What should we do? The medicine we should take is bitter. No chance that we will, though. But I feel better getting it off my chest.


  • We need a constitutional amendment to reduce drastically the run-away corruption (the influence of lobbies) in our system. This includes third-parties rich donors (Goldman-Sachs) just as much as it includes public labor unions. We need to fund our politicians better, both their campaigns and their expenses—and punish legal bribery and offenses even more aggressively. Our politicians should be less beholden to lobbies and campaign funders.

  • Stop gerrymandering. All districts should be drawn based on an algorithm that minimizes the average distance to polling stations across the US. This is not hard to do.

  • We need to find a better model to fund minimal public journalism. NPR, PBS, and the NY Times and the WSJ (not the oped pages in either) are the only remaining rays of light.

  • We need to find an intelligent way to allow those who contribute more in taxes (not those who have more income or who are richer!) to have more influence on how the money is spent. This does not mean contribution in absolute terms. Someone who has paid 40% of her income in taxes should have a lot of say over spending decisions, even if this is less than someone who has paid more in absolute dollars, but a lower tax rate. Our 40% payer has a real stake in the community. The current system, where voters are bought by a bunch of rich PACs, is the worst of all worlds.

  • We need a smart balanced budget amendment. Because we are so far from balance, it needs to be phased in slowly (over a decade), and it needs to make sure we pay back in good times what we borrow in bad times.

  • All promises to future recipients (social security, medicare, public pensions, etc.) need to be actuarially funded. This must apply on federal, state, and local level.

  • We need to lower our foreign policy ambitions and reduce our military. We can’t afford them. Our target military spending should be no more than 3% of GDP (right now we spend 4.7%), and tied to the spending of the world or our designated largest competitors. We spend 41% of the world’s total military expenditures. The Chinese are next with 8%, followed by the Russians with 4%. (Really!) We should be constitutionally limited to no more than 20% of the world military expenditures and to no more than double the next-biggest spender. If the Chinese Russians, Chinese, and Indians reduce their military expenditures, they should know that so shall we—automatically.

  • We need to bring back the COLA annual consideration for Social Security. It can’t be the only automatic increase when everything else has to be cut. We need to tie the retirement age to life expectancy. Maybe 10 years below life expectancy.

  • We need to reform our tax laws. Corporate taxes for companies headquartered and producing in the US should be zero or close to zero. (They are already avoided, but mostly by off-shoring. Let’s keep them here.) We need a reasonable anti-dynastic inheritance tax—say 10%—to reduce evasionary tax maneuvers. We need a federal VAT. We need to disallow deducting interest payments (financial crises arise from leverage).

  • We need to stop the rotating door from government to lobbyists—from generals working for Pentagon procurement while expecting to move to weapons manufacturers; from top aides to politicians explaining to lobbyists what their industries should lobby for, moving thereafter to these firms themselves; from Fed governorships to Wall Street firms. We need to pay our public servants better, too—but shut down all such conflict of interest.

Economics, not Government Spending

  • We need to break up our financial services giants, and force immediate and open disclosure of their primary risk exposures. Everyone should be able to find out what will happen if real-estate were to go down 10% and interest rates were to go up by 5%. Everyone should be able to find out whether Morgan-Stanley will survive if Goldman goes under. There should not be a single point of failure in the financial system that can bring down the system. In cases of the bankruptcy of any systemically important financial institution, all limited liability extended to the board members, executives, and main traders is voided. (Yes, this will make them more conservative, as it should.) We need to raise the capital requirements.

  • We need “instant bankruptcy” procedures for systemic institutions. If a systemically important firm is illiquid for more than 24 hours, it is automatically declared bankrupt and becomes fully owned by the government. No ifs, ands or buts. No lawyers arguing in courts for 12 months over who owes whom what, while all creditors are about to go under because they are not paid. The government can sell off the firm, and pay off the creditors in priority order in its own time frame. But the important aspect is that the firm continues operating.

  • We need investment banking, commercial banking, and speculative arbitrage to be separate.

  • We need a quicker court system. It makes no sense to have to wait two years for a trial. We need the loser in trials pay a reasonable amount to the winner for legal expenses, not actual legal expenses, but depending on the amount at stake. A reasonable amount may be 10%.

  • We need to make public the amounts of money that lawyers receive in class-action lawsuits vs. the victims. Legal fees in class-action lawsuits should be limited to 10% of what the victims are getting. (The point is that we are not generating social wealth by suing one another. We can do with fewer lawsuits, even if this means that sometimes the victims are not compensated.)

Medical Reforms

  • We need to control medical spending. Yes, we will need death panels. If there is no reasonable path to recovery, let’s not pay for prolonging the inevitable.

  • We need universal health coverage. The current exclusively-private-market health care system in the USA is a complete failure. The cost of insurance companies vastly outweighs their cost savings. Medicare, our government-run health care system, is run better than our private health-care system. — A two-tier medical system would be a good idea. As in Canada or the UK, there would be free and basic health care, although with a 10% copayment. Treatments should be limited to those that pass a cost-efficiency criterion. It would not cover all treatments, such as expensive chemo-therapy or experimental treatments. The drug of choice may be the second-best if it is far cheaper. Patients may have to wait in long lines. There would be no right of patients to sue for compensation. It would not be a Cadillac plan. This basic health insurance must be completely independent of one’s employment. (It must not cost business to have their employees insured at this basic level.) To avoid run-away government commitment, we need to tie expenses, both medical and administration, to GDP. If it exceeds this amount, payments are pro-rated and the admin of the basic service is cut (to have the bureaucrats suffer). As is the case today, anyone willing to pay more can buy additional services or private health insurance to cover more expensive treatments. This is the second tier. It preserves the good aspects of US health care today. It can cover ridiculously expensive treatments, such as joyous months on the respirator.


  • We need to reform our educational system. This means we need to break up our teachers’ unions. No public sector union should be allowed to spend funds to lobby in elections. It is an intrinsic conflict of interest. This does not mean we should pay our good teachers less. On the contrary. I would favor dramatic pay increases for teachers if they are combined with such a breakup.

  • We should think long and hard how we can educate better the half of the population that sits below the mean. Maybe trade apprenticeships (as in Germany) would be a good idea.

  • We need better minimum-wage laws. Right now, the minimum wage is too high in many cases for employers to take the chance of hiring someone without work experience. One idea: during the first five years of anyone’s working career, the minimum wage gradually increases to the common minimum wage. No minimum wage the first year, 20% the second year, 40% the third year, and so on.

  • I like the separation of church and state (no creationism in the curriculum; no religious zealots on school boards), but in a nod to those that are more so inclined than I am, we could allow 1-2 hours of ethics/religion instruction per week, where students that do not want to attend are permitted not to attend. we could allow such modest religious presence in schools. It would not break the world. It is unimportant. It is important that our science and arts education is science and arts based and be void of religious influences. I would rather have an honest separation of the two.

Social and Other Reforms

  • We need to institute a work-visa program for our now-illegal immigrants, that guarantees them decades of the right to work, incl a driver’s license, etc., provided that they don’t commit felonies or serious misdemeanors. This visa should oblige them to pay taxes (incl social security and medicare), but it would not qualify them for the social services. This is indeed unfair, but it is a whole lot better what they are getting now.

  • We need to decriminalize drugs and convert our War on Drugs into a War on Crime. If addicts shoot up in their own homes, but don’t harm anyone else, let them. What business is it of government to meddle with what people want to put into their bodies?

  • Let’s go even further: give drug addicts their drugs if they are willing to stand in a government line, just as others do at the unemployment line. It’s suitably demeaning. It will eliminate all glamour of drugs, and the incentives of drug dealers to hook new addicts.

  • We need to reform our intellectual property laws. Software patents are a disaster. Patent trolling is a disaster. Any company that has never produced what it has patented should lose its patents after 5 years. Copyright should expire by default after 10 years, but be renewable for another 10 years at most twice. These changes would not impede the incentives to innovate—on the contrary.

  • We need to reform our legal system. The main expert witnesses should not be bought by the litigants, but selected by the court. Most commercial cases should be decided by expert judges, not juries. We can’t afford the indirect costs of our current army of ambulance chasers and class action attorneys.

  • Publicly funded research in the US should owned by the US, and be freely licensed to anyone for use in the US. We can allow firms and scientists to take patents in foreign locales, however. But we, the US people, own the US intellectual property that we paid for.

  • We need to treat terrorists just like criminals, not like supernatural aliens. This means normal trials when captured—and the death penalty when appropriate. We can handle it.

  • We should allow our courts to ban news reporting of terror actions, upon request by the AG. Yes, some news will get out. But it will reduce the 24/7 coverage. The unusual aspect here is that the whole point of terror attacks is to generate news coverage. No news coverage, no terror. Less news coverage, less terror.

  • We should have DNA fingerprint samples from everyone, stored in a data base that is owned and accessible only by the judicial system itself. When a crime is committed, the police can submit samples for identification to a special court, which decides whether the use of its data base is reasonable or not. The data base must be as safe as (or safer than) the IRS ring fenced data base. Politicians and police must not be able to get easy access to it, much less control it. We must have faith that it is used to protect the innocent and convict the guilty.

  • If we want to fight terror, we need to permit reasonable profiling in certain situations—such as boarding airplanes. Muslim Americans are not terrorists, but the 9/11 high-jackers were young Muslim. They were not Swiss, Black, Chinese, or Senior Citizens. At the same time, our security system that ignores other classes is stupid and ineffective. If senior citizens do not have to take off their shoes, then what stops a terrorist from asking an older friend to hide stuff in their shoes? If handicapped chairs are exempt, what stops a terrorist from rolling in in a wheelchair? If liquids in a diet coke bottle can explode a plane, why wouldn’t you buy a few more tickets and mix together toiletry bottles?

  • Possession of assault weapons requires a license that is granted only in rare cases.

Foreign Policy

  • The time of American hegemony is coming to an end. Let’s face it. Our future power will depend on our ability to work with others, especially European and Australasian democracies. The sooner we recognize it, the better we will be off.

  • We should have a no-tolerance policy for genocidal regimes, even if they are our allies. It will only hurt us in the long run. It was us who supported the Red Khmer against Vietnam. It was us who supported Iraq’s use of chemical weapons. It was us who supported the Shah and brought down Allende. Kissinger is wrong. The long-term costs of his form of real-politik exceed the short-term benefits.

  • We should bomb Sudanese troops (but not send ground troops) if it starts to commit genocide in Darfur again.

  • We should be cautious in our dealings with China and Russia. We need them, but neither regime will be judged kindly by history or their own people in the future. In fairness, they are by and large merely corrupt, not murderous regimes, exceptions not-withstanding.

  • We should use our economic leverage over China and Russia for the greater good—and not when it is in our interest, as we have so often done. This has only bred cynicism and resentment. China and Russia support Syria and Iran partly because they want to oppose the US and partly because they suspect that the outcome will be better for the US than it is for them. We have to be clear that the point of our policy is not to make the US better of.

  • We must wean ourselves from oil, including North-American oil. It is a global oil market. We need to invest more in modern nuclear power, which are much better than the old plants, and with much stronger regulatory supervision than what we are currently able to muster. We need to drive the costs and nuclear waste down. Nuclear power can cost 1/10 of what oil costs and is non-polluting. (We need gas and coal, too—unfortunately, but true.)

  • We should lean on the Israelis and Palestinians to negotiate seriously. Every year they don’t make progress, we should be committed reduce the amount of subsidies to both sides (UN, US, and other government subsidies) by 10%. Before AIPAC complains, I believe it would help Israel in the long-term, too. There is no reason why 90% of the conflict cannot be solved right now, keeping 10% explicitly to be resolved in two decades. In 20 years, after we have had many years of peaceful coexistence, it will be much easier to solve the remaining 10%. (Look at Germany and France—who cares about Elsass-Lorraine when everything is peaceful and immigration is open. This is what we fought a world war for?) We should ask Egypt to take over ultimate responsibility for Gaza again, including full control of the borders to Gaza. We shouldn’t bottle up the Gazans there—the tunnels without controls are especially ridiculous as a solution. So what if Hamas wants to destroy Israel? Let them run a clean and prosperous Gaza that does not attack Israel, and everyone should be happy. In a few decades, they will have too much to lose to want conflict. After some decades without armed conflict and terror, both sides should be ripe for a real peace without fear of the other. (The US could even offer to open military bases in Israel and Palestine as security guarantees to both, if need be and if support on all sides for this is strong. Heck, Germany loved it!)

Most Radical Suggestions

  • US States should be allowed to secede the union, and instead enter a Commonwealth, where mutual obligations are much weaker—maybe limited to immigration, free trade, a common currency, and a common court that decides when a Commonwealth state breaches its mutual obligations. It is no longer the 19th Century. If Texas really wants to be its own state without Obamacare, why not? Are we still afraid that the British (or Mexicans) will attack states individually?