A Line In The Sand

Every member of the Federal political class is afraid of challenging the monsters of Social Security, Medicare, and Medicaid. Without a plan to rein in the costs associated with these old lions, the Republic cannot continue to function in today's economic atmosphere.

I offer here the outline of a plan. It is something, and if no one really, really likes it, it is probably be the plan that would work.

First, Social Security. I propose an age-level change. Enact it immediately. Any citizen above the age of 45 will receive the promised benefits regardless of income level unless said citizen opts out of the system, never to return. This is not a decision to be made without considerable thought, but the benefits to the individual are undeniable if one is willing to take responsibility for oneself and if one wishes to stop being kicked around as a political football every two years or so. I would opt out under the following conditions.

One, I would receive a tax credit for every dollar I had paid into the system along with interest accrued at 4% per annum. I haven't figured this out, but I suspect I'd have tax credits sufficient to cover my tax liabilities for years into the future because my tax credit idea includes vouchers for payment state and local taxes including property taxes and license fees for vehicles. The Feds would write a check to the political subdivisions to cover the cost. Simple.

Two, I would require the employer of the individual to contribute 4% of the employees' gross wages to a self-directed IRA for the employee. The present rules would continue to apply to the IRA. The employee would be required to match the 4%. The immediate benefit to the economy is the 7+% in additional payroll tax savings that employer and employee would keep. What a shot in the economy's arm!

Three, I would allow individuals to remain inside the present system. Either decision, once it is made, is irrevocable for eternity which is a very long time.


This is pretty simple. I don't think it's a budget-busting idea, but I don't have the advantage of ordering a Congressional Budget Office analysis for it.

Everyone knows how accurate those CBO numbers are.

As for Medicare, allow folks above the age of 60 the option to stay in the present system or to opt out to receive vouchers to buy their own coverage at market rates. Simple. Under 60, you get the vouchers starting right now. Buy the coverage you want, and you get a tax credit for any money you spend above the value of the voucher.

Medicaid is the animal that should actually die. It is nothing if not a prescription for abuse and eventual bankruptcy of every agency that it infects. Get rid of it. Save the states and Feds the money. The resultant savings would allow states much flexibility in the care for their own citizens, and state legislators are much easier to hold accountable than the barons who run Washington, D.C.

Add you own ideas, or call mine crazy. If we citizens don't talk and act, nothing will happen. Just look at the paralysis in today's legislatures.