Friday, May 20, 2011

Debt Reduction Strategies and Obstacles

     As is the case for many people concerning my opinions, I read Mr. Thomas' columns "A Solution to the Debt Menace" with great reluctance and my usual skepticism.  I could only imagine what this one was about.   
     I became even more skeptical when I read that the plan Mr. Thomas was writing about was developed by The Heritage Foundation but I found much in the recommendation that even I could support.     For the last 15-20 years, I have suggested that Social Security and Medicare should be what has become known as "means tested."  In other words, these safety nets should be available to people in proportion to their ability to pay and need to be covered.   
     Homeowners insurance, auto insurance, term life insurance, income-protection insurance, hospitalization insurance and various kinds of warranties that we purchase don't guarantee those paying for the coverage will ever receive benefits.  We buy protection but hope we never need them.  The same applies to Social Security and Medicare:  Most young people hope their future financial conditions can obviate the need for either.
     However, for too many years benefits have been given to those not needing them but willingly accepted them.  People no long feel guilty about receiving what they don't need, even if it means simultaneously expanding the numbers and failing to address the needs of the most vulnerable Americans..
     When I first recommended gradually phasing out Social Security and Medicare benefits as incomes increased,  I also suggested that future benefit adjustment be considered to differentiate between people who choose not to have or adopt children and those who have them.  
     Children who are gainfully employed contribute to pools that finance much of their parents retirement and medical care benefits.  As it stands now, people with no children receive the same retirement benefits as those with five children gainfully employed and paying into the programs. 
      I've forgotten what remedies I proposed at that time.  But one reader said I should "have (my) head examined" and that the editor should have his examined for printing it.  I may have suggested that retirees' benefits should be related to the incomes of their children.  This would have given parents an incentive not only to have children but to educate them well.     
     Some practices, however, continue to seem appropriate only because they have been in operation for so long, not because there aren't better alternatives.  Like it or not, the success and sustainability of Social Security and Medicare relate directly--even if not solely--to the earning power of retirees' children.   And problems cannot be resolved by ignoring factors that contribute to the problem.     This aspect of the solution, however, also would be phased in over a period of time.   
     I am disappointed, to say the least, that, whereas Republicans have the Paul Ryan Plan and The Heritage Foundation Plan to address problems related to our long-term national debt, Senate Democrats and liberal think-tanks have not come up with debt-reduction plans of their own that are consistent with their values and indicative of the vision they have for the futures of all Americans.  
     The Democrats' plan seems to be having the Senate come up with a compromise plan with Senate Republicans that will, then, be further compromised with the House approved Ryan Plan.  A 50-50 compromise in the Senate would become a 25-75% compromise by the time something is agreed to that will pass both houses.  
     That's right:  25% is likely all the President and fellow Democrats can get from Republicans.  Whether "the people" knew it or not, that's what they asked for last November, either with the votes they cast or with the votes they failed to cast because they failed to vote.   Democrats are mostly the blame, however, for not persistently and emphatically pointing out to supporters and potential voters both the possible and very likely consequences of not voting.
     Republicans, emboldened by last year's elections, will not approve paying the nation's bills (they will even risk devastating the world's economy) unless Democrats surrender.  The resulting legislation will be a longterm social disaster,         
     But President Obama cannot lead where this Congress doesn't want to go.  And with Republicans controlling the outcomes in both houses of Congress, Obama can either lead the nation where Republicans want to go, or refuse to lead at all, and allow voters to decide next November what they want.  We can hope, that in the meantime, Democrats and Republicans agree on a strategy to recover from an even worse economic condition than the one they are presently unable to resolve.
     But the 25% that Republican concede doesn't have to be that bad if it includes things like: extending the Bush tax cuts for the middle class, not touching Medicaid and student loans, extending unemployment benefits through 2012, means-testing Medicare and Social Security, and earmarking cuts only for areas that can be tolerated until voters in 2012 get perhaps their last chance in to get it right, and eventually repeal the disastrous legislation that likely must be approved this year.  
     As America moves from where we are to where our economy and our politics are that change must be considerate of the potentials for human pain, and assure that pain is born in proportion to people's ability to endure and emerge from it as better people, with a plan that sustains economic recovery and promotes political integrity.  Big business and politicians who serve the wishes and needs of their constituents have the collective ability to make such a win-win recovery a reality.   But where the wishes and need of people are secondary, big business and their politicians can bring this country to its knees.  
     The past ten years have found democracy in America trending toward oligarchy or something resembling it.   As peoples of the Middle East and the rest of the world seek to embrace the hopes of democracy and the blessings of liberty, Americans find themselves in a battle to hold on to their own.

Ronald
EMail:  rcspoon@earthlink.net
Blog:    ronaldspooner.blogspot,com

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