Sunday, January 8, 2012

How to Fix the USA-Part 1: Fixing Corruption

Here's my attempt to list a series of reforms to rectify the USA's ship of state.  Most of these ideas listed below are from other people.  Some of them might even be good ideas!

It feels increasingly that everything in America is compromised with corruption and it's getting worse.  I believe that one maxim to rely on is "where there is corruption there is an absence of democracy. Conversely, where there is the fresh air of democracy, there is less corruption"  Therefore improving democracy should help fix the corruption problem in government and corporations.  Corrupt officials reflect the decline in morality of the American people.  To some extent, our current recession/depression is a moral collapse (fraud at every level).  To reduce corruption, then we need better education, better parenting and better discipline for people.  In short, we need a better culture but that's another chapter in this series.
  1. Ban all money donations to politicians--penalty for violations is immediate impeachment.  All Federal level campaigns should be paid with public money (taxpayer money).  Each candidate should get the same amount.  No peddling of influence while in office either!  Lobbyists must not be able to give money to campaigns or congressmen.
  2. Congress must be subject to all national laws that everyone else is subject.  For example, insider trading is currently legal for congressmen!  How obscene is that?  
  3. Terms must be limited.  Democracy is not working well enough (as our founders intended).  Special interests have become entrenched.  Two terms seem enough and no more.   Allow democracy pick someone new (without the influence of special interest money--see item 1.   The goal here is to bring the fresh air of democracy rather than the stale air of career politicians.
  4. Reduce Federal government spending and reduce the size of government.  Big Government by definition means Big Corruption. It always has and always will.  Nearly all Federal programs become hugely corrupted---especially redistributive programs like Medicare.  The solution?  Keep Federal government small!  It's what was clearly intended by the founding fathers, the Constitution and most of American history.
  5. Reduce the Federal Government spending back to 18% of GDP or less, to reduce the size of government per Item 4.  Eighteen percent would more closely match revenue and lead to nearly balanced budgets.  In reality, the US should be running surpluses to pay down debt!  Tax revenue needs to rise while spending must be radically reduced.  What could be more obvious?
  6. American corporations have become corrupt and need an injection of shareholder democracy.  Executive pay increases have been out of control for decades--a sure sign of corruption!  Solution: shareholders must approve executive pay packages including stock options, etc.  Major investors like public pension funds must be on the Boards of Directors-by law.  We need new ideas to increase shareholder democracy.
  7. Devolve as many Federal government functions to the State level (again as intended by the Constitution and the majority of US History)   US states are much better run and accountable to the people.  US State governments actually work (as opposed to Fed. Govt)
  8. Federal Balanced budget amendment seems promising.  After all, most US states have balanced budget mandates.  Wars must be funded with new taxes as long as they persist.  War must be approved by Congress as the Constitutions require. 
  9. Comprehensive Qualification exams for candidates?  Candidates should know about US history, economics and take qualification exams.  No pass=no candidacy.
  10. Bring back a Glass Steagal and/or implement the Volker Rule.  Break up the big banks into regional retail banks and ban "hedge fund" activities by the banks.  Investment banking ("Hedge fund "activiities) must be spun-off, outlawed or limited in scope in case of catastrophic failure. No bailouts of banks or corporations.  Capitalism works because occasionally bad actors gets killed and fail.  Just look at the composition of the Dow Jones average 60 years ago to see how failure is essential in capitalism.
Part 2 of "How to Fix the USA will be ideas to reduce Federal spending.  This will reduce government size and reduce corruption and address our fiscal crisis.

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