Monday, March 10, 2008

Remember Perot? 1992? "shared sacrifice"?


So hear we go. Remember the 1992 election? Ross Perot entered the race, dropped out, and re-entered? He talked about “the American People” and hinted that they needed a lot more discipline, which he called “shared sacrifice”. If he hadn’t thrown a tantrum in the middle of the year, he might have won. Democratic candidate Paul Tsongas, who also dropped out, had made similar comments.

It seems like no candidate can run on talking about sacrifice. No, candidates make great-sounding rhetoric and then demand the sacrifice later, like Woodrow Wilson, and then FDR. No, George W. Bush never quite did that. John McCain, back in 2001, said something to the effect that individuals need to find causes greater than the self.

Nevertheless, the idea of “shared sacrifice” or at least responsibility sounds like it could become a foundation for resolving health care and pension crises. The Republicans do have a point in suggesting using pre-tax dollars for retirement accounts (eventually replacing social security), and health spending and premium accounts of various composition (perhaps someday replacing Medicare). It’s even possible to imagine pre-tax dollars for long-term care insurance accounts or “filial responsibility” accounts.

There may not be that much difference between this concept (perhaps one that McCain will advance in the campaign) and Hillary’s concept of mandatory health insurance, with some Massachusetts or California –like system to help low income people buy insurance. But, of course, that proves the point. Many people don’t make enough money to be able to afford all of the premiums and saving deposits, even pre-tax. Inevitably, some sort of system comes up to make the high-income (or “rich”) people pay more; perhaps with taxes, perhaps with premiums graduated based on income. Without doing something like this, the taxpayers wind up footing the bill for charity care anyway, the argument goes. And that would be right.

There’s a lot of good from this pay-as-you-go approach. It’s appropriate to have some health care consulting companies like The Lewin Group run some numbers and econometric simulations to predict what will happen. Along the way, we should figure out how to get in network discounts to everybody. And we should take a hard look at whether we should keep counting on employers to become the intermediaries for collecting health insurance premiums when other countries that we compete with don’t do this. No matter what, however, there will be enormous public costs covering those who did not or could not pay into a contributory system. We already know this from the debate on social security.

And this seems like “the worst of times,” as Americans reeling from the effect of what seemed to by a Ponzi scheme of mortgages. Yet we seem to have the same thing with our retirement and health care.

While we’re on the topic of “shared sacrifice,” at least Barack Obama is on a promising track when he promises carrots – tuition assistance – for national service. But, look at the recent report that the military GI bill today is woefully inadequate. And we all know, now, the arguments and counterarguments about the “back door draft” and whether military conscription could resume. And, of course, if it did, what would happen with “don’t ask don’t tell”? (Hopefully, Meehan’s bill would pass.)

Finally, the whole idea of “sacrifice” – or perhaps raised levels of interdependence – come up with these enormous problems of possible pandemics and most of all global warming. Will individuals be tracked for their own “carbon footprints”? Juliet Eilperin has a disturbing front page story in the Washington Post this morning (March 10 2008). “Carbon output must near zero to avert danger, new studies say,” link here. We’re competing with China and other developing countries person by person in our use of fuel resources and carbon emissions.

There’s a lot to take in.

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