GOP presidential candidate Mitt Romney, a native Michigander, said that he would bring back to Michigan many of the jobs lost during the conservative reign of destruction. He didn't say how other than giving Detroit $20 billion for "research." But, industry wouldn't spend that money on anything having to do with production if there is no improvement in demand for what industry produces. We all should know corporations only make production investments when there is a need to keep up with demand. If the federal government bought a fleet of autos from Detroit it would do more to bring back jobs than would an "incentive tax break" the GOP always propose, claiming that would spur commercial investment.
Those in the "political party of great ideas" say we on the left have no ideas. They lie.
There is a solution to the myriad economic problems caused by the conservative revolution. It's called Democratic Capitalism, and works like this:
Eliminate both the income tax and payroll tax ~ they have been so distorted by special-interest exemptions that they are no longer useful or fair ~ and institute a profits tax. No profits, no taxation. Every employed person gets a base income ~ tax free ~ to meet housing and sustenance requirements and profit sharing from their employer. When employees create profit, they should share in the distribution of that profit.
If more than half a person's income came from profit sharing, each and every one of them would keep an alert eye on the shenanigans of the executives to keep them honest. That would reduce the need for government to do so. Shortchanging employees on profits would be considered theft and tax subversion by the employer since a employee receiving less than legally entitled would not be taxed on the stolen money.
There was a recent news story saying that about $350 billion of uncollected taxes annually escape the nation. Collecting those taxes would eliminate the conservative-created deficit, allowing the rest of us to pay less or, at least, nibble away at the national debt. The Internal Revenue Service (IRS) could collect those unpaid taxes, if allowed to do so. Guess what agency Republican libertarian presidential candidate Ron Paul proposes eliminating.
The profits are taxed according to this formula:
Individual taxes pay for Social Security and health insurance for all. When we can match other advanced countries with universal health coverage spending only 10% of GDP on health, we will free up hundreds of billions of dollars to circulate in the economy. That will create growth. Those who hate the idea of healthcare for all can easily not participate. George Bush has a "No fly list" to keep people off aircraft. We could have a "No admittance list" to keep people who hate universal healthcare out of the hospitals.
One of the stupidest idea to come out of the present presidential campaign is the proposal that Americans be required by government to buy health insurance from a private-sector insurance company or that employers be required to offer health coverage. That does little to cover all persons, because the main reason nearly 50 million Americans don't have coverage now is the prohibitive costs. And our businesses are less able to compete in the global market because healthcare costs are too cumbersome.
Requiring individuals to buy health insurance is also unconstitutional because government doesn't have the constitutional authority to dictate that to any American. Government can tax and spend to provide the coverage as "general welfare" and that's the only method government can use for universal healthcare. The only solid solution is a universal sharing of the costs, and that isn't being discussed other than some people proposing Medicare for all. Better, but not ideal.
And if insurance companies suffer some financial setbacks, so be it; that would be minor compared to the hardships they have inflicted on Americans for far too many years. If people in the health-insurance industry lose their jobs, they can always find work in the areas that factory workers relied on when their jobs were "outsourced."
When we eliminate the income and payroll tax, we free up hundreds of billions of dollars that states can tap into to enroll all their residents in basic HMO program in which some insurance companies can participate by opening HMO clinics, leaving hospitalization and recuperative expenses at the federal level.
The only idea more ridiculous than mandates is to leave the situation as it is.
Opponents of universal heath coverage claim "we can't afford it." But paying more than 15% of the nation's wealth for healthcare to cover only 85% of the population is ludicrous when other advanced nations spend 10% of their wealth to cover 100% of their population. We can't afford to keep the present system.
Righties are in a (pseudo) panic over Social Security's shortfall of 15-20% of promised benefits three or four decades in the future ~ if the economy grows at 50% of its historical average ~ but aren't concerned about a debt approaching $10 trillion today because "deficit don't matter." They claim Ronald Reagan single handedly destroyed the Soviet Union by driving it into bankruptcy. Apparently they want to do the same with the US.
Some right wingers, such as libertarian Paul, advocate weaning Americans off Social Security and into a system of investments in the private sector. They then advocate eliminating regulations in that same private sector leaving everybody's retirement at peril of being "Enronized" out of existence. So tax cuts for "investors" don't do much good here. Those right wingers are mad.
The only other major investment tool available for retirement would be in the financial markets, notably CDs that rely on government debt for income. In today's dollars, a single person getting 4% return in CD interest would need $500,000 in CDs just to have a $20,000 annual pension. Now imagine the size of the national debt needed to support that huge of a nest egg. It boggles the mind just how much debt the nation would have to carry for that to work.
If employee profit-sharing tax went to Social Security and those not employed, such as the idle rich and retirees who are not now paying into the system, being taxed according to the formula as if they were employed, there would never be a "Social Security crisis" because it wouldn't matter the ratio of retired persons to workers, they all would pay into the system.
Tax business profits to pay for government operations. If they dislike such a situation, they may stop doing those things that make government grow; such as polluting, which requires billions of tax dollars for cleanup. Or firing their employees, which requires higher payroll taxes to keep the "downsized" workers from total ruination. Businesses might provide safe working conditions: imagine mines that don't collapse onto miners, or factories whose machinery doesn't chew off arms or more. Imagine warehouses in which stacked crates don't fall on forklift drivers.
Then, toy sellers might keep dangerous toys off the market rather than pay the taxes needed so that government would do that for them.
Tax corporations to pay for national defense and homeland security. If the military-industrial complex likes to waste billions of dollars each year on unnecessary, unworkable or redundant weaponry, let it pay for it all. A major improvement would be to turn over our foreign military bases to our allies and bring US troops home. Our allies could maintain those bases and keep them ready in case we need to reoccupy them in the future to counterattack a foreign attacker; as if any foreign nation were stupid enough to attack the one nation that spends more on the military than the entire rest of the world combined. Spending our military budget at home helps our economy; spending it abroad hurts the economy.
If corporations don't like to pay such taxes they will find ways to reduce those boondoggles. It creates a pleasant image to picture the legions of lobbyists from K Street marching up Capitol Hill to plead for a reduction in military spending, and not to raid the United States Treasury as they do now. And freeloaders like Halliburton couldn't run off to Dubai to escape taxes: make a profit in the US, pay a US tax.
Institute a special tax surcharge on any and all persons and institutions who championed this illegal war in Iraq. Use that surcharge and taxes on stock dividends to meet all costs of the war. Guess how long that war would last if the warmongers paid for it. It would be appropriate if George W. Bush, Dick Cheney and all their up-to-the-last-minute supporters sacrificed their fortunes to pay for what they so desired. Those Americans who secured our independence in 1776 risked their lives and fortunes for freedom; asking the same of neo-cons now is reasonable.
We should keep the gasoline tax to create and maintain the interstate highway system, but all revenues collected must be kept and budgeted for only that purpose.
This plan offers five separate budgets and would outlaw borrowing from one budget by another to cover deficits, i.e. Reaganomics.
If these five budgets cover the scope of the nation's needs, we could start eliminating such taxes as the telephone taxes, taxes on bank interest and others, because if telephone companies and banks paid taxes on their profits there may be no need to tax their customers.
We should also eliminate all pensions and healthcare coverage for persons elected and appointed to government positions until all the previous ideas have been implemented. Or, the money earmarked for their pensions and healthcare could go to pay for the war so many of them wanted. Then they will get the same pensions and healthcare as everyone else.
This program can eliminate the deficits of hundreds of billions of dollars run up each year by conservatives and will allow us to begin paying down the debt, retiring that held by foreign nations first. Realistic calculations are that an average of $1 billion surplus annually would allow us to get out of the debt brought on by one Reagan and two Bushes in only 10,000 years.
The Democratic Capitalism program is to reduce the size and scope of government needs gradually, allowing people, markets, programs, etc. time to evolve without devastating shock. Paul's nonsense of an abrupt ending to everything he dislikes invites disaster.
These proposals are only directed at the long-term financial concerns of the nation and not to the short-term recession now on the horizon. How the program will address other problems is a matter for future articles.