Our economic system is called Capitalism (for a good overview of the term Capitalism see wikipedia). It is equally clear that in the financial sector with all its deregulation and non-interference by regulators, we have seen Capitalism at its worst. If anyone needed proof that laissez-faire à la Milton Friedman is baloney then you are seeing the results of this before you.
With all the wealth that has been destroyed and which still we destroyed, it should have become clear that the current economic system does not work and that a new approach to doing things is needed.
To come up with a new solution, it seems in order to do a analysis of the problems caused by our current economic system.
To live (and I mean that literally) you need money. To get that money most people have to find a job that pages wages they can live on. This is becoming more and more difficult and with the current economic downturn, I would say, it is an illusion form many people to find a job, or a job that they can live on.
Our way of living leads to people becoming sick. The lifestyle is based on consumption of goods. Consumption is a stress reliever. The stress is being artificially induced in the working place, where people work as wage slaves just to pay their mortgages, leasings, student credits and consumer credits.
Many health-issues today are caused by this setup. Many of them may just disappear once the stress is eliminated.
Natural resources are for the most part non-renewable. This is true for many metals needed in high-tech stuff like your PC, plasma screen, iPhone etc. It is also true for oil from which many plastics, drugs, etc are made. Without those things, there is no modern society, you will have to go back living as in the 18th century.
Our way of living produces too much waste and too much pollution and too much. Those in turn hurt our ecosystem. This affects not only the habitat of wild animals, but also the habitat of humanity. Today, the ecological footprint of many humans, especially in the countries that have embraced the capitalistic system, is way too great. This must be changed.
Environmental issues are also created by the way this work is organized. The commuting to and from the workplace not only takes hours, it also puts a stress on people and on the environment.
With the above, it is easy to see that we are in a vicious cycle with factors that do reinforce themselves and make it increasingly difficult to keep it working. In fact, we may have reached the breaking-point of the system. Once past that, there is no way it can be « fixed », more and more resources would be needed to keep it working. The only solution is to stop that madness, step outside this destructive logic and come up with something new. Here is a first idea of what could be done.
(1) Reform social security. Scrap different programs for people in need and Medicaid and pay every US Citizen a monthly “basic income” of USD 2800, which will cover basic needs for housing, food, clothing. This way people will no longer have to work to make a living. The basic income will not be taxed;
(2) people may earn an “additional income” by working on their terms and as much as they want, depending on their needs. This “additional income” will be taxed, but only lightly until it reaches USD 250,000 , see (6);
(3) Freeze all mortgages for primary homes in trouble and restructure them, so people can afford them, there will be no need for foreclosure;
(4) Set the maximum interest rate for debt that can be charged to 15% p.a., define maximum allowable charges;
(5) Tax consummation through VAT,tax Carbon (di)oxide emissions, tax transactions (wiretransfers, stock-exchanges, etc);
(6) Tax additional incomes (see 2) from 33,600 to 250,000 will be taxed lightly, starting at 4% ending at 12%. Incomes above 250,000 will be taxed progressively starting at 12% reaching 79.9% at 5mln. Higher incomes will be taxed at 99.9%;
(7) Tax large fortunes – above 100mln – progressively the higher the income, the higher the tax, starting at 35% and reaching 79.9% at 2bln;
(8) Tax large heritages progressively starting at 35% reaching 79.9% at 2bln. Limit amount that can be inherited to 200mln;
(9) Ban lobbying by corporations in any legal shape or form. Corporations were not meant to benefit from any right guaranteed in the bill of rights. They are neither “natural persons”, nor do they belong to “the People”. Therefore they cannot “petition the Government”.