There is something interesting going on right now in our polarized country.
We have Paul Ryan saying that we have an unmanageable debt crisis and so we have to cut taxes, cut spending, repeal healthcare reform, and privatize Social Security and Medicare. Only one of those four (cut spending) has any direct relationship to the deficit at least for the next ten years.
We also have President Obama agreeing that we have an unmanageable debt crisis and so we have to raise taxes, cut spending, expand healthcare reform, and keep Medicare and Social Security largely unchanged. The President is doing a little better here. Two of his proposals will have a direct impact on the deficit over the next ten years (taxes and spending).
When you look at the polling data, it’s clear that the American people want both lower taxes AND continued government spending.
That’s why fringe candidates like Donald Trump are doing so well. He claims to have a pocket full of magic beans. These are the same beans that helped Trump amass his personal fortune. He is now offering to use his beans for the benefit of the American people. Those beans will bring business savvy to government. Those beans will allow the American people to continue to enjoy the government services, entitlement programs, and low taxes that the American people want AND magically bring down that nasty deficit too.
The reality that we all know from that Jack and the beanstalk story is that there are unanticipated consequences to planting those magic beans.
The same thing is true here.
Donald Trump’s real appeal is that he may know something we don’t and be able to get us out of this financial mess. The reality is that Donald Trump knows nothing about how to run a government, much less represent the wealthiest and most powerful country in the world. What he does know, however, is how to use influence and celebrity to make money and that’s just what he is doing here. He doesn’t honestly believe that he can be elected President. He is just taking advantage of an obvious opportunity to get lots of free TV and press coverage by pandering to the worst instincts in the American electorate. All it took was a lot of ego, media smarts, and the promise of a few magic beans.
The truth is that only people who can get us out of this mess are us.
That’s only right too because we were the people who got us into this mess because we believed the last “magic bean” story that markets could regulate themselves and that Dick Cheney was telling the truth when he said “Deficits don’t matter”.
We have to raise taxes on everyone to increase government revenue.
We have to cut big ag, big oil, and all other big business subsidies that represent the worst of pork barrel lobbyist politics.
We have to cut defense spending in a major way and wind down our occupations of Iraq and Afghanistan.
We have to raise the salary cap on Social Security to cover the baby boomer retirement bulge.
We have to add a means test to Medicare so that it remains available to those who can’t afford other care, and is not abused by those who can.
We have to continue to invest in healthcare reform. We’ve taken the first step in universal coverage to reduce the cost of we all share now for care for the uninsured. We need to take the next step which is to transform the re-imbursement system from one based on transactions on to one based on outcomes.
We have to reward those people who take responsibility for their own health with lower insurance rates. We do that by forcing those who abdicate responsibility for their own health to bear more of the burden for their own care. This would introduce a financial penalty for those who engage in behaviors that damage their health (drug abuse, alcoholism, smoking, obesity). Hopefully we’ll also have the compassion to offer services and support to help those who want to overcome their addictions.
The Medicare and Medicaid problem is not a spending problem. It is a demographic problem and a business model problem.
There is little we can do about the demographic problem of aging baby boomers. It is just a reality. But part of the end of life expense (where roughly 80% of a lifetime’s medical cost is spent) CAN be mitigated through healthier lifestyles and support for end of life options like DNR’s, durable medical directives, healthcare surrogates, living wills, and access to hospice care. The right viciously attacked provisions of the healthcare reform act which funded educational efforts around end of life choices, but it is the right of every person to be aware of their choices and how the medical establishment will respond if there are no expressed preferences.
The business model problem will continue to be a problem until we are able to change the re-imbursement method from transactions to outcomes.
Fortunately there is at least one budget alternative to what has already been proposed by Democrats and Republicans which embraces many of these options.
In the meantime, if we can at least stop believing that a handful of magic beans in the pocket of a Prince Charming will solve our problems and start believing that we have to do this ourselves, we will have taken a significant step in the right direction.