Byron's Blog

Anonymous hopes the presidential candidates will actually return to a serious discussion of issues that matter to people, such as health care and Social Security, and offer you the opportunity to opt out of either one.

Power to the People

by Anonymous

Does it feel as if the Presidential campaign is now infused with a certain dullness? Certainly seems that way. A ho-hum vibe surrounds the lack-luster discussions on who has the best plan to fix the economy, provide health care system or enable you to collect Social Security one day.

Say what you want about Reverend Wright, or any of the other distractions that have diverted attention away from the issues. What's important is where they stand on the more significant matters. Problem is, too often politicians waste your time saying what they think you want to hear, rather that offering solutions to the emerging crises confronting the nation. 

Right now, they just cannot seem to stop talking about gas, as if anything that any of them do will have an impact on pump prices. Just take a historical tour through the nation's attempt to set energy policy and you will see one big pile of wasted dollars. The various schemes you hear to use this or that tax to lower prices are plain silly. What fun Anonymous had the other day during a colleague's rant about how the government must impose yet another tax on oil companies. The colleague offered a blank stare to this one question: explain how any tax increase lowers prices? 

They don't. Taxes increase prices. Tax cuts reduce prices. Enlightened people also know that those cuts can also be used as a tool to provide incentives for individuals and firms to act in specific ways. You want to lower gas prices? Reduce the tax on it and offer tax breaks for people who build and buy hybrid cars. Forget about getting mad with oil firms. Anger and more taxes will merely translate to higher prices for you and everyone else who drives. Besides, high gas prices will not matter once you own a car that gets 70 miles, or more per gallon. Eventually the price of fuel will stabilize, maybe even start to drift lower as demand falls. See how simple that was?

Here's another easy one. People are anxious about health care. The political response -- a plethora of plans and plenty of talk about how the government will take care of you. National health care is a wonderful idea, but fails to take advantage of another concept that helps reduce prices: competition.

It is ridiculous to try to develop any national policy without allowing you the option to choose a government sponsored plan, a private plan or a blend or the two. That would give you choices, but also force government and private health care providers to compete and offer you value. The result would be affordability because consumers would have the opportunity to abandon coverage that's too expensive or did not meet their needs. The market place at work -- what a wonderful thing.

The same concept would work well for Social Security. Anyone born on the tail end of the baby boom generation or later has to have at least some jitters about whether or not the Social Security dollars are going to be available for them. Understandable, given the government runs the thing, but there's an alternative -- allow qualified individuals to have the option to invest those dollars themselves. Every accredited investor should have the option to take control of those dollars.

Who are accredited investors? They're are people who are either money professionals themselves or who meet the income and net worth requirements to invest certain types of funds. Elitist you say. Hardly. These standards are already in place and could easily work to determine who can take control of those accounts.

What about others who want that option? Simple. It's not difficult to develop strict rules for brokers and financial planners who would handle the investments for non-accredited individuals and reduce risk for them by limiting the options available for those accounts. High quality municipal bonds or triple A rated corporate bonds represent two good alternatives. People could then decide whether they want to stick with the traditional Social Security system or be more involved with their retirement dollars, which potentially enables Americans to earn more than with the antiquated government system.

Not surprising, politicians set up Social Security as a pay-as-you-go system, instead of structuring similar to an insurance policy with premiums that match the dollars that individuals will collect. That's why the thing's running out of money -- more people collecting than paying. An overhaul would take years for the bumbling politicians who run government, so why not give people the choice now to stay with the system or opt out?

Do not expect the candidates to include any of this in the national debate during the current campaign, or any other for that matter. They are not inclined to discuss ideas that will actually lead to solutions. They're busy trying to figure out what they can say to make themselves popular. That means that fundamental changes to improve the nation and the quality of your life get pushed aside for the sake of useless rhetoric, but what's new about that?