The Two Percent Solution

1. The Two Percent Solution: A pragmatic approach to solving America's biggest problems

"If you can gauge it as a candidacy based on national priorities," said McCain adviser Rick Davis, "then your response to these attacks would be, 'Look at how we waste money already. Sure, two percent of the GDP is a lot of money, but we're spending two percent of the GDP on bullshit right now.'"

The Two Percent Solution proposes that by redirecting just 2% of America's GDP (about $220 billion annually), the nation can solve its most pressing domestic problems. This approach aims to:

• Provide universal health coverage
• Improve education in low-income areas
• Ensure a living wage for full-time workers
• Reform campaign finance

The solution combines liberal goals with conservative means, offering a pragmatic middle ground that can appeal to both parties. It challenges the notion that these problems are intractable and demonstrates that with a modest reallocation of resources, significant progress is possible.

2. Addressing healthcare: Universal coverage through market-friendly reforms

"It transforms campaign finance from an inegalitarian embarrassment into a new occasion for civic responsibility," Ackerman told me.

Universal coverage can be achieved through a system of tax credits that allow individuals to purchase private insurance. This approach would:

• Provide subsidies for low-income workers to buy insurance
• Implement community rating to ensure fair pricing
• Allow for competition among private insurers

The plan aims to cover all Americans while preserving market incentives and avoiding a government-run system. It addresses conservative concerns about efficiency and liberal goals of universal access, demonstrating the potential for bipartisan solutions in healthcare reform.

3. Improving education: Attracting top talent to teach in low-income schools

"To me, the solution to poverty, it's working 80 hours a week, it's working your butt off, it's saving money and it's having that kind of initiative."

Teacher quality is crucial for improving education in low-income areas. The Two Percent Solution proposes:

• Raising teacher salaries in low-income schools by 50%
• Offering up to $150,000 for top-performing teachers
• Making it easier to dismiss underperforming teachers

This approach aims to make teaching in challenging schools a prestigious and desirable career choice, attracting talented individuals who might otherwise pursue more lucrative professions. By focusing on teacher quality, the plan addresses one of the most significant factors in student achievement.

4. Ensuring a living wage: Subsidizing low-income workers without burdening employers

"The philosophy behind the employment subsidy system is that the private benefit of employment does not fully capture—and hence the paycheck of less productive workers does not fully reflect—the whole of the social benefit from these people's becoming employed workers."

Wage subsidies can ensure a living wage without placing the entire burden on employers. The plan proposes:

• A government subsidy to bring minimum wage workers up to $9 per hour
• A sliding scale that tapers off as wages increase
• Focusing on full-time workers to promote self-sufficiency

This approach addresses the needs of low-wage workers while preserving market incentives for employment. It recognizes the social benefits of work that extend beyond individual productivity, justifying public investment in ensuring decent wages.

5. Reforming campaign finance: Introducing "Patriot Dollars" to democratize political funding

"It transforms campaign finance from an inegalitarian embarrassment into a new occasion for civic responsibility," Ackerman told me.

Patriot Dollars would give every registered voter a $50 voucher to support political candidates or organizations. This system would:

• Inject $5 billion in grassroots funding into campaigns
• Offset the influence of large private donors
• Encourage greater civic engagement in the political process

By democratizing campaign finance, this approach aims to reduce the influence of special interests and wealthy donors while increasing the political voice of average citizens. It offers a market-based solution to campaign finance reform that could appeal to both liberals and conservatives.

6. Tackling entitlement reform: Preparing for the baby boomer retirement crisis

"If reluctant or accidental agenda setters are destined to be agenda setters nonetheless," I asked, "what is the framework through which you think about how to exercise that power responsibly? Is that a fair question?"

Entitlement reform is crucial for long-term fiscal sustainability. The Two Percent Solution proposes:

• Shifting from wage indexing to price indexing for initial Social Security benefits
• Implementing a premium support system for Medicare
• Addressing rising healthcare costs through systemic reforms

These changes aim to preserve essential benefits while making the systems financially sustainable as the baby boomer generation retires. The approach emphasizes the need to address these issues proactively, before demographic shifts make reform more difficult.

7. Overcoming partisan gridlock: Finding common ground through "ideologically androgynous" solutions

"We're just not like them," Clinton told his colleagues, intimating that Democrats operated on a higher road.

Bipartisan solutions are essential for making progress on major issues. The Two Percent Solution advocates for:

• Combining liberal goals with conservative means
• Focusing on practical outcomes rather than ideological purity
• Creating "grand bargains" that address concerns from both parties

By finding common ground and embracing pragmatic solutions, the approach aims to break through partisan gridlock and achieve meaningful reforms. It challenges both parties to move beyond their comfort zones and embrace innovative approaches to longstanding problems.

8. The role of luck in life outcomes: A philosophical foundation for social policy

"Suppose one accepts, as I do, this line of reasoning as justifying governmental action to alleviate poverty; to set, as it were, a floor under the standard of life of every person in the community," Friedman has written.

Luck plays a significant role in determining life outcomes, from inherited genes to socioeconomic circumstances. Recognizing this fact provides a philosophical foundation for social policy that:

• Justifies efforts to create more equal opportunities
• Supports a decent minimum standard of living
• Balances individual responsibility with societal obligations

This perspective draws on the work of philosophers like John Rawls and economists like Milton Friedman, finding common ground between different ideological traditions. It offers a rationale for social programs that can appeal to both liberal and conservative sensibilities.

9. The press's responsibility: Keeping important issues in the public eye

"We tend to be and, probably should be, guided by what public officials ... are debating," said Walter Isaacson, a former president of CNN and editor of Time magazine.

The media plays a crucial role in shaping public discourse. The Two Percent Solution proposes:

• A "Still True Today" feature to highlight persistent issues
• Greater emphasis on policy analysis and context in reporting
• Rethinking the "stenographic" approach to political coverage

These changes aim to keep important issues in the public eye, even when they're not the focus of current political debate. By providing consistent attention and context to major challenges, the press can help foster a more informed and engaged citizenry.

10. Building a constituency for change: The importance of citizen engagement

"The citizen's job in a democracy is to make the world safe for leaders to do the right thing."

Citizen engagement is essential for creating political will for reform. The Two Percent Solution emphasizes:

• The need for an informed and active public
• The power of organized constituencies to influence political priorities
• The importance of making politicians feel safe taking risks for reform

By fostering a more engaged citizenry, the approach aims to create the political conditions necessary for implementing ambitious reforms. It recognizes that meaningful change requires not just good ideas, but also public pressure and support.

11. Funding the Two Percent Solution: Reallocating resources and priorities

"Let us suppose that we know from economic theory that under the standard assumptions defining a competitive market economy, income and wealth will be distributed in an efficient way, and that the particular efficient distribution which results in any period of time is determined by the initial distribution of assets, that is, by the initial distribution of income and wealth, and of natural talents and abilities."

Funding the Two Percent Solution requires reallocating existing resources and rethinking national priorities. The plan proposes:

• Cutting corporate subsidies and tax loopholes
• Implementing a gas tax to reduce dependence on foreign oil
• Canceling portions of tax cuts for high-income earners
• Reforming inefficient government programs

These measures aim to fund ambitious social programs without significantly increasing overall government spending. By focusing on efficiency and prioritization, the approach demonstrates that major reforms are possible within existing resource constraints.

Last updated: July 29, 2024