Healthcare and the Social Security Non-Crisis
The rapidly escalating costs of health care are threatening a serious fiscal crisis, along with immeasurable human costs. Infant Mortality in the U.S. is one major index. The UN Human Development Report 2005 reveals that "since 2000 a half century of sustained decline in infant death rates [in the United States] first slowed then reversed." By 2005 the rates had risen to the level of Malaysia, a country where the average income is one-quarter that in the United States. The report also reviews the effects of government programs. In the United Kingdom, for example, the rate of child poverty rose sharply during the Margaret Thatcher years, then reversed after the Labour government adopted policies to halve child poverty by 2010. "fiscal redistribution has played a central role in strategies for meeting the target," the report concludes: "Large increases in financial support for families with children," as well as other fiscal programs, "boosted the incomes of low-income working families with children," with significant effects on child poverty.
The financial crisis is surely is no secret. The press report that 30 percent of health care costs go for administration, a proportion vastly higher than in government-run systems including those within the United States, which are far from the most efficient. These estimates are seriously understated because of the ideological decision not to count the costs for individuals- for doctors who waste their own time or are forced to misuse it, or patients who "enter a world of paperwork so surreal that it belongs in one of Kafka's tales of the triumph of faceless bureaucracies." The complexities of billing have become so outlandish that the National Coordinator for Health Information Technology, the president's senior adviser, says when he gets a bill for his four-year-old child, he "can't figure out what happened, or what I'm supposed to do." Those who want to see government bureaucracy reaching levels that even Kafka might not have imagined should look at the official ninety-eight-page government handbook on the Medicare prescription drug plan, provided to Medicare participants to inform them of their options under the bill passed by Congress in June 2004, with the help of an army of lobbyists from pharmaceutical companies and health maintenance organizations (HMOs). The idea, the Wall Street Journal informs its affluent readers, "is that patients will be encouraged to bargain-hunt for medical care" and may even save money, if they can hire enough research assistants to work through the many private options available, and make lucky guesses. Health Savings Accounts, also welcomed by the editors, have similar properties. For the wealthy and the corporate beneficiaries the exciting new programs will be just fine, like health care in general. The rest will get what the deserve for not having ascended to these heights.
The Bush administration response to the health care crisis has been to reduce services to the poor (Medicaid). The timing was again impeccable. "As Republican leaders in Congress move to trim billions of dollars from the Medicaid health program," the Washington Post reported, "they are simultaneously intervening to save the life of possibly the highest-profile Medicaid patient: Terri Schiavo." Republican majority leader Tom DeLay, while proclaiming his deep concern forSchiavo and his dedication to ensure that she has the chance "we all deserve," simultaneously shepherded through the House a budget resolution to cut $15 billion to $20 billion from Medicaid for the next five years. As if the exploitation of the tragedy of this poor woman for partisan gain were not disgraceful enough, DeLay and others like him were depriving her, and who knows how many others, of the means of moral values and concern for the sanctity of life.
The primary method devised to divert attention from the health care crisis was to organize a major PR campaign to "reform" Social Security--meaning dismantle it--in the pretext that it is facing an awesome fiscal crisis. There is no need to review the remarkable deceit of the administration propaganda, and the falsifications and misrepresentations repeated without comment by much of the media commentary, which cooperated in making it the "hot topic" in Washington. Exposure has been carried out more than adequately eslewhere. The steady drumbeat of deceit has been so extreme as to drive frustrated analysts to words rarely voiced in restrained journals: that Bush "repeatedly lied about the current [Social Security] system," making claims that were demonstrably false and that his staff must have known were false(New York Times, Paul Krugman, 15 Aug, 2005)."
It is not that the system has no flaws. It surly does. The highly regressive payroll tax is an illustration. More generally, an OECD study found that the US system "is one of the least generous public pension systems in advanced countries," consistent with the comparative weakness of benefits in the United States.
The alleged crisis of Social Security is rooted in demographic facts: the ratio of working people to retired people is declining. The data are accurate, but partial. The relevant figure is the ratio of working people to those they support. According to official statistics, the ratio of working people to dependents (under twenty, over sixty-five) hit its lowest point in 1965 and is not expected to reach that level through the projected period (to 2080). The Propaganda image is that the retirement of the "baby boomers" is going to crash the system; as repeatedly pointed out, their retirement has already been financed by the Greenspan-led increase in payroll taxes in 1983. That aside, the boomers were once children, and had to be cared for then as well. And we find that during those years there was a sharp increase in spending for education and other child care needs. There was no crisis. If American society was able to take care of the boomers from ages zero to twenty, then there can be no fundamental reason why a much richer society, with far higher output per worker, cannot take care of them from ages sixty-five to ninety. At most, some technical fixes might be needed, but no major crisis looms in the foreseeable future.
Critics of Bush's efforts to chip away at Social Security by various "ownership society" schemes have proclaimed success because public opposition was too high to ram the legislation through. But the celebration is premature. The campaign of deceit achieved a great deal, laying the basis for the next assault on the system. Reacting to the PR campaign, the Gallup poll, for the first time, included Social Security among the choices for "top concerns." Gallup found that only "the availability and affordability of healthcare" is a larger concern for the public than Social Security. About half of Americans worry "a great deal" about it, and another quarter a "fair amount," more than are concerned about such issues as terrorism or oil prices. A Zogby poll found that 61 percent believe the system faces "serious problems" and 14 percent think it's "in crisis," though in fact it is "financially stronger than it has been throughout most of its history, according to the Trustees' [President Bush's] numbers," economist Mark Weisbrot observes. The campaign has been particularly effective among the young. Among students, 70 percent are "concerned that the pension system may not be there when they retire."
These are major victories for those who hope to destroy Social Security, revealing once again the effectiveness of a flood of carefully contrived propaganda amplified by the media in a business-run-society where institutionalized deceit has been refined to a high art. The propaganda success compares well with that of the government-media campaign to convince Americans that Saddam Hussein was an imminent threat to their survival, driving them completly off the spectrum of world opinion.
There has been some discussion of the curious fact that the need to reform Social Security became the "hot topic" of the day, while reforming the health care system in accord with public opinion is not even on the agenda, an apparent paradox: the very serious fiscal crisis of the remarkably inefficient and poorly performing health care systems not a crisis, while urgent action is needed to undermine the efficient system that is quite sound for the foreseeable future. Furthermore, to the extent that Social Security might face a crisis some time in the distant future, it would result primarily from exploding health care costs. Government projections predict a sharp increase in total benefits relative to GDP, from under 10 percent in 2000 to almost 25 percent in 2080, which is as far as the projections reach. Through this period Social Security costs are barley expected to increase beyond the 2000 level of 5 percent. A slightly larger increase is predicted for Medicaid, and a huge increase for Medicare, traceable primarily to extreme inefficiency of the privatized health care system.
Sensible people will seek differences between the Social Security and Health care systems that might explain the paradox. And they will quickly find critical differences, which are quite familiar in other domains: the paradox mirrors closely the "schizophrenia" of all administrations that underlies the "strong line of continuity" with regard to "democracy promotion," to take one example. Social Security is of little value for the rich, but it is crucial for the survival for the working people, the poor, their dependents, and the disabled. For the wealthy, it is the "major source" of retirement income, and the most secure. Furthermore, as a government program, it has such low administrative costs that it offers nothing to financial institutions. Social Security helps only the underlying population, not the substantial people. It is therefore natural that it should be dispatched to the flames. The medical system, in contrast, works very well for the substantial people, with health care effectively rationed by wealth, while enormous profits flow to private power for superfluous bureaucracy and supervision, overpriced drugs, and other useful inefficiencies. The underlying population can be treated with lectures on responsibility.
There are other sound reasons to destroy the Social Security system. It is based on the principles that are deeply offensive to the moral values of the political leadership and the sectors they represent--not those who vote for them, a different category of the population. Social security is based on the idea that it is a community responsibility to ensure that the disabled widow on the other side of town has food to eat, or that the child across the street should be able to go to a decent school. Such evil ideas have to be driven from the mind. They stand in the way of the "New Spirit of the Age" of the 1850s: "Gain Wealth, forgetting all but Self." According to the right thinking, it isn't my fault if the widow married the wrong person or if the child's parents made bad investment decisions, so why should I contribute a few cents to a public fund to take care of them? the "ownership society," in contrast, suffers from none of these moral defects.
Returning to the November 2004 elections, we learn a little of the significance from them about popular attitudes and opinions, though we can learn a lot from these studies that are kept in the shadows. And the whole affair adds more to our understanding of the current state of American democracy--with most of the industrial world trailing not too far behind, as privileged and powerful sectors learn and apply the lessons taught by their leader.
The financial crisis is surely is no secret. The press report that 30 percent of health care costs go for administration, a proportion vastly higher than in government-run systems including those within the United States, which are far from the most efficient. These estimates are seriously understated because of the ideological decision not to count the costs for individuals- for doctors who waste their own time or are forced to misuse it, or patients who "enter a world of paperwork so surreal that it belongs in one of Kafka's tales of the triumph of faceless bureaucracies." The complexities of billing have become so outlandish that the National Coordinator for Health Information Technology, the president's senior adviser, says when he gets a bill for his four-year-old child, he "can't figure out what happened, or what I'm supposed to do." Those who want to see government bureaucracy reaching levels that even Kafka might not have imagined should look at the official ninety-eight-page government handbook on the Medicare prescription drug plan, provided to Medicare participants to inform them of their options under the bill passed by Congress in June 2004, with the help of an army of lobbyists from pharmaceutical companies and health maintenance organizations (HMOs). The idea, the Wall Street Journal informs its affluent readers, "is that patients will be encouraged to bargain-hunt for medical care" and may even save money, if they can hire enough research assistants to work through the many private options available, and make lucky guesses. Health Savings Accounts, also welcomed by the editors, have similar properties. For the wealthy and the corporate beneficiaries the exciting new programs will be just fine, like health care in general. The rest will get what the deserve for not having ascended to these heights.
The Bush administration response to the health care crisis has been to reduce services to the poor (Medicaid). The timing was again impeccable. "As Republican leaders in Congress move to trim billions of dollars from the Medicaid health program," the Washington Post reported, "they are simultaneously intervening to save the life of possibly the highest-profile Medicaid patient: Terri Schiavo." Republican majority leader Tom DeLay, while proclaiming his deep concern forSchiavo and his dedication to ensure that she has the chance "we all deserve," simultaneously shepherded through the House a budget resolution to cut $15 billion to $20 billion from Medicaid for the next five years. As if the exploitation of the tragedy of this poor woman for partisan gain were not disgraceful enough, DeLay and others like him were depriving her, and who knows how many others, of the means of moral values and concern for the sanctity of life.
The primary method devised to divert attention from the health care crisis was to organize a major PR campaign to "reform" Social Security--meaning dismantle it--in the pretext that it is facing an awesome fiscal crisis. There is no need to review the remarkable deceit of the administration propaganda, and the falsifications and misrepresentations repeated without comment by much of the media commentary, which cooperated in making it the "hot topic" in Washington. Exposure has been carried out more than adequately eslewhere. The steady drumbeat of deceit has been so extreme as to drive frustrated analysts to words rarely voiced in restrained journals: that Bush "repeatedly lied about the current [Social Security] system," making claims that were demonstrably false and that his staff must have known were false(New York Times, Paul Krugman, 15 Aug, 2005)."
It is not that the system has no flaws. It surly does. The highly regressive payroll tax is an illustration. More generally, an OECD study found that the US system "is one of the least generous public pension systems in advanced countries," consistent with the comparative weakness of benefits in the United States.
The alleged crisis of Social Security is rooted in demographic facts: the ratio of working people to retired people is declining. The data are accurate, but partial. The relevant figure is the ratio of working people to those they support. According to official statistics, the ratio of working people to dependents (under twenty, over sixty-five) hit its lowest point in 1965 and is not expected to reach that level through the projected period (to 2080). The Propaganda image is that the retirement of the "baby boomers" is going to crash the system; as repeatedly pointed out, their retirement has already been financed by the Greenspan-led increase in payroll taxes in 1983. That aside, the boomers were once children, and had to be cared for then as well. And we find that during those years there was a sharp increase in spending for education and other child care needs. There was no crisis. If American society was able to take care of the boomers from ages zero to twenty, then there can be no fundamental reason why a much richer society, with far higher output per worker, cannot take care of them from ages sixty-five to ninety. At most, some technical fixes might be needed, but no major crisis looms in the foreseeable future.
Critics of Bush's efforts to chip away at Social Security by various "ownership society" schemes have proclaimed success because public opposition was too high to ram the legislation through. But the celebration is premature. The campaign of deceit achieved a great deal, laying the basis for the next assault on the system. Reacting to the PR campaign, the Gallup poll, for the first time, included Social Security among the choices for "top concerns." Gallup found that only "the availability and affordability of healthcare" is a larger concern for the public than Social Security. About half of Americans worry "a great deal" about it, and another quarter a "fair amount," more than are concerned about such issues as terrorism or oil prices. A Zogby poll found that 61 percent believe the system faces "serious problems" and 14 percent think it's "in crisis," though in fact it is "financially stronger than it has been throughout most of its history, according to the Trustees' [President Bush's] numbers," economist Mark Weisbrot observes. The campaign has been particularly effective among the young. Among students, 70 percent are "concerned that the pension system may not be there when they retire."
These are major victories for those who hope to destroy Social Security, revealing once again the effectiveness of a flood of carefully contrived propaganda amplified by the media in a business-run-society where institutionalized deceit has been refined to a high art. The propaganda success compares well with that of the government-media campaign to convince Americans that Saddam Hussein was an imminent threat to their survival, driving them completly off the spectrum of world opinion.
There has been some discussion of the curious fact that the need to reform Social Security became the "hot topic" of the day, while reforming the health care system in accord with public opinion is not even on the agenda, an apparent paradox: the very serious fiscal crisis of the remarkably inefficient and poorly performing health care systems not a crisis, while urgent action is needed to undermine the efficient system that is quite sound for the foreseeable future. Furthermore, to the extent that Social Security might face a crisis some time in the distant future, it would result primarily from exploding health care costs. Government projections predict a sharp increase in total benefits relative to GDP, from under 10 percent in 2000 to almost 25 percent in 2080, which is as far as the projections reach. Through this period Social Security costs are barley expected to increase beyond the 2000 level of 5 percent. A slightly larger increase is predicted for Medicaid, and a huge increase for Medicare, traceable primarily to extreme inefficiency of the privatized health care system.
Sensible people will seek differences between the Social Security and Health care systems that might explain the paradox. And they will quickly find critical differences, which are quite familiar in other domains: the paradox mirrors closely the "schizophrenia" of all administrations that underlies the "strong line of continuity" with regard to "democracy promotion," to take one example. Social Security is of little value for the rich, but it is crucial for the survival for the working people, the poor, their dependents, and the disabled. For the wealthy, it is the "major source" of retirement income, and the most secure. Furthermore, as a government program, it has such low administrative costs that it offers nothing to financial institutions. Social Security helps only the underlying population, not the substantial people. It is therefore natural that it should be dispatched to the flames. The medical system, in contrast, works very well for the substantial people, with health care effectively rationed by wealth, while enormous profits flow to private power for superfluous bureaucracy and supervision, overpriced drugs, and other useful inefficiencies. The underlying population can be treated with lectures on responsibility.
There are other sound reasons to destroy the Social Security system. It is based on the principles that are deeply offensive to the moral values of the political leadership and the sectors they represent--not those who vote for them, a different category of the population. Social security is based on the idea that it is a community responsibility to ensure that the disabled widow on the other side of town has food to eat, or that the child across the street should be able to go to a decent school. Such evil ideas have to be driven from the mind. They stand in the way of the "New Spirit of the Age" of the 1850s: "Gain Wealth, forgetting all but Self." According to the right thinking, it isn't my fault if the widow married the wrong person or if the child's parents made bad investment decisions, so why should I contribute a few cents to a public fund to take care of them? the "ownership society," in contrast, suffers from none of these moral defects.
Returning to the November 2004 elections, we learn a little of the significance from them about popular attitudes and opinions, though we can learn a lot from these studies that are kept in the shadows. And the whole affair adds more to our understanding of the current state of American democracy--with most of the industrial world trailing not too far behind, as privileged and powerful sectors learn and apply the lessons taught by their leader.