01/12/2024
AWESOMENOMICS!!!
Here is an article by my student Stefan Steinberger that has gone public to solve many of the great economic challenges of our time. He did 100 hours of Leadership Development with me. He is 19 years old and I am super proud to see him as example of our new generation!!!
Awesomenomics
Stefan Steinberger
Berton Capital
Executive Summary
Awesomenomics is a set of economic policies that aim to achieve greater equality, innovation
and socially positive prosperity for the largest number of people in the world, without the need
to cut government services, or raise or lower taxes to reach its goals. Awesomenomics relies on
independent thinking instead of left and right idealism but does not suffer from the current
political polarization. The main goal of these policies is to decrease inequality without slowing
economic growth, sacrificing innovation, or raising taxes. The core tenant of Awesomenomics is
to increase competition in all markets, particularly when the government is making the
purchasing decision. Historically, increased market competition drives higher innovation and
lower inequality. I believe all nations would benefit heavily in the long run from
Awesomenomics.
The Goals of this Paper:
I am offering this policy paper to help society and individuals within those societies. I am
hopeful that these insights are beneficial. I developed these ideas to offer the world an
alternative set of economic policies to what is currently being proposed by both the left and the
right global political spheres that I believe can make a fundamental difference in people’s lives
and a significant positive impact on society and our world.
Politics
In the American economic system, we have only a few major political parties. Many members of
these parties are extreme in their views and rely on one-sided economic policies that might
achieve their political goals but also create economic inefficiencies. Alternatively,
Awesomenomics is designed to be simple and uncomplicated in its implementation. Although
Awesomenomics is imperfect like all economic systems, it is designed to anticipate and
incorporate technological change and other factors that will increase innovation and
productivity in the future.
All significant schools of economics are flawed, including my proposals, but all economic policies
will create significant inefficiencies when they ignore basic economic principles such as supply
and demand. Constraining either supply of products and service or business and consumer
demand will result in distorted market outcomes, which is one of the key elements of a free
market system. That said, unrestrained market capitalism doesn't always work in an efficient
way like the theory purports and creates inefficiencies when implemented poorly, which
requires additional regulation and oversight. However, when structured correctly, free market
economics produces lower prices, greater innovation, and an improved standard of living for
most people.
Most policy recommendations for decreasing inequality rely on higher taxes or increased
regulation, which stifles Innovation. Awesomenomics provides a set of economic policies to
decrease inefficiencies while increasing innovation and economic growth without drastic tax
increases, cuts in government spending, or declines in standards of living.
Each industry discussed in this paper has its own set of problems that can be solved with free
market forces, which will lower the need for regulation and decrease inefficiencies.
Awesomenomics requires fewer sacrifices than most other economic systems and can be used
for the economic betterment of society. Although the examples that follow are not the only
industries that would benefit from the policies in this paper, they are examples of the benefits
of these ideas to help our society in a practical way.
Awesomenomics would limit lobbying to 1/5 of its current level with the growth in future levels
tied to the annual CPI. Rather than eliminate lobbying completely, these restrictions would
reduce lobbyists’ influence on the political system and all politicians more freedom to act in the
best interest of their constituents while still being able to raise enough money to fund their
political campaigns.
Healthcare
The U.S. does not have the best quality healthcare on earth, yet it pays more per person than
anywhere else on the planet. Healthcare expenses also increase annually as a percentage of
national GDP and with the aging of the U.S. population the aggregate cost of healthcare will
continue to consume a greater portion of the economic pie. The primary issue is the limited
level of competition allowed in the medical industry.
Awesomenomics would introduce free market policies in the healthcare industry. For instance,
it would allow the government to openly negotiate prices with insurance and big
pharmaceutical companies and require hospitals and other medical service providers to disclose
prices. Awesomenomics would also allow individuals to choose healthcare service providers and
hospitals based on transparent pricing and quality ratings. The primary goal of these policies is
to increase competition to lower prices and improve quality.
Historically, competition has resulted in lower prices and increased innovation in many
industries. Forcing medical providers to compete would result in more competitive pricing and
lower healthcare costs, and higher quality services. For instance, elective plastic surgery prices
have fallen each year for the past decade (adjusted for inflation) because these providers are
forced to deal with free-market competition rather than being paid for by private insurance. On
the other hand, most other medical prices have increased each year because of the perverse
incentives of third-party payers (i.e., insurance).
US Congress would have to pass legislation to allow the government to negotiate directly with
healthcare providers and force all potential providers to disclose prices, but these policies would
not require any cut in government services, increase in government spending, or higher taxes.
Housing
Awesomenomics would introduce regulations that limit the annual increase in rents to annual
inflation (based on the CPI) plus 3 percent (to offset the impact for recessions and economic
downturns). It would also decrease zoning laws to allow the housing supply to keep up with
housing demand. Currently, zoning laws limit the supply of new housing stock, which artificially
inflates rents and housing prices. The goal of these policies is for housing to behave like a
commodity so that it is priced in line with supply and demand. The only regulation necessary
would be building codes and other safety regulations.
Awesomenomics would eliminate the tax deductibility of mortgage interest expense and, in
turn, lower the capital gains tax rate on stock investing. Housing is a non-productive asset, and
its ownership should not be subsidized by the U.S. tax code. Alternatively, the stock market is a
productive asset and stock investing should be encouraged by a lower tax rate on capital gains.
Defense Spending:
Defense spending continues to rise every year. The military industrial complex oligopoly creates
excessive profit margins at the leading defense contractors and wasteful defense spending for
the government. Interestingly President Eisenhower, who was a five-star General before
becoming President, raised similar concerns in 1961. Sadly, he would be shocked by how much
larger the problem has become than when he warned of its potential dire consequences.
Awesomenomics would introduce free market policies into government defense spending by
allowing the government to negotiate contracts directly with military contractors to ensure that
they are getting the best prices possible in a free market, open the bidding process to a broader
set of contractors, and force a greater level of transparency on all contracts and individual bids.
Awesomenomics’ primary goal is to abolish the current military industrial complex by increasing
the level of competition between military contractors and limit excessive profit margins at the
current incumbent contractors. The increased competition between contracts would also drive
innovation.
Lockheed Martin, Northrop Grumman, RTX, Boeing, and General Dynamics are major
contractors and effectively form an oligopoly. This concentration of supplier power results in
anti-competitive behavior and inefficient outcomes. By forcing more competition,
Awesomenomics would allow the government to get higher quality products, greater
innovation, and lower prices.
Awesomenomics would also limit political lobbying by all defense contractors to a level that is
20% of their current spending. The current high level of lobbying by the defense contractors
distorts government spending and leads to unnecessary government purchases. Given the size
of the defense budget, these savings would total billions, if not hundreds of billions, of dollars.
The lower defense spending would help to reduce the federal budget deficit and, ultimately,
help reduce the national debt, without sacrificing national security.
Prison System
The U.S. prison system is ridiculously expensive. The annual cost of a standard prison cell is
more than a 5-star hotel.
Awesomenomics would open the bidding process to a greater number of private prisons service
providers to encourage more competition, which would decrease costs and increase innovation.
Unfortunately, there will always be a need for prisons and because of the nature of the business
the government will always need to be involved in it. That said, having the government own and
operate prisons has resulted in an overly expensive outcome.
Awesomenomics would create an open market and competitive bidding process to allow the
government to outsource the incarceration of individuals that would result in a well-managed
and cost-efficient prison system without the need for the government to own and operate the
actual prisons.
Awesomenomics would require criminal records to be sealed for small crimes and insignificant
misdemeanors. Unfortunately, individuals with single criminal activities are often discriminated
against even if their crime was insignificant or happened when they were a minor. This stigma
limits significantly their career and educational opportunities, which, ironically, often results in
their having no choice but to commit additional crimes to provide for themselves. One of the
best ways to break this cycle would be to allow these individuals to move forward with a clean
slate and not have their criminal record create significant obstacles. This policy will also be good
for society because it will reduce the number of repeat offenders, which would reduce the
number of individuals that need to be incarcerated in the prison system.
Transportation Infrastructure
Awesomenomics would change the bidding process to allow for more direct market
competition in bidding for government infrastructure projects resulting in lower costs and more
efficient deliveries. More transparent bidding would restrict the ability for politicians to
manipulate the process by giving favorable access and treatment to their friends, which results
in higher prices and greater inefficiencies.
Education
The US spends more money on education per student than any other nation in the world yet
ranks only in the lower part of the top 20 nations. Awesomenomics would promote market
competition by eliminating inefficiencies that have historically increased the cost of education
and resulted in higher inequality. For instance, textbook contracts are often awarded to the
incumbent supplier without allowing other vendors to compete. In addition, school boards are
forced to purchase the latest textbook edition even though the incremental changes are
immaterial and shorten the useful life of already purchased editions.
Awesomenomics would also open the bidding process for all school contractors and suppliers.
These policies will ensure that all contracts are rebid annually to prevent incumbents winning
contracts without a competitive bidding process. Increased competition would reduce prices,
which would lower operating expenses and reduce tuition for all students.
Awesomenomics would promote an increase in the number of non-profit charter schools to
allow more families additional school choice and, indirectly, encourage competition with current
bureaucratic boards of education. Awesomenomics recognizes that allowing an increase in the
number of charter schools will require additional oversight and regulation to keep out any
potential bad actors that would exploit the system for personal gain and not deliver adequate
education to their students.
Awesomenomics would also ban college schools from offering unnecessary amenities, such as
ski resorts, and other non-education related luxuries. These offerings increase the cost of
education without increasing the quality of that education. These higher expenses result in
higher tuition. Government supported student loans increase the inflation in tuition. Therefore,
instead of subsidizing student loans the government should regulate and limit how universities
and colleges spend money on expenses not related to education. These policies would reduce
institutional expenses, which will translate in lower annual tuition.
Additionally, Awesomenomics would separate the research institution from the college /
university, which would allow one institution to focus on research and the other to focus on
education. The research institution would operate as a separate entity from the education
focused institution.
Labor
Awesomenomics would promote a more egalitarian labor market. To achieve a more efficient
labor market, the government needs to eliminate affirmative action for college admissions and
employment recruiting as well as legacy college admission. Both policies result in inequality for
those individuals most affected by these restriction and distort the labor market. Instead, all
selection processes should be based on merit and not government required favorable access.
Legacy admissions are morally questionable. Like most affirmative action policies, legacy
admissions lead to lower-quality individuals being admitted. With bans on affirmative action, it
would be morally important to ban legacy admissions. These new policies will decrease
inequality through better access to education and create a better-qualified workers workforce,
which would supply the economy with better candidates.
Conclusion
In conclusion, I believe many of the Awesomenomics policy recommendations can work in any
modern economy and are the most efficient way to structure the contemporary economic
landscape. I acknowledge that other economic policies have merit. However, I believe that
Awesomenomics would be the most effective way to decrease inefficiency while increasing
innovation and not requiring increases in taxes or cuts in government spending.
Dedications
I dedicate this paper to those individuals who helped me on my personal journey, particularly
John Marrione, Paul Johnson, Akim Ndlovu, my parents, Dara Caponigro and David Steinberger,
and Beth Levinstein as well as many more people that are too numerous to name. I offer this
dedication to show the world I am a good man and always have been. I accept that when I was
between the ages of 5 and 19, I made some bad choices and, although I was mistreated by
many other individuals, those actions against me do not justify my behavior at the time. Despite
my specific actions, I have never been an evil man and always been mostly a good man.
I suffered from several conditions as a child, but that has not and never will define who I am. I
was diagnosed with bipolar disorder as a kid, and I hope that the lies I stated as a child will not
define the person I am. I also recognize that I had additional brain development to experience,
as well as pressured speech and other bipolar side effects that influenced many of my decisions.
I wrote this paper to offer the world an alternative set of economic proposals that I believe can
make a fundamental difference in people’s lives and a significant positive impact to society and
our world. Some of the decisions I made were morally wrong, so I hope this paper is mostly
designed as enough of a contribution to society to make-up for my earlier poor decisions and
bad actions.
I want the world to benefit from this paper. I feel that I made many decisions when I was
younger that hurt other people and went against my moral code. I am offering this policy paper
as redemption for those actions to help society and individuals within those societies, and to
make-up for my past behaviors. I am hopeful that these insights are beneficial to our world.
Special thanks to Paul Johnson who helped edit this paper.
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