Your points are spot on.
I feel that the only way to recover is a secession movement.
Once the brains, creativity and money making ability separate from the rest the total collapse of the socialist old republic will eventually lead to their petitioning the new free state to let them join.
The new state could correct the mistakes that led to the downfall by a simple change in voting requirements. No representation without hefty taxation, absolutely positive ID of voters, no welfare...only workfare, no citizenship just because you happen to be born on the new state’s territory...citizenship based only on the citizenship of the parents.
There would be many other changes but I’d say that 99% of the new constitution would mirror the old...which is pretty damn good but just needs a few changes.
I see no way to reform the old republic now...only a separation will work.
“I feel that the only way to recover is a secession movement.”
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Who is going to secede? How would they do it, and what would they form?