Seems like some of these ideas are coming into vogue with the comments by Dr. Ben Carson and the Ryan budget proposal.


In my opinion, the major problem with the healthcare system is it is fundamentally backwards.  The concept of employers deciding what, if any, health coverage to provide their employees is just wrong.

I would propose the following 10 point solution (sorry it isn’t 2000+ pages long):

  1. Heathcare insurance is to be purchased by individuals and families.
  2. All health care expenses would be tax-free.
  3. Employers should be incentivized to contribute to their employees health insurance expense.  Employers should receive a generous tax break for doing this, such as a write-off for 2x their contributions
  4. Anyone can purchase any healthcare product, you cannot be turned down for any reason.  There is no concept of a pre-existing condition and you cannot be dropped except for non-payment.
  5. Insurance companies need to define products and price them according to the risk pool associated with that product.  These need to be national products to maximize the…

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This is an earlier post fro 2011 that still is very pertinent today.


I would like to propose a new line of thinking in solving our debt crisis.  It is derived from living through several industry crisis.  The proposal is what I call the 0 10 10 plan.

Today, we have a baseline budgeting system that is using an 8% baseline.  What that means is next years budget starts 8% higher than the previous years before any new program increases or reductions.  Therefore, with this years budget at 3.729T according to Wikipedia that would mean the baseline for the 2012 budget would be 298B more or a total of 4.027T.  With the economy struggling to grow at 1 to 2% this is a path to the end of the United States and much of the world will go down with us.

This is absolutely unsustainable and irresponsible!

So my proposal starts with a zero baseline budgeting process.  There are no automatic…

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Time to fix Washington – My Thoughts

As I listen to all the banter back and forth on the solutions to the fiscal cliff and see that no one is actually proposing anything that solves any of the problems I become more and more disheartened with what has become of our governing processes.  So much so that I believe it is time for some tough love for Washington.

I would propose that two thirds of the states sponsor a constitutional convention to write and ratify a constitutional amendment to drive fiscal responsibility into the political discourse.  The amendment could either take the form of a balanced budget amendment or a mandatory spending cap amendment, my preference.  In either case the amendment must have some VERY significant teeth.

The path I would suggest is an amendment that would call for spending to be capped at the prior years actual level for any year where the federal government runs a deficit.  Should the next year be in deficit as well the budget will be the lower of the prior year or the first year in the string of deficits.  There should be an exception for expenditures in times of declared war or extreme national crisis in which case the cap can be temporarily removed for a one budget year period with a two thirds majority of both the House and Senate.  Also, there would be an allowance for modifying “mandatory spending” so that all spending areas would be available to Congress to address the deficit.

This approach would gradually balance the budget through the natural growth of the economy and would not dictate how the deficits are managed providing Congress some flexibility in dealing with these challenges.

However, there would need to be some significant penalties associated with violating the covenants of the amendment.  I would suggest that it be mandatory that the House of Representatives writes a budget each year and the budget must pass the House and Senate and be signed by the President.  Should Congress and the Executive fail at this task.  The remaining terms of all members of Congress and the President will be vacated and the States shall appoint new members to fulfill the remainder of those terms, the reconvened Congress would then nominate a President and Vice President to fulfill the remaining Presidential term.  The objective is to make it so onerous for Washington to fail to pass a budget by including their own pink slips in the process that it should never happen.

I would be interested in your feedback since it has become clear that Washington cannot fix itself.

My 2 cents


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Efficiency in Educational Spending – My Thoughts

Are we getting any value for the money we spend on public education? Here is the most recent data (2009) I could find based on the total spend from age 6 to age 16 compared to the OECD countries.

This reminds me of the auto industry back in the late 70’s and 80’s where we were told to buy American even though the cars were more expensive and bad.  Now we are told we need to spend more money on education and we are getting bad results.  It is time to fundamentally rethink the way we educate our children.  The public education system is another K car.

You decide!

My 2 cents


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The 0 10 10 Plan a path to Prosperity

I would like to propose a new line of thinking in solving our debt crisis.  It is derived from living through several industry crisis.  The proposal is what I call the 0 10 10 plan.

Today, we have a baseline budgeting system that is using an 8% baseline.  What that means is next years budget starts 8% higher than the previous years before any new program increases or reductions.  Therefore, with this years budget at 3.729T according to Wikipedia that would mean the baseline for the 2012 budget would be 298B more or a total of 4.027T.  With the economy struggling to grow at 1 to 2% this is a path to the end of the United States and much of the world will go down with us.

This is absolutely unsustainable and irresponsible!

So my proposal starts with a zero baseline budgeting process.  There are no automatic increases in anything.  By starting with a 0% baseline, whatever growth we see in the economy will help to restore our budget as opposed to a baseline that is greater than the most rosy scenario anyone could imagine.

However, this incrementalism doesn’t help now!  It puts us on a trajectory to fiscal responsibility but our hole is too deep to rely on just a zero percent baseline.  We need to find a way to cut expenditures.  Unfortunately, everyone in Congress has their pet program that cannot be touched.  I agree that there is a tremendous amount of waste and redundancy in government programs but fixing that is a long drawn out battle of political will that will not solve our immediate issue.

Taxing more is also a non-starter.  It too will be a multi-year debate on how to restructure the tax code to be flatter to clear up many of the lollipops Congress has been handing out to their contributors for decades.  Also, the class warfare line has done nothing but cause both sides to dig in and nothing will get done.

So what I propose is a 10% reduction in government staff.  The government employs 2.15 million people on both the civilian and military side and about half of that again in government contractors.  So a reduction of 300,000 positions immediately and then a hiring freeze until we balance the budget.

When my company went through the tech downturn in 2002, the first thing that was done was reduce staff.  We didn’t reduce out output, we just asked everyone to do more with less but get the same amount done.  It is the quickest way to reduce expenses.  Sure you do it with respect, offering early retirement and manage it through attrition, much the way the auto industry did many of their staff reductions, but you need to get people off the payroll.  According to the USA Today article, the average federal employee makes 71,206 with loadings, pensions, and benefits that is approximately 100,000 per employee.  A reduction of 10% would generate a savings of 30B per year, or 300B in government speak.

A nice start but not enough.

Then look at an across thew board 10% reduction in salaries.  Savings an average of 7100 a year per employee would add another 20B in savings, again 200B in government speak.

This plan doesn’t address the hard problems of how to manage down the cost of entitlements and control health care expenses as well as structural changes to government organizations, however, it puts us on a glide path toward prosperity that is doable in the short term.

We need to do what can be done while focusing still on some of the hard choices.  Waiting on the hard choices to made before any real substantive action is done is a recipe for failure.

My 2 cents


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Reining in the debt and should there be more taxes – My thoughts

As the political games continue in Washington, us poor old Americans continue to be lead around like sheep. A Congress calling for real cuts and getting $38.5B only to later learn it really was only $350M, the rest were things we were going to do but decided not to.

Also, as gas prices sky rocket, hitting the average American harder than any other tax promulgated from the political class, Congress decides to play sleight of hand and calls for hearings to see if “evil speculators” are causing this latest rise, when any economically educated, CNBC University, person can tell you that since oil is priced in dollars and the dollar is collapsing, dollar denominated commodities will rise in price. Look at gold, copper, cotton, etc. Yes, some of the excess price jump is due to concern over future supply, but that wasn’t the case two years ago when the price started its’ climb…it is the debt stupid. Everyone is questioning the solvency of the US economy and it is being reflected in the value of our currency.

Sure the easy answer, and the one the Obama Whitehouse cannot make, is to exploit ALL of our available domestic sources of energy…I heard yesterday that the Alaska Pipeline is operating at only 1/3 capacity, what a shame.

However, while that is most definitely something we should do, unless we get control over the debt we will be forever in the downward spiral. We were able to avoid the effects of it initially because we were deemed as less risky than the problems in Europe, in essence the queen of the pigs, but since then Europe has taken the bitter austerity pill, now the spotlight is on us.

So what to do? When your household has tapped out the credit card, do you request raising your credit limit and continue to make the minimum monthly payments, no you look hard at your budget and get rid of things that you may like but cannot afford right now. You may need to still ask for that limit extension just to have an emergency buffer, but you cut your budget and start paying down your bills. You also, start putting some money away for a rainy day…pay yourself first as Suzie Orman always says.

So how does this play at a Washington scale? I think Congressman Ryan and his Committee have made a good start but there are several additions I would add.

1. Make the Social Security Trust Fund into a “real” trust fund and get the money out of the grubby little hands of Congress. Pass a Constitutional Amendment creating this that is very actuarially tight , so no assumptions on unrealistic returns, and insure that it is fully funded now and forever.

2. Real healthcare cost reform. Obamacare started out talking about saving money, but for the sole purpose of providing healthcare to everyone. Let’s get back to cutting healthcare costs…see my previous thoughts on this here,

3. Start to eliminate Federal Agencies and combine functions together. We do not need the National Institute of Health, or the Department of Education, or the EPA, or NASA. The functions can all be performed by the private sector. Also, there seem to be many areas where there is overlap, look at Intelligence, with the CIA, NSA, DIA, or in law enforcement, with the FBI, the Secret Service (non-presidential details), and ATF. Combine them so you bring down the number of bureaucracies.

4. We need to do more to pay down the debt. I would propose setting up a completely ringfenced fund, that Congress cannot touch, where every dollar is used to pay off the principle on the debt. This would be funded by a separate voluntary line item on your tax returns and a mandatory 3% surcharge on incomes over $1M that sunsets when the debt principle is paid off. (I hate the thought of any more taxes but I think we are at a point where it is unavoidable, I just do not want to give that money to Congress to be wasted).

I believe the time for half-measures is over.  We need to get our house in order for the sake of our daily existence both for ourselves and our future generations.  I do not believe the political class will do any of this without being pushed kicking and screaming.  Also, while there are things that I have a hard time stomaching, like raising any taxes, I believe we must act and decisively.  If we do, I believe you will start to see results almost immediately when you fill up at the pump.

My 2 cents


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Michigan’s changes to the emergency financial manager act – My Thoughts

Changes to PA72

See related article in the Detroit News

I applaud the legislature for their actions to help cities and school districts to right their ships.

The points that the opponents of these measure fail to understand or at least acknowledge, is this is a measure of last resort. If the duly elected officials are unwilling, unable or incapable of exercising their responsibilities in a fiscally prudent manner, then they need help. Just because a person is electable doesn’t necessarily make them helpful for the position they hold. We cannot have our cities, towns and schools failing because of the egos and sensitivities of a few who were not up to the job.

At the end of the day, the big picture is the health of our communities and the education of our children. In the real world, when someone is hired and they fail to do the job, they get fired. If a business begins to fail and is worth saving the shareholders will bring in a turn-around specialist. I see this as no different. The individuals who are failing to prudently exercise the judgement the voters elected them to exercise, should be removed, when and only when, they are putting their community in financial danger.

I agree that there is the potential that this power could be abused and that needs to be closely monitored. However, this tool is being developed to fix institutionalized abuses of power that have unequivocally failed to deliver financially responsible organizations that deliver the services that we are paying for through our taxes.

If these institutions are run responsibly, then this change in the legislature has no meaning to them, the only concern should be from those in power in failed cities, towns and school districts. Those managers and elected officials that have allowed their institutions to fail on their watch, should be concerned but more importantly should be thankful that their community will have a tool to get the problems fixed.

I believe in the great majority of the cases where PA72 would come into use, the individuals in charge are good people trying to do the right thing but lack the tools or the know how to get their problems fixed and they have escalated out of control.

PA72 is a tool to bring things back into control in these situations.

A big problem needs a big stick, responsibly wielded.

My 2 Cents

Cross posted on the Detroit News Forum

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Could the current Middle East turmoil be an affirmation of the Bush policies – My thoughts

One of the intended consequences of the War in Iraq was the establishment of a Democracy in the Middle East to hold up as a example of what life could be. While the Democracy and the democratic process in Iraq are far from perfect, I believe they are having the intended effect on the region.

First we had the uprisings in Iran which the US and the Obama administration failed to offer any support, but the tone was set. Then we have the referendum to split the country of Sudan, followed by the uprising in Tunisia. That lead to Egypt, Yemen and Jordan with Syria potentially next.

The common threads are corrupt governments and corrupt business practices concentrating the countries wealth into the hands of the government anointed elite and the average citizen struggling. However, the power of the new media and the new flows of information have emboldened the youth to understand the status quo is not the only option. Since they have little to protect, they are willing to risk everything to gain the chance to succeed or fail on their own, not by the dictates of a corrupt system.

More of these uprisings will fail than succeed, this time around, but the world has been put on notice. The people understand now what is possible, not just in the United States , but everywhere. When those possibilities are squashed the people will stand up!

Thank you President Bush for your courage and wisdom!

My 2 cents


Crossposted on

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Damned if you do and damned if you don’t – My thoughts

It is getting very hard to understand exactly what the Democrats and President Obama want the American populus to do. Their “green” agenda is contradictory.

On one hand they are pushing for the use of hybrids and electric vehicles in a pursuit to eliminate the internal combustion engine and the use of petroleum products. They are exacerbating this by driving the price of oil and gasoline up by the drilling moratoriums in the Gulf of Mexico and Anwar. The recent events in Egypt and the rest of the Middle East have the potential to exponentially increase the price of oil pushing any new car buyer further toward their “green” vehicle agenda.

On the other hand, the recent comments by the Environmental Protection Agency on the war against CO2 will cause a dramatic shift in the electric power generation in our country. Coal, our most abundant and cheapest source per MegaWatt, is out as a suitable fuel in the new agenda. Wind and solar are in, but lack the scale and reliability to deliver the capacity we need to meet today’s electricity demands. Also, billions of capital dollars will need to be spent to retool power generating facilities to change-over to more “green-friendly” fuels like natural gas. All of these costs will be past on to the electricity consumer doubling or tripling the electric rates.

Then comes your new eco-friendly, green friendly, electric car that you just were forced to purchase due to the sky-high price of gasoline. Charging these vehicles can double the electricity usage of a common household. With the CO2 agenda pushing electric rates up, how much will it actually cost to operate this “cost-saving’ vehicle. My guess is the hope is that since it is buried in your electric bill as opposed to dollars paid directly at the pump, the administration believes you will not notice.

I believe they are wrong. The American public is smarter than this. We need to tell the Administration to stop tinkering with the free market system and let the people choose what fuels they wish to use based on conventional market fundamentals, not regulatory manipulations of those fundamentals. Let us choose which vehicle type best meets out needs, if the electric car was a hit it would still be around from when it was first introduced…in 1891.

Picking winners and losers only leads to losers! The government has a long history of unintended consequences and we are seeing just another example unfold before our eyes.

My 2 cents.


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Obama now taking over Pharma research – My thoughts

In today’s New York Times, Sunday January 23rd, it published an article on the Obama administration starting a laboratory to develop new drugs.

The chief complaint in the article is that the pipeline of new drugs has been steadily in decline and that the government needed to step in.

If you look at the problem and its’ root causes, the reason why many pharma companies are doing less research is the FDA approval process for bringing a new drug to market makes it financially unprofitable that unless it is a sure-fire home run and there are very few of those, no company can make a profit…and the government doesn’t care about making a profit or the complex regulatory environment since that creates more government.  So the government now needs to step in and fix the problem it created by competing with, and ultimately eliminating the research in the private sector.

Haven’t we seen this story unfold before?  Didn’t the government NEED to step in and FIX the mortgage problem because the banks weren’t loaning enough money.  As a result, they created Freddie and Fannie, who basically now do ALL mortgages and were used in the social engineering project that brought down the economy, to fix the problem.

I say this is absurd!  Fix the problems of the regulatory approval process at the FDA, which in and or itself is dubious constitutionally, and let the private sector do what it is designed to do.  If there are areas where there is need for new drugs and never will have a profitable business model, then let the World Bank fund global research projects and let the Universities from around the world help solve the problem.

This far overreaches the mission of our government as defined by the United States Constitution.  Eliminate the obstacles to the private sector being successful and if it is a global problem, let global resources solve it.

My 2 cents!


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