Republicans Say Medicare Threatens National Solvency: A View From the Perplexed

by George Kennedy on August 24, 2012

 

Republicans Say Medicare Threatens National Solvency: A View From the Perplexed

David Brooks’ “Guide for the Perplexed” left some moderate voters more perplexed.  What is perplexing is his belief that Medicare is THE entitlement problem of our times and thus constitutes the biggest threat to national dynamism and contributes to our national decline.

Brooks’s argument against Medicare is well timed to resonate with the current national political discussion on entitlement spending to show a direct correlation between entitlement reform and national solvency.  His argument, we believe, is too narrowly drawn and thus unpersuasive beyond a partisan conservative base.

U.S. national dynamism could be the framework topic for a larger, more complex discussion of which entitlement spending, or, more appropriately pre-paid benefit health programs, is just one area of important inquiry.  Americans would likely welcome this discussion.  However, the sound and fury of a divisive national political campaign is less ideal for a serious discussion on so broad and complex a topic.

National solvency entails more than a review of our national balance sheet.  Here’s why:  We are first and foremost a nation of values.  Budgets reflect our values and values reflect our priorities.  Let’s take Medicare.  Polls show that a majority of Americans, especially independents in key swing states, prefer not to “voucherize” Medicare.  The President is trusted when it comes to Medicare.  Scores of voters like the Medicare Program just the way it is because it is good value, more efficient, and cost effective than alternatives proposed by conservatives.  In fact, many seniors say it is one of the better programs administered by the federal government.

Brooks tells us that today, 47 percent of every dollar is spent on entitlements and, by 2030, 61 cents of every non-interest dollar will be spent on entitlements.  He goes on to say entitlement spending is crowding out spending on investments in our children and on infrastructure.  This spending, he writes, is threatening national bankruptcy.  Sounding the alarm, he goes on to suggest entitlement spending is increasing so quickly that there is no tax increase imaginable that could conceivably cover it.  Medicare, in his view, is the principal culprit.

Strengthening American Dynamism:  Brooks conveniently and blithely dismisses the impact of tax increases as a source of new revenue to partially offset rising costs of entitlement programs.  The case has been made that modest tax increases on incomes beyond $250,000, combined with tax reform would begin to generate additional revenues for infrastructure projects and new energy-saving technologies.  Moreover, offering tax incentives to create more jobs here at home would lower the unemployment rate, reduce dependence on unemployment insurance, and revitalize American manufacturing while increasing overall productivity.  GNP rises while increasing our ability to pay the interest on the national debt.  We begin to bring our debt under control.

Bringing down healthcare costs through regulatory reform as other major countries do reduces the cost of government healthcare and results in major savings to the taxpayer.  To argue otherwise is to suggest that current levels of inefficiency, fraud, and abuse among healthcare providers are acceptable because we are dealing with private enterprise.  Demanding reforms to lower costs is a third rail for conservatives and those elected officials dependent upon campaign contributions from large healthcare providers.

The insurance industry needs reasonable, but effective, oversight if premium costs are to be contained.  A growing number of Americans are aware that the quality of healthcare and accessibility to good healthcare in the U.S. relative to many other countries has declined while costs in the U.S. continue to escalate well beyond inflation levels.  Many Americans, including some in my community, travel outside the U.S. for high-quality, affordable healthcare by medical professionals trained in both the U.S. and Europe.

A national discussion on current and future solvency must include national defense.  National defense cannot be off the table.  It is legitimate to ask, how much defense is enough to guarantee our nation’s security?  Where can we institute reasonable reforms, cost saving measures, and greater efficiencies?  Conservatives demand this standard be applied to all non-defense and domestic spending.  Why is defense sacrosanct?  The arch-conservative Grover Norquist also makes the point that because something is labelled national defense does not mean that it is.

Conservatives war against public education only threatens state budgets and, by extension, our national financial picture.  Firing over 650,000 public employees increased unemployment levels nationally and necessitated greater political urgency for short term Congressional legislation to provide a temporary financial safety net.  Our unemployment rate would be closer to 7 percent had conservative governors chosen not to wage war against public sector employees in several states around the country.

There really needs to be a more honest and open national dialogue regarding how to address the question of American solvency.  If only we could leave our elected officials out of it.  Major financial institutions sit on hundreds of billions of dollars in assets they refuse to lend to small businesses – the prime employer of American labor – citing “economic uncertainties” as the immobilizing factor.  Trillions of dollars in off-shore accounts which, if repatriated, could function as non-government stimulus.  Some of those funds were earned here in the U.S.  The corporations involved just do not want to pay their fair share of taxes.

National solvency is a smorgasbord of issues and concerns.  The topic also presents a potential menu of missed or conveniently ignored opportunities.  Therefore, a meaningful discussion that produces a workable consensus requires a more integrated, less ideologically partisan approach if our goal is to improve U.S. national solvency and sustain American dynamism in the face of intense competition.

George Kennedy

George Kennedy is a retired senior Foreign Service officer with extensive international experience. He holds a B.A. from the University of Oregon and two graduate degrees from the Johns Hopkins School of Advanced International Studies in Washington, D.C. Mr. Kennedy was a political advisor to state and federal officials and has authored strategy pieces for Members of Congress and presidential candidates. He serves on the Advisory Board for the School of Social and Behavioral Sciences at the University of Arizona.

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