Pessimism v. Optimism

[kandrathe]

Hi,

Before the Spam delete:)

I was a Pessimist pre Obama, soon after Obama became the MAN I became an Optimist. Now that we have a 4th Party "the Party of NO & TEA" I'm a Pessimist again :(

At my age this could give me a heart attack :P

It will not survive as a third party. The Tea party movement will evaporate unless it acts to give the Republicans the conservative populist spine to begin to massively cut back Federal spending. Of course, the other choice is to raise taxes like 250%. Simply put, we are spending 4 trillion (and growing), and income is now a little under 2 trillion. We have about 63.3 trillion in unfunded liabilities to spend on the baby boomers for their Social Security and Medicare costs, but the government spent all the money and there is not enough income to keep those promises anymore.

Before GWB I was naive enough to think the government would make little difference either way, now we've seen the worst of both sides and its getting worse not better. Now I'm just disillusioned in both parties. I'm wondering if the John Galt strategy "stop the motor of the world" is perhaps best, in that we thinking people all just need to go on strike and quit earning income for awhile. Perhaps the best strategy for surviving the next few decades would be to find a small out of the way place and return to self sufficiency and agrarianism. Yeah, tax my tomatoes. I'll deal in the commodity of food, rather than my rapidly depreciating US currency.

But, rather than just complain about what's wrong, I've been writing to my representatives and getting more active in local politics trying to talk some sense into them. I'm working on an idea with the libertarians here, which probably has a snowball's chance in Hades, but what the heck, you never know unless you talk to someone. Right? So, if we are going to implement a nanny state, there are options for doing it in a private market manner rather than just capitulate to big government tyranny.

My idea is that rather than all of us forking over X% per paycheck for social security, and Y% per paycheck into Federal run health care, and Z% for a bunch of other run away entitlement spending... How about we all just get a special account at a private bank which acts much like a IRA, or 401K. But, it also can be used to spend say up to $5000 per year on health care costs. Then, return health insurance to a *real* insurance plan with a $5000 deductible (the same as is allowed to be spent from your "personal care taking account". By *real* insurance, I mean the insurance company pays for things based on risk again. You don't have auto insurance that covers oil changes, right? If your head lamp burns out, you pay for that out of pocket usually. Currently, health insurance acts more like pre-paid health care. You pay $6000 per year for "coverage" whether you use it or not, so people keep using it for everything to get some value for their dollars spent.

But then, the non-profit group health insurance companies find the entire groups health care consumption went up as well as the prices for new technologies, treatments and drugs, so they have to jack the prices up again to remain solvent. Time to re-read Henry Hazlitt's book on inflation, and his book on the inflation crisis (even though we are some years before it will hit). Isn't it funny how we are right back at the mid 1920's again, and we've not learned a darned thing? In a nutshell, since the government's spending is with the most newly printed money, it has the most inflating effect. Ever stop and wonder why things like college educations are inflating so fast? Could it be because almost every college applicant receives some amount of federal grant or subsidized loan? Being involved now in the post-secondary education industry, I see it first hand.

So, why not use this account for college as well? Parents can open the account for their children when they are young and divert some limited amount of money tax free into their childrens future "life account". Now we have government out of taking money from everyone to pay for everyone's retirement, health care, and college education. With this idea, people would be in control of their own savings again in their own account, with the stipulation that it be spent on college when they are young, medical costs throughout their life, and after 65 (or 70), they can begin to draw a pension from it until they die (or it's drained). If they die with money to spare, their account gets divided up to the survivors life accounts. It also keeps the money out of the hands of soul less bureaucrats who want to spend it on useless projects to please constituents, or to export democracy to depose puppet dictatorships we created in some former intervention.

The difference with this "life account" is that it is your own money you are spending, so you will be frugal with how you spend it. You are contributing to your own health care and old aged fund, and then also I would recommend this be open for employers to divert their benefit contributions toward as well. A matching contribution for health care, as well as for retirement. There would probably need to be some controls on how the money is invested (bonds, etc.) to assure it continues to grow over time and doesn't disappear in some stock market bubble.

Now, I'm not so optimistic to think that everyone will be able to earn enough to keep their account in the black, and so the taxpayer would in the worst case scenario need to contribute up to $5000 per year to cover the HSA portion of their health care costs. This is where we take care of those who can't care for themselves and have never saved enough in their lives to pay for their health care needs. I expect the costs of taking care of only those who really need it to be under 100 billion. It's a big number, but its affordable socialism that won't destroy the world economy. The devil is in the details, and how one might migrate from the broken ponzi scheme we have now, into something sensible that brings power back to the people.