From the writings of Paul Zane Pilzer, summation by Scott Cram

ECONOMIC SOLUTIONS

Problem: Drug dealers.

Solution: Announce that the Secret Service believes that most of the $100 bills in circulation are counterfeit, but that the government is willing to back every $100 bill, under one condition. Old $100 bills are turned in to local banks for new $100 bills over a period of one year. Each person will be required to fill out an I.D. form for the exchange. After one year, no exchanges may be made, and the old bills are no longer legal tender (Too bad the government didn't do this when the $100 bills were recently redesigned.)

Reasoning: The majority of the 1.57 billion $100 bills are held by drug dealers. Any drug dealer who attempts to exchange a large number of $100 bills will be on Secret Service's record. Any drug dealers who don't exchange their bills will be stuck with worthless paper. With a majority of bills not being turned in, there's a large, legitimate profit to be made by the federal government, as well.

Problem: Drug Users.

Solution: Tax each ounce of cocaine $2000 and each ounce of marijuana $750. To ensure payment, authorities would be authorized to confiscate the private property on which the substance is found, until the tax is paid. There are two alternatives to paying the full tax. First time offenders could pay just 10% of the tax due if they agree to attend a six-month drug education program (a la drivers ed). Those who are medically or self- identified as a drug addict would have the option to be enrolled in a drug-treatment program, paid for in part by the addict themself. After a following 36-month probation, all charges would be dropped and the arrest record expunged. Failure to complete the programs would make the drug user liable for the balance of the tax. Probation violation would make the user liable for both the balance of the original fine, as well as new fines incurred by the violation itself.

Reasoning: Contrary to popular belief, the inner-city minority-group drug addict is not the backbone of the $120-billion-annually drug trade, but the white middle- and upper-class recreational user. If this program were implemented, it would start eliminating the drug dealer's major customers. In combination with the above $100 bill exchange program, these plans would cripple both supply AND demand for drugs, a boon for the war on drugs.

Problem: Car theft.

Solution: Automobile makers would be fined based on a weighted percentage of their vehicles that are stolen relative to those of other manufacturers. Insurance companies would not pay for any collision repair involving parts of questionable origin.

Reasoning: The fine on automakers would encourage them to develop part- identification programs. This would also make it easier for the insurance companies to verify the origin of the individual parts. This would force body shops to start ensuring the legitimacy of their parts, thus reducing the demand for stolen auto parts.

Problem: Due to prison overcrowding, many criminals, some dangerous, are being let out early. This threatens safety and, in may cases, past victims.

Solution: A statutory amount of victim compensation would be set by each state legislature for each type of crime. For example, you might have a $10,000 fine for a car theft, going up to a $100,000 fine for a murder. When a convicted criminal is released on probation or parole, the state would be required to pay 80 percent of this fine to the crime victims, and 20 percent to the police department responsible for the arrest and conviction.

Reasoning: This would force the public sector to bear the real cost of letting criminals out of prison early. If a car thief is up for parole two months early, for example, and his statistical profile says he has an 80 percent chance of committing such a crime, the state would be forced to look at the, say, $6500 cost of keeping him incarcerated vs. the $8000 cost (80% of $10,000) of letting him go. Mercy would be shown to victims, rather than to the criminals.

EDUCATION

Problem: Schools that don't properly and fully educate our children.

Solution: Parents recieve a tuition certificate each year for the national average amount spent per student (say, $5,000 per pupil) each year. The tuition certificate could be redeemed at any accredited public or private school.selected by the parents. The school woud redeem for an amount from half the stated value of the certificate up to 150% of the value of the certificate, depending on the grades recieved by the student (using our $5,000 example, the school (not the student or parents) would recieve: $2500 for an F average, $3750 for a D average, $5000 for a C average, $6250 for a B average, $7500 for an A average). Standardized national testing would keep the schools from manipulating the grades to their own economic benefit.

Reasoning: It would spawn an education INDUSTRY. Eventually, the highest quality educators, maybe led by investors and business people, would band together to create high quality schools all around America. Schools that don't do a good job would have to close because they couldn't compete. That same school might be sold to new investors who create a higher quality school. All American parents would finally enjoy the privilege limited to just the wealthiest - that of recieveing the highest quality education. As with many private industries, the quality would go up while costs would go down. Can you imagine the quality of our education advancing as fast as the quality of our computers?

Problem: Standards for child care are non-existent. Children aren't learning basic necessary skills nor are they having proper moral values instilled in them. Society misses out on the potential benefits were these children to become productive members of society.

Solution: A child-care (that's child care, not day care) certificate program modeled on the suggested tuition program above, with some minor modifications. Parents of children between the ages of eighteen months to five years would recieve a FIXED amount to redeem for a month's worth of child care at an accredited child care center. The sessions would also be a fixed length, dependent on the age of the child (18-24 months might get 3 hours twice a week, 2-3 year olds a 3 hour sessions 3 times a week, 3-4 year olds a 3 hour session 4 times a week, 4 year olds get a four hour session five times a week) The sessions would focus on basic skills and basic value instruction (Robert Fulghum's classic "All I Really Need to Know I Learned In Kindergarten" would be the ideal text here). Once the program is in place, mandatory care could be implememented.

Reasoning: A child care industry would develop of enormous proportions (10 million+ children each with a, say, monthly $200 certificate). Innovative methods would be developed to teach skills and values. Child care centers would pop up in every neighborhood and apartment complex. If we use the $200 monthly estimate, a three and a half year program would cost a total of $8400, which is much less than this child would eventually start contributing to the annual economy upon high school graduation (or even sooner!).

ENVIROMENT

Problem: Air and water pollution

Solution: Every automobile sold would be taxed based upon the amount of oxygen it consumes vs. the volume and purity of its emissions.

Reasoning: This would force automakers and car buyers to view enviromental protection in advance, rather than in the "rear view mirror" (like today's penalties and fines).

IMMIGRATION

Problem: Illegal aliens are crossing the U.S. border and taking advantage of tax money in the form of welfare, etc., without contributing an equal or greater amount to our economy. Tight limitations to how many people can come in annually pressure those who desire a better life to become illegal aliens.

Solution: The federal government would pass legislation that allows states and private employers to recruit immigrants as legal working residents of the U.S.. After five years of employment, these immigrants could apply for permanent-resident status and citizenship as stated in presently-existing laws. Legal working residents would be required to have a job, contribute to the economy an amount at least equivalent to the municipal services he or she uses, not adversely affect employment opportunities of existing citizens and have a private or public entity guarantee that the alien would not become a public burden if the job was terminated.

Reasoning: Those who contribute to the economy would remain in the country, while unproductive immigrants would be returned to their country of origin. States and employers could post bonds to help return the unproductive immigrants. Economically depressed areas that are losing population could be declared "Free Immigration Zones" (FIZ), in which any company could hire legal working residents. The would probably be even more beneficial than the current "Free Economic Zones" (FEZ), which allows local economies to manufacture and store goods without the traditional tariffs. Each state would design a program to meet the needs of its municipalities and citizens. Jobs would be brought into America, rather than shipping them overseas.

MONEY AND THE ECONOMY

Problem: Surviving commercial and savings banks are contributing little to the economy. The U.S. has gone from 3,057 savings bank branches with 15.8 million mortgage borrowers and 111.9 million depositors in 1984, to 3,777 branches with 9.4 million mortgage borrowers and 81.3 million depositors. Over a similar period, commercial bank branches went from 57,010 to 64,006, with a similar 50% reduction in productivity. (Ironically, the current solution is for banks to merge, creating bigger dinosaurs.)

Solution: Eliminate the FDIC and the Federal Reserve. Allow commercial and savings bank to compete for their supply of funds in the open market.

Reasoning: Companies that focus on new technologies create products that have a useful life of 1-3 years. If they borrow money, they can afford interest rates of 33-100%! For more traditional companies, outsourcing can eliminate the need to borrow at all. Interest rates can be safely left to the market, because banks would still have to compete with credit cards, debit cards, smart cards, frequent flier miles, etc. as forms of cash. Without the FDIC, banks that place their funds in risky ventures would have fewer customers, thus preventing another S&L crisis. The 2 million people who work in these nonproductive jobs would be freed to take REAL productive jobs potentially increasing the GNP by roughly $100 billion!

Problem: Many minimum wage jobs can be replaced by automation. With minimum wage on the rise and the price of automation going down, the possibility of replacement looms larger and larger for these types of jobs.

Solution: The minimum wage is kept at the current level, but it's supplemented by the government on a per-dependent basis. For each dependent, the government would pay, say, an additional 70 cents an hour, in the form of a reverse withholding tax.

Reasoning: No additional jobs would be lost to automation. As far as the employer is concerned, the minimum wage remains the same. Employers would find it easier to hire those who need the job the most (people with dependents), because they get the largest supplements. The benefits would go only to those minimum wage earners who need it. This reverse withholding tax could also become a vehicle for selective employment programs, such as people who are on welfare or have disabilities.

Problem: While the price of most consumer products (TV, food, cars, etc.) have been falling, the price of housing has been going up. Even many middle- class families have been priced right out of the housing market.

Solution: Create standard building codes on a national level - even if it's just for electrical, plumbing and framing. States would be allowed to make modifications to the code, such as special earthquake modifications in California.

Reasoning: This is essentially what Ford did for automobiles. If building codes were uniform, you would see the emergence of home manufacturers, rather than home builders. Imagine if car makers were required to comply with different safety and pollution standards in each county and town where their vehicles were sold and/or driven! The only reason these codes exist for housing today is to artificially protect local housing unions.

Problem: Technological changes are constantly throwing people out of work at an amazing rate. While they search for a new job, these people have little, if any, resources to help them keep up with these changes.

Solution: Alongside current unemployment compensation, the unemployed would also recieve an equal sized education benefit certificate, redeemable at any licensed education or training center. The centers would dispense the cash benefit if, and only if, the displaced employee showed up for that amount in mandatory education courses.

Reasoning: This would encourage people to keep up with the latest changes. The government wouldn't have to worry about the quality or content of the courses - the free market would determine the best curricula. The benefit to the economy is obvious.

SMALL BUSINESS

Problem: Small business is being discouraged by taxing people who strike out on their own. For example, imagine someone who works for a large corporation and contributes $10,000 to his pension plan (tax-free) and it compounds at 10 percent annually. In 25 years, he can retire with $1,081,818. If this same man is employed by a company with no pension plan, he has to pay (in combined federal and state taxes) about $5,000, effectively lowering the interest rate to 5%, rather than 10%. His nest egg would only be $250,567-$831,251! The government effectively confiscates up to 75% just for having the initiative to strike out on your own!

Solution: Level the playing field. Allow every citizen to save, tax-free, as much as they want towards their own retirement. This would be like an IRA, but wouldn't be limited to only $2000.

Reasoning: It would encourage more small businesses to develop. It might result in eventual elimination of defined benefit pension plans (popular in large organizations). In an age where the average worker stays at a job for about 6-7 years, it makes no sense for an employer to control your retirement funds. Corporations would no longer decide how you invest your money, nor would the government.

Problem: Large companies can effectively educate their employees, tax-free, about the latest technologies. This results in Americans who aren't even qualified to get a job interview with these same companies to effectively pay for the education! Small businesses have no such advantage.

Solution: Again, level the playing field. Allow every American citizen to fully deduct educational expenses from their income.

Reasoning: It would encourage more small businesses to develop. It would stop the financial discrimination of the uneployed by the employed. More people could keep up with the latest technologies, thus expanding the economy at an increasing rate.

Problem: Large companies have an unlimited tax deduction for amounts spent on employees' health care. Small businesses have no such advantage. Those who have government-subsidized health care, which is prohibitively expensive, are those who need it the least.

Solution: One last time, level the playing field. Allow all individuals a full tax deduction on every dollar spent on health care.

Reasoning: People would start shopping for PERSONAL health care insurance, most likely with a high personal deductible (i.e., a person with a $3600 annual premium might find his premium reduced up to $2000 if he agrees to pay the first $1000, due to saving the insurance company the cost of paperwork on that first thousand). People would start comparison shopping for health care matters (insurance, doctor visits, etc.). Our brightest minds would start focusing on more efficient ways to deliver health care, doctors & hospitals would have new incentives to invest in new equipment, technologies and procedures. Service might actually come to the health care industry! Health costs would actually start going down.

The technology for a small business boom is in place, but it really hasn't happened yet. If these three plans were implemented, you would see a major small business boom happen. This is because small businesses could then fairly offer the same benefits as big corporations, enabling them to compete for the best and the brightest. And with small businesses able to change in response to the times quicker than a large corporation these days, they would have a significant advantage.