Friday, October 22, 2010

On Metaphors

Metaphors are snobbish inside jokes. It is regrettable that it requires a metaphor to describe a metaphor.

Wednesday, October 13, 2010

Me for President

Since the midterm elections are coming up, I though I would offer my solution for most everything that ails our government. Here goes:

1. Our most immediate problem is unemployment. If a politician wants to get elected, then he needs to promise that this will get fixed with the quickness. Last I checked, estimates for unemployment were somewhere around 9.5%. It's fair to say that the incumbant party, whether responsible or not, will have to answer for this. I know of two things that we could do, relatively quickly, that would rapidly reduce this percentage.

First, repeal the 16th amendment and replace it with a consumption based tax (a VAT would also be preferable to the crippling tax code we have in place right now). This would reduce the total financial commitment that every business needs to make to their employees without affecting the real income or take home pay of those employees. More free money, more spending, and finally, more hiring. I predict (without any credentials here) that this alone would cut our unemployment in half, maybe more.

Second, eliminate minimum wage. With unemployment so high, we need to really ask ourselves which is better; Having high unemployment with some sector of the population making a 'living wage' and the remainder making NOTHING, or everybody making something? It's a tough choice, but I think that 'spreading the' opportunity seems like the right thing to do.

2. Next is our national debt. This consists of nothing but hard choices, which politicians avoid like the plague. But let's look at the deficit and see if there is something we can do. The majority of our deficit is in debt to ourselves, in the form of IOU's to Social Security and Bonds. Bonds are a tough issue and are closely tied to spending, so lets go after the low lying fruit first: Social Security.

On paper, Social Security is in great shape with over 5 Trillion dollars owed back to it by taxpayers via Congress. (Congress is allowed to take out loans from Social Security, but must pay that money back with interests) Unfortunately, we don't have 5 Trillion stuffed under a mattress somewhere, and so we make installment payments. The payments are not big enough to cover expenses today, so there is a serious cash flow issue, and the burden is way too big to tax away.

My solution is multi-pronged. First, let's stop the problem from getting worse. We need to amend our laws to stop Congress from ever borrowing money from Social Security again. Its just like with people that have addiction to credit cards, we cut the cards up so they can't do any more harm to themselves.

Second, Social Security is in dire need of scope clarification and reduction. Social Security was started with noble purposes, but it has gradually morphed into a retirement pension system. On its face, this doesn't seem like such a bad thing, because they are making interest on investments by tax payers. The trouble is that they are making lousy investments with deadbeats (Congress) and so the investments aren't really going well enough to serve as a pension plan. The other factor to consider here is that people who have come to rely on Social Security are scared that the rug will get yanked out from underneath them. Therefore, we need a strategic and equitable withdrawal from Social Security.

Under my plan, everyone over the age of 45 at the time of passage of my perfect bill would still receive Social Security much as we do today, and everybody who works will continue to pay into the system. Everyone under the age of 45 will no longer be eligible for Social Security upon retirement, but only upon disability. In exchange for this sacrifice, Congress shall remove all caps and limitations from pre-tax investments, and shall not charge income tax on anything withdrawn from retirement accounts upon retirement for those under 45 at the time of the passage of the bill. When the last retiree dies, then whatever is remaining in the coffers shall be distributed amongst those who have paid into the system in proportion of contribution. Citizens would then be free to purchase disability insurance in the private sector in proportion to their income and needs. If there is still a massive deficit, then cancel the debt with the tax payers and never look back.

Now, back to bonds. Bonds are a good thing in limitation, and when the proceeds from sales yield some tangible or knowable asset, like roads or schools. Unfortunately they are now being used to subsidize entitlement programs, the war on drugs, or other pet projects that buy votes. The way to solve the bond issue is to seriously cap spending. Republicans fail on this issue every time because they advocate spending cuts. If they did nothing but cap growth and leave spending at current levels, eventually things would solve themselves and wouldn't make anyone a bad guy. Spending should be capped, and not allowed to rise again until we have a balanced budget, or until the deficit is a healthy percentage of the GDP.

Nations problems are now solved. You're welcome.