Many who are successful attribute it to their ability and hard work. That is often true, but most Americans also owe their success to the opportunities, education, and resources that our country provides us – and also to good fortune. Our country provides safety nets so that no matter how fortunate or unfortunate a person is in their life, they will receive healthcare and not be destitute in old age. Those safety nets are often called “entitlements programs “, and that is true. We all pay to support those programs through taxes and contributions and we are all entitled to the benefits. Those who do not need the safety nets, or who do not wish to pay their share, often want to reform them in ways consistent with their self-interest.
In the Tulsa World article, “Social Security, health care reform needed”, John Brock lays out a plan to remove government from managing retirement funds, Social Security, workers compensation, and health care. Mr. Brock says “the solution to our government’s problems is to empower people to manage their own affairs.” Though empowering people sounds good, the article is based upon questionable assumptions.
The first assumption is “that the government is controlling our lives more and more.” That is a common theme in politics these days, but hardly true. We democratically elect our representatives and leaders, and we have much more control over our government than probably any other country in the world.
The second is “having a government manage these necessities is risky. “ He points out that Greece, Spain, and a number of state and local governments are having financial problems. That’s true, but is not necessarily because of their entitlement programs. Many of the problems stem from the fact that the wealthy have found ways to reduce or avoid paying taxes. He goes on: “For decades governments have been taking on future obligations without making provisions to cover the costs.” However, in many cases, provisions were made to cover the cost but later tax cuts reduced the expected revenues. Then, there are many who do not think that teachers, policeman, fireman, serviceman, and other government employees are worth the retirement funds provided them.
The next assumption is that Social Security “will default in the near future”. The Social Security trust fund is adequate to pay benefits through 2023, and raising the FICA cap could extend it through 2080. The Social Security Trust Fund is invested in US Treasury bonds, which earn interest and are as solid as theUS government. We are lucky that Social Security was not privatized in 2006, as the recession would have wiped out much of our retirement savings.
The final assumption is that we all have the time and the expertise necessary to deal with the work that Mr. Brock’s plan would require. Those who are wealthy and lucky would certainly profit from managing their own accounts, but those who lack expertise or are not lucky may end up with no medical care provisions or retirement funds.
The idea of insurance is to spread risk and the larger the population, the less expensive and more reliable insurance is. Spreading the risk over every citizen increases the efficiency and provides a safety net for everyone. We are lucky to live in a country where we enjoy the benefits that self governance and cooperation affords us. We should resist efforts to remove programs which provide our safety nets from government management, particularly if it makes them less reliable or managed by those who desire to profit from them.
(c) 2012 J.C. Moore