What's your opinion about these economic reforms I propose

Root causes of Economic Crises

Main Assertions

Governments should concentrate on long-run structural policy changes
The main idea is the primary role of the government is to strategize the changes its going to make to the factors of production and society to maximize prosperity
Example: Make basic Digital skills mandatory for both young and old
An Independent central bank should manage the money supply
Use Use the Gold Standard
Economic Growth measures the fluctuating purchasing power of individuals Hence, wages and income fluctuate in proportion to GDP fluctuation
Individual prosperity is measured by weighted average of GDP
We're Not in a Recession. Why Does It Feel Like We Are?
For any economy to succeed there need to be:
Free markets
Fair competition
Minimal State intervention
Decentralization
Modest and efficient Welfare (Redistribution of wealth)
Meritocracy
Corporate decisions should take in consideration all stakeholders

GDP factors

Government spending -> It must come from a balanced budget
Consumer Spending -> true mark of GDP
Total Investment -> The higher the better
Net Exports -> It should be balanced or positive

Debt must be balanced by wealth creation

investment
high skill workforce
innovation
research

Dismantle Social Security

Only Social Safety net

Javier Milei on government failures

The economy should be structured like this:

Social Market Economy
Circular Economy
Fiscal Discipline ”It is the ability of a government to maintain a balance between its expenditure and revenue, ensuring macroeconomic stability and sustained economic growth. It involves avoiding excessive borrowing and debt accumulation”
Balance Budgets
Low Debt to GDP ratio
Small Government “the greatest possible economic liberty and the least possible government regulation of social life” Decentralize government power to municipalities
Small Public sector: Provision of public goods and regulate externalities
Fiscal conservatism
Economic liberalism
Competition law
Free markets and minimal government intervention Government failures: Government interference in the economy often does more harm than good.
Free trade

Distortion of markets

Brands Loyal Customers (Example: Apple Products)
Behavioral Marketing (Exploitation of human psychology and irrationality)
Advertising (Those with money get more exposure)
Lobbying of Powerful Business (Influence of Government Officials)

Remedy through value for money consumption
(Flagship killers: Oneplus over Apple) & (Generic Drugs over Brand Drugs)

Force Consumers to be rational and Utility Maximizers

Regulate Influencers, Marketing, Advertisers, Supermarkets
“Good” Influencers: Honest Tech reviews
Use of Standards and Metrics for Products
Example: FDA Certified mark for Drugs
Example: Vesa Certified DisplayHDR mark for Monitor screens

Diminishing Marginality

Every dollar received by the poor is significant
Every dollar received by the wealthy is insignificant

Flow of Money

The larger the middle class (above living wage income earners) the more the money flow to various and diverse segments of the economy
The poor with below living wage income and the wealthy with high wealth concentration act as a black hole to the economy where money flow to inactive bank accounts, necessity goods and to less diversified segments of the economy

Dangers of economic inequality

Political instability
Increased Crime
Increased Unhappiness
Reduced Social cohesion
Reduced Social goods
Worse Health

Welfare

Replace all Welfare with Universal basic income

Universal basic income avoids the welfare trap

Benefits

It provides cash which the individual sees as the best possible way of support
It targets poverty directly through income rather than through general old-age benefits or farm programs
It replaces all supporting programs and provide one universal program
The cost can be lower than the cost of existing programs mainly due to lower administrative costs.
The program should not distort the market in the way minimum wage laws or tariffs do

Retain Single-payer healthcare, Child Benefits and Social Housing for Young Couples, programs for continues upskilling, retraining, fund/give incentives to a group of unemployed people start a worker cooperative, provision of Public Goods and protection of the Environment

Constraints:

Minimize the total cost
Retain a balance fiscal budget
Retain the incentive to work
Don’t distort the markets
Standard workweek of 32 hours

Set the universal basic income as equal to the sum calculated by optimal tax theory

Assessed according to the balance it achieves between three factors:

the improvement in overall well-being from a more equitable distribution
the loss in economic efficiency due to the distortions introduced
the administrative costs

Welfare strategy is funded by Wealth redistribution through wealth tax on the most wealthy and ridiculously high income earners

The money supply should not be affected by Universal basic income

Employ the Buffet Rule
”Tax plan which millionaires and billionaires to pay the same tax rate as middle-class families and working people”

Pillars of economic growth

Simplified tax system and provide tax incentives
Cut Red tape (Bureaucracy)
Reliable and stable banking system
End culture of corruption, godfather and para-state
Simplify and speed up administration of justice
Education system that can feed labour market with new talent
Strong competition authority to stop cartels
Rewrite labour law from ground up to make it easier for business to access work but also allow workers to assert their rights
Put in key ministries worthy people with high training and experience in global market
Ecosystem where business share expertise, resources, sales networks, logistics and infrastructure
Creation of Institutions which regulate the Economy (Not the State)

Health Care

Single-payer healthcare
Payment Contributions from all members of Society
A set amount is paid by single payer insurance and the rest comes from co-payment
Co-payment should be varied across Clinics, Hospital and Doctors. According to forces of Supply and Demand based on the Quality of Services, ownership of State of the art Machines, Specialization level and Competency of Doctors
The government insures everyone, but medical care is in private hands
No limits of the total amount of money someone spends on Co-payment

Education

High School Diplomas, Bachelor Degrees and Master Degrees are not all that matters.

Life-long learning, Grit, Interpersonal skills and work experience are what matters.

Increase the flexibility of Occupational Mobility

Downgrade the role of bachelor degrees
Recognize Certificates
Recognize Internships as work experience
All workers are obligated to have Linkedin, thus providing a faster way for business to discover talent and workers to advertise themselves
Businesses are obligated to be transparent about wages before hiring
A unified digital system where workers provide review about their work experience on a business and give a rating

All wage should be paid per hour (Not per month)

Problem: Crony Capitalism

Solution:

Less Power to the Wealthy (Control of Business decision making)
Less Political Corruption

How to fight the power of the Wealthy

Fight Shareholders Primacy

“Making capitalism more ethical: Dynamism with decency”

Stakeholder theory in all Bussiness
”is a theory of organizational management and business ethics that accounts for multiple constituencies impacted by business entities
The theory argues that a company should not ignore any of its stakeholders and should balance their interests and needs”

2. Universal basic income is funded by Wealth redistribution through wealth tax on the most wealthy and ridiculously high income earners

3. Worker Cooperatives Law 10 unemployed people, instead of getting welfare they will be given money to start a new Cooperative

4. Consumer protection – Fight Cartels

5. Bailouts

Save the Banks | Not the Bankers
Save the Business | Not the shareholders, board of directors and managers

How to fight Political corruption

Asset and funds-source declaration
Transparency and access to information
Checks and balances
Auditing agencies
End impunity
Empower citizen to hold government accountable
Close international loopholes

Pensions

Retirement options to invest in good ETFs or Portfolios)

Policy

Stable Long-term zero tax on necessity goods with high inelastic demand
Remove active income tax for poor and middle class individuals
Have active income tax for ridiculously high earners
No contributions to health care and social security from low active income earners
Remove tax from home renting for low active income earners that live inside. (Provided the house is not big and luxurious)

Sources:

Prof. Antony Davies: Why Government Fails, Explained

How a Wealth Tax Works: Explained by Elizabeth Warren

Why No One Wants to Live in the UK

Causes of Prosperity

How the US Is Destroying Young People’s Future | Scott Galloway

They Launched a 6 Day Work Week. The Results Are Disastrous

Posted by Uncle_Duck_1