A Moderate's Plan for America

I have several ideas for Moderates in this country to fend off the Democratic Party's socialist agenda. These strategy ideas won't be easy to implement, because the socialist party will fight stiffly against any changes to their already implemented program.

The Obama administration has already extra-legally taken control of the third largest auto manufacturer (Chrysler--and forced it's sale--and swindled bond holders out of monies owed to them) and have a large minority interest in the largest (GM--and turned effective control over to their union allies).

The Troubled Assets Relief Program--TARP was supposed to be used to bailout banks and other "too big to fail" investment companies (AIG being at the heart...which by the way manages Congress's retirement funds). Instead it has morphed into a catchall slush fund that is being used far beyond the purpose it was intended for. It is being used to continually bailout Chrysler, as well as being funneled through AIG to companies such as Goldman, Sachs, GMAC (GM's auto/mortgage loan arm).

Much of those funds have been diverted to executive bonuses, or executives learning of "loans" going to companies, have purchased stock in advance of proposed bailouts (Stephen Friedman a member of the Goldman Sachs board was forced to resigned as the chair of the New York Federal Reserve after reports surfaced that he had bought 37,000 Goldman shares and that he did so on learning that his company would be getting paid back at 100 cents on the dollar for its toxic assets insured by AIG. Mr. Friedman made more than $5 million on that insider information.

The passage of the huge $800 billion dollar special interests bill, inaptly named "stimulus package" that was in effect a political payoff of constituent special interest groups. The bill's purported purpose was to stimulate the economy but instead allowed the Democratic majority to provide huge subsidies to political contributors and groups whose support allowed the socialist party to take control of Congress with a much larger majority that previously held. As unemployment rises, the public's ire has risen as well as distrust in the Democratic majority's aims and economic policies.

With the near certain passage of the government's seizure of the health care industry, that an average of 55% of likely voters strongly opposes is merely one more step in the Democratic Party's and Obama administration's efforts to enact European style socialization of the American Economy. The back room deals that shut out the Republican party have been characterized by Sen. John McCain (R-AZ) as, "unsavory process to get 60 votes – which included, he said, giveaways such as the 'Cornhusker kickback,' the 'Louisiana purchase,' the 'Florida flim-flam' and all of the other kinds of dealing that went on – will be seen as 'very distasteful' by the American people."

Michael Barone a syndicated columnist in the of the Washington Examiner describes as the 21st Century Kansas-Nebraska act. "[The] Kansas-Nebraska was an attempt to settle a fundamental issue by legislative legerdemain and political trickery," says Michael Baone,. "The Democrats' health care bills are an attempt to settle a fundamental issue by partisan maneuver and cash-for-cloture. As Stephen Douglas learned, such tactics can work for a while, but the country -- and the Democratic Party -- can end up paying a heavy price."

One Democrat and Atlantic blogger (and Obama voter) Megan McArdle writes, "We aren't done talking about health care. We haven't even really started. Our budget problems are as big as ever, and we just used up both political capital, and some of our stock of tax increases and spending cuts, to pay for something else."

These then are the major issues that now face the country. We have the highest unemployment rate this country has face in more than 25 years. Yet the Obama Administration has attempted to use Keynesian solutions to these problems. The major issue with that is that Keynes economics has never proven to work in the past.

Herbert Hoover attempted to use some proto-Keynesian policies after the the economic meltdown that caused the Great Depression of the 1930's. Mr. Hoover created the Reconstruction Finance Corporation in an attempt to bail out troubled banks. Furthermore, he engaged in deficit-finance relief expenditures. And his Secretary of the Treasury Andrew Mellon supported those effort. Federal spending rose precipitously under Hoover, most of the increase financed through deficit spending. All of those efforts failed miserably.

It's well documented that FDR used many more Keynesian methods to counteract the effects of the Depression. However, the nascent recovery of 1934-35 sputtered out under the weight of many of the New Deal tariffs and regulatory measures enacted at the time. FDR's policies didn't end the Great Depression, the advent of a worldwide conflict in 1939 did.

Now, in the present time if we genuinely desire to mitigate the effects of this recession we as a nation must urge our politicians to take a number step immediately. The first step toward recovery would be to use the remaining TARP funds to pay down the burgeoning national debt. A debt that has ballooned in the past year with Congress having to yet again raise the debt ceiling.

The second step would be to take the remaining stimulus funds and expend them solely on infrastructure projects. That would allow the construction industry to recover far more quickly than is presently the case. Unemployment in blue collar industries is roughly 40%, by far the hardest hit sector of the economy. This is what China and Germany have done and thus have weathered the crisis in much better shape than the US has done. An alternative would be to use the to once again pay down the debt

An additional use for $50 Billion dollars from this fund would be as a basis of small business loans. This will have the effect of freeing up funds that small business needs in order to conduct their operations. Additionally, by allowing small business those funds, they will increase their hiring. It costs small businesses an average of $330k to create full time positions. Under the stimulus, the government has spent $2.4 million each to create temporary positions that will need to be refunded every year. That's an 8-1 spending ratio, not cost effective in the long run.

A third solution would be to reduce taxes across the board, better yet, overhaul the "progressive" (or rather the REGRESSIVE) income tax system with a flat income tax rate for all individuals, businesses and or corporations. End any and all federal tax breaks for business. Tax all businesses equally with no exceptions. Do the same for individuals. The ONLY exception on individual taxes would be for those who earn below X dollars (i.e. the poverty line).

Reign in government spending by eliminating those departments which are merely jobs programs in disguise. Education, for one, combine HHS, HUD and vastly reduce their mandate. Eliminate Labour. Use the money saved to pay off the debt, return those workers to the public sector where they could be producing wealth instead of sucking off the government tit. Additionally, end the extra-constitution practice of adding earmarks to budgetary bills. Furthermore, we need to permit localities and states to grant genuine incentives to those who wish to build manufacturing concerns so that we can rebuild our manufacturing base. A base that is rapidly siphoning off to Mexico, China and India.

Unfortunately, the Obama Administration has decided that governmental seizure of health care is a crisis. In the opinion of voters, it surely isn't, but if you have to absolutely have to interefere with the system, there is a way within the present framework to modify the system that will increase health insurance coverage far beyond what it is now. By institution portability, which means to remove employment as a means of health insurance. Allow the 1300 companies to offer insurance regardless of state lines. This will allow genuine market competition.

Another must is Tort Reform. Lawyers have boosted the costs medical coverage by 20% or more (some say 30%). It should not be a gigantic crap shoot. Limit damages to actual loss, and only with gross negligence. Loser pays for all the winner's costs and fees. Make health costs 100% tax-free. By allowing portability between states and permit ALL of the health insurance organizations to provide insurance regardless of state lines.

Force the Pharmaceutical companies to sell to other countries at the same rate as they charge their biggest customers here. They will then pay more, and we'll pay less. This will institute immediate savings, because America presently permits other countries to provide drugs at a vastly reduced rate, while we foot the full bill plus the difference they pay.

The final problem that must be face soon is Social Security/Medicare/Medicade. Rollback the retirement age back to 65 as a minimum for eligibility for Medicare. Vigorously prosecute all fraudulent disability claims. Tack on a 1-2% national sales tax to pay for it. This will eventually end the Ponzi scheme, while honoring the obligations that we previously.

These are some reasonable solutions that would be effective to the major problems this country faces. Unfortunately, no politicians worthy of the title would ever settle for simple solutions to complex problems. Especially when such solutions would reduce the role that government would play in our daily lives, and thus, the Democratic Party would never adopt them as they are hell bent on adopting European Socialist systems wherein government controls most aspects of our lives. The Republican Party on the other hand has become "Democrat Lite." It was under their watch in the early and mid-portion of this decade that unrestrained earmarks became the norm. It remains to be seen if the Tea Party can rise out of the ashes of the present mess. It's certainly possible.