DRAMATIC CHANGES FOR CURRENT, BUT FAILED, PUBLIC POLICY

Scott Burns, my favorite business columnist, has a prescription that will right the wrongs perpetrated by past Congresses.

AMERICA 2.0
By Scott Burns

AssetBuilder
March 11, 2011

My recent column suggesting Congress should make a down payment on restoring our trust by returning the excess employment taxes workers have paid since 1984 hit a nerve. Reader mail carried messages of frustration and anger— a sense of futility about change. Responses to a follow-up column on the size of our financial problem brought questions: OK, readers asked, what should be done?

Here is a list of dramatic changes for current, but failed, public policy. It is dramatic because we need to do more than tweak laws and tax rates. We need a true “new deal.” It’s time for America 2.0.

TERM LIMITATION

A Constitutional amendment would be nice. If we can’t get it, we can do it by voting the buggers out. Elected office should be held for no more than 12 years. No exceptions. The usual argument against term limitation is that we will lose valuable experience. (Yeah, right.)

A TOTALLY NEW TAX SYSTEM

We need to take the tools of envy, greed and extortion from politicians, regardless of party. We can do this by eliminating every single bit of the tax code and the IRS. We need a national sales tax. The Fair Tax proposal makes provision for true progressivity. People with less income would carry less of a burden than people with more income. The Fair Tax would tax consumption. It would not tax labor or capital. It would cause those who want to consume their fortunes to pay more in taxes. Those who invested for the future would be doing without and benefiting everyone. A national sales tax is the logical extension of the simplification proposed in the (ignored) proposals from the Commission on Fiscal Responsibility.

Eliminating the employment tax and the income tax would end the accounting games that allowed Congress to “borrow” all those employment tax overpayments we’ve made. It would also give all of us a single “cost of government” number. Readers say our politicians would never give up their power to determine who pays more taxes and who pays less. The answer to that is simple: Vote against any candidate who will not commit to the Fair Tax proposal. This is what I intend to do with my votes for the rest of my life.

ABOLISH MEDICARE PART D, THE PRESCRIPTION DRUG PLAN

Congress is discussing trimming future Social Security benefits for which workers have overpaid for decades. Strangely, there is no discussion of the unfunded liabilities of Medicare Part D. Since its 2003 passage this law has created unfunded liabilities that exceed the unfunded liabilities of the entire Social Security retirement and disability program.

Today, the cost of drugs continues to rise faster than inflation. The involuntary insurance premium is also rising far faster than inflation. So here’s a solution: Abolish Medicare Part D. Cut the pharmaceutical industry loose from its federal subsidy. Allow insurance companies and individuals to buy prescription drugs however, and wherever, the price is right. The change would refocus the pharmaceutical industry on providing drugs people could afford rather than drugs no one, including our government, can afford.

END THE HEALTHCARE NIGHTMARE

The promise of Social Security is for a particular level of dollar retirement benefits. It should be kept. The promise of Medicare is not in dollars. It is in healthcare. The promise can be kept by adopting some combination of the national healthcare systems of Germany, France, Japan, Canada or Great Britain. This will provide healthcare to more people at nearly half the expense. Skeptics should read T. R. Reid’s “The Healing of America.” Medicare, not Social Security, will bankrupt the country.

CUT MILITARY SPENDING

The nation with the largest economy should spend more on defense than any other nation. It doesn’t, however, need to spend more than the next 18 largest spenders combined. Our official figure of $663 billion is more than the combined spending of China, the United Kingdom, France, Russia, Germany, Japan, Saudi Arabia, Italy, India, South Korea— and eight other nations.

More important, that $663 billion is just the directly stated bill. According to one study, the total for national security is over $1.2 trillion when spending buried elsewhere is considered.