Can the U.S. Economy Be Saved?

Can the U.S. economy be saved? In a word; Yes! But it won’t be simple, and it won’t be easy, and it won’t be without a fight. The U.S. economy has a whole bunch of things wrong with it and a whole bunch more impacting it every day. There are internal structural flaws that have been inserted into how it works because they help a few connected entities. There are external forces acting upon it which have a negative result; also because they benefit a small number of special interests. But none of these problems, inequities or forces make it impossible to get the U.S. economy stabilized, on track  and pointed in the right direction for the vast majority of Americans. 

Some of the imbalances that have driven the economy off the rails are obvious; and so are the remedies. However repairing the unbalancing wrongs and implementing the corrective fixes will undoubtedly take a bit of combat between those representing the majority of the American people and those working for the few, the wealthy and the connected. The first step in getting things headed the right way is to make sure that everyone knows and understands the how, what and why of the problems and the why, what and how of the solutions. 

The thing most indicative of what’s wrong in the economy is the budget. And more particularly the different ways in which different factions propose to deal with it. The Republicans, T-Folk, supply-siders and other believers in Voodoo economics say that; lower taxes for the rich and less regulation on industry will create boom times here in America and that some of the wealth flowing up to the top will eventually trickle down to the rest of us. And thus by a “natural” process the entire economy will improve, the total tax revenue collected will rise, and the budget shortfall will be reduced to some degree. Of course they add; drastic cuts must be made in the entitlement programs that the vast majority of working, wage earning, Americans are entitled to. They claim that then the budget will balance, in fact they are willing, nay eager, to make it a law that the budget must balance. 

But as you look at that set of proposed  economic “fixes”, you can pretty quickly see the many flaws and falsehoods in the plan. Just to come close to balancing the budget you would have to cut a third of it, most of which would indeed have to come out of the largest portion; the entitlements. To cut a third of Medicare and Medicaid spending we would either have to eliminate a whole bunch of services now provided and/or the eligibility of a lot of current and future participants. Many of those Americans have been putting whatever amount of their hard earned money that has been required into the Medicare fund. They have and have a right to the expectation of getting the benefits for which they have ponied up their money. 

The same is true of Social Security; and in an even larger way. Because Social Security has been around longer, there are more people currently invested. These 100+ million Americans have made plans and are and will be counting on their expected share of Social Security for a decent, comfortable (but not luxurious) retirement. Granted people are living substantially longer and more active lives than when the Social Security system was implemented. But the fault that there will not be enough money to proved the promised benefits cannot and should not be blamed on the participants, who paid whatever was required. The fault lies with the politicians who were afraid to appropriately raise the contribution rate and retirement age; but instead only made minimal changes so as not to get their constituents mad at them and lose their votes. So they wound up creating the current situation where they will have to both significantly increase the revenue of the Federal government and make some radical changes in the contribution rate and retirement age. This will anger their real constituents - the American people – even more than the gradual but consistent changes they should have been making all along. It will also anger their wealthy and well connected contributors who are steadfastly demanding that their paid for politicians absolutely refuse to raise any taxes a single red penny. 

The uber-rich, who are increasingly attempting to control the U.S. government for their own benefit, are afraid to accept even the slightest increase in the contribution they are required to make to the economic needs of the U.S. They fear that if an increase of their share helps produce an improvement in the government’s ability to provide necessary it is required to and thus improve the general welfare of the majority of Americans; the concept of requiring them to kick in their appropriate part will catch on. Even though they can afford to contribute a bit more without actually feeling any pinch, and even if this helps the majority of their fellow citizens a considerable amount; they are against it because they fear it will perhaps lead to additional increases. However these fears by the rich would be looked upon as deserving more sympathy if; they weren’t already greedily gaming the system, at the expense of vast majority of American’s, through the corrupt practices of corporate welfare in all its many and varied forms. If everyone were contributing an appropriate amount without cheating and stealing from their fellow citizens, none of us would have to pay “too much”; just what’s required and fair. 

To minimize everyone’s tax contribution, along with the ending of the criminal practices of unneeded and unhelpful tax breaks, allowances and subsidies; the issue of waste fraud and abuse must also be properly dealt with. A modern health information system which is uniform and easily accessible would go a long way to eliminating all the multi-billion dollars of fraud being perpetrated on the current Medicare and Medicaid payment structure. But the clean-up of our medical services industry can’t end there. The issue of the huge ongoing increases in cost of everything in the health services industry from procedures to pharmaceuticals must be looked at with a careful and critical eye. If too much money is being spent during the short period of end of life; we must implement better education of what modern medical practices can, and most importantly, cannot do in terms of not only length of life extension, but what is best for the patient in terms of the quality and dignity of their lives and their deaths. In that the American people for decades have been providing public funds in the trillions of dollars to the basic research which results in the creation of the majority of our modern drugs; the unprecedented profits Big Pharma is making must be looked at and modified to reflect the amount of investment the American people have made to create those profits. Sweetheart deals such as the current Big Pharma-Medicare/Medicaid arrangement which prevents our large public health care system from negotiating for better, more competitive prices; must be renegotiated in the interest of fairness to the American people. The wastefulness and sometimes harm that is caused in the providing of health care in this country by the health care insurance industry needs to be examined. The involvement of these paper shufflers as often slows and even prevents proper medical treatment for some patients, as it does to facilitate it. Neither Federal bureaucrats nor corporate bean counters looking only at the bottom line, should be in charge of making medical decisions that belong exclusively between medical professionals and well educated patients. There are scores of such changes and tweaks throughout the whole medical industry that could bring the costs in the U.S. down from almost 20% of DGP to the developed world average of 12% of DGP. 

The same paradigms of fairness to the taxpaying citizens of America can and should be applied to the huge expenses of the military. The realities of necessity should the prime and only factor in the development and procurement of military supplies. The ability of elected officials to “bring home the bacon” is corrupting and unwise factor in military spending that must be eliminated in the cause of efficiency and sound spending. The structure and fairness of pricing for military acquisitions is also an area that requires better, more honest scrutiny. Military vendors are entitled to a fair profit; but military or any other type of government contract is not and should not be a license to overcharge or steal. The recent occurrence of our military and other government suppliers to make additional profit by outsourcing the purchase of parts or systems from China must be stopped immediately. Too many fake or counterfeit parts have been discovered and the lives of our military personnel have been put in danger by this corrupt practice. A strict policy of original manufacturer equipment, by American companies, unless a highly compelling reason is provided, for all military and civilian government purchases must be put in place. This would help our economy a significant amount as well as serve the interest of our vital national security. 

Getting the cost and spending of the three largest parts of our present entitlement areas under tight and efficient control would be a critical first step in righting the ship of our economy. Tossing out entire corrupt and convoluted tax code would also be absolutely necessary. We do need a system of raising resources from taxation; but it must be fair, transparent and not punitive towards any member or group in American society. A simple fair and appropriately progressive tax on all income, no matter what the source, with an appropriate exemption for the income required to provide a basic decent standard of living, would be a starting point. If there were no hiding, shielding, exclusion of any income for either corporate or private entities; it would be both harder to and less of a motivation for cheating on income taxes. Everybody, except those not currently paying their fair share (if they pay anything at all), would be paying less. And those required to pay more, would have the necessary income to allow it with any noticeable pain or change in life style. It is only pure, simple, unjustifiable, personal greed that makes people want to not contribute fairly to the resources necessary to make this country strong and self sufficient again. 

Even after the spending and revenue aspects of our budget are put into balance; there are still other key factors in our current economic structure that need to be changed in order to complete the task of getting our economy back on the path from which we deviated onto one that contributed to making it the mess that it has become. Our current approach to trade policy would stand out as the single most significant problem preventing the American economy from getting healthy, growing and then flourishing once more. The whole way in which “globalization” has been seen and dealt with has not been in the best interest of the people of the U.S. The rise of multinationals with no real attachment or commitment to any country and the forced “joint venture” for nominal American companies required by countries like China; are in fact against the best interest of our economic well being and our long cherished American way of life. To succeed while trying to compete on a “global” playing field that is radically unlevel is an impossibility. By definition the free workers in America cannot compete with the slave laborers in China when it comes to wages. Even including our 10 to 1 advantage in productivity an American worker would be paid less than the current minimum wage; and our minimum wage isn’t even a practical living wage. On a level playing field where China had to pay their workers a living wage, provide the opportunity for workers to organize and travel freely, comply with even basic worker health and safety standards, produce their goods in an environmentally responsible manner, not use inferior materials, counterfeit parts, or banned toxic substances in their goods, and all the other appropriate regulations American manufacturing has to adhere to; China couldn’t even come close to competing with the U.S. or most other industrial nations. 

The increased short term profits China and its international partners (including American companies) are making at the expense of real American industry and U.S. workers must be modified by the proper use of tariffs to level the playing field. This would result in the return of virtually all the manufacturing and jobs that have been outsourced in the past two decades. American workers can make things as well (often better) and as totally price competitive as any workers in the world, on a level playing field! Passing and enforcing the necessary Fair Trade laws is what is required to give American workers that chance. 

Fair Trade; an equitable re-writing of the U.S. tax code; cost controls and appropriate funding of our public health commitments; increased contributions and proper fiscal management of the Social Security safety net, are all obvious vital steps in saving our economy. But the key part of putting all of these needed pieces in place is the absolute commitment of the majority of the American people to the concept that we are all in this together. If we don’t act as a united people with the common goal of fixing what is wrong for the benefit of all our citizens; we will not be able to accomplish the required tasks. However if we do approach it as a truly united nation; the American economy can be fixed and the way of life envisioned by our American Dream restored. Isn’t that a goal deserving of our very best effort and well worth fighting for?