Killin Gnatsies

1. Cut defense spending

We currently spend around 16% of our total budget on the Department of Defense, a department we haven’t seriously used since 1945. The only department that gets more money than the DOD is Social Security, and this seems odd to me: if we haven’t fought a real war since the seventies, and we use the DOD for fighting wars, why are we spending almost $600 billion a year on defense?

The reason is Ronald Reagan. He figured “Hey, the economy does well during wartime, and we like it when the economy does well, so let’s have a permanent wartime economy.” This is the key bit. We fund the Defense Department like it’s WWII, and that’s a problem, because while Reagan was smart enough to figure the first part out, he didn’t seem to realize that it ISN’T WWII anymore. That means that there is no bombing of foreign factories that make ours more important, there is no massive expenditure on the part of other countries to fund their armies, and in a globalized economy, that matters. We can’t compete with other nations when we spend this much cash on defense while they fund social programs that improve their economies in other ways.

However, the DOD does do something very important: research. They have led the way in many of the major innovations in the past few decades, primarily through DARPA, their big R&D department. We cannot afford to lose this edge in technological advancement, so we have to cut funding in personnel and weapons manufacturing over research. The government is also the only agency that really can have enough money at is disposal to fund large projects.

But we need personnel and weapons, right? Of course we do. If the never-ending wars end, we can finally cut employees and stop building crazy amounts of guns and shit. But what if we have to fight a war? Well, the only wars we’ve fought for the last seventy years have been created by us. And there hasn’t been a major war (between serious powers) since the creation of the UN. So we put our trust in diplomacy, and the global economy: if anyone attacks us, we cut them the fuck off. That’s more powerful than a giant army any day. We also have to change the way our army is trained: instead of a bunch of dudes marching in, we have to learn to use a few well-trained operatives to counter guerrilla tactics, because again, that’s the only thing we’ve faced since WWII. The world has changed, we haven’t, and now we’re facing the consequences.

2. Pay off the debt

Well, now that we’ve freed up some cash from that stupid amount of money being spent on defense, we’ve got to put it somewhere. We’ve got a national debt around $14 trillion, so let’s get a surplus going (the typical tactic is: we cut spending somewhere? That means we can spend more somewhere else!), then buy our country back. And instead of borrowing to pay for whatever new thingy we want now, let’s not act like a five year old and reallocate resources if we need it, and wait if we just want it. Poor budget management has sunk our nation’s economy and credibility.

3. Fund education

We used to be a powerhouse in the area of education; the world sent us their brightest to be educated. This allowed us to keep some of the best minds in the world, and bring American culture to the ones who returned to their home countries. I cannot stress how important this is: in a post-industrial economy, we have to make sure our citizens are educated, because there’s a good chance they’ll be white-collar workers who use their brains instead of their hands.

Many schools in our nation are underfunded, and many are overfunded; there is a disgusting disconnect between the best schools and the worst schools, and that cannot continue. We need to remove the connections between property taxes and school funding (because then rich neighborhoods get the best schools, and poor neighborhoods, who need more help, get shit schools), and redistribute the resources so that schools are funded equally and environment doesn’t hinder a student’s education.

With a well-educated population, our government will have to step up its game; the best antidote to corruption and poor administration is watchfulness, and we need our people to know what’s going on to keep our government honest.

4. Raise corporate tax rates

Corporate taxes are taxes levied on corporate profits. The United States has one of the lower corporate tax rates in the world, at 15-39%. We need to jack that up to around 50% at the most (only for the highest earners). The US is one of the largest consumer economies in the world, and corporations have been gradually destroying the American worker in an attempt to raise profits (more on that later). If Exxon-Mobil can continually break records, posting profits about $400 billion a year, we need to take advantage of the fact that they are squeezing workers and cutting costs everywhere to maximize that profit.

No matter how much we can cut DOD funding by, we will probably need more sources of income, and I’d say we tax giant corporations before we start raising individual taxes. Given the system of tax brackets, it will also encourage the growth of small businesses, which stimulate local economies.

5. Bring back the union

Unions used to mean something in this country. But ever since the 1970s, when union density peaked at 35% or so, it has been declining. This is largely in part to aggressive cost-cutting measures on behalf of corporations (the more they save in expenditures, the more their stock goes up, the bigger bonus for Mr. CEO), and anti-union legislation like the Taft-Hartley Act (passed in the 1940s) which has been used more and more effectively to combat unions, along with professional union-busters and more anti-collective bargaining groups.

America is slowly but surely approaching something called the “hourglass economy”; this is not difficult to see. The rich are getting richer, the poor are getting poorer, and the middle class, which is what a nation is built on, is slowly getting squeezed out. A few are going up, but most are going down, and nations like ours are built on middle-class families with middle-class incomes. Not everyone can be upper class (someone has to do the low-paid grunt work), but with machines taking more and more manufacturing jobs, we have gone from an industrial economy to a service-based economy, and service jobs required education (which the lower classes can’t afford) and a strong consumer base to stay in business. It’s a cycle: middle-class incomes beget middle-class jobs (because only a significant amount of consumers with disposable income can sustain an economy based largely on disposable income), and if that cycle turns vicious, the loss of middle-class jobs leads to a loss of disposable income, which leads back to a loss of middle-class jobs, etc. It ends with 10% of the population owning 95% of the wealth, and everyone else gets to do their bidding. That’s the way things are in third-world nations.

Unions are the antidote to this. Corporate pay cuts lead to strikes, which lead to pay raises, overtime, health insurance, vacation pay, and an overall spreading of the wealth (!!!! SOCIALISM!!!), which is necessary for a healthy economy. Without a strong union, the corporation holds all the cards, and they will waste no time in using their power to screw each and every worker out of their future for a profit margin. It’s ugly, but that’s capitalism.

6. End predatory lending

It’s disgusting how lenient we are with credit card companies, and how uneducated and fucking stupid the average American is. However, the first part is a bigger problem; most of these companies encourage you to go into debt for a simple and obvious reason: it helps their bottom line. The more money you owe, the more interest you pay, the more money they make. And instead of taking a stand against this, and trying to protect the average citizen, the federal government doesn’t give a shit (see: US economy).

We need to push the limits on interest rates down to somewhere around 10%, so that companies can’t try and hook all the old ladies who think they’re getting a great deal on a credit card, because they just don’t have the cash anymore, and end up thousands of dollars in debt. People are irresponsible when they think “Oh, I only have $200 in the bank, but my credit card has a $2,000 limit so it doesn’t matter”, probably because they don’t understand what’s going on. Then the company says, “Well, you owe us $150, but you only have to pay $100 now!” and people don’t realize that other $50 is going to compound and compound and compound until it’s a couple grand. The federal government’s job is to protect people from things that can hurt them (to a limit, of course), and that obligation doesn’t end with terrorists.

7. Reconcile with the world

This one is less about economics and more about PR; America has a terrible image in the world today. We provide more foreign aid than any other country, and yet people hate us. Why? We’re perceived as an invader, as a nigh-unstoppable force sent to destroy their culture and way of life, force everyone to eat McDonald’s, drink Coke, and wear Nikes, then squirrel the profits back to our country. And there’s a lot of truth to that.

But we as a country can do a couple of things about it. First, the education thing. If we’re perceived as smarter, people will be less likely to promote the “idiot American” stereotype. Second, we have to distance ourselves from our corporations. American can no longer be continually defined by brand names. Promoting our charitable organizations and federal gifts will help with this, as will repeatedly reassuring people that there isn’t anything we can do about the actions of American corporations (which we can’t, at least not in foreign countries). We should publicly reprimand companies that use child labor, take advantage of conditions in third-world countries, and generally do nothing to promote environmental, economic, or physical health in the countries they operate in. Third, we must admit our arrogance, and our mistakes, and apologize for them.

For me, this also involves trying to resolve crises diplomatically before we send in the troops. America has a longstanding tradition of “shoot first, ask questions later” that has gotten us into political and economic trouble. There is nothing wrong with diplomacy, and the attitude that certain foreign leaders (like those who keep trying to kill us) will not be reasoned with is stupid. I’d say that before you can make that judgment, you kind of have to try to reason with them. Where is the harm in the president sitting down with the leaders of terrorist groups and the people they are trying to kill and asking them what their problem is? Maybe they have a legitimate claim, and we can resolve the situation instead of trying to blow each other up. It seems kind of odd to me that we just assume all these people are mentally unstable and unworthy of a little talk. The worst that can happen from an attempt to mediate the situation diplomatically is that nothing is resolved.

8. Increase manufacturing

And we’re back on the economy. America has grown from an industrial economy to a service economy, as stated before, and in doing so, we managed to ditch all our manufacturing power; we essentially traded it for service jobs (which are better in nearly every respect). We have to build new plants, update the old ones, and get back in the game; the reason China and India are outperforming us is not only sheer volume of labor, but a focus on the basics: getting goods to consumers. As a nation, we are far more technologically advanced than other countries, and could likely build almost fully-automated manufacturing plants. The objective here obviously wouldn’t be to create jobs (though it would create several), but to provide low-cost American-made goods, which require less transport and are more likely to stand up to federal codes.

You may argue that there is no reason to do this, then, because China already provides us with everything we need. But because of their position, they own us. And while it wouldn’t put the economy into overdrive, and the initial costs would be high, building new manufacturing plants would create some jobs, and we could export more than we import, which is vital for a healthy economy.

Furthermore, if the government steps in and facilitates this by raising import taxes and limiting markups that companies tag on to compensate, we have one of two outcomes: more federal revenue, leading to more funding for education, research, etc. or more domestic growth (which leads to more tax revenue, etc.). Of course, our obsession with neoliberal economics makes this pretty unlikely.

Conclusion: