Wednesday, September 9, 2015

"Identify problems but offer no solutions"

A commenter on my "I Want a President That's a 'Strong Leader.' Not!" piece complained about people "who just identify problems but offer no solutions."

Good point. So here are my solutions. Part One is stuff that can be done in 2017 with any Republican president and Congress. Part Two is the agenda for the rest of the president's term. Part Three is what I really believe.

What Is To Be Done, Part One

First, the easiest. Reverse as many Obama era regulations and executive orders as possible as soon as possible on the Macchiavellian principle that you should do all the dirty work right away. There will be a huge hullaballoo, but the president can argue that his election is a mandate to roll back Obamism.

Then, the economy. The problem here is that government spending is a weight on the economy and government regulation is a brake on the economy, and monetary activism is a distortion of the economy.

So the president should send a mini-budget to the Congress that rolls back as much domestic spending as possible, right now, starting with green energy. Then he should do as much as possible with executive actions to make welfare and disability unattractive, and make it as easy as possible to hire new workers. He should make a start on simplifying the tax code by reducing marginal tax rates as much as politically possible.

Then he should start an attack on all the anti-growth regulations of the Obama era, starting with the National Labor Relations Board and the regulation of the internet with the FCC. Sarbanes-Oxley should be on the chopping block.

Then we have financial regulation and monetary policy. The president should gut Dodd-Frank and the Consumer Financial Protection Bureau and return to a rules-based monetary policy with a return to normal interest rates. We should dial back the mad policy of subsidizing sub-prime mortgages which are a constant dagger pointed at the financial heart of America.

What is to be Done, Part Two

There are four big trillion dollar functions of government in the United States. See my usgovernmentspending.com for details. The four big functions costing about $1 trillion each per year are: Government pensions, including Social Security; Government healthcare, including Medicare and Medicaid; Government education, K thru graduate school; and Defense. Non-Medicaid welfare comes in at about $0.5 trillion a year.

So the first thing to do is to reform Social Security and Medicare. Social Security should be started on the road to a real personal savings program, with subsidies for the working poor; Medicare should be moved to a normal health insurance program with subsidies for the elderly poor. We should start to disassemble the education monopoly with education choice. And on welfare we should be looking at fixing its perverse incentives. Right now, a welfare recipient trying to get off welfare typically faces a marginal tax rate of 50%, higher than a billionaire.

What is to be Done, Part Three

Government is force, so we need to ask, with every government program, is force really called for? On retirement savings, the answer is yes if someone willfully refuses to provide for themselves; but most people should provide for their own. On elderly healthcare, we don't want grannie neglected by cruel children; but most people should provide for their own. On education, we don't want children neglected by their parents and refused a chance to rise in the world; but most children want to grow up and at least be like their parents, and today they can get a pretty good education from a tablet, especially if they have to become literate to learn how to play the games. On welfare, we don't want the poor thrown on the streets, but most people could take care of that by belonging to mutual-aid societies as they did a century ago before the welfare state put them out of business. Maybe anyone that ever went on welfare should be forced to belong to a mutual-aid society.

This program would only be possible in an America where the vast majority of people said to politicians and government: you can put that free stuff and those subsidies where the sun don't shine.

But the truth is that humans love free stuff. That's why we have coupons and sales and supermarket specials and affinity programs. And what people really love is getting free stuff from the government. So the world I imagine is not yet.

OK: there it is. That's my three point program!

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