November 16, 2013


ENTITLEMENT REFORM, TEA PARTY STYLE : New CBO numbers leave no other choice (Peter Ferrara, American Spectator)

Real entitlement reform involves fundamental structural reforms that change the way the programs operate. Those structural reforms can introduce positive, pro-growth incentives that lead people to productive activities that promote financial independence, rather than counterproductive activities that promote only government dependency. Instead of those counterproductive activities subtracting from the economy, productive activities resulting from the reforms would contribute to increased economic growth and prosperity for all.

Instead of negative benefit cuts that take away from the poor and seniors, those reforms would result in higher incomes and benefits for the poor and seniors. Yet, such reforms would ultimately reduce government spending by far more than could ever be achieved by trying to slash benefits for the poor and seniors. Indeed, ultimately over the long run, these reforms would reduce federal spending by half from what it would be otherwise. And these are all tried and true reforms that have already been proven to work to produce these results in the real world.

Instead of Social Security encouraging people not to save for retirement, retirement can be based on savings and investment through personal accounts for Social Security and Medicare. Because a lifetime of savings and investment will always result in higher income and benefits than a lifetime of no savings and investment, these personal savings and investment accounts would pay higher benefits for retirees than Social Security even promises but cannot pay. Moreover, with personal accounts, each retiree would be free to choose his or her own retirement age, rather than politics and the government imposing one uniform retirement age on everyone, with market incentives to delay retirement as long as possible, to increase benefits.

But because benefit spending under these reforms are moved off the federal budget altogether, and into the private sector, the result would be the greatest reduction in government spending in world history. The ultimate, long-term goal should be to empower all workers with the choice of substituting personal savings, investment and insurance accounts for the entire payroll tax, displacing the tax entirely with a personal family wealth engine.

The personal accounts would also produce mighty rivers of new capital investment that would cascade throughout the economy, financing breakthrough innovation and cutting edge technologies that would further promote economic growth and prosperity, and leapfrog the American standard of living generations ahead. [...]

Similarly, Obamacare can and should be replaced with Patient Power and Health Savings Accounts that maximize power and control of the sick over their own health care. The market incentives of those HSAs have already been proven to powerfully reduce health costs in the real world. By expanding the same tax relief that now applies only to employer provided health care equally to everyone, health care for all can be assured, unlike with Obamacare, with no individual mandate and no employer mandate, a tax cut of a trillion dollars, and at least $2 trillion in reduced government spending.

Everyone would then choose their own health plan, including Health Savings Accounts if they prefer. The government would not be telling the Catholic Church it has to buy insurance that pays for abortion and contraceptives. If you like your health plan, of course you can keep it. It is all your choice. If you like your doctor, of course you can keep your doctor. It is again your choice. Joining the interstate sale of health insurance with medical liability reform and HSAs would result in the most powerful reduction in health costs ever. That would further promote economic growth and prosperity for all.

Posted by at November 16, 2013 5:08 PM

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