Healthcare, America's Debt, and the GOP

Steering a nation on a proper course, requires leadership.  But, even the best leaders can be hobbled by public perceptions clouded by misunderstandings.  WWII, where the public's isolationist views prevailed until the Japanese hit Pearl Harbor is one example.  Another example was JFK's surreptitious introduction of troops into Vietnam under the guise of their being "observers" (all to help out the French colonialists).  In that situation, the public never saw coming the disaster that followed.

The problem is not unique to America.  When the liberal politicians, who followed Churchill, took the reins in Great Britain, they put their country on a path to economic disaster.  It was not until the Brits voted in Margaret Thatcher, the "Iron Lady,"  that affairs got righted.  But, it was not without pain.  In that instance, it was the miners who probably suffered most.

America is a great country and can continue to be a great country, but it is also one capable of stupidity (prohibition) and a remarkable short memory (how we happened to enter into Vietnam).  Remember the Simpson-Bowles Commission?  Allow me to jog your memory.  It was when there was a concern in the country that our debt was growing to such an extent that it was only a matter of time before we'd begin to experience inflation and a subsequent destruction of our economy.  Today, with the debt having grown far above what it was when this commission submitted its report, no one seems worried.  Were we wrong back then?  Or, are we now much closer to a precipice we haven't yet fallen over?  Or, is it something in between?

One thing is clear.  We're not Greece facing the problems of Greece.  First, we're much bigger than Greece. (Putting an arrow into a mouse is going to do much more damage to the animal than doing the same to an elephant.)  Second, our currency serves as the world's reserve currency.  This allows us to behave in a manner uniquely favorable to the United States.  (A number of other nations do, in fact, resent our privileged position, but to date no other nation is able to offer those features uniquely American; namely, a relatively large and free market and relatively high transparency in financial matters.  Of course, the freedom of our markets and our transparency are somewhat related.)

If you accept the above, how do you bring governmental spending under control?  In truth, this is not a GOP vs Dems problem.  Both parties have been responsible.  And, why is that?  Because of log-rolling (you do this for me and I'll do that for you).  In addition, there has also been a monstrous misapplication of the economic theories of John Maynard Keynes, which calls for relatively free government spending in a depressed economy and niggardly spending in a robust economy.  Entitlements and log-rolling generate huge and wasteful spending in our economy even when it is going ahead full blast.

Let's first look at entitlements.  First, we have social security.  (I put this first because it's relatively easy to fix.)   Social security is essentially a kind of life insurance.  If you die before 65 you don't get to collect.  If you live beyond 65, you begin collecting very nicely.  The problem with this program is that too many people have been living beyond 65.  This was the age when in earlier times most people had died.  The solution is easy:  make people wait a few years longer before allowing them to collect their payments and/or require somewhat higher contributions to the system when people are working.

Medicare and medicaid.  These programs, with medicare being the larger of the two, suffers not only actuarially, but also from costs that have risen at a rate far greater than our inflation.  This has resulted in a degeneration of medical care in America.  There is, for example, the growing number of doctors who opt out.  There is the growth of concierge medicine, where you pay an annual fee to a doctor who will then allow you to see him for that year for treatment for whatever ails you.  Then too there are the many doctors that prescribe for you treatments only available at facilities in which they have a financial stake.  There is the practice of hospitals charging $5 for an aspirin or a band-aid.  This is designed to make up for the underfunded governmental programs in which they are required to participate.  Clearly, our medical system is sick and seems to be getting sicker.

We have neither the time or space at this point to recommend solutions to the problems besetting the delivery of medical care in America.  But, clearly, it deserves the soonest possible attention.  However, instead of doing serious work on this problem, we introduce a new system under the Affordable Health Care Act which is highly complex and understood by almost no one, including virtually all the lawmakers who voted for it.

And, last, but not least, we come to log rolling.  And, here we find the GOP and the Dems equally guilty.  (You approve my spending bill and I'll approve yours.)  True, lobbyists will try to move lawmakers this way and that.  But, lawmakers are adults.  They ought to know what they're doing.  And, whatever they decide to do, they ought to be doing it for the country.  (Does this sound naive?)

And finally a word on the Tea Party.  I love them.  They understand the damage being done to our economy by log rolling and want desperately to put a stop to it.  They are people with a vision, who regrettably are short on tactics.  In the Washington arena where only power counts, they find themselves getting creamed.  They reach for the only lever they see; namely, denying funds to the spenders and log rollers.  What happens?  They find themselves vilified as trying to bring down America, a charge brought by the very people who are eating away at this country's foundations.

The  GOP has a big job ahead of it.  It's got to pursue the vision of the Tea Party, but it's also got to educate them on matters of strategy and tactics.  And, for goodness sake, find a new direction on social issues.