Saturday, December 17, 2011

The 40% Plan

I have been trying to compose an economic plan to get us out of this great recession and I came up with an idea. I call my plan the 40% plan and here are components of the plan.

First of all, we would have a 20% Flat Tax on individuals and corporations on all income after the first $20,000, a 15% Goods and Services Tax (GST), a 0.5% tax on derrivatives (D-Tax), a carbon tax, an inheritance tax tax on estates worth $5 million or more, and a 3% Land Value Tax (LVT). The payroll and alternative minimum taxes would be abolished while corporate and capital gains taxes will be rolled into the flat tax. If the LVT, D-Tax, and GST raise sufficient revenue, then the income tax will be reduced and eventually abolished. To make the system more progressive, every man, woman, and child legally residing in America will recieve a $2000 annual tax credit.

I intially supported the FairTax but I came to realize a exclusive sales tax of 30% (or an inclusive sales tax of 23%) would be seen as too high for consumers and that no country in the world has abolished income taxes. Even Russia has a flat tax and VAT and is one of the most prosperous economies in the world right now. China, Singapore, Taiwan, and South Korea have streamlined and flattened tax systems that tax income, consumption and land and they are reaping the benefits.

I would then outline the federal budget like this: Of 100% of the GDP 5% will go to social security, 5% will go to health care, 5% will go to defense, 5% will go to rebuilding the infrastructure, 5% will go to education, 2% will go to "general government", 2% will go to Criminal Justice and Homeland Security, 2% will go to paying the intrest on the national debt, 1% will go to research and development, and 3% will go to paying down the national debt.

The principle of the national debt will be built into the federal budget and reducing it will be a national priority. If we can combine this with a high rate of economic growth, we can retire the national debt in 10-15 years and save the American people $400 billion a year in interest payments on the national debt as well as save the average American $5000 a year in interest payments on their loans and mortages.

The 5% in rebuilding our infrastructure will go to shovel worthy projects as well as shovel ready ones. The American Society of Civil Engineers gave America an infrastructure report card of "D+" and estimated it will take $500 billion a year for the next five years to rebuild our infrastructure to support the current economy and population. We will build an infrastructure that will sustain the economic and population growth of decades to come. Future generations won't remember the "stimulus package" but they will reap the benefits of well maintained roads and bridges, a nationwide bullet train network, well built and maintained public safety, health care and educational facilities.

The 5% going to health care will go to Medicare and Medicaid alone. However, as the economy grows, we will implement a Universal Health Voucher system that will replace Medicare, Medicaid, SCHIP along with the employer based health care system. All legal residents of the USA will recieve UHVs to enroll in basic medical and dental plans offered by insurance companies who will have to accept all those who wish to enroll regardless of pre-existing medical condition.

The 5% going to education will not go into the same broken education system we have now. We will reform our K-12 system as well as invest more money into it. We will implement a school voucher system. We will close the departments of education and recruit our teachers not from the high schools but from those who already have their B.A. degrees in the liberal arts and sciences and implement a apprenticeship program to train those from outside the teaching profession to become teachers brining real-life experience to the classroom. We will also have a universal GI Bill attached to a program of Mandatory National Service to give all Americans the oppurtunity to attain a higher education as a more educated workforce is essential to a more prosperous economy.

The 2% going to Criminal Justice and Homeland Security will go to recruiting and hiring four million more police officers, firefighters, and EMTs; keeping unrepentant inmates in jail and rehabiliting those who demonstrate repenatance; upgrating the technology, compensation, and benefits of all first responders, and financing a system of Immigration and Naturalization Centers to ensure the assilimilation of all immigrants into the USA.

The 1% spent on research and development will go to researching and developing alternative sources of energy, medical research, real scientific research on things like global warming, artificial intelligence, robotics, space exploration and colonization. America will become world's research and development laboratory once again. America will be on the cutting edge of technology once again.

We will continue to spend 5% of our GDP on defense and that may eventually be increased. However, we will also get more out of the defense dollars we spend by consolidating overlapping agencies and noncombat arms of the separate armed services. While we must pursue every technological advantage, we also must invest more in the things the grunts need like body armor and less on F-Machines that are too expensive to fly. We will invest in more manpower, more and better weapons for the grunts, more and better training, more tankers and transports, and more close air support aircraft.

I figure if we adopt this plan, we will have a economic growth rate of 15%, put 15 million people to work rebuilding America's infrastructure, pay down the debt in 15 years, extend health coverage to everyone, maintain and improve public service, afford universal tetitary education, and finance the military we need to defend this country. Eventually, we will also reduce the overall tax burden on the USA from 35% to 25% or less.

Tuesday, February 8, 2011

What to do about Egypt

I have been following the events in Egypt for the past two weeks just like many of you all have and people have been asking "what should we do about Egypt? Should we intervene?" I think it is safe to say that Mubarak has passed the point of no return and is on the way out. The question is who or what will take his place? Would it be another Arab strongman who may either be loyal or allied against the US? Would it be an Islamist regime that will ally itself with Iran against the US? Or would it become a true democratic republic with free elections and multiple parties?

At the time of this entry, I can't tell you what or who will take Mubarak's place. However, in the event that an Islamist regime or an anti-American Arab strongman takes power, I know what we must do. We must secure the Suez Canal and we must defend Israel against Egypt.

I propose assembling a multi-national coalition of combat divisions from NATO, the US, and other countries that will descend on the Suez Canal zone and secure it. This force will not only defend the canal from the Egyptian army but also create a firewall between Egypt and Israel. The canal will still belong to Egypt but because of the international strategic importance of the Suez Canal, Egypt will have to accept a permament multi-national military presence in the Suez Canal Zone.

If Egyptian forces engage the multi-national force in hostilities, then the multi-national force will advance to Cairo and forcibly remove the regime that authorized the attack on the canal. The multi-national force will occupy the country and new elections will be held to guarantee a democratic republic and security of the Suez Canal.

I hope it doesn't come to this. I rather see Egypt become a democratic republic on its own or at least have a strongman allied to the US rise to power. But we must secure the canal regardless of whomever rises to power in the post-Mubarak era.