Monday, August 8, 2011

Three Steps to a Better America

The responses to the S&P downgrading of America's debt have consisted mainly of blaming the other party and palliative suggestions.

I believe bolder ideas exist that would not only save our financial system but improve our quality of life.

I recognize that these three ideas are easier to recommend than to implement but as Goethe wrote, "Small goals inspire no one."

1. America must scale back its aspirations. It can no longer be the world's superpower. As all empires from the Roman to the British, the American Empire has had its rise and now is in its fall. Partly because of America's hubris, its largess, and its profligacy, and partly because of competition from Asia, the U.S. will unavoidably descend to become merely one of a number of major nations.

So, for example, the U.S. can no longer afford to be the world's policeman: we must get out of Iraq and Afghanistan now. We no longer can afford military bases around the world.

Nor can the taxpayer afford to build fancy buildings (the new lobby of San Francisco City Hall is pictured above.)

Nor can government afford to spend on risky "innovations." Most innovation that government "invests" in is that which every company has rejected as a bad idea. Most government investments are sloppy 10,000ths.

For example, the government now wants us to forget about its ethanol debacle so it can get us to invest in its energy idea du jour--solar and wind energy--despite their physics delimiting them to being no more than a tiny contributor to our energy solution. Indeed that fact is acknowledged by the collective wisdom of the market: the solar and wind stock indices are down 85% from their highs, which, not coincidentally, were when Obama took office.

Similarly, we should not spend more on education. The U.S. has long ranked #1 in per-capita education spending yet our achievement ranks #23, tied with Poland. There is no evidence that 'investing" yet more on education spending will yield an acceptable rate of return. That is especially critical with the U.S.'s economy so precarious. But the phrase, "invest in education" (including the now-proven ineffectual Head Start) sounds good so politicians continue to tout it. We'd be wiser to close down the entire massive education bureaucracy: the U.S. Dept of Education, State Depts of Education, County Offices of Education, and all but a few District Offices of Education. The cost and labyrinthine, often conflicting, mountain of mandates from those bureaucracies improves education little; indeed, may, net, make it worse.

The savings derived from the above should be used to pay down our debt, balance the budget, and eventually, returned to middle- and working-class income taxpayers to spend as they see fit, which would create sustainable jobs., unlike the government's "stimulus" jobs, which have been calculated as costing us at least $278,000 per job, and created "shovel-ready" projects that weren't.

2. Convert health care (including Medicare) into a basic free safety net for the poor and free-market, fee-for-service for everyone else, except for catastrophic care, for which private insurers would provide competing products. The free-hand of the 300,000,000 Americans would drive down cost and improve quality. The government's role would merely be to require health care providers and insurers to provide clear, potent information to enable even the most vulnerable of our citizens to wisely choose their health care providers.

3. Convert from a consumer-spending-driven economy to a quality-of-life driven economy. The public could and should be educated by schools, colleges, and government to recognize that the path to a life well-led and a society we can be proud of involves goals of creative expression, kindness, and societal contribution, not of a new car, bigger house, and yet another pair of shoes.

As always, your comments are welcome.

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