New Bold Viewpoint on Our Future

 

New Bold Viewpoint on Our Future
By Rick Olson, 320-248-9933, olson48176@gmail.com

I am a former Republican who once thought of himself as a conservative. I even compiled a conservative voting record while serving in the Michigan legislature. So, what I am about to tell you may surprise you as several of the recommendations would clearly be labeled “liberal” or perhaps even “progressive”, but this is where I have ended up by following the facts.

We have many serious issues/problems that need solutions. We are not hearing about them in the Biden vs. Trump discussions, as the issue is whether you are for or against Trump, not whether you are for or against policy proposals.

That is why the possibility of Dean Phillips joining the Democratic primary race for President interested me. Might we see a “New Bold Viewpoint on Our Future”?

Below are some of the issues that will drastically affect you, your kids’ and your grandkids’ future that might be addressed if we follow the facts and not worry about party platforms. This is NOT intended to be pessimistic but rather a call to action to ensure a prosperous future for generations to come. This is possible if we choose to do it. However, not to choose is to decide.

Climate Change – It should no longer be disputed that the world’s temperature is warming, that it is caused by humans burning fossil fuels releasing carbon dioxide into the atmosphere and that it is critical that we do something about it. According to recent reports, in August we already reached the 1.5 degree Centigrade increase in temperatures from the historical baseline, i.e., the threshold that the 2015 Paris Accords aimed to prevent being reached. The question now is just how bad will we allow the change to occur. In the first two years of the Biden administration much has been done to stem the tide, but much more needs to be done. It is unlikely that more subsidies requiring more government spending, regulations, mandates and prohibitions will be enacted soon.

But, there is a solution on the demand side - the proposed Energy Innovation and Carbon Dividend Act. The proposal is a carbon tax and dividend concept endorsed by multiple prominent economists because it is market based where price signals in the market will give businesses and people incentives to invest in products other than coal, oil and natural gas, rather than by coercive regulation. It is revenue neutral, so it will not grow the government. The dividend received by the households will exceed the higher costs of products for an estimated 68% of households. And the Border Adjustment feature will induce other nations to do the same, with the result that neither our exporters nor from other countries are disadvantaged.

Medical Care Costs - At current rates of increases in the cost of health care exceeding inflation, projections show the total percent of our nation’s Gross National Product rising to skyrocketing, unsustainable levels, making the cost of health care unaffordable and access to health care precarious for many people.

My training has taught me that when you are trying to solve a problem, you first diagnose the true cause, then devise a plan to eliminate the cause. It has been reported that 32% of medical costs are administration costs, one of the biggest costs compared to the administrative costs of Medicare of 6%. It appears that to lower medical costs, we need to reduce administrative costs by changing the system to something like Medicare for All. Let’s call it “Americare”.

Social Security System Solvency – We need to ensure the solvency of the social safety net for our elderly. With the Social Security Trust Fund projected to run dry in 2035, the clock is ticking and each year that goes by will make a solution necessarily more drastic. Minor tweaks in the (1) retirement age, (2) the Social Security tax rate, (3) increase in the threshold beyond which the tax is no longer collected, (4) the inflation factor used to determine the SS benefits changed from the overall CPI to the index for seniors and (5) the taxation of SS benefits collectively could yet solve the problem without unfair excessive impacts on either the elderly or our younger generation who will need to pay for these benefits.

Immigration – We need to balance compassion for those seeking shelter from persecution in their homelands and the need to maintain our national sovereignty and culture.

·         The insecurity of those who were brought into the United States at a young age by their parents needs to be ended by at least making them permanent legal residents, if not provided a pathway to become U.S. citizens.

·         We need to acknowledge reality that we are not going to deport the bulk of the 11 million undocumented people in the U.S. and devise a solution which creates a means by which they can earn permanent legal resident status.

·         We need to welcome with open arms the highly qualified people who wish to relocate to the U.S. that we need not only to help our economy grow, but also to grow the working age population who will fund our rising costs of our aging population.

·         Obviously we must secure our borders, by whatever means is the most cost effective, whether it be a wall or sophisticated surveillance.

·         Coupled with that we will need a robust guest worker program to ensure those industries that rely on migrant labor can get the labor force they need.

Most of the Immigration issues could be solved in a bi-partisan manner if they were not being held hostage for partisan reasons.

Budget Deficits and National Debt - We cannot continue to increase the percentage of our national debt to Gross National Product, without putting unfair burdens on our coming generations. With the National Debt (defined as “debt held by the public”, which excludes the $6.8 trillion the federal government owes to itself, and not including the liabilities for future Social Security and Medicare benefits already promised) now exceeding $26 trillion dollars and about 98% of our GDP and projected to rise to 119% in the next ten years if our federal budget deficits are not brought under control, it is essential that something is done or the future growth of our economy is in jeopardy. It is grossly irresponsible to dump trillions of dollars of debt on our children and grandchildren and rob them of their economic prosperity.

We cannot expect to balance the budget by reducing spending. Even the Republicans when they controlled both houses and Trump was president did not do it. While it is beneficial to control Medicaid costs, etc., new taxes will be needed to lessen the budget deficits and not just the rhetoric of “taxing the rich”.  

If so, what taxes could be raised which would have the least distorting effect on savings and investment, the drivers of future growth in the economy. Many economists would recommend consumption taxes such as the "Value Added Tax" used in the European countries. The VAT collected at the producer level is passed on to the final product, effectively raising the prices to consumers. This may be objected to as “contributing to inflation” but it is likely to reduce consumption. This could cool off the economy but could be offset by the Fed reducing interest rates to stimulate the economy. Yes, there would be some pain, but much less than if nothing is done.

Widening Gap Between the Top 20% Earners and the Bottom 20% - The VAT recommended above would aid in this to some extent. Corporations now avoiding income taxes due to deductions would be subject to hit by the VAT. Wealthy people would pay more taxes as they consume much more than lower income people, who could also be protected from the higher costs by having exemptions from the VAT for essentials, such as food and medical costs.

Trade Policy - We need to recognize that international trade is not a zero – sum game; that everyone can benefit. We need to treat our allies as friends, even if they also are economic competitors. We can be tough with other nations, such as China, who hack our security systems and businesses and steal trillions of dollars’ worth of trade secrets and/or subsidize their businesses to unfairly compete with ours, but we need not rattle sabers to do so.

Foreign policy/national security. We must continue to assist Ukraine defeat Russia, not only for the benefit of the Ukrainians, but also to deter China from invading Taiwan.. With Russia, China, North Korea and Iran hacking our internet and computer systems and attempting to influence our elections and disrupt our personal interactions, we must take whatever action necessary to defend ourselves and our institutions.

We must Be Not Afraid to tackle these contentious issues. None of these are unsolvable. No solution will satisfy everybody. Any proposed solution will bring out vehement opposition. The solutions suggested involve some people winning and some people losing, which affects how they vote as voters express their self-interest. However, hopefully there is a majority that will see that the long=term general interest is more important than the immediate impacts on them.

We need Presidential candidates talking about these issues because our long-run welfare depends on it. We need a Presidential candidate who has the courage to speak truth to power. Not truth to the power of the politicians, the K Street lobbyists, Wall Street or the people who have amassed great wealth, but to the people. We need a Presidential candidate who has the courage to speak the truth to the people of the United State to solve these and many other issues. We need a public servant, not a partisan politician.

“Leaders don’t tell the voters what they want to hear. They tell them what they need to hear.”

Might a new bold campaign focusing on the long-term issues that matter and avoiding the cultural issues inspire voters to reject politics as usual? We can address these issues and ensure a prosperous future for the generations to come.