I have a number of friends/acquaintances who are involved in various ways in the incoming Obama administration. I wrote to them roughly the following note:
I realize that everyone you know is now deluging you with their advice on how the country should be run, in the hopes that you could get their ideas to the right ears. I wanted to take the liberty to share with you also three ideas which would have no significant marginal cost, and would be of great value in addressing the current economic crisis. I also realize that you and the rest of the transition team have undoubtedly thought of these ideas; I am adding in my vote that these are initiatives with high returns on political and financial capital.
1) Increase immigration by people with capital. There are approximately 2.2 million vacant homes in America. There are far more than 2.2m families in the world who want to move to the US and hope that their child grows up to be President. These immigrants will create economic activity and fill those vacant homes. This fact should allow the administration to override the forces that oppose immigration.
2) Radically simplify the tax code. Im sure youve seen the estimates that the cost of compliance with the 67,204 pages of US tax law is equal to 10 to 24% of total tax revenues. Worse, the cost of compliance is effectively a regressive tax. With the right tax structure, you can increase (or keep flat) government revenues, while simultaneously increasing corporate profits and creating jobs. I realize that many people will oppose a flat tax, but even if you simply introduced a progressive tax with no deductions, exemptions, etc., you would make compliance dramatically more efficient. The big obstacle to reforming the tax code is that every politician has a pet interest that the existing tax code subsidizes. The current air of crisis may create a unique opportunity to get politicians aligned that fundamental reform is necessary .which it is.
3) Promote healthy eating. This is great for the environment, saves money, and promotes health particularly for lower-income urban residents who tend to eat unhealthy diets. There are non-coercive and money-saving measures that the government can take to promote healthy eating. The easiest way to address our health-care crisis (the elephant in the economic room) is to promote people being healthy, and improving their diet is by far the simplest way to do that.