Posted by
Patrick Henry on Sunday, August 28, 2011 1:36:27 PM
America is awash in red ink, with nearly $15 trillion in debt and $1 trillion plus annual
deficits as far as the eye can see. The two indisputable facts are (a) that such conditions
are unsustainable, and (b) that entitlements such as Social Security, Medicare, Medicaid
and the Patient Protection Affordable Care Act are the main drivers of debt. Clearly,
something must be done to change America's fiscal course. But what?
Let's begin by assuming responsibility and exonerating the founding fathers of blame
for our mess. They were, by-and-large of Christian upbringing, considered Christian
charity a moral duty and could never have envisioned a nation drifted so far from
such moral commitments or so overmatched by the sheer volume of need within it.
For better or for worse, the situation is what it is, and we have to start from present
reality rather than engaging in historical with hunts.
What's wrong with Social Security? The current rate of retirement is simply
outstripping the rate at which current workers are paying into the system, so that
today SS is paying out more than it is taking in. Unabated, that spells certain
insolvency, and the drop dead date is somewhere in the mid-2020s. Compounding
the situation is that presidents from Johnson through Clinton routinely raided the
SS trust to pay for otherwise unfunded wars and social programs. Clinton finally
did away with the trust, sweeping what was left into the general fund and enabling
him to claim a "budget surplus." The total pilferage amounted to nearly $6.5
trillion, replaced by IOUs the cash-strapped government cannot currently make
good without tapping general revenue needed for other things.
Hardline conservatives would solve the problem by abolishing all entitlements.
That, however, would be like trying to "unsink" the Titanic. An entire generation
of the elderly built their retirement on the government promise of social security.
Leaving millions destititute by cutting them off, would create greater problems
than it would solve. The far left wants to protect social security in its current
form, a solution about as effective as whistling past the graveyard. What do
you suppose it is about the term "unsustainable" that they don't get?
The tough truth is this: government cannot go on paying for everyone's
retirement. While it is unthinkable to disenfranchise those already on social security,
it is only sensible to insist that those under the age of 45 begin saving to fund
their own "golden years," for the most part. They must, of course, continue
paying into the system to support the current elderly population, but they must
be realistic enough to understand that unless they want to pay three or four times
what they are paying now, they won't be able to benefit at the same levels when
their time comes. Nobody wants to hear that, but that's how it is.
So what can government do to help? Perhaps government could insure
private retirement savings accounts, declaring them entirely untaxable up to
an agreed limit. Of course, if government assumes the risk, then government is
entitled to participate in risk management. If SS could then supplement such
retirements savings with payments of, say, one-third the current amount, duly
adjusted for inflation, the system might be able to maintain solvency. The recent
Bowles-Simpson Deficit Reduction Panel also proposed a rise in the retirement
age, based on new health and longevity markers. Such proposals have already
been floated in congress.
OASDI should be revisited and revised. The assumption for these programs
seems to be that the beneficiaries are permanently incapable of remunerative
employment, which is utterly false. Payments under such programs should be
means-tested (meaning that individual need should be evaluated on a case-by-
case basis) and time limited, paying out nomore than was paid in.
SSI, the program that pays those who are, by reason of illness or injury
unable to work, should undergo an austerity audit. Many, many people are
paid by the government not to work at all when they are not completely
disabled, on the one hand, and their right to not be discriminated by
employers is protected on the other. The system is broken.When people
claim to be in pain, even when doctors can find no medical cause for such a
claim, all too often they are rubber-stamped through for SSI. Sometimes
a fellow named "Jim" joined my weekend golf foursome. He was on
permanent disability for a "back injury," allegedly suffered while doing
work as a plant electrician. While he "couldn't" work, he was on the golf
course 4-5 days a week, participating in a game that is notoriously hard
on the back. Yet he never once complained. Disabled? Give me a break!
Fraud is another major problem with all the entitlements. The most
glaring examples are Medicare and Medicaid. Many doctors have been
convicted of overbilling Medicare, sometimes for patients who do not
exist or have never actually been seen. They most often get off by
returning the money and paying a fine. All is forgiven. In Medicaid there
is rampant cheating by people hiding income they should be using to pay
their bills, or claiming to provide services never actually provided. Even
the most flagrant convictions lead to only light jail sentences and small
fines the offenders can't pay anyway. Then, these same offenders
immediately re-apply for benefits, and are almost always reinstated in
the system. What should happen is that both providers and recipients
found guilty of fraud should be permanently cut off from benefits of the
system, and in egregious cases subject to harsh confiscatory justice
including homes, cars, bank accounts and other possessions. By not
pursuing such enforcement, government simply becomes complicit in the
fraud.
The point is that each of the entitlements could be so dissected and
reassembled as to reduce benefits to those who don't truly need them,
put a stop to most fraud and abuse and return the welfare mindset from
dependency to responsibility. Only no one has the fortitude to do it.
Wisconsin Representative Paul Ryan proposed a budget, recently,
that offered some of these remedies. It passed in the House, but not
in the Senate, and faced a promised veto from the White House. To
make matters worse, it was (and is) demagogued by welfare state
liberals as "pushing grandma off a cliff in her wheelchair," even though
it specifically exempted those in or near retirement from cuts. It is an
unfailing maxim that dishonesty is the tool of last resort for those who
will not face reality and wish others to also remain blind.
It is within America's power, even in this deep hole, to just stop
digging. It will require re-thinking our current system, signifcant belt-
tightening that will undoubtedly cause pain for some, and courageous
action, sometimes in the face of public outcry. But the most important
reform is one that will start all American's asking again, "What can I
do for my country, and myself," instead of "What can my country do
for me?" The message to the current generations is this: "There is no
more free lunch." Ignore it at your peril!