Before giving you solutions, let me restate my pessimistic view: This idea of life being good for the average person is an accident due to the influx of fossil fuels over the past century. Evolution requires the majority to be so miserable that they are unable to reproduce. The lifestyle of the bottom 50% of the world seems to be quickly improving, but as crop lands decrease from global warming and Chinese demands for meat increase (more more crops "wasted") and fertilizer getting more expensie, 50% of the world could suddenly find themselves in danger of starvation, not helped by U.S. tax subsidies on U.S. crops that creates world dependence on U.S. food production.
But if you are only interested in improving U.S. lifestyle, then some answers are: implement Buffett's idea of import certificates in order to balance trade, along with a gradual increase in tariffs. Tax the upper 5% heavily, and create INTELLIGENT government jobs for the bottom 50% such as reopening mines. A huge military and wasteful social security/medicare are not intelligent government jobs. Make school and health care free so that the poor have more money to spend on the economy that will also help generate wealth for people providing the goods and services. Money trickles up, not down. Free health care implies allowing foreign doctors who do not require payment in terms of an arm and a leg and doing away with all health insurance which means doing away with malpractice suits which means people have the right to review their doctor's services without fear of a slander suit. In other words, do away with the waste of insurance and legal systems by using amazon-type review systems sponsoring by the government. Provide social programs aimed at not letting uncontrolled pregnancies. Do not provide free food. Minimum wage is not needed if the wealthy are taxed properly and services for the poor are substantial. Minimum wage is a tax on the middle class for the benefit of the poor. Do not let the wealthy have access to better education nor better health care. Get the wealthy motivated in improving society rather than isolating themselves in "gated communities" and being the only ones with access to medical care and education. Get them motivated in guiding the poor away from crime rather than creating so many prisons and a police force to enforce the will of the wealthy against the will of the alienated. Be brutal to those who have children without the ability to pay for them. Guide taxes and government spending in order to increase happiness per MEDIAN (not average) person. Carefully define "happiness" in this equation. It means good jobs, good spouses, good health, good sense of community, good food, and good housing. Make house loans 6% interest and divert all the interest on 30 year loans (3 times the house value) as the ONLY tax on every couple who makes less than $100,000. Why are banks getting 3 times the value of the house construction cost? What did they provide to society in exchange for that much money? This means end private banks. The money belongs to the government, so let the government control it and thereby earn the interest on it. It's crazy for the government to be paying interest to ANYONE on its OWN money. That's just a banking scheme. End sales tax, except on luxury items, because sales tax is a taxed bias against the poor who are the drivers of the basic economic demand. Encourage small business. Stop leveraged buyouts. Revert all the gifts to the banks, and let the FBI put them in jail, taking back all bank/finance CEO personal gains in the past 8 years. Stop campaign funding. The government should give equal budget to all candidates, but need to discover an intelligent rather than money method of selecting initial candidates. No re-zoning to maintain senate seats. Take the top 10,000 amazon reviewers and let them have control of society. They are a very charitable and intelligent group of people that are apparently very well liked for their thoughts and efforts. Let them form groups based on their field of interest and self-select from themselves who should be the leaders. WE, the readers of books, have selected the best reviewers of the best books. Then let them selected among themselves. This helps filter out the limited intelligence of the common man. But even the lowest level, those of us voting on reviews is above average because we are actually reading books. So it's actually 3 levels competing to discover the the intellectual elite. This is an artificial intelligence method, an ensemble of agents, or collaborative filtering, and the idea of a representative government, that the U.S. is not implementing very well so far. Computers are making a much more intelligent government possible, much better than Plato could have imagined.