Tuesday, April 25, 2006



1) Move toward private accounts for Social Security. This will ensure that benefits paid match resources available. Private accounts will allow investment in diversified index funds and fixed rate funds. During each year a Social Security benefit will be paid to every person's private account.

2) Social Security, healthcare, and health insurance taxes only collected for benefits paid out in the same year.

3) Move toward HSAs, reduce regulation, and simplify healthcare. Allow individuals to make more of their own healthcare decisions. Allow pharmacists to write most prescriptions. Money in HSAs should be invested in indexed healthcare funds, this ensures that benefits will grow along with the healthcare industry.

4) Provide nationalized insurance and basic health care to all Americans. This will include only the most basic, necessary, and cost effective care (and that benefit from very large economies of scale). No patented procedures or medications will be covered. Long-term care will only be provided for life-threatening and debilitating degenerative conditions and only proven effective treatments will be covered.

5) Streamline education and training of doctors and healthcare workers. Create more focused and specialized programs.

6) Simplify taxes and focus taxes on consumption.

7) Allow deficit spending only when interest rates are below historical inflation. Deficits will be funded with long-term debt only.

8) Restrict non-deficit spending to a fixed percentage of GDP. Exceptions will be made for extra-ordinary disasters and war. Extra-ordinary and war spending will be funded by additional tax or deficit spending (if available).

UPDATE: Inflation may be too conservative. Nominal GDP growth would be a better number to compare with interest rates. It would be really nice if we could figure out what the marginal contribution a dollar of government spending contributes to GDP.

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