Not Swimming but Living in Pools

It seems painfully obvious that as Social Security/Medicare safety nets run out of cash, the U.S. Supreme Court considers whether or not Congress has the constitutional authority to mandate health insurance, as small employers and the self-employed opt out of or cannot afford pension and healthcare benefits, something’s gotta give. Some estimate that one third of Americans rely solely on Social Security for their retirements, at a time when Congress is struggling with ways to cut those benefits beneath the bone. With a graying population and a serious erosion of required skills in the changing labor market – accompanied by the greatest cuts in training and educational programs in modern history – it also seems obvious that the coming generations will not have the ability to perform work at the same high rates of pay necessary to fund these social benefits for the elderly. A perfect storm is brewing with pain and misery in the headlights.

If the government cannot fund these mandates and create affordability for those who need it most, we have to look at alternatives. We have to be willing to open the door to competition in places where lobbyists have been able to shut the door. One of the greatest examples of such anti-competitive statutes is the prohibition against Americans from accessing pharmaceutical prescriptions from European or Canadian sources on the grounds of “public safety” or to support “research.” I don’t know about you, but when it comes to sanitation, I’ll take any large city in Switzerland over any large city in the United States. We cannot afford to continue a corporate social welfare state, protecting bloated American pharmas on the backs of the poor and the elderly, pretending that we believe in a free market while imposing absurd anti-competitive barriers that make our prescription drugs among the most expensive on earth.

We also need to enable masses of people to pool their resources – the original concept behind insurance and even Social Security – to create affordable healthcare and alternatives to current pension structures. Unions traditionally offered benefits to their members, from health insurance to retirement programs. But today such collective bargaining units have a declining power base and reduced membership, and there appear to be limited alternatives where companies simply do not provide such benefits anymore. There are, however, some unique ideas floating out in the ether.

One of the more interesting ideas is getting the states or municipalities to serve as pooling sites for smaller companies that really don’t want to deal with the complexities and requirements of running approved pension plans for their workers. New York City is looking at such a plan, and “[l]awmakers in Connecticut and California have introduced bills to either study or create such a program and the Pennsylvania state Treasurer has expressed interest, although he has no power to introduce legislation himself… At the heart of the proposal is something called a cash-balance pension, a hybrid that combines features of a 401(k) plan with those of a traditional pension plan. Workers can watch their benefits grow each year as an account balance, but the assets that secure the benefits are held in a pooled trust.

‘The structure could be attractive because it would be flexible — employers could reduce the rate of increase during recessions, saving money and reducing the chance of a runaway pension obligation. But the idea could be controversial, because the role of managing the money would fall to state pension systems, now under fire in many places for their handling of city and state workers’ pensions. Republicans have tended to see the idea as one more manifestation of ‘big government.’” New York Times, March 26^th.

Regardless of how you feel about government involvement in such programs, the accelerating number of Americans below the poverty line (25% of us) or in the low income category (the next 25% of us) does not mesh well with a society that is getting older and less-skilled. If pools of homeless people, which may include your parents and grandparents someday, are not attractive to you, the time to deal with such issues now. And if we don’t have the money to provide additional government programs, we at least have to facilitate more private solutions.

I’m Peter Dekom, and we need to vote out politicians who are more focused on the next six months than the future of America.