Not Bad Enough Yet, Part II

We are besieged with domestic crises. The health care crisis, the deficit crisis, the Social Security and Medicare crises, last, but far from least, the unemployment crisis. If we keep going on as we are, the consequences will be dire.

We are told that these crises are insoluble, the U.S. has become ungovernable, Washington is broken. Actually though, it wouldn’t take all that much to fix them, and Washington is quite capable, theoretically, of doing so. Things just haven’t gotten bad enough yet.

Here are a few modest proposals. The first five of them are currently being proposed in the United States Congress by Wisconsin Republican Representative Paul Ryan.

1. Make Medicare and Social Security solvent by doing some means testing and gradually raising the age of eligibility for Social Security.

2. Give taxpayers the option of a simple 10% flat tax with no deductions.

3. Medical savings accounts, tort reform, allowing health insurance to be sold across state lines, and the same health insurance tax treatment for individuals as for employees.

4. Make U.S. corporations competitive with the rest of the world by bringing their taxes in line with other countries. Currently, the average combined federal and state corporate tax rate in the U.S. is 39.3 percent, second among OECD countries to Japan’s combined rate of 39.5 percent. Lowering the federal rate to 30.5 percent would only lower the U.S.’s ranking to fifth highest among industrialized countries.

5. Eliminate taxes on interest, capital gains, dividends, and death.

6. Eliminate unnecessary federal government departments and programs.
    a. Farm subsidies
    b. Department of Education
    c. National Endowment for the Arts
    d. support for NPR and public television
    e. etc., etc., etc. – this is a long list

7. Finally (and this is the real kicker) abolish public employee unions.

For the first time in American history, a majority of union members are government workers rather than private-sector employees. 7.2 percent of private-sector workers are union members. 37.4 percent of government workers are union members.

Union membership in the private sector has been declining for a long time, because it makes companies less competitive and workers don’t want unions anymore. The reforms that unions came into being to institute, have been instituted.

Private sector unions are adverserial. The union negotiates with management and they hammer out a deal. Public sector unions and management are collusive. The union facilitates the election of management. Management becomes an advocate for the union. This makes no sense whatsoever.

Public employee union benefits, pensions, and salaries are bankrupting government at the local, state, and federal levels, as is the extreme difficulty of firing or laying off government employees.

None of these proposals would be difficult to implement procedurally, and they just seem like common sense to me. All of the crises mentioned above, except, maybe, unemployment, would be solved. I believe that these measures would be such a relief to the real economy, the entrepreneurs and professionals and workers, that we would see a turn-around that would greatly lower the rate of unemployment as well, but that is speculation. Others may demur.

The difficulty is not procedural but political, except for eliminating public employee unions. That would take some doing. But none of these ideas are even being considered by the current Congress and President. That’s why there is a tea party movement.

These are the things that need to be done. Whether or not they will be done will be determined by the elections in November of 2010 and 2012. And by whether or not it has gotten bad enough yet.