Solving the worlds economic problems – after a couple of bottles of wine

So here’s the thing, there is a really simple formula for economics, at a personal level. You are either working class, middle class or upper class. And there is a simple way to tell.

You are working class if 100% of your income is used to live. If every penny you earn goes to your rent/mortgage, food, clothing, transport etc, and there is nothing left for fun and savings then you are working class.

If at the end of the month after you have paid all the bills, you have a stack left over and you can choose to save or party, then you are middle class. How much of a buffer you have determines how middle class you are (lower-middle, middle-middle or upper-middle)

If though, the amount of money you spend on paying bills seems inconsequential to what you choose to save and spend on luxuries, then you are wealthy and are in the upper class. At this level you can “choose” to stop working and still have enough to keep you in the style you have become accustomed to for the whole of your life. Now there are still scales in the upper class. If you can choose to design your own yacht with enough bedrooms for all your friends and a permanent crew of more that six, and park it in one of the worlds most exclusive harbors, then you are most likely in the upper-upper class.

So now you know where you sit, what does this really mean. Well to start with there are different policies that you want your government(s) to implement to make your life easier.

If you are working class, you really want to pay fewer taxes, as the less you pay the more you can spend on basics. Actually when the working class tax rates gets lower, it actually is a good thing for the economy. As working class people tend not to save, but instead spend, meaning that whatever they earn goes pumped directly back in to the economy.

If you are middle class, you want to pay less taxes, as the less the government takes the more you are likely to spend on happiness of save and allow you to protect you and your family from those bumps in life.

If you are upper class you want to pay less taxes, as the less you pay the more you can leave for your children, ensuring that they can afford all those rehab centers and legal teams to fight the press and ensure those pictures of you playing naked billiard’s in Vegas are not published in your home country.

If you are working, middle or upper class there is a simple way of getting what you need. Don’t give any of your money to politicians. If politicians stopped spending billions on pointless pokes at each other and instead started to work out, how to get everyone working and not wasting money on over priced and under delivering government programs taxes can get lower for everyone.

If people are in work, then they don’t need so much in social security programs. Government is a major employer, so when you cut people you end up increasing social security costs (see Europes current mess as an example).

Tax the hell out of companies that move jobs outside of your country. Don’t make it so easy to hire cheap labor, make it preferential to hire locally. Also lower the taxes dramatically on companies that hire more people at times of high unemployment.

If healthcare was ubiquitous, and managed as a not for profit, then costs can go down dramatically and quality of overall service can go up. Lets face it, if you are sick you need help, you don’t need to go bankrupt. Healthcare costs go down when people are kept healthy. Outcome based charges always provide the most efficient model (see Mayo clinic http://en.wikipedia.org/wiki/Mayo_Clinic).

Also Americans (through government) should never pay more than the best negotiated rates in the western world. Be it drugs, services or other goods. Put in place a simple rule on all government contracts that ensure the invoices paid reflect the power and size of America. Not list-price per person. This will reduce the cost of everything.

If you are planning a war, propose a tax increase to pay for it, and then lets see just how important that war is.

No more no-bid contracts

Get rid of all levels of lobbyists. Make it illegal for people to be able to pay to have their views be given a private audience. From Judges to Police Chiefs, from Commissioners to Senators, from Representatives to Presidents, make it illegal for elected officials to take money in exchange for even a discussion on a topic. Pay for questions must be illegal.

Education is the long term investment that governments must make. Teaching critical thinking, the sciences and basic skills is fundamental. Rip the politics out of education, and allow schools and teachers the freedom to teach people how to learn, and they will then be able to learn whatever the economy needs. Teaching to a test is useless, as outside of a couple of game shows fact based learning is not preparing people for the real world. Give kids the skills to learn and they can do so much more.
Today so much of the cost of education is bureaucracy and overhead. Let schools choose the best way to teach, and let the measure be how successful their students become beyond school. It will dramatically lower the costs and improve the delivery.

Time for more wine.
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