Last week, my article on unintended consequences resulted in several responses asking what I would do to fix government. I have a list of items that can be implemented to correct many of the issues facing our nation. Let me start with the balance of trade. A favorable balance of trade means that a country is exporting more than it imports. This is necessary for a healthy and vibrant economy. We have an unfavorable trade balance that means we import more than we export. Over the last 10 years, these trade imbalances caused part of the dire financial straits our country is in. One of our largest imports is the $900 billion of oil we purchase overseas each year. This irritates me as we have some of the largest untapped energy reserves in the world.
My first suggestion would be to take Newt Gingrich's advice and drill here, drill now. For some reason our politicians prefer buying oil from nations that support terrorism or countries like Venezuela that expropriate American assets. Gov. Rendell, like a spoiled child, just placed a moratorium on drilling in the Marcellus gas shale because his bill to tax this gas was rejected. His irresponsible action will cost Pennsylvanians jobs and prevent our state from becoming both energy and financially independent. Our energy security should not depend upon governments that dislike America or the whims of a lame-duck governor.
Next on my list would be to repatriate almost $1 trillion that is stranded overseas. Subsidiaries of American corporations have accumulated this money from their profitable foreign operations. Taxes have been paid on these earnings to foreign governments. When these funds are returned to the United States, the corporations will have to pay additional American income taxes. I suggest a six-month tax holiday to encourage corporations to repatriate this money. This can be accomplished at no cost as the money is not coming home now and will never come home as long as our frivolous tax-and-spend politicians will confiscate it on arrival. If these funds were repatriated, corporations would be able to build new world-class facilities and create jobs here, jobs now.
I would also cut income and investment taxes. We need to get the economy going again. This can only be done when people have money to spend and corporations have a business friendly environment to encourage investment. More money in people's pockets means more discretionary spending. More money in the government's pocket means more pork barreling, irresponsible spending and needless waste of our financial resources.
As I've said in previous articles, I would deport illegal aliens immediately. This will create jobs for Americans who are unemployed or underemployed. To encourage Americans to take jobs they otherwise would not take I would cut unemployment insurance benefits to 26 weeks from the current 99 weeks. Unemployment insurance is meant to bridge the gap between jobs, not provide two years of income for those who are unable or unwilling to find work. We will also need to remove able-bodied people from the welfare rolls. This may require some investment, as we may need to set up childcare centers for single mothers. We may also have to hire bounty hunters to find fathers who have abandoned their families and are not paying child support. If someone fathers a child, then they are obligated to support that child until they reach maturity. Irresponsible fathers can't just run away and leave a destitute single mother to raise multiple children on government handouts.
The government remains in the banking and automobile businesses. It is time to return these businesses to the private sector. The government cannot run a private enterprise effectively. Let's look at the Chevrolet Volt. This car, which was supposed to be an all-electric vehicle, now has an engine. This engine was originally intended to charge the battery so the motors could power the car. Unfortunately, the all-electric car with a gasoline engine did not perform well. As a result the engine now powers the car and charges the batteries. This car gets 40 to 50 miles per gallon (mpg) and was misnamed an all-electric vehicle when it really is a hybrid. GM now calls the Volt an extended range electric plug-in vehicle. With a full charge and a tank of gas it can travel 350 miles. The new Ford Fiesta achieves nearly the same mileage (40 mpg highway) using an all gasoline engine. The Volt will cost in excess of $40,000 to buy. The Fiesta, with more legroom, trunk space and greater range, will cost $14,000. Would you buy the Ford Fiesta or a Government Motors Chevy Volt?
The government needs to get out of the banking business. Throwing away another $350 billion to rescue Freddie Mac and Fannie Mae is foolish. Let's stop encouraging people to buy houses they cannot afford. Cleanse the real estate blight through the foreclosure process as quickly as possible. The real estate market will not recover until the inventory of distressed properties is liquidated. The banks will not recover until they can monetize their bad loans. I believe that if we let the private sector take over, the housing market will stabilize within six months.
The President continues to ramble on about how he and his government are helping small business. As a small businessman let me tell you he has done nothing for me. Just try to obtain a small business loan today! A massive amount of paperwork and financial restrictions on your personal capital makes this process difficult to say the least. It is time to make small business loans as simple as car loans. I can go into a dealership today, pick out a car and finance it on the spot in less than an hour. The last small business loan I applied for took a week of our time to compile the information and complete the forms. The process was so difficult that when we paid off the loan, we chose not to borrow again. Make the small business lending process simple and businesses will borrow. If they borrow they will hire employees and expand their businesses. As they do, they will become the driving force that propels our economy into a sustainable recovery.
We also need to downsize government. Both the Department of Energy and the Department of Education are complete and utter failures. The Department of Energy's mandate was to make the United States energy self-sufficient in 10 years (by 1978). It is now 2010 and we are spending almost $1 trillion a year on imported energy. Shut this department down and let the private sector find and exploit our own petroleum and energy products. They will bring them to market in less time than it takes Congress to agree on a balanced budget.
It is time to cut the number of staff in the other government departments. We need to downsize the government just as the private sector was downsized over the last 30 years. Get rid of bureaucracy wherever it can be found, cut the paperwork, and make the process of doing the people's business efficient and effective. I would start with the staff that works for Congress. I was shocked yesterday to find that there are 24,000 employees who work for our congressmen and senators. When Hillary Clinton said it takes a village I didn't think that she was talking about staffing Congress! Staffing Congress takes a small city! Let's get this back to 5,000 or 10,000 people. Given the "canned" letters I receive in response to the questions and comments I send my senators and representatives, it would be better to let the computer systems send me the letter without human intervention. It is time for our congressmen and senators to work! Force them to make their offices efficient and cut the overhead of administering Congress.
Every government department should be downsized. Automate processes to cut staff and strip out layers of management as we did in the private sector. It is time to terminate expensive consultants (leeches) that are bleeding every cent they can out of government. In some of my past projects, I monitored those who constantly attended meetings as a means to identify ineffective managers. If a manager spent more than 50% of their time in meetings then we would let them go. We could decimate government by terminating those who are employed to sit in meetings but do no work. How can a manager supervise staff if they are sitting in meetings all day?
A phrase I used in my business when we would go through our process rationalization was "why am I doing what I am now doing"? We asked our staff to analyze every task they did to ascertain if it was truly needed. We found that certain reports were being prepared on a weekly basis even though I only asked for them once or twice. My staff wanted them to be ready in case I needed them again. The other question I would have them answer during this process modification was "what value has this procedure added to the organization"? Why should we do things that have no value? I believe that if private sector analysts applied modern business techniques to government we would be able to cut the size of government by 50 to 60 percent. This would not only save on wages but also on office space. A more efficient workplace would certainly bring joy and happiness to those government workers who remain.
Let's close our overseas military bases. We can no longer afford to be the protector of the world. Bring our troops home and put them on our borders. We can develop long-distance strike capabilities for our military that includes naval fleets, heavy lift military transport jets and rapid deployment capabilities. All of this equipment and ordnance would be made in the good old USA. Our military can be based in the U.S. and fly wherever they are needed. Now that the "war in Iraq" is over we should withdraw the remaining 50,000 troops that are stationed there before they are killed or wounded in "peaceful operations". We should pull our troops out of Afghanistan and any other hot spots in the world. Let the United Nations provide peacekeeping troops. The blue helmeted United Nations forces seldom have to fire the guns and rarely take casualties.
As for the United Nations we currently contribute more than the other 177 member nations combined. Many of the nations that we provide aid to vote against us and our positions in the United Nations General Assembly. If they are not on our side then let's stop sending them our foreign aid dollars. Spreading our wealth to other nations only ensures eventual poverty for everyone. Close down the UN Building in New York and move it to Switzerland, which is a neutral country. They can enjoy having Mahmoud Armadinejad in Geneva when he wants to make a speech demonizing the United States. Once the UN moves, we could ban him from America for being the terrorist and mass murderer that he is.
I'm sure that these suggestions will seem radical to many readers. They are just a few of my ideas. Times are tough. The old methods of shoving issues under the carpet or borrowing money to support waste no longer works. As a recent commercial from Citizens Against Government Waste (CAWG.org) depicts, we have wasted so much money and borrowed so heavily from the Chinese that they now own us. (http://www.youtube.com/watch?v=OTSQozWP-rM ). You have to watch this video to understand that we must change. Now is the time for effective change. We need change that restores our country and our constitution that was ravaged for decades by flippant Politians. On Tuesday, please vote. We have to ensure that we flip the house and shake up the senate. They work for us. Demand a balanced budget that pays off our debt. Force them to do the work of the people, not spend their time in the holiday resort we call the Congress.
© 2010 Gordon Smith All Rights Reserved