The Editorials of E. Desiderius

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Sunday, May 14, 2006

The Bankruptcy of the United States: A New New Deal For A New Century

The United States is bankrupt. We are bankrupt on good policy ideas and solutions, on sound fiscal policy, and on political leaders who can effectively wield government to move America forward. The problems confronting us are great: The dollar has declined to new lows against almost all global currencies. Tensions with Iran and the rest of the Middle East, as well as a strong Euro mean that the petroleum will probably be priced in Euros within a handful of decades. Within the next 20 years, our currency will cease being the premier reserve currency of the world, meaning that our current trade deficit is unsustainable. Medicare will be bankrupt by 2018, and Social Security will only be able to pay full benefits for another 34 years, until 2040. Further, as of this very moment, the national debt stands at 8,368,490,168,346.07, and each citizen’s share of the debt is approximately 28,015.46. Corporate wealth is soaring, and the gap between the rich and the poor is ever-widening. Our dependence on foreign oil is greater than ever, as gas prices soar, and investments in alternative energy decline. And we are engaged in a global game of cat and mouse with Islamic extremists and bogged down in two wars in the Middle East.

The problems that the United States faces are significant, and the action of our political leaders on these important issues is truly revolting. Congress has spent the last six years investigating baseball steroid allegations, threatening to ban gay marriage and flag burning, preventing the removal of one woman’s feeding tube, and turning its back on the creation of an Imperial presidency, and launching the feeblest of investigations on the truly important issues. The most important priority of progressive Americans in the new century should be to protect the social safety net that

With that said, this author proposes the following two policy prescriptions to save the social safety net:

1. Revision of Health Care Policy

The United States currently spends 16% of her GDP on health care, while leaving approximately 1/5th of her adult population uninsured. In just 9 years, health care costs will increase to approximately 20 percent of GDP. Meanwhile, other industrialized countries with single payer universal coverage spend significantly less: Switzerland and Germany spend just over 10% of GDP, and Canada and France spend just under 10%.

Meanwhile the private insurance companies in the United States spend approximately 20% of their budgets on lobbying and marketing to prevent the enactment of universal coverage. The insanity of the whole situation is that insured Americans are actually paying to prevent lawmakers from enacting a single-payer universal health care system. American insurance companies often refuse to pay for preventative medicine, but will pay for extremely expensive medical procedures that are a direct result of their failure to cover preventative medicine.

The United States is the only industrialized nation in the entire world not to provide her entire population with guaranteed health insurance, while spending more money than any nation in the world for inferior care (highest infant mortality rates in the developed world, etc). The waste in the system is apparently, but the political support for single payer insurance is still very high: 56% of the American people believe that fundamental changes are necessary in our health care system, and 34% believe that the entire system needs a complete rebuilding. 62% believe that health insurance is a government responsibility, and 87% of Americans are either very or somewhat concerned about health care costs in the future. 54% of Americans are dissatisfied with the quality of health care.

Meanwhile, business are struggling to try and meet the unwritten mandate that they should provide health insurance to their employees, and Congress is attempting to lower state restrictions to make it easier for business to purchase low-quality partial insurance instead of more comprehensive coverage.

Politically, major reforms to the system are blocked by powerful lobbies, despite political support found in the general population. A very minimal, and easily enactable, policy solution would be single-payer universal health care for minors, something along the lines of MedicareJunior. The idea is that all Americans, birth to 18 (and extendable to age 25, if attending a university or other job-training program full-time) would be covered by government insurance. This would have the benefit of shifting the responsibility of covering minor children and young people from the business that insure their parents to the government. Businesses would no longer have the burden of insuring families, just individual employees and perhaps their spouses. Medicare Junior could be funded by a payroll tax on employees, similar to the social security and Medicare deductions already taken out of paychecks.

2. Revision of Social Security/Medicare Policy

Social Security has over and over been called the third rail of American politics: “Touch it and you die.” It is not politically popular to raise the retirement age, nor would lobbies such as the AARP allow such legislation to pass without a massive legislative battle. However, the system cannot maintain the current rate of spending, especially with the retirement of the baby boomers. Private savings accounts and encouraging people to save for their own retirement is genuinely not a bad policy, but the social safety net must remain firmly in place. Thus the retirement age should be raised: benefits should be given incrementally. Medicare benefits could remain at age 65, and the social security pension could start as a very small pension at age 70 with a pension increase at 75 and full benefits coming at age 78. At the beginning of social security, Americans were only living a handful of years beyond retirement: now they are living several decades. Older Americans are healthier than pervious generations. As painful as it is, older Americans should plan on staying in the workforce longer, at least in a part time capacity. Several decades of living on a government pension was not the original intent of social security. Exceptions could be made for physically demanding career jobs: individuals who can show that they can not longer perform a career-level job because of physical handicap or age could be entitled to full benefits and pension past age sixty.

Sources/Relevant Articles:
Polling – Health Policy
The Nation – The Motherhood Manifesto
Universal Health Care Action Network – Strategies For Affordable Health Care for ALL
Why the United States Has No National Health Insurance: Stakeholder Mobilization Against the Welfare State
Washington Post – Serving Up Social Security and Mdeicare, Without the Fixings
NCHC - Facts About Healthcare
LA Times – Medicare In Poor Finiacial Health, Trustees Say
US National Debt Clock

Posted by George Gordon | Sunday, May 14, 2006 | E-mail this post

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