By David Bradshaw, Editor, RMP
May 15, 2009
Now is the time to explore serious, alternative free market solutions to fix our broken Medicare and Social Security system, instead of asking Americans and their employers to embark on a grandiose experiment in socialized medicine. Such an experiment could drive federal taxes up by 80%.
“House Democrats are weighing an expansion of the government’s role in health care that would include a mandate that employers provide coverage to all full- time workers or pay a percentage of their payroll to the Treasury,” reports Bloomberg News.
“It sounds to me like the government is about to mandate participation in the biggest Ponzi scheme since The Social Security Act of 1935! “ says Swiss America CEO Craig R. Smith.
WATCH: "Forcing Employers to Pay for Heath Care Will Kill Jobs" -Craig Smith live on FOX Cavuto - 5.-15-09
“The prospect of government mandating employers to provide coverage to all full- time workers should terrify business owners. The idea of forcing employers to pay for a government run health care system or pay the equivalent to the Treasury. What is the difference? This is going to cost jobs at a time when can least afford to lose them,” says Mr. Smith.
"Federal income taxes for every taxpayer would have to rise by roughly 81% to pay all of the benefits promised by Social Security and Medicare under current law over and above the payroll tax. The total unfunded indebtedness of these government program comes to $106.4 trillion,” reports Forbes.
“What we are facing is not just a health care crisis, but a looming government revenue crisis. It’s a double whammy. As the Social Security surplus disappears, it forces us to confront the true size of our deficits. Unless we can find a workable fix in the next decade, all those IOUs will have to be paid back by the next generation,” says Mr. Smith.
CNBC reports “Obama's 'Public' Health Plan Will Bankrupt the Nation… Does anybody really believe that adding 50 million people to the public health-care rolls will not cost the government more money? About $1.5 trillion to $2 trillion more? At least. So let’s be serious when evaluating President Obama’s goal of universal health care, and the idea that it’s a cost-cutter. Can’t happen. Won’t happen. Costs are going to explode."
President Obama declared this week “the stars are aligned” to pass his health care agenda this year, with the legislation set to begin in the House of Representatives in July. “We’ve got to get it done this year. We don’t have any excuses,” Mr. Obama said.
Meanwhile this week Reuters reported the Social Security and Medicare retirement and health programs for the elderly will run short of funds sooner than previously thought because the recession has taken a toll on tax revenues.
“The Social Security trust fund will be exhausted by 2037, four years earlier than previously estimated, and the Medicare hospital trust fund will become insolvent by 2017, two years earlier than estimated, said a report by the trustees of the two popular programs.” -Reuters
Proposed Free Market Solutions
Every year consumers pay more and more for healthcare. About 50 million American have forgone coverage due to the astronomical price of premiums. Businesses are also hemorrhaging under the weight of rising costs.
The Medicare and Social Security crisis requires a substantial overhaul of the system. It's time to get the government's hands out of our pockets and instead allow the free market privatization of our retirement options. Great Britain and Australia have both proven privatization of Social Security to be successful. Privatization produces; more income, boosts private savings, triggers economic growth and minimizes tax burdens.
“Government barriers to free trade stifle competition, with disastrous results. The absence of robust competition artificially inflates the cost of insurance, preventing millions of Americans from purchasing affordable coverage. This shifts the cost burden to those who pay for insurance and to government programs. To reverse this, competition must flourish,” reports Michael Ciamarra, a Fellow with the Center for Health Transformation.
“One approach the president may want to explore is a targeted new take on an old national standby--the savings bond. It's a proven method for financing. It's something many Americans are familiar with. And if it's structured properly--to give bond buyers a real piece of the budget savings that health care reform is expected to produce--a new form of Health Savings Bond could be well-matched and well-timed for this specific enterprise,” reports Dan Gerstein at Forbes.com.
Last time health care reform was up for serious public debate in 2004, we supported CATO Institute's Social Security Choice plan calling for half of the payroll tax (6.2%) to fund existing retirees and to allow individuals to divert the other half into privately invested accounts.
Now is the time for financial accountability America! Let your elected leaders know how you feel. If you would like a complimentary copy of our Special Report “Social Security: The Problem and Proposed Solutions”. Part I of this Special Report is posted here.