I also think the system is not generating enough merits but, in my case, Im not worried about ranking up. What I miss is the possibility of giving more merits for good posts.
I think the system would be improved if everybody above a certain rank would get some merits at the beginning of the month, like merit sources do. Not many, but maybe 5 for members 10 for full members and so on.
Its happened to me some times, and I think to many people, that I would have liked to give merit to a certain post but I couldn't.
Better option is to increase the merits allotted to merit sources. I am not in favor of default merits or any automatic merits given to members every month. Most of them will be abused as it is happening currently. Even some senior rank members did this which is pathetic. If we increase the merits for merit sources, it is safer. This is because only trustworthy people are selected for that role. It will also solve the problem that you mentioned. Since these people will have more merits to give to all rank members, the members receiving those merits will also get Smerits for spending.