Monday, February 22, 2010

A Real Solution

Rep. Paul Ryan, once again putting forward his Roadmap for real reform (excepts):

Imagine your family's finances if you spent and borrowed like Washington: you'd owe $60 in credit-card loans for every $100 of income. Every month you'd pay back a little but borrow even more. In 10 years, you'd owe $87 for every $100 you made. At some point you'd hand off the debt to your kids. If they worked until 2035, they'd owe more than $180 for every $100 they earned. In 2050, your grandkids would owe more than $320. By 2080 they'd owe seven times their earnings. Of course, lenders would cut them off well before then, and your family would be ruined. But this is the path your government is on right now.

I like this because it puts our government's failing into easily understandable numbers.  I think we sometimes get lost in the billions and trillions, and examples like this break things down very quickly and effectively.  Ryan lays out some more groundwork:

Today, our country faces a fiscal meltdown—and Washington's continued cowardice is a big part of the problem. The social-insurance strategies of the 20th century—Medicare, Medicaid, and Social Security—are driving our federal government and economy to collapse. It's long been obvious that we're ill prepared for the retirement of the baby boomers. Now, the recession and Washington's recent spending spree have accelerated the day of reckoning.

Consider just one program: Medicare. Today, this program is short $38 trillion of what it promises to provide your parents, you, and your kids. In five years, the hole will grow to $52 trillion. Your family's share: $458,000. Medicaid will add trillions more in state and federal debt.

Social Security's surplus is already gone, and its debt is mounting. Without shoring up its finances, the government will be forced to cut benefits nearly 25 percent or raise payroll taxes more than 30 percent.

So, the problems we face are huge; we all know that.  What's Ryan's plan for correcting these failures?

You, not your government or your boss, should own your health plan. The Roadmap replaces a tax break that benefits only those with job-based health insurance with tax credits that benefit every American. It addresses the key drivers of rising health-care costs, securing universal access to quality, affordable health coverage.

Everyone 55 and over will remain in the current program. For those now under 55, the Roadmap turns Medicare into a health-care program like the one enjoyed by members of Congress. Future seniors will receive a voucher and will be able to choose from a list of Medicare-certified insurance plans that best suit their needs. The government subsidy will provide additional support for those with lower incomes and higher health costs.

Everyone 55 and older will remain in the existing program with no change. My plan offers those now under 55 a choice: continue to take part in traditional Social Security or join a retirement system like Congress's own plan. Future seniors will be able to invest more than a third of their payroll taxes in savings accounts they will own. These accounts will be guaranteed and managed by the federal government—not by a private investment firm. For both Social Security and Medicare, eligibility ages will gradually increase.

Sounds good to me.  What do you think?

Now, on the economy at large:

To get the economy going again, the Roadmap offers the option of a simple, low-rate, two-tier personal income tax, eliminating loopholes and the double taxation of savings and investment. Corporate income taxes will be replaced by a simple 8.5 percent business consumption tax. (For specifics on these and other reforms, go to

Ryan's proposal does precisely the opposite of all of Obama's agenda: it puts the responsibility and power into the hands of individuals rather than the government.  Hey, that's what made America great in the first place, so why not get back to it?

And that's why the Democrats can't stand it.  Obama has made several calls on TV for Republicans to offer their own plans and ideas...Ryan's plan has been public for months and has been presented to Congress at least twice (that I've seen).  Since they have no way to really combat the facts, they simply ignore it.

America is in trouble, but it can be fixed.  Not by empowering government, but by doing just the opposite.  That's the struggle we face right now, and that's why we need to support plans like Ryan's.  I'm not a terribly big fan of entitlements like Medicare in the first place, but we can't exactly take them away, certainly not with so many people desperately in need of them right now.  Step one -- stopping the bleeding and putting the country on solid footing again -- is to fix what can be fixed right NOW.  Step two -- trimming back entitlements that already exist -- can and should happen later.  But it's clear that we cannot wait any longer for step one to begin.

There's my two cents.

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