Five Steps to Economic, Social and Cultural Greatness!

  • 501K – Dual Track Retirement SystemCIVIL Governance has proposed to the President and 40 members of the House and Senate a plan to solve this issue and produce of retirement system that is financially sustainable.

    It is based on ideas already floated in Congress: savings for individual nest eggs, fixed benefit Medicare, and meanings testing benefits (Bill gates does not need money from the government.)

    CIVIL’s solution recommends increasing the retirement age 2 ½ years then associating it with life expectancy.  Retirement age will float up slowly with life expectancy.  The fixed retirement age has created the most of the under funding issues.

    Second mean-testing has already been recommended in Congress and is a good idea, but to means-test, Medicare needs to be updated to a fixed benefit solution.  This, too, has been floated in Congress. Means testing just the richest 5% reduces outlays by 15%.  Raising the retirement age reduces expenses another 15%.  Another 15% can be accrued much smaller reductions of benefits from retirees from median income up to the top 5% earners.  In net, this would take nearly half the costs from the current system, allowing workers to save 6% of the income, leaving a 1.65% employee tax and the employer tax of 7.65% to fund the current systems beneficiaries.

    The results are spectacular: 1) $100 trillion in personal nest eggs in 40 years, the extra savings increasing economic growth; 2) the biggest tax cut in history for everyone, including the poor; 3) reduction of underfunded mandates by nearly a half over 40 years.

    At around 20 years into the system as retirees need less and less government assistance, the employer tax can be reduced as well, further fueling economic growth.

    Most important, had this solution been in place the last 50 years, a worker that had earned only the minimum age their whole life would have a nest egg of $104,000.  Only one-third of Americans have saved this much.

    Congress has been silent on the proposal. A call to your congressman to ask about CIVIL’s Dual Track Proposal might help get the ball rolling for a sustainable financial solution.

  • Competitive Education for All: Shouldn’t the poorest students have the same school choices that the rich.  They do.

    No healthy economy can produce dynamic results without a well-educated populace. Thomas Sowell believes ½ of our high school graduates are not prepared for 21st  Another million drop out.  This human capital deficit cost the economy hundreds of billions of dollars a year. The two political parties have fought each other to a draw, and education stasis that leaves America in an education lurch.

    Competitive Government, government that plans for competition rather than against it is essential to remedy the breaking the result-less draw in education.Enabling legislation that would allow states, or even school districts, to compete basis on policy will open up education innovation from fully Blue states, to fully Red states.  The Blues may wish to continue a three-tier government and union driven monopoly.  In between states may open doors for more private and public charter options.  Perhaps a small state like Rhode Island might try an all private solution.  There could even be district to district competitions, say Chicago fully public solution versus Rockford all Charter Public option.  Any set of solutions will be open.  The essential focus is on inner city schools where government if fully and completely failing students.

  • Social Policy: Current policy moves money from one group to another hoping that more money in solving the poverty and income inequality problem.  It hasn’t.  Over the last forty years, federal anti-poverty and social programs spent $40 trillion dollars and poverty is at the same level as in 1965.  The government’s social policy is based on the flawed belief that lack of money the causes of poverty.  Lack of money is a symptom not the cause of poverty.

    Lack of human capital and lack of hope are the cause of poverty.  Three key success factors raise people from poverty, education, industrious work and marriage.  When these three success factors are the focus 97% of people need no help from government.  Additionally,  industrious work and marriage and two key factors with the pursuit of happiness.  Something focused on human capital building.

    Executing on the first two strategies should lead to improved human capital, especially in the inner city where the challenges are the greatest.  Increased savings produced by the second strategy will produce a larger stream of jobs of the newly educated.  And when our youth and a better education and better jobs, marriage formation will increase.

  • Simplicity: The costs for complying with the US regulatory laws are approaching $2 trillion – about 11% of our GDP.  These costs are a dead weight for business formation and growth.  Do we need regulation?  Sure.  Do we need to hire a team of lawyers just to figure out how to comply?  Not really.  The people who write our rules and regulation are lawyers and they love complexity and are foreign to simplicity.  The result: costly compliance.  CIVIL will work to set up a Chief Simplicity Office dedicated to review of our regulatory environment.  To broaden the problem-solving for rewriting and simplifying our laws the CSO will launch X-Prizes for simplicity, asking the 300 million US citizens to take a crack and finding what Einstein suggested solutions needed to be, simple but not simpler.  Einstein also said that ‘if you can’t explain it to a six year old, you don’t understand it yourself.’   As one might imagine, there’s a lot of simplification to do.  Most important, simplification of our regulatory environment could easily lead to a 50% reduction in $2 trillion in compliance costs.  Imagine delivering a $1 trillion increase in productivity to our economy.  That should help.
  • Immigration:  Most of us are unaware that a high percentage of legal immigrants that come to the US create businesses.  Forbes Magazine states that 40% of the Fortune 500 companies are run by an immigrant or child of an immigrant.   Fortune 500 companies employ over 25 million people.  Forty percent of that number is 10 million, or about 6% of our workforce.  Percentages not the non-Fortune companies are about the same.  Though this great record has come from an 19th century-style, family and chain-immigration structure, this aging system needs replacement.
    America needs more focus on business formation, on entrepreneurs, as this important economic variable is down by 33% over the last 8 years.  A strong economy cannot be sustained without new business formation.  Though a streamlined and simplified regulatory environment will help (and is a discussion point below) increasing the stream of entrepreneurs is extremely important.  A new 21st Century Immigration Policy must have as its top priority immigrants who are entrepreneurs, innovators, inventors, patent-seekers, researchers, idea generators of all kinds – who seek America free and open markets to launch their dreams.  And bring their nuclear families.