Thursday, October 17, 2013

High school students studying for a US government test: here is what you need to know, here is what the teacher will ask (about the "budget deal")

Do I think this food fight will happen again this winter?  I hope not, but let’s just review a few concepts.

First, I think high school seniors taking government classes this year know what will be on the test. They are terms like “debt ceiling”, “sequester”, “Patient Protection and Affordable Care Act”, “Hastert Rule”, “discharge petition”, “cloture” "pork", "earmarks", "gerrymandering", and “filibuster”.  I would love to have subbed a government class during the shutdowm. Teachers, have at it.  They’ll even be on the SOL’s.  Rather than matching or multiple choice questions, I’d like to see free response, letting students explain in their own words what these terms mean and why they can become significant to the well-being of everyone.
Should the debt ceiling law be removed?  The Wall Street Journal has argued that it actually acts as a brake against majority rule.  (What if the “majority” insisted that all bloggers have liability insurance, using the example set by Obamacare?) 

But the mere existence of the ceiling logically implies that there is always the possibility of default, particularly that some entitlements, especially Social Security payments for “better-off” retirees, could even stop forever, according to scenarios I outlined on my Retirement Blog Oct. 7.  Others, including the conservative Washington Times, argue that unpopular foreign investors, like China, could get cut off by angry politicians. And guess what, despite Obama's "no negotiations", there is pork in the final bill that he signed. 
I think there is a better way.  Have a law, or even constitutional amendment, that limits future spending (that is, any spending that creates obligations that do not yet exist on the books) as a fixed percentage of GNP, or even a slightly variable percentage.  The only exception would be declared war or some kinds of natural catastrophes or WMD terror attacks.  The sequester is a bit like that, but not completely. (Teachers – that makes another good essay question for a test.)  As for entitlements, benefits already imputed by previous FICA and Medicare taxes, and determined by actuarial present value computations (with due allowance for elements that truly are just “premiums” like disability) should be considered as already enforceable debt obligations.  That is, as for already owed debts, seniors should be on the same playing field as China. Similar concepts should apply to veterans’ benefits and military and federal worker and contractor pay for work or service already performed.  But other entitlements, like Medicaid and various safety net programs, could become vulnerable, and the role of social capital, family, and volunteerism as a moral expectation needs to be on the table, too.

The “individual mandate” portion of Obamacare could be cushioned by subsidies, but then that tends to add to new debt.  The fact is, young adults are better off if they are properly insured.  In the real world, tragedy can happen even for a college-age Clark Kent or Spiderman. (“With great powers come great responsibility.”  And, yes, Bryce Harper and RG-III have health insurance.)  I think that GOP ideas of “ownership” of health accounts, much like retirement counts, as a replacement of the individual mandate. Could be worked into the discussion. The inducement for employers to go part time in service businesses sounds serious and needs real attention.  OK congressman James Lankford told a story of a husband and wife who, owning franchises, were forced to divorce to be able to afford Obamacare for their employees.  What an irony for the “heterosexual marriage debate”.  

No comments: