How to stop the revival of Laissez-Faire?

[ag]

We will never lose SS or Medicare. When was the last time a major government program like that was cut? It won't happen, no matter what the tea party believes. They'll never have a large enough majority to enable it, and no President would be stupid enough to be the one that took all medicare away from the seniors or removed their SS checks.

1996, Aid to Dependant Families and Children

That mainly affected people who were so poor that they didn't have very much political clout at all for such a decent sized group of people. It was also easier to scapegoat welfare recipients than it is to scapegoat retirees.

When some politician makes a serious run at cutting SS you'll see even sterner opposition.. since getting rid of it would be taking from everyone.

Which is why the destruction of SS/Medicare will come in two phases. First they'll make both programs "means-tested", essentially turning them from universal programs to welfare. Once they are seen as "welfare programs", it'll be easier to get rid of them.

This is slightly more realistic. Still, it is hard to see how to have it implemented. Do you cut off the Medicare for those currently receiving it? But then even the rich would scream bloody murder. And, in any case, what's rich? Most elderly don't have such a high income (and Social Security is a non-negligible component of it). Or do you do this just for the future? But, then, the problem is, individual incomes change over the liftime. So, at what point do you kick out the people of the program?

Means testing, combined w/ the huge costs of medical care in the US, creates very strange incentives. If the condition for having Medicare is not to have a large private pension, most people (except for the outright very rich) would choose not to earn a private pension. But if that happens, abolishing the program would become that much harder with time: if today we can count on at least some people having private pensions to replace the public ones, after a period of means testing, you'd wind up with having to empoverish nearly everyone if you choose to go the full abolition route. 

[ag]

Well you know, if those programs did go away, you could always set up similar ones in your areas. But nah, we can't have economic diversity in a nation of 300 million, we must conform to one standard that ultimately only benefits the corporations instead.

Only when people fully embrace decentralized economics will we see any real progress.

Well, yeah, that's sort of doable. But it would, probably, require imposing residence permits, at least on the elderly. Florida, would, probably, require Arizonans over 65 visas to come  w/ their grandchildren to Disney World ) I can just see the line at a Floridan consulate in Phoenix )

Anyway, I am going to bet on the following: if you made participation in these programs voluntary, not even the Utah legislature would vote to withdraw.

[ag]

Again, it must be emphasized that this would have to be gradual.

In order not to have libertarians lynched by mobs on sight, it would have to be very gradual. As in, taking decades. There is a problem with gradual, though: it would be extremely unpopular among the young: they'd have to pay taxes to fund a program which they will not be benefitting from. Furthermore, there would have to be a political commitment to that gradual abolition. Given, for instance, how stubborn the Mickey Mouse copyright has been in refusing to expire, I somehow doubt that a much greater political pressure for reinstatement could be resisted. And, of course, even that may only work for Social Security: that, indeed, could, in time, be replaced with private accounts and family support (it would radically change how Americans live their lives, but, gradually, it could be done).

Abolishing Medicare would cause such a backlash that no government would even dare seriously proposing it. Furthermore, means testing it would, almost inevitably, guarantee that very few people would ever save enough for retirement to fail the means test. In fact, saving would be considered almost suicidal. When you are 75 and sick, you'd have to be extremely rich to afford private medical care in the US, or private insurance for that matter: you are not even risky at that stage, you are a near certain drain on resources.  It makes no sense to save all your life to then spend it all in a couple of years on a few hospital stays and a surgery or two, and land on the dole at that point, anyway. So people won't save, period, or else would hide their savings in the offshores, or gift everything they own to kids, or you name it. T

It could be mitigated by requiring insurance companies to sell cheap insurance coverage to all the elderly, and than subsidizing them to cover the losses. But what, exactly, would be the difference between that, and the Medicare, as we know it?

Hm. Come to think of it, this would result in a humongous migration of elderly Americans to Mexico. Mexico provides elderly American expats a way of buying into the national medical insurance scheme (IMSS). Admittedly, it is not free, but it is orders of magnitude cheaper than it would be in the US. The IMSS care is no frills, but reasonably high quality, especially in the largest cities. Furthermore, private insurance can be bought for a fraction of the US price. And even private medical services are much cheaper than north of the border. Also, of course, modest pension fund savings go much further in Mexico than in the US. So, I get it. The whole abolition thing is designed to transfer the bulk of Florida's population to the Yucatan. The moment the abolition bill is tabled, I am investing in the beachfront property on Riviera Maya (and, unlke all of you,  North Americans, I can buy under my own name!! And even with a government subsidy!!!! Hoot!!!!)

[ag]

Hey, and the migration plan has further attractions. Mexican law prohibits foreigners buying property along the sea shore, where, probably, many of the retirees would want to go. So, the usual trick is to register a trust with a bank and buy the property in the name of the trust. So, if Social Security is means tested, moving to Mexico would have the salutory benefit of making it much harder to be shown to be failing the means test: you don't own anything, you just frequently vacation (perhaps, rent-free, but try proving it). Now, just register at home as resident in your grand-nieces studio appartment in Rochester, NY and, voila, you are as poor as a church mouse, legally lost all your savings in a Mexican real-estate speculation. Brilliant

[ag]

Well you know, if those programs did go away, you could always set up similar ones in your areas. But nah, we can't have economic diversity in a nation of 300 million, we must conform to one standard that ultimately only benefits the corporations instead.

Only when people fully embrace decentralized economics will we see any real progress.

Well, yeah, that's sort of doable. But it would, probably, require imposing residence permits, at least on the elderly. Florida, would, probably, require Arizonans over 65 visas to come  w/ their grandchildren to Disney World ) I can just see the line at a Floridan consulate in Phoenix )

Anyway, I am going to bet on the following: if you made participation in these programs voluntary, not even the Utah legislature would vote to withdraw.

I am not talking about making federal ones voluntary though. I'm talking about scrapping federal ones and then letting individual communities set up local ones. So no federal social security, but Los Angeles could have a social security system if they wanted.

I don't support say a single payer health plan federally, but I'd support one being set up in my community.

I guess, it is doable. As long as you allow LA to start issuing work and residence permits to those to wish to move from San Francisco, it might work. I am sure you'd be happy if next time you get a job offer in another town, the local migration authority is telling you they are putting you on the waiting list for a visa interview. It is hard to see how to do it without harming population mobility, though - any relatively generous municipality is going to be screwed, with people moving in only just in time to qualify for payouts.

And, as far as medical insurance is concerned, as I said, it will all simply result in wholesale shipping of grandmas off to Mexico, to be covered by IMSS.

[ag]

Well you know, if those programs did go away, you could always set up similar ones in your areas. But nah, we can't have economic diversity in a nation of 300 million, we must conform to one standard that ultimately only benefits the corporations instead.

Only when people fully embrace decentralized economics will we see any real progress.

Well, yeah, that's sort of doable. But it would, probably, require imposing residence permits, at least on the elderly. Florida, would, probably, require Arizonans over 65 visas to come  w/ their grandchildren to Disney World ) I can just see the line at a Floridan consulate in Phoenix )

Anyway, I am going to bet on the following: if you made participation in these programs voluntary, not even the Utah legislature would vote to withdraw.

I am not talking about making federal ones voluntary though. I'm talking about scrapping federal ones and then letting individual communities set up local ones. So no federal social security, but Los Angeles could have a social security system if they wanted.

I don't support say a single payer health plan federally, but I'd support one being set up in my community.

Likely to be riddled with even more inefficiencies than a national program.

Decentralized local programs adapted to fit the specific needs and conditions of smaller more homogeneous populations are likely to be far more efficient that a national one-size-fits-all scheme.

They would, indeed, be perfectly adapted to local needs and conditions. So perfectly, that you would not be able to move from New York to Jersey City without satsifying the local authorities that it is YOU, who is perfectly adapted to local needs and conditions.

If, however, no way is found to limit population mobility, the local adaptation would be very simple: no Social Security almost anywhere, except in places w/ very unique attractions (I could see NYC managing it at low level). For the most part, it would be exactly one policy fits all.

[ag]

Seniors wouldn't flee. Again, as I said, the government would subsidize all costs beyond a certain point, it's not like we just drop them entirely. The point is, they get private healthcare with some government subsidies, but not the gargantuan single-payer system we have now.

That's not abolition. That's just diluting benefits somewhat. That will, surely, happen: medical costs have to be contained. But, in the end, it's still Medicare pretty much intact.

The problem w/ private health insurance for the elderly is that the elderly don't, really, present that much of a risk after a certain point: they are a near certain cost. So, after a while it's not, really, insurance, it's paying out of pocket. And you know what out of pocket costs are in the US. So, at the end of the day, it's either the single-payer government paying the doctors, or single-payer government paying the insurers (ok, you can have the elderly themselves pitch in a few percent of the cost), or out-of-pocket medicine w/ most of the elderly on the dole after a few years, or substantially decreased life expectancy. Pick your poison.

[ag]

I've been saying it for years, our only way out is a culling of the Baby Boomer population.

Just ship them all down here. That way, if ever you guys get too nasty towards our migrants, we can reciprocate by staging a massive repatriation of 70-year-olds on foot through the Sonora-Arizona desert )

[ag]

Seniors wouldn't flee. Again, as I said, the government would subsidize all costs beyond a certain point, it's not like we just drop them entirely. The point is, they get private healthcare with some government subsidies, but not the gargantuan single-payer system we have now.

That's not abolition. That's just diluting benefits somewhat. That will, surely, happen: medical costs have to be contained. But, in the end, it's still Medicare pretty much intact.

The problem w/ private health insurance for the elderly is that the elderly don't, really, present that much of a risk after a certain point: they are a near certain cost. So, after a while it's not, really, insurance, it's paying out of pocket. And you know what out of pocket costs are in the US. So, at the end of the day, it's either the single-payer government paying the doctors, or single-payer government paying the insurers (ok, you can have the elderly themselves pitch in a few percent of the cost), or out-of-pocket medicine w/ most of the elderly on the dole after a few years, or substantially decreased life expectancy. Pick your poison.

If you mandate insurance coverage, and make insurance companies keep the same premiums across all age groups, it could work out.

Essentially, you don't even have the insurance companies look at individuals' characteristics.

If you mandate insurance coverage for everyone, it could work out, of course. But you would have to a) tightly regulate the insurers and b) gave them some almost quasi-governmental authority. In particular, not merely the coverage would have to be required, but a specific level of coverage: you do not want the healthy and the young to be able to buy cheap contracts with basic coverage, they'd have to be required to purchase expensive contracts, same as the old and sick. Also, the insurers themselves would have to be tightly regulated on what policies and at what price they sell. In short, it is possible to make the private sector provide the service - there is no problem there. But, de facto, it will mean that, de facto, the private insurers are just agents of the government, providing the public service. It is all but outright nationalization of the private sector.