Bold solutions for the new year

Who am I to address national problems? The same pundit who vented last week, which means you can take these ideas with less than a grain of salt, think they’re brilliant (as my parents invariably do) or mull them over and decide later.

Don’t just complain and take potshots; come up with solutions. That’s the gist of some comments regarding last week’s column, in which I took swipes at notables including Treasury Secretary Henry Paulson, Fed Chairman Ben Bernanke and the top nominee for Wall Street’s sleaze of the century, Bernard Madoff.
So here are three bold solutions as we head into what looks to be a very tough 2009.
Who am I to address national problems? The same pundit who vented last week, which means you can take these ideas with less than a grain of salt, think they’re brilliant (as my parents invariably do) or mull them over and decide later.
First, my assumptions about the economic landscape.
The current slump isn’t over and will get worse. There has been credit-fueled overinvestment in many areas over the past 10 to 15 years — think retail space, office buildings, housing — which means there is little reason to build more in the near term.
Second, even if domestic or international demand for goods suddenly were to increase, the odds of which seem slim, our manufacturing capacity is a shadow of its former self and would provide little boost to the U.S. economy. So don’t look for much of an uptick there.
As a result, unemployment could reach 10% or 15%, a post-Great Depression high, which will further impede recovery, since the American economy runs on consumer spending.
Of course, the government won’t stand idly by. Look for massive spending on top of already gargantuan spending (and money printing and taxation). Will it work? Maybe, but maybe we’ll see a new economic condition — “slumpflation,” a state characterized by a mildly shrinking or stagnant economy, spotty corporate profits, high unemployment, a weak dollar, high inflation and rising interest rates.
That’s what we’re up against; here are three bold solutions:
Bold Solution #1: Cut out the middleman
If the government wants to juice the economy, let it give the money directly to those who will increase aggregate demand, i.e., Mr. and Mrs. Squeezed American. Set a floor for income, say, $15,000 or $20,000 per family (remember Nixon’s proposed negative income tax?) and if someone loses their job — which the IRS will know from the absence of withholding taxes — send them a check. Will there be cheating? Of course. But who cares? The money will get spent, which means demand will go up, and employers will hire.
We’ve already wasted billions bailing out banks, with little to show for it, and soon there will be massive new “programs” that will require huge bureaucracies to administer. That will be great for the economy of suburban Washington, already the richest area of the country, but little will trickle down to those who truly need it. Just give the damn money to struggling people and let them “waste” it any way they want.
Bold solution #2: Encourage thrift and education
As a nation, we’ve grown fat, dumb and lazy. For years, the rest of the world has paid our tab, but that gig is ending. It’s time to get off our collective rear ends and act like the hardworking, frugal immigrants who still flock here — and which we used to be.
To encourage thrift, there should be no tax at all on FDIC-insured savings accounts. Retirement accounts should be Roth-like and grow tax-free, with no tax on employer contributions. The self-employed and employees should pay the same Social Security tax. Dividends should be taxed once. And if the feds need more money — which they will — let them impose a national sales tax on everything other than food so everyone can see — and argue about — the stake the government is grabbing.
As for education, set high national standards for reading and math, and then let parents choose between public and private schools. Public schools should be encouraged to improve and be supported, but it’s insane not to allow competition from private schools, charter schools or any other institution that can do the job. Maybe the teachers’ unions have a point when they charge that school choice isn’t as great an idea as its proponents say — but why not give it a try?
In the meantime, public schools should wake up and realize that the world has changed. We’re no longer an agrarian nation where kids have to pitch in with planting and harvesting. Schools should be run year-round, from 8 a.m. to 5 or 6 p.m. — preschool for 4-year-olds included.
If the teachers’ unions are as committed to education as they say, let them put their mouths where their lobbying money is and get to work. Focus on reading, math and science so we can compete internationally and provide art, music and mechanical training to cover the broad spectrum of needs and talents. Feed the kids nutritional food rather than glop. And while we’re at it, install air conditioning and computers so schools can become true year-round community resources.
Bold solution #3: Tax and discourage big-time sports
I know you’ll think I’m crazy on this one, but professional sports are as damaging to our country as smoking, high-fructose corn syrup and agricultural subsidies. Sports have become America’s religion, and it’s a false god.
Don’t get me wrong; I believe in team spirit, sportsmanship and exercise. Yet none of those has anything to do with siphoning billions in taxpayer money to subsidize sports arenas, focusing on games at the expense of education and making heroes out of thugs.
Big-time sports dull our minds, make us as passive as the Romans in the stands of the Coliseum and divert us from the real game — keeping us a world leader economically and politically.
Impose a 20% excise tax on professional sports events and a similar tax on the teams’ revenues from advertising, skybox and merchandise sales. The money could be used to pay for education, which would give poor kids a better shot at a good life than a lotterylike chance of a career in the NFL or the NBA.
It also could pay for the negative income tax. After all, if CEOs want to spend hundreds of millions of dollars of corporate money to play golf with Tiger Woods, let at least some of that money go to the people who have been “right-sized” out of jobs.