To most reasonably informed Americans, there are some really basic things that its representatives in government should do, but lack the political will to execute. Without real reform, the middle class will continue to decline, forcing entrepreneurs to go to other markets, and the concentration of wealth in the hands of an increasingly smaller minority of people will accelerate the decline of the American Empire. Here are a few obvious steps that should be taken:
1. Campaign Finance Reform. It is well known to most Americans that powerful lobby groups control discourse in American politics. It's been a problem for decades. Some attempts were made recently to tweak campaign finance rules have had recent unintended consequences such as shadowy "arms-length" financiers like the Koch brothers that increasingly control the agenda. Here's the problem: currently, a Presidential Campaign costs $100M or more.When raising this much money, how do you build your war chest without big influential donors?
2. Tax Reform: Nobody wants to pay taxes. An entire industry has been built around finding loopholes in an increasingly complicated tax regime influenced by the lobby groups and shadow leaders that finance Senate and Congressional campaigns. A simple flat tax rate with no exceptions and no loopholes combined with a consumption tax should accelerate revenues, and help stem the decline of the middle class, which is the primary problem for the long-term growth prospects of the US economy. Tax reform is unlikely without campaign finance reform.
3. Cut all departmental spending in concert with tax reform. No sacred cows like Defense and Medicare, and no targets like the old and the poor. Eliminate entire government agencies that do useless things like the "War on Drugs".
4. Eliminate useless banking regulations, vigorously enforce obvious banking regulations, and improve transparency. In a word, simplify and enforce. This should help move the US banking industry back to where it actually contributes to the growth of the US economy. The cannot happen without campaign finance reform. Stop wasting time talking about the foolish gold standard.
5 Kill all corporate subsidies.
6. Focus budgets on growth oriented activities such as education, infrastructure, and health.
Of course, none of this will happen because the Tea Party is intent on turning the United States into a banana republic while the middle class gorges itself on religion, prescription drugs and inane reality TV. Richard Koo is right and Rand Paul is crazy.