If you have knowledge, let others light their candles at it.
Margaret Fuller
"Baby Joseph" Maraachli, RIP: 1/22/10 - 9/27/11
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| Photo Courtesy of Lifesitenews.com |
I also want to express appreciation for the related efforts of Fr. Frank Pavone and others from the group Priests for Life, for helping the Maraachli's stand up to the heartless Canadian government and medical establishment, which had effectively sentenced young Joseph to death in a cold, sterile hospital, instead of being allowed his unalienable right to live, the priceless gift of additional months in the warmth and comfort of his home and the loving arms of his parents.
There is little doubt, as we consider an all but fiscally bankrupt US government taking on unsustainable ObamaCare and trying to push even more health service mandates on an already inflation-bound system with a limited health practitioner pipeline and accelerating requirements to accommodate an aging population and hence facing inevitable decisions on how to contain costs, that these kinds of unconscionable decisions may soon be coming to an health care provider near you, unless and until the US Supreme Court puts an end to unfettered, megalomaniac, unconstitutional federal government empire building. There is a difference between sheltering households from unmanageable costs associated with catastrophic health conditions and underwriting ordinary health related expenses, like birth control bills, annual checkups, etc. We need to avoid morally hazardous scope creep stretching into the middle class; we must vest patients (e.g., by cost-sharing) into a more sustainable health care system, into not treating providers, medications and tests as "free" resources, by engaging in healthier lifestyle choices, etc. We must have medical malpractice tort reform in order to stop redundant, unnecessary "cover my ass" defensive medicine. Government policies and micromanagement of the health care industry are a major part of the problem, not the solution; how a government which can't even balance its own checkbook can be trusted to "improve" the health care system, far beyond its level of competence, is beyond me.
Social Insurance: Some Comments
Isaac Max Rubinow, whose life spanned the turn of the twentieth century, wrote a number of relevant books including Social Insurance. He traces the evolution of social insurance through European social legislation in the latter nineteenth century, in particular Germany. Social insurance, earlier termed "workingmen's insurance", "emphasizes...the policy of organized society to furnish ..protection to one part of the population". Perhaps at risk of oversimplification, we can broadly classify social classes in terms of poverty, wage-earners (hourly), lower middle class,..., large property-holders. The primary focus of progressive legislation was on wage-earners: their pay usually did not yield much discretionary income or allow for significant accumulation of property (e.g., rainy day savings, retirement, etc.) Moreover, the work was often physically demanding, and the wage-earner only got paid for his hours of work, so if he injured himself, got sick, or was unable to keep up the pace of his work due to aging and a body breaking down under physical strain for decades, it was too easy for him and his family to drop into poverty. Even if he was able to work, he was still highly vulnerable to changes in demand for labor (e.g., recessions). (Note that under times of economic distress, wage-earners can find themselves competing with workers migrating from higher classes, e.g., a laid-off salaried employee whom cannot find an alternative salaried position.
We can broadly categorize relevant legislation by type of employment impairment: short-term (industrial accident, illness, unemployment compensation), long-term (old age, disability), or permanent (survivors). Early legislation focused on short-term impairment. Other reforms (e.g., pension) were more controversial because, for instance, old age is more of a natural stage of life than a random event.
There were different phases for providing insurance to the target population, particularly with respect to wage-earners: education (e.g., help with personal finances and establishing a savings plan), a non-profit social insurance option (e.g., making premiums more affordable by eliminating commercial profit markups), coverage of overhead/administrative costs, and then cost sharing (government partial or full premium subsidies and/or mandated employer and/or worker premiums (employee share of premium costs). There was also a phased roll-out to classes of employees: industrial, farmer, commercial, and others.
Rubinow readily admits that social insurance does not meet the actuarial standards of commercial insurance, and there are paternalist aspects to it (e.g., mandatory contributions, because many employees will not voluntarily pay even subsidized costs). There are, of course, all sorts of moral hazard for individuals not paying the true cost of their insurance (e.g., prudent work behavior, healthy lifestyles, migrating to an area with more work opportunities, saving for retirement, working beyond a retirement age even when healthy, etc.)
There are a number of objections one could make to these original progressives, of course, beyond the questions of moral hazard. The profit motive provides a natural incentive to improve costs, including administrative. The private sector has a natural incentive to gain market share by lowering price, given the supply/demand curve--including markups. There is no natural incentive for the state to improve efficiency since it could increase taxes or print money; it, by nature, is a monopoly. Companies have to pass along their costs to remain a viable going concern; a state typically finds political resistance to increasing premiums or decreasing benefits.
Today's variations of social insurance have evolved beyond the idealistic intentions of progressive legislators. For example, I know a relative (not blood) whom turned down an opportunity to take a part-time job at a nearby university because he or she could clear more from unemployment compensation. We have healthy individuals filing for public sector retirement in their mid-50's (or even earlier) from white-collar jobs; we have some enlisted personnel in the military retiring at half-pay for life in their late 30's. We have all sorts of Medicaid/Medicare fraud, the nature of which does not exist in the private sector. We have entitlement funds (social security/Medicare) with some $50T in unfunded liabilities..
The libertarian George Mason University economist Walter Williams recently penned a column called "Gov. Perry's Right About Social Security". (This deals with Perry's famous reference to social security as a Ponzi scheme.) I did want to point out a few points raised during the column, not the least of which was to list 3 Nobel Prize economists whom have called social security a Ponzi game/scheme. But he quotes social security documents which, at the very least, misled the American people by, for example, implying a ceiling in contributions, that you had some vested account: "the checks to you are a right".
The Nestor decision (below) asserts that there is no Fifth Amendment property right, the Social Security promise of benefits is not a contractual right. Nestor had paid 19 years into social security and was deported for being a Communist a year after becoming eligible for benefits. The social security law excluded deported Communists from payment. Whatever Nestor's ideology (as a conservative/libertarian, I have zero patience with Communist ideology), but this 5-4 decision was WRONGLY DECIDED.
My biggest takeaway from the column was his quoting 1937 and 1960 Supreme Court decisions:
- "Employee and employer [FICA] taxes are...not earmarked in any way." (Helvering v Davis)
- "To engraft upon the Social Security system a concept of 'accrued property rights' would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands." Flemming v Nestor
The Nestor decision quote is judicial spin worthy of a Barack Obama speech.
As to the Helvering decision, it said social security was NOT a contributory insurance program. (This is a ludicrous state of denial of the plain truth; even FDR would consider it a form of social insurance. Some justices must have eaten mushrooms with Alice in Wonderland.) Social security is a type of annuity, an insurance company product. In theory, the government takes on the risk that you will outlive your retirement savings in the form of payroll contributions on your behalf into the system. (In reality, there is no savings account in your name, of course, because social security is a pay-as-you-go scheme.)
Remember what George Bailey said in It's a Wonderful Life when there is a run on the savings and loan just as he's getting ready to go on his honeymoon?
You're thinking of this place all wrong. As if I had the money back in a safe. The money's not here. Your money's in Joe's house...right next to yours. And in the Kennedy house, and Mrs. Macklin's house, and a hundred others.What would George Bailey say today if he was the Chief Actuary of the Social Security Administration?
You're thinking of this place all wrong. As if I had the reserve fund investments in a lockbox, out of the hands of big-spending politicians, with liquid, diversified positions in dividend-yielding Blue Chip stocks, strong growing mid-caps and small-caps, commodities, and/or high-rated corporate bonds. No, your money's in AIG. And in Fannie Mae. And in Freddie Mac. And in Government Motors, where Chevy Volt sales are hot. (Not in sales--just 302 in August, but we now have first responder fire and rescue crews outfitted with Chevy Volt safety tools.) And in Solyndra, And in below-water government-backed mortgage backed securities. And in nearly $15T of other government "investments" in past spending.Musical Interlude: My Favorite Groups
Fleetwood Mac, "Hold Me"
