Couldn't agree more. Although I don't know why you say the solution she set forward was "temporary." She wasn't so much advocating a economic or political quick fix as she was promoting a fundamental shift in philosophy, which necessarily would be permanent. Also, we shouldn't forget: she was first and foremost a philosopher. Not an economist...
Pretty sure you already know this, but I just want to say for the record I am NOT a cultish, Rand-deifying Objectivist. In fact, the Ayn Rand Institute kinda makes me want to vom. And not just because I'm wasted.
It also pisses me off when she claimed that Objectivism sprung out of her mind with ZERO influence from other thinkers. This is bullshit. She owes a huge debt to Nietzsche, Schopenhauer, Mencken, and Herbert Spencer. Shit, she even wrote Mencken a starry-eyed letter before she was famous that pretty much said she wanted to devote her career to the awesomeness he embodied (I'm paraphrasing obviously).
And here's my response, which is very much stream of consciousness and thus thoroughly unpolished:
Perhaps I'm interpreting the ending of Atlas Shrugged the wrong way, but it seemed as though the people living at Galt's Gulch were planning on rebuilding an American nation-state much like the one that had originally existed, just with John Galt's philosophical principles written into the Constitution. Thus, there would still be a federal government, but its influence would be tightly contained within the sphere that Rand thought appropriate. Such a project would be inevitably destined to fail.
I'll lay out my arguments more clearly in a forthcoming column, but I have become convinced that human nature is such that Rand's radically hands off government could not exist for any length of time. It would be hijacked by some internal or external actors seeking to maximize their own power and the whole cycle described in Atlas Shrugged would just happen all over again. That's just the nature of human bureaucratic institutions. Failing to recognize this fact is a sign that one is looking at the world through an incredibly unrealistic ideological lens.
Given that all of the above is true, the best solution is to facilitate a situation in which the nation-state has been eliminated altogether. Currently, the death of the nation-state would plunge us all into a dystopic state of underdevelopment. This is why the invention and adoption of technology that will enable the creation of self-contained and sustainable resilient communities is crucial. If food, energy, manufactured goods (all of the material requirements of modern life) can be produced within a community composed of only thousands or tens of thousands of people, then there would no longer be an economic justification behind having nation-states at all.
Of course, even after they've degenerated into pure parasitism, there's no way that large-scale governments will just go away on their own. They are run by entrenched hierarchies of bureaucrats whose lascivious lust for power over others knows no bounds. But, increasingly I don't think that's going to be the problem. The real danger is that the modern nation-state will go extinct before resilient communities are ready for prime time. If that happens, we'll be in a world of hurt. It could quite literally mean the end of the line for our current human civilization. It likely wouldn't be the end of the world, but horrifyingly large numbers of people would almost certainly die from starvation, exposure to the elements, etc. Seriously, just give some thought to what would happen to you if your electricity went off permanently and there wasn't any more gasoline available to power our vehicles.
We've previously discussed some of the events that I think will lead up to the demise of the modern nation-state. Ultimately, I just don't think our current societal structure will be capable of sustaining itself for more than a few decades longer--at most. Just look at history. Technological and social change always eventually get out ahead of any political power structure's ability to control. When this happens the existing social order dissolves and chaos ensues for some period of time until a new way of ordering society emerges.
For example, the industrial revolution resulted in the collapse of monarchy and agrarian feudalism and enabled the birth of the nation-state as we know it. There is simply no reason to assume that our current political institutions will fare any better as they run up against the numerous challenges that 21st Century technology is throwing at them. Look at the ongoing financial crisis. The byzantine web of overlapping financial obligations that we built was just too complex for the current economic and political power structures to handle. Computers and the Internet let us setup the system, but we didn't know what the hell we were doing. And now that the system has broken down, no one really knows how to fix it.
Rather than wasting precious time and resources attempting to repair a system that is clearly neither stable nor sustainable, we need to build resilient communities as soon as possible. That way, when the systemic collapse inevitably arrives, we will be prepared for it.
But back to Rand.
In Atlas Shrugged, as I said, Galt's Gulch was only a temporary refuge from which the novels heroes could weather the storm of the corrupt state's collapse. Then they fully intended to build up a new, pure state in its place. For all of the reasons I laid out above, this is not an attainable goal. Instead, what's necessary is the construction of millions of instantiations of communities built with the same basic blueprints as Galt's Gulch. That will be the new societal equilibrium. In the next era of human history, there will be no large-scale political organizations such as the United States of America.
It won't be anarchy exactly--and it certainly won't be utopia, but it will be radically different than the world of today. Hopefully, it will be better. In any case, we should do our best to try to make sure that it is.
(Obviously, it's entirely possible that I'm wrong about most of this stuff. The above only represents my thoughts at the moment. I make no claims of certainty here and my views and predictions will likely evolve further over time.)
Here's a somewhat random yet highly instructive example of how an organically formed community can better deal with a serious security threat than can any nation-state's bureaucracy.