The way things are going, it looks as if the U.S. will either default on its debt because of disagreements in Congress or will keep raising its debt ceiling, eventually getting to the point where it can no longer pay–sometime in the next twelve years. Putting aside late fees and annual fees, the minimum payments will be more than the government can afford, and the U.S. government will be forced to default.
If the government does default, creditors will be unwilling to lend money to the U.S. Also, all of the money U.S. citizens put into Social Security, for example, they may never see again, and all kinds of federal funding (schools, prisons, veterans’ pensions) might not exist. The citizens of the U.S. will suffer to a greater or lesser extent depending on how effectively the government deals with the situation. One way or another, the issues being decided because of the U.S. government shutdown are not light and transient, and will affect us positively or devastatingly for the rest of our lives.
If the government folds or becomes insolvent, there will not be a national military, Social Security, or national food safety and regulatory agencies: the states will have to fend for themselves. Larger states like California or Texas will probably be able to manage, but how will smaller states survive? What would we use for money, and how would “the Fed” be regulated? There are so many disturbing variables. The states might still band together to create military alliances or military organizations, but we might have 50 separate states with no official central government forcing them to act as a whole. The U.S. might not be a nation as it is today.
The U.S. government learns to live within its means, and, over three decades, we could balance the budget, pay off all our debts, and develop savings. To accomplish this, the government would need to become more of a regulatory agency and less of a financier.
The three biggest national expenses for the U.S.– the military, prisons, and the debt:
The military would have to be cut by 80%; the U.S. might have a military base in Kuwait and Cuba, but other foreign bases need to be dismantled or drastically reduced. The military should be for defense purposes, not to control the world. If countries are willing to pay a portion of the expense to have a U.S. military base in their country, fine. The U.S. would have only what is necessary to protect itself and its interests. This way, the U.S. could afford to pay off its debt–currently $16,749, 632, 792,721.39.
In the military, everyone would be a volunteer, and everyone would be paid based on what they were willing to do. What is a human life worth? It depends on the market rate. If some were willing to go to the front lines in a hot war, for example, those enlisted men would get paid more. Furthermore, a country would have to pay the U.S. for the U.S. to have a military base in that country (with the exception of Kuwait, for example). If they want protection–let them pay for it, at least a percentage of the cost. Other countries would pay for the U.S. military–if they wanted America’s help.
According to a 2012 CBS news report, the United States accounts for “about 5 percent of the world’s population, but we have 25 percent of the world’s prisoners.” Over 2.4 million people are in prison in the U.S.–despite the fact that the crime rate has dropped by over 40% in the last 20 years. Why so many in prison? A response to drug use and urban violence in the 1970’s. Does the current prison system decrease the drug problem and make our society safe enough to justify its existence? The cost? Between $40,000 and $60,000 per year per inmate.
In order to justify the high costs of their existence, prisons should be financially self-sustaining, and would need to create significant income through manufacturing, for example. The inmates would work long days and would be expected to create value; prisoners would have to pay for their own keep as well as some of the legal and court costs involved in apprehending and convicting them. The cost of prisons would also have to be reduced so that the taxpayers would not be responsible for the burden. How luxurious the prisons would be would depend on how much work the prisoners accomplish. Prisons would also have programs to help prisoners with their mental and spiritual problems, as well as educational programs, so that prisoners could in fact be a more valuable part of the U.S. workforce.
A Related Issue: Drugs
Have prisons solved the drug problem, and are they cost-effective? Maybe not. Instead, there could be drug colonies for people who use marijuana, with severe penalties for users who move outside these colonies. The purchase of marijuana (and all drugs) would be regulated by the state or the federal government, and the sale of drugs would raise money. Each of these communities would have its own tax base, police, jails…and could make it as expensive a community as its residents want.
In fact, there could be a large state–one big state for hardcore drug users–with a wall around it, with guards, for serious drug users–and this state would have to handle its own financial issues. If they had crime, they would have to be motivated to make things better. This state would eventually oust, incarcerate, or put to death the most violent or mentally ill drug users. Since they might be on a tight budget (being self-sustaining), they might resort to more quick and dirty ways of resolving serious problems involving crime.
These communities might in fact serve to resolve drug problems and do away with heavy drug use–because it would cost the drug users too much money to run the community. This solution would almost do away with prisons, and would most likely solve the drug problems in a few years, while making money because the state or federal government would make a profit from the sale of the drugs. This alone would give the U.S. a great deal of money with which to pay off the national debt. By the way–the penalty for using drugs outside this area would be severe.
We should spend more on education for those who demonstrate that they are learning–students who show promise, according to national standardized tests–so that when we spend money on education, we get a return on that investment. Students should be judged only on how much improvement they make during a certain time period. We should reward for improvement, and not on the basis of race or an unusually high starting level of accomplishment or aptitude.
Having the states take a larger responsibility for education would reduce the financial burden on the federal government. Yet whatever money the federal government did put in would be based on return on investment (ROI): each student would have to improve, based on yearly test scores, and any government funding or scholarships would be distributed accordingly. Private foundations and colleges in each state could choose to fund students according to other criteria.
A Good Start
With our military, prison, and education budgets reduced, we could focus on paying the debt. Our expenditures would already be down by 80%.
The Post Office, National Parks, Social Security,
and the Oil Companies
The Post Office would also have to be self-sustaining; it can charge whatever it needs to sustain itself, and would have to raise its prices.
The national parks would also have to be self-sustaining, and would have to charge enough to stay open. Each park would have to be as self-sustaining as possible, with additional monies coming from donations.
Social Security, in the long-run, would be replaced by mandatory individual retirement accounts. It’s cleaner, and each person takes responsibility for himself; you know what you have to retire on. The money is at least in your name–whereas if you let the government invest it, the money might disappear if the government becomes insolvent. Then, we monitor those organizations that are monitoring the funds.
Instead of oil companies lobbying the government, the oil companies could pay the government so that their rigs are protected overseas. The oil companies would pay based on how much protection they want and for how long. The U.S. government would use volunteers (mercenaries) to protect its investment.
And what about war?
Given the reduction in military bases and military spending, what happens, for example, if two countries in the Middle East go to war and use nuclear weapons?
It’s their business.
The U.S. could invade countries that have developed nuclear weapons, and could be involved in quick wars to disable nuclear programs, but would not maintain a presence in those countries for years and years.
We are not in charge of the world, and if other countries choose to end the world–we will do better to provide a good example, rather than maintaining a military presence everywhere and dispensing huge amounts of aid.
You might also like:
A free economic zone in America
Small talk, Indians, and attracting US clients
A special economic zone for insourcing in Oklahoma
Diversity — a personal story