Sunday, October 20, 2013

An Immodest Proposal

I'm unhappy with the direction of our country, and more particularly, the growth of government. I don't think the U.S. debt to GDP ratio approaching 90% is healthy, nor do I see any end to government growth in sight. I don't think that the government (all levels) should spend 38% (or whatever it is) of our GDP.  I also don't think that regulating the healthcare market (which represents 18% of the economy) through 20,000 pages of regulation is going to make health insurance cost less or the medical care better. Similarly, I don't think Dodd-Frank is going to make the financial markets any safer or more efficient. In fact, almost every regulation we pass, in my opinion, damages or hampers the economy in one way or another.

But clearly many if not most people disagree with me. We have deep philosophical disagreements that I don't totally understand, and frankly, I don't think we are going to be able to resolve them any time soon. And as we have seen recently, when these philosophies clash on the political stage, it can be ugly.

Depressing. But here's where it gets better, because I have come up with a solution! What is it? Simple: we should split up the country! Sort of. That is, we should divide the county into at least two regions that can pursue their own economic policies. The regions would roughly follow the outlines of the current divide between red and blue states. It might be nice to have a third, libertarian region, too.

Each state will be allowed to decide which region they want to join. If you want to join the Democrat region, you are subject to the Obamacare, Dodd-Frank, cap-and-trade, and whatever other regulation The Democrat region passes. If you want to join the Republican region, you are freed from those regulations but subject to all other regulations specific to that region.

Now to make this work, the regions would have exclusive control over all domestic laws that are currently federal laws. That includes national education policy, employment law, and all entitlement spending. However, we will keep a central federal government with the power to conduct foreign policy. We don't want to have a military conflict between regional governments. The central government will have to collect taxes to fund the military, intelligence and foreign policy bureaucracy, but that will be the limit of its taxing power. We'll constitutionally require that the central government run a balanced budget. Taxes for central government will be levied as a flat tax, however, the regional government can change the default by subsidizing or taxing its citizens in a way to make the regional taxes progressive. All policy to counteract the business cycle will be handled by regional governments. Regional governments will be allowed to print their owner currencies and have their own central banks, if they wish.

We will need a Supreme Court to decide foreign policy and military issues, only. The Supreme Court will no longer need to interpret the constitutionality of economic regulations like Obamacare, since those laws will be handled on a regional level. Regional governments will set up their own federal court system as they desire.

Free trade will be the rule for trade between the regional governments.

States will be allowed to move back and forth between regional governments as often as they desire. If the Democrat region passes Obamacare, and the state wants to abandon or join that regions, then they can do so.

Citizens will be allowed to move, uninhibited between regional governments. Regional governments will be allowed to place whatever limit they want to on the entitlements that citizens can receive from the regional government, based on whatever criterion they deem appropriate.Time in the region and taxes paid to the region are two obvious factors a regional government might take into consideration.

My ideal would be allowing every person the freedom to choose the regulatory regime he lived under, without having to move out of his home. The next best thing is probably having 50 different regulatory regimes to choose between. Unfortunately, we mostly undid that system, I guess because some people thought we needed bigger, top-down government. So I propose this system as a compromise. Those states who favor large-top down central government can choose that form of government for their region. People like me who think the government is doing more harm than good can get the de minimis government we desire. Everyone gets what they want. Who could possibly object?

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