Robespierre, the architect of the reign of terror in revolutionary France, is reported to have said
“If you want to make an omelet, you must be willing to break a few eggs.”
We need to remember this as we enter a period that will likely be called “The American Spring.” It will not be as violent as the revolution in France. Nor will it be as violent as the Arab Spring we have been witnessing in the last year. We already have the freedoms people sought in revolutionary France. We already have the freedoms people seek today in the Middle East.
But the scent of tear gas is in our future.
The coming American Spring is going to be tough. Many eggs need to be broken if we are to save our country. It will start to happen when we begin to tell the politicians they have done enough for us. That we want no more. Things will start to turn around when the first politician doesn’t fake it.
That hasn’t happened yet. Republicans fake it when they argue to cut taxes because cuts “pay for themselves” through higher federal revenues. Democrats fake it when they spend more but call it “investment.” The witless conspiracy of our two parties has brought the country to bankruptcy. It has to end. Not over ten years. Not in (or on) another generation. It has to end now, with sacrifice for all. If it means voting every single existing politician out of office, so be it. If my reader mail is any indication, we could have a national recall and start over right now.
Here are some, but just some, of the eggs that will go into the new American omelet.
- Break the back of the finance/banking complex. The financial institutions continue to play heads-they-win, tails-you-lose ball. The change from George Bush to Barrack Obama proved there is only one party in America. It is the Institutional Party, the party of finance. Democrats and Republicans put institutions first, people second. We can change this by adopting Limited Purpose Banking. This is banking where the bankers aren’t making their profits and bonuses with our money, while having their extravagant risk back-stopped by our taxes.
- Whip the insurance-medical complex. This is the complex of vested interests that pushed George W. Bush, a Republican president, to create a guaranteed income for the pharmaceutical and insurance industries with Medicare Part D. If this is a free enterprise country, let the pharmaceutical companies produce products at prices people can afford. In one step Medicare part D created unfunded liabilities equal to the entire Social Security program.
- Get real about unlimited healthcare entitlement. It has been estimated that 10 to 30 percent of Medicare spending is lost to fraud. Other studies suggest that another 30 percent of all medical care is unnecessary. There is no demonstrated benefit for the extravagant spending. We spend half again as much as Germany as a percent of GDP on healthcare— but our lives are shorter.
- Admit, and Share, adversity. This means a higher tax rate on Social Security benefits for current as well as future seniors who have abundant income from other sources. Raise the maximum income for paying the employment tax.
- Want to be a member of the USA? Then pay your membership dues. We can’t have a nation where more than 50 percent of the people pay nothing in income taxes. Everyone needs to put something in the pot.
- Higher tax rates for the very well off. When some kids go to summer camp in their parents’ private jet, the mal-distribution of income has gone too far. Whether you are conservative or liberal, the growing gap between rich and poor is destructive. It is better to redistribute wealth and income with taxes than with guillotines.
- Cut defense spending, change foreign policy. Avoid joining the Russians as another nation broken in Afghanistan. Build a more mobile defense capability. Only spend as much as the next 5 largest military spenders rather than the next 20 nations. Get real about the cost of oil: Include much of the defense budget. Build a policy that radically changes energy consumption in America.
Think I’m crazy? Tell me. Hear me loud and clear? Let me know that, too. Send a note to firstname.lastname@example.org.
Scott Burns is the retired Chief Investment Officer of AssetBuilder, the creator of Couch Potato investing, and a personal finance columnist with decades of experience.