Tea Party-Two Party

Guilder’s Guide to Greatness: Part 2

February 24, 2010

Continued from Part 1


Neither coercively-enforced Medicare nor Medicaid would be necessary if we removed many of the stifling administrative regulations from the health industry that separate the doctor from the patient and drive up costs. Florin assumes that if the omnipotent government got out of the health business, that pestilence would immediately sweep the land. However, if we removed many of the bureaucratic roadblocks that hamper the creation of low-cost, private health clinics and charitable organizations such as religious hospitals, we could fill the vacuum of Medicare and Medicaid without the fiscal time bomb that is strapped to our budget now. Many criticize the inefficient bureaucracy of HMOs, or Health Maintenance Organizations, for the distance they create between doctor and patient. I completely agree with these critics. However, most don’t realize that it is our friend Uncle Sam that subsidized these inefficient behemoths to give them market dominance through the 1973 HMO Act. I wish more people could see that the proposed “solutions”—increased Medicare, Medicaid, and the proposed Obamacare overhaul—have the same root causes of the healthcare mess we are in now. Try looking at it another way: out of our entire health system, plastic surgery is the sector with the cheapest costs. Why? Because plastic surgery is the least regulated area of the health industry. Conversely, plastic surgeons are one of the few groups of doctors who haven’t seen the large salary reductions of the rest of the industry in the past decade.

In addition to these solutions, the health insurance industry, another widely criticized area of our health care system and justification of Medicare and Medicaid, could be easily and quickly improved in the following freedom-boosting ways:

  • Allow the purchasing of insurance across state lines—widely advocated by fiscal conservatives, the Democratic Congress refuses to include it in the healthcare over hall. Allowing real free market competition in the insurance markets will reduce many of the flaws of our current government-subsidized and restricted system.
  • Like in every other insurance industry, medical insurance should only need to be used when something bad happens to you, like breaking your leg or being diagnosed with cancer, not in order to come in for routine checkups. Medical clinics that allow cash payments rather than insurance tend to have lower overall costs. Ron Paul mentions one such clinic in Tennessee that I can bring up in comments.
  • Establish tax-free medical savings accounts, much like the 401k system, which can be used to save up for unforeseen medical expenses as well as routine costs.

Guilder’s Guide to Greatness: Part 1

February 24, 2010

Hey readers, this was originally part of my post on the budget freeze, but I decided to post it separately to keep things short enough for one sitting. Hopefully you will see that my perspective is not that of a mere “ivory tower” theoretician, but someone concerned with the effects of policies on the day-to-day lives of average Americans.

Social Security Reform

Our current Social Security practices are quite frankly asinine. Our “pay-as-you-go” framework is glaringly vulnerable to population fluctuations, as the current baby boomer crisis has shown. Now that there are more seniors retiring and fewer working people to pay their Social Security dues, the system is becoming insolvent, and a generation of workers will be compelled to fork over unprecedented levels of income to the government in order to pay for a flawed system. Why? Because they happened to be born after the Great Society hysteria of the LBJ administration, the period during which the belief that the government could magically erase problems with giant, fiscally draining programs abounded.

A much better alternative to our system would be to expand our current 401k system, in which individuals are responsible for their own savings. The government’s 401k program works by automatically deducting a percentage of you paycheck into a tax-exempt savings fund. If the government offered a voluntary, expanded 401k system, it would not have to tax Peter to pay for Paul’s retirement, as each citizen would be responsible for their own savings. Those that chose not to opt for the system could save privately, but society would not be expected to support them if they neglected to save. The main advantage of an expanded 401k system is that it would be MUCH cheaper to maintain than the current Social Security System, as individuals would earn their funds over the course of their lives, rather than having them supplied by other taxpayers. For all the whining I’ve heard from liberals about Obama’s cuts for programs for the poor, education, etc., I’m irritated that they don’t realize that their policies (government intervention in the economy through bailouts/stimulus packages, and fiscally unsustainable programs like Social Security) have put us in this situation in the first place. It irks me when liberals refer to conservatives as being the voice of “No” when they plainly reject all alternatives and assume that anything that gets done is their own idea.

Continue to Part 2

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