” is “giving” them something every month. Think about how the majority of the people view their Income Tax Refund. The vast majority miss the point that it is merely their money which was confiscated and held, forcibly, at no interest, and is now merely being returned to them. There are ways around that, but most people think that little present in April is nice, because the Government Schools have done a good job in not teaching economics.
Point 2: I am merely using their own boast that the tax is “Progressive”. And “Progressive” always means exactly what I said in the first message. The productive pay and the unproductive absorb. Productivity falls and dependency grows. As an example, I retired at the earliest possible date because I was tired of working 40% or so of my hours on the job to pay for government. Most of which I feel is not only non-productive, but counter productive.
Point 3: Seems to be the same excuse for not reducing taxes in the past by the people we are trying to oust. “Revenue Neutral”, in reality, is just a shorter means of saying “We are going to spend whatever we want and take it from you anyway we can, so mind your business and let us mind ours!”. The dynamics of an economy is totally alien to our political “leaders”.
Point 4: I did not read the book itself, but have read from the web site frequently since the proposal first saw public exposure. I have listened to the arguments by Bortz and others from time to time. I find nothing in either of those which would change anything I wrote in the first post.
Point 5: I take issue with your item 5. I am making perfect sense here. I do not pay Social Security “Contributions” nor Medicare Payroll Taxes since I am retired! The same holds true for anyone who has retired. We had the promise that we were “Paid in full” on those two taxes. (We do pay some current “premiums” for Medicare, even after retirement.) Under the (un)FairTax, having paid them for all our working lives, we would be forced to start again, tearing up our previously issued receipt. Those two “entitlements” are going to make up the largest share of taxes in the future and the ones most likely to drive increases in the (un)FairTax making current retirees not only pay again, but pay for services they will probably not live to see. This is obviously not the only reason I reject this plan, but the one which justified the “(un)”. I also realize that those plans will perhaps pay a higher return to me than I paid in. (Then again, any keystroke may be my last!) That will not be true for the next wave of retirees, who paid even more of their wages toward the promise of a “Paid in Full” receipt. One thing government should never do is break a promise. That strikes me as kind of an ex-post-facto thing.)
Also, the (un)FairTax is not like I describe as my initial support for a consumption tax.. It does not show as a line entry on the sales slips. Just as a VAT is a “hidden” tax, the (un)FairTax will make the same ignorant people that I mentioned in Point 1 to believe that the culprit is the manufacturer/retailer, not that the government is merely taxing the daylights out of them. (I do not mean the “ignorant” in the pejorative sense, but as the dictionary definition. Again, they are merely a product of our current educational system where to truly understand government or finances, a student is on his own.) I do not buy the argument the supporters present that prices will reach equilibrium with current prices. That takes glasses with a deeper shade of rose than I own.
I fully agree the tax code is a mess. As a retiree with “conventional” investments, I probably spend 40 to 80 hours preparing my taxes each year when record keeping and calculation is considered. I do support a consumption tax, but as an “open” and “explicit” sales tax. I don’t think that is politically viable since it doesn’t conceal government costs from the public well enough. I don’t hold much hope for a 5-liner either, mainly because of the many benefits to the political structure provided by favorable treatment to certain constituency, i.e. those that pay the most!
I suspect we agree on most of the points behind each other’s viewpoints. I also suspect there is a better solution than the (un)FairTax. (I also hope you will forgive my little idiosyncratic reference, but I find it is effective in getting folks with whom I discuss the plan to look at the downsides and the unintended and/or unadvertised consequences.)
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Go back to the hold standard? Are you nuts?
Simple question: Where will you put that gold? How much will it cost to insure/protect?
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