Restoring
Our American Dream
Conservatives Have Been Destroying
Our American Dream
The
following four books describe how Conservatives, unregulated globalization and
increased competition have increased the risks that destroy our American Dream.
·
Jacob
S. Hacker and Paul Pierson, 2005, Off
Center, The Republican Revolution and the Erosion of American Democracy
·
Joseph
E. Stiglitz, Making Globalism Work
·
·
Jacob
S. Hacker, The Great Risk Shift, The
Assault on American Jobs, Families, Health Care and Retirement, and How You Can
Fight Back.
Preparing for Victory
I believe
that our increased personal risk is the primary reason that the Democrats will
take complete control of our federal government and many state governments in
2008, as the Republicans now have.
People will react negatively to the increase in personal risk, even more
than to the
With
control, we will be able to pass the most extensive legislation since Lynden
Johnson’s victory in 1968. Our major
challenge is to be ready to lead. We
must become clear about what we want and be confident in pursuing it. We must choose principled and effective
leaders. We must get them elected. What we want is to Restore the American Dream.
Our Vision
Restore Our American
Dream Freedom
and
Democracy
for all Fair Elections and Open Government
Fair
Taxes and Competent Spending
Growing
Prosperity Investment for
Productivity
Quality
Health, Education, Jobs and Retirement
Environmental
Protection and Energy
Peace and
Security Personal Security
and Equal Rights
Justice
and Peace Everywhere
International
Leadership and Cooperation
The best
way to present our vision is in outline form.
Sometimes as on a street sign, we can only present a single slogan, such
as ‘Restore Our American Dream’ perhaps with the addition of ‘Freedom and
Often
people will only remember the slogan at the top. Some may remember some of the three more
detailed components. A few may remember
some of the even more detailed ones.
Ensuring
Democratic Government is necessary for adopting measures to increase our
prosperity and security. Investing for
Productivity and Reducing Risk are the major components and first steps in
increasing our security and prosperity.
Investing for Productivity and Restoring our International Leadership
and Cooperation will take longer to yield benefits, but these benefits are
crucial to increasing our prosperity.
Our
vision of producing economic growth which is shared fairly among all of our
people is expressed in more detail by Gene Sperling, 2005, The Pro-Growth Progressive, An Economic Strategy for Shared Prosperity. The following policies show how, just as the
Clinton Administration turned around the mess left by Reagan and the first
Bush, we can turn around the mess produced by the second Bush.
Our Challenges
Our
political strategies and agenda for restoring our American Dream must be
oriented to overcoming our obstacles.
Our president and governors can institute a few changes administratively.
Major changes will require federal and state legislation. To pass needed legislation, our liberal
legislators will have to understand and agree concerning what is
necessary. Their agreement will depend
upon supporting public opinion and liberal groups. Mobilizing
public opinion and interest groups cannot be done concerning many issues at
once. So we will have to choose the
sequence in which various legislation will be promoted and passed.
Some
important and easily passed legislation should be passed quickly, to develop
momentum for other legislative victories.
If it doesn’t distract from the main thrust of legislative reform, some
less important but easily passed legislation which brings various beneficiaries
on board should be quickly passed.
The underlying challenge is the
power of our opponents. Legislation which reduces
their power will ease the passage of much other legislation. Even though this will be hard fought, this
legislation should be passed before going on to pass the legislation which our
opponents have resisted. Another major challenge is to obtain and
free up the revenues to fund our programs.
Our Agenda
Based
upon the challenges described above, I propose the following legislative
agenda. This agenda is uncertain, but
provides a clearly stated alternative which can be debated and modified. We should begin with election, corporate
governance and budgetary reform necessary to other reforms. Then we should restore our federal revenues
through fair taxation and eliminate ineffective spending, thus providing funds
for other reforms.
We should
begin investing for productivity, including sustainable energy and initiating
international leadership and cooperation, especially with respect to
maintaining international justice and peace and to taming globalization.
We should
next address the items with the most benefits for individuals and families:
providing or stimulating quality medical care, education, jobs and income for
all from preschool through retirement.
It is unfortunate that these items can’t be addressed first, but their
success depends upon political and budgetary reforms and the freeing up of
funds tax and spending reform. Many of
the investments for productivity will also provide health, education, job and
income benefits.
1. Election Reform
Reducing the
inordinate influence of rich and powerful industries, corporations and
individuals upon our legislative and executive officials is necessary to
reorient them toward our common welfare, pass liberal legislation, reduce
wasteful corrupt subsidies and public expenditures and eliminate monopoly power
which increases consumer costs.
We need
to establish an electoral commission within our judicial branch, which would
·
regulate
redistricting to eliminate gerrymandering to produce safe districts
·
change
the electoral college to ensure the president with the most votes wins
·
eliminate
winner-take-all state presidential elections
·
create
instant runoff elections which allow voters to vote for their favorite
candidates, without weakening the chances of their next favorite candidate
·
regulate
campaign practices, including the provision of public campaign funding and
limits on private campaign funding
·
regulate
and make transparent lobbying efforts and enforce ethics violations
·
regulate
debates to include other candidates besides Democrats and Republicans
·
create
ombudsmen to provide many constituent services now provided by, freeing the
legislators to legislate and removing this incumbent advantage.
The
result would similar to more democratic, less corrupt European governments, in
which officials keep lobbyists at arms length.
Private health insurers and pharmaceuticals could no longer stop extending
Medicare to everyone.
Giant subsidies
would not be given to highly profitable oil companies, giant
agro-businesses. Agricultural Industries
could not obtain quotas and other protections from fair competition, nor
compete unfairly in less developed countries.
Media companies would have to pay for their use of our airwaves. These are only a few examples of rampant
corruption that could be stopped with great savings to American taxpayers and
consumers.
2. Corporate Reform
Corporations
which sell beyond state borders should be chartered nationally. Their charters should require that boards
include represent a variety of stakeholders beyond their capitalists, including
employees, suppliers, consumers, and communities. Many of their activities should be
transparent, with enforced sufficient penalties for imposing extenalities
(negative costs) on others.
Legislation
should clarify that corporations are not people and don’t have the same rights,
such as virtually unlimited freedom of speech.
Their rights and responsibilities should be detailed. As in
3. Budgetary Reform
Our
federal budget should be structured similarly to state budgets and business
budgets, with separate operating and capital budgets. Capital budgets should be financed by long
term bonds, which might include selling bonds to our Social Security Baby
Boomer Reserve Fund. Operating budgets
which pay for operations should generally be balanced. To balance our budget, any increase in
spending beyond revenue should be offset in a cut in other spending. Exceptions to a balanced budget should be few,
strictly defined and limited in duration, such as during a depression. Our Social Security and other transfer
spending and their earmarked (now FICA) taxes might be included in a separate
third transfer budget.
4. Restoring Revenue
Our taxes
should be adjusted to bring in the 20% of gross national product which has been
traditional since World War II, except immediately after the tax cuts by Reagan
in 1981 and Bush in 2001 and following years.
In 1883. Due to revenue failure,
Reagan increased taxes some in 1883. As
will be indicated below, it may be desirable to transfer funding of education
from the states to the federal government, which would require an increase in
federal taxes with a corresponding decrease in state taxes.
5. Fair Taxation
As will
be detailed in next week’s ‘Time for a Change’ commentary, our high income
recipients are receiving more than they deserve. Our income tax should bring in the same
percentage of our gross national product that it did in 2000 before the Bush
tax cuts. It should be changed to a
progressive flat tax with a deduction of our median income. Suppose the flat income tax rate is 40% and
the medium family income is $50,000. A
family with $50,000 income would pay nothing, with $100,000 would pay $20,000
(20%), with $200,000 would pay $60,000 (30%), with $500,000 would pay $180,000
(36%), and with higher income would pay closer to 40%. Our lowest income 50% would pay nothing and
only above over $200,000 would people pay more than they pay now.
To keep
it simple, virtually all tax deductions should be eliminated, except possibly
documented charitable deductions.
On a
revenue neutral basis, our FICA jobs tax should be phased out as a Value Added
Tax (VAT) is phased in for supporting our Medicare programs. Our FICA tax discourages employment. Personal employment earnings should still be
monitored to provide the basis for Social Security payments. The VAT would discourage consumption as
should be in our over-consuming society.
Lower
income recipients and employed persons paying lower income and FICA taxes would
offset to some extent the decreased demand for consumer goods due to the
VAT. Increased capital spending for our
physical and social infrastructure would also increase employment. Our budget shifts money from consumption to
savings and investment.
6. Eliminating Ineffective
Spending
Having
reduced corrupt influences on our legislators, we would virtually eliminate
subsidies to industries and corporations, retaining perhaps a few strictly tied
to productivity and other socially desirable gains. We would greatly decrease military hardware
spending oriented to weapons only useful against enemies with sophisticated
military hardware. We would use various
means to reduce non-cost-beneficial pork.
We would
also save money and increase effectiveness by rationalizing many of our safety
net programs (see below). Of particular
importance is cost controlling our publicly financed medical care (see below).
7. Investing for Productivity
We need
to address our enormous maintenance deficit in our highways, bridges, parks and
other physical infrastructure. We need
to invest further in public transportation, including particularly
urban-suburban transportation to enable people to commute more easily and
cheaply their jobs. We need to invest
further in high speed communications.
We need
to invest in basic and science, especially with respect to growth industries of
the future, such as renewable energy and efficiency, biotechnology, and nano-
and other materials. These will provide
immediate jobs, incentives for students to choose these careers, reduce our
dependence upon foreign energy and materials and create export industries.
We also
need to invest in social infrastructure.
Healthy, educated, secure people living in thriving families are more
productive than otherwise. Investing in
these provides both immediate benefits to them and productivity benefits to our
economy.
8. Quality Medicare for All
We can
provide Medicare for all at less cost than now, as do all other modern
countries. We save money in three ways
by: (1) eliminating many enormously expensive end-of-life treatments that extend
life little and often at excruciating low quality, (2) substituting universal publicly
paid health care for privately paid health care with its enormously higher
administrative costs, many due to checking eligibility, and (3) bargaining with
providers, including physicians, hospitals and pharmaceuticals.
We should
begin covering children during their preschool ages and lowering the Medicare
qualification age to 62. Then continue
raising and lowering the wages until everyone is covered. With Medicare for all, Medicaid no longer
exists, prevention is cost-beneficial, people no longer wait so long that they
require more expensive care, and people’s decisions to take or change jobs are
not affected by medical coverage.
The end
result will cost the federal government little if any more than now, will
benefit most of us health consumers both health and risk wise, will increase
our productivity, and will reduce the costs of businesses, thus making them
more competitive.
9. Quality Education for All
We are
the only modern nation which funds our schools locally, such that school
funding varies hugely depending upon the property base which can be taxed. Those schools which need the most funding
receive the least. The result is many
children are barred from participating in our American Dream. They and all of us suffer the result.
We should
shift most funding from our states to the federal government. The money should be distributed on a basis
which provides more money per student to districts with educationally
disadvantages students. Thus more highly
qualified teachers and smaller class sizes could occur where children come from
culturally disadvantage homes.
We should
offer all children K -12 education; provide child care for younger children;
provide after-school programs (which greatly assist families with no
stay-at-home adult); provide college financing similar to the post-WW II
veterans assistance programs, with cost control incentives for limits for
college institutions; and provide life time education grants of perhaps $20,000
during any 10 year period (which can be used for continuing skill upgrading or
for concentrated study in anticipation of a necessary career change). Much money will be saved by rationalizing our
many small education support programs into more universal ones.
10. Quality Jobs
Government
regulations must be ensure that workers can easily unionize, that workers
receive extra pay for overtime and that safety standards are upheld. Job flexibility may be encouraged such as job
sharing, discretionary time of work, family leave, etc., but avoiding unfunded
mandates which disproportionately harm small businesses.
Industries
may be regulated to encourage appropriate competition, not so little as to
produce monopoly power nor so much as to produce insufficient returns to
properly reward stakeholders. The
corporate reforms discussed under #2 above will also help.
11. Sufficient Employment and
Retirement Income
Our
minimum wage should be increased and indexed to median wage. Our refundable earned income tax credit
should be set at a level that everyone who works full time receives an income
above the poverty level. The tax and
investment policies described above should increase employment and wages, as
will improved health and education.
Besides
social security, people should be encouraged to save by purchasing the
government bonds which fund public capital investment. The interest rates on these bonds should be
indexed to remain above inflation, with a bonus for people who don’t cash their
bonds until retirement. The risks and
administrative costs of such savings would be much lower than if they were put
into brokered private stocks and bonds.
12. Creating an Adequate Safety
Net
Competitive
globalization is here to stay.
Businesses can no longer provide half of our safety net. To reduce vulnerability to risks, our public
safety net must be expanded, to assist everyone to deal with health crises,
education, unemployment and retirement.
We must provide support to stressed parents.
Creating
an adequate safety net requires (1) reducing the ability of private insurers
and others to corruptly block expansion of our safety net, (2) installing cost
controls for our safety net, (3) rationalizing the variety of unintegrated
politically motivated safety net programs, (4) restoring fair progressive
taxation to produce traditional levels of federal revenue, (5) eliminating
non-beneficial federal expenditures, such as subsidies for rich and powerful
energies and military expenditures oriented to non-existent threats. Dave Thomas
In Conclusion
This
brief political platform simply seeks to outline how our American Dream can be
realistically restored. For more
detail, read the following books on our reading list:
·
Barry
Bluestone and Bennett Harrison, 2000, Growing
Prosperity, The
·
Lester
R. Brown, 2003, Plan B, Rescuing a Planet
under Stress and a Civilization in Trouble
·
Rahm
Emanuel and Bruce Reed, 2006, The Plan,
Big Ideas for
·
Ted Halstead (ed.), 2004, The
·
John Kao, 2007, Innovation Nation, How American is Losing Its Innovation Edge, Why It
Matters, and What We Can Do to Get It Back
·
Jeff
Madrick, 2002, Why Economies Grown, The
Forces That Shape Prosperity and How To Get Them Working Again
·
Matthew Miller, 2003, The 2% Solution, Fixing
·
Gene Sperling, 2005, The Pro-Growth Progressive, An Economic
Strategy for Shared Prosperity.