March 17, 2016
The middle class is angry because of economic anxiety over job security, health care costs, family destruction and the lack of reliable pensions. Whoever wins the Presidential election is going to deal with a highly polarized country looking for solutions. Here are some suggestions:
Extend Medicare to all Americans for catastrophic illness. Bernie Sanders is correct. No American should lose his or her life savings because of an illness. His solution to extend Medicare to all Americans would be too costly, and more importantly, discourage the investment needed for medical innovation. A reasonable compromise would be to extend Medicare to cover all Americans for medical bills that exceed $75,000. Patients could then purchase insurance to cover this $75,000. This would be affordable to most. Obamacare’s provisions that prohibit insurance companies from denying coverage for preexisting conditions along with the requirement that employees purchase this insurance for low-wage workers should remain. Not only would such a plan be a boon for small business, but it would encourage large corporations to keep jobs in the United States as their health care costs would plummet.
Bring Back the Savings Bond. There was in a time in America where a person could walk into a bank and buy a bond for as little as $25. These bonds paid 5.25% interest and purchaser even received a book that showed how the bond value increased over time. President Clinton and his Treasury Secretary Robert Rubin bowed to the wishes of Wall Street and destroyed the Savings Bond by reducing the interest rate. Their goal was to force the middle class into much riskier investments and they succeeded admirably. Presently, saving bonds pay a measly 0.1% to 1.64%.
Our Federal Reserve Board, consisting of unelected officials, has pursued a financial policy of catering to Wall Street by artificially keeping interest rates low. This has punished savers, especially seniors living on fixed income, who are lucky to get 1% on a one-year CD. It also permits Wall Street to speculate with impunity, finance the mergers of companies who gut workers pensions and health care plans while using their profits to finance the political class on both sides of the isle.
Expecting our politically-motivated Federal Reserve to start acting responsibly would be unrealistic. But allowing the American people to return to a safe and secure investment that competes with the Federal Reserves’debilitating policies would make it less relevant.
Renegotiate trade agreements. Donald Trump is correct. Ever since NAFTA passed, the middle class has been obliterated. When I grew up in western Pennsylvania, a man could support a family on one income. Now my hometown is a matriarchy, with working class women toiling in multiple low wage jobs, while the men sit home on disability and obsess over the Pirates and the Steelers. Everyone cannot be a doctor, a lawyer, an investment bankers or a government employee. Not everyone is college material. Working people need jobs with financial security, health care coverage and pensions that allow them a dignified retirement.
Handle volatile social issues by democratic process. America’s overclass has imposed secular public schools, abortion, free contraception and rampant pornography by manipulating the judicial system, not by democratic process. This has destroyed the family structure by making relations between the sexes a recreational sport rather than an act of love. The taxes required to support destroyed families continue to rise. While reasonable people can disagree on these volatile issues, they should be decided by elected officials, not judges.
Make social security, interest, dividends, pensions and pension withdrawals tax free. The present tax system encourages debt and speculation rather than savings and investment. Our citizens are not only discouraged from saving for retirement, but routinely threatened to have their pensions and benefits taxed more if they choose to do so. Removing this threat encourages people to save, feel more secure in retirement and reduces economic anxiety.
Stop trying to make the world safe for democracy. There was a time in America when war required shared sacrifice from all its citizens. The protests over the Viet Nam War changed this. The draft was abolished and our army became all-volunteer. When these protesters came to the levers of power, they were gung ho for war. Their children are safe. It is the poor, the minorities and the lower middle class who are disproportionately returning from the Mid-East in body bags. Our forays into Iraq and Afghanistan have accomplished nothing. We should rebuild our military, aggressively deploy the Strategic Defense System, protect our veterans and create the best firewalls possible to prevent cyberterrorism; but war should be reserved for when our country is directly threatened.
These solutions are well known to the political class. The problem is that vested interests will fight them tooth-and-nail.