Sunday, November 27, 2011

What’s killing Republican’s Strategy to Privatize Social Security and Medicare?

Keywords or Terms: Privatization; Medicare; Social Security; Republican’s Strategy; Elderly and Disabled; Returns on Investments in Social Welfare Programs; Statistics and Accounting Principles; Will to Change; Alleviation of Poverty;  Democrats; and, Republicans

Republican lawmakers are at the vanguard of privatizing Social Welfare Programs. Privatizing Medicare has been reported as the bane of contention why the Super Committee failed to reach accord over the nation’s mounting deficit. At the heart of discontent from Democrats is the concern for senior citizens and the disabled who would suffer direct impact of unsavory machination that may arise from the privatizing of Social Security and Medicare. At least there have been two separate attempts to privatize Social Security and or Medicare with Republicans’ inklings, which failed woefully in congress in the past three decades. With the insinuation that an accord could not be reached between Republicans and Democrats on cutting the nation’s deficit because of Republican’s desire to privatize Medicare, and the Democrats’ discontent over the move in the congressional super committee, it is worthwhile to evaluate the Republicans’ strategy to privatize the pillar stone of Democrats’ effort in lightening the load of America’s Senior Citizens and the disabled through the support for Social Security and Medicare Programs.

Why haven’t Republicans fulfilled their desires over Social Security and Medicare? For Republicans, Social Welfare Programs are a drain on the nation’s purse and during the time of deficit, they must be the first to be on the chopping block. For Democrats, Social Security and Medicare are corner stone programs of what it takes to be responsible to pair constituents in our society who are either old or disabled; and, can hardly help themselves. While Republicans portray themselves as fervent advocate of fiscal responsibility, Democrats characterized their support for Social Welfare Programs as social cost that must be borne to make the face of capitalism, humane. While Republicans place their bets on the doctrine of everyman for himself, God for us all; Democrats see the need for an invincible hand of fairness to the failures of the free-market system in a pluralistic Democracy.

Republicans’ position on the issue of efficiency of social welfare programs are rooted in staunch free-market enterprise doctrine. Democrats’ position are rooted in the natural progression of slight imbalance in the free-market enterprise system, which they construe as needing corrective measures to make the system work, fairly; especially for many in the fixed income group in their golden years, dependent on social security checks, retirement checks, IRA and 401Ks. While Republicans base their evaluation of social welfare programs on specific metrics of efficiency derived from accounting principles and proxy statements, Democrats see the face of the teaming millions of retired citizens crying for help in their golden years and some disabled citizens, who could have been productive except for the misfortune of illness or natural biological failures. Republicans seek the greatest returns for government investments in social welfare programs; Democrats not only seek the same results but clamor that such results must have a human face.

At any given time, Republicans often denigrated Democrats as big spenders, especially on social welfare programs, while Democrats have painted Republicans as ruthless and often willing to throw the elderly and disabled under the bus, in their quest for efficiency of social welfare programs. Absent conviction that either group may move their metrics of measuring efficiency of social welfare programs to an amicable ground, leads to the type of stalemate found in the recent congressional super committee debacle. While Congressional Republicans are largely interested in aggressive maneuvers to convince Congressional Democrats and the public that the answer to deficit spending from social welfare programs can only be found in letting the forces of the free market dictate the efficiency of each of these social welfare programs; drumming up the usual brouhaha that government should get out of the way as it is the real problem for failure in the system, Democrats advance a defensive maneuver that without government involvement, the forces of free market enterprise system annihilate the disadvantaged, the elderly and disabled; especially during the burst period of the sequential boom and burst scenario legendary of our capitalistic economic system.

Over time, however, this blog believes that while both groups have great points to support their position or conviction, because the motivation for their individual position is based on completely immeasurable quantitative and qualitative metrics, either group will never triumph with their relative advancement on social welfare programs in the public arena. From record of historical upward and downward swing in the Americans economy, it will be difficult for Republicans to demonstrate that if we actually privatize social welfare programs, Social Security or Medicare, the nation will be better-off; or the quality of life enjoyed by all citizens, will be appreciable than what we now have. For example, in the last effort by Republicans under the Bush Whitehouse, if the privatization effort on Social Security had been realized or received the blessing of congress, how would the elderly and disable have fared when we went into a recession in 2008.

In similar argument, the obsession by Democrats that funding for Social Security are Sacrosanct and Medicare costs could be managed with better scrutiny of health services’ providers and associated health insurance costs, one is apt to believe that their support for Social Security and Medicare are based on justifiable empirical evidence of the infrequent failures of the free-market system; thus, there is a place for their position in the realm of public discuss. For example during the Clinton’s Whitehouse, budget deficit were better managed and the nation was able to pay down some of its debts; however, the nation was unable to curtail its rising Medicare cost or prevent congress from borrowing from the Social Security trust fund to address other national problems. Moreover, Republicans’ and Democrats’ agreement to invest in two foreign wars in the late 2001 practically eroded whatever gains accruing from better fiscal management during the Clinton’s or Democratic Whitehouse. The failure of each major political party to address the issue of fiscal responsibility with respect to raiding the social security trust fund make both incapable of advancing the ‘holier than thou’ argument for or against fiscal responsibility with respect to social welfare programs.

Ideally, the wish of either political party’s congressional lawmakers to demonstrate with some degree of success that each is fiscally more responsible than the other would have been possible, if either had advanced unblemished arguments or positions that are empirically or historically verifiable. However, that is not the case, and either congressional leader of both major political parties is oblivious of the shortcomings of their individual arguments and or position in current day American economy. What’s not obvious or easy to demonstrate for either political party leader in congress is that their casual association of prescriptions for not bankrupting Social Security or Medicare stand on shaky grounds and the significance of opposing arguments to either’s position, gradually erodes when subject to objective quantitative and or qualitative scrutiny.

The ability of predicting what will happen if Social Security or Medicare is privatized is very unclear. Profitability of either social welfare programs in a privatization scheme cannot rely on empirical data or results from a country as Chile or similar experience in a European country, as each of these examples are not replicable of our country, because of the size of our economy and life-span of Americans. America has a bigger economy than any around the globe and we have the fortune of our elders living longer than many citizens of the world. What will happen if Chile invests billions of dollars in medical research and elder care as is done America will their social security program survive easy liquidity? How much capital is invested in elder care or retirement savings or expenditures in Chile or France? Are the bedrocks of argument of bankruptcy of America’s Social Security and or Medicare Programs, really estimable without the concrete evaluation of quantitative and qualitative factors that are likely to doom these programs? The nation has the wherewithal to make correction in factors that may doom Social Security and or Medicare into bankruptcy, without privatizing either program. What the nation cannot afford is a prescription of privatization of these programs that could actually damage other social indicators that makes the country the first in the world in many areas of assessments.

How about a re-evaluation of a culture of entitlement to some social welfare programs? There are different points of view on whether the reform to the health care system enacted in 2010, can rally address the problems of health care cost and inflation without some additional tweaking. There are even critics in the health care industry that laments that the nation is saddled with an illness treatment industry rather than a health care system. On one hand, there are those who believe that we need a one-payer health care system to address the shortcoming of an illness treatment industry; and, through asking of the right questions, collection of the right data from patients, health care providers, hospitals and doctors clinics, drugs manufacturers and setting up an advanced electronic medical record management infrastructure, the nation will be able to cut waste and address the problem of rising health care costs and inflation. Unresolved issues regarding these variable factors have been part of the problem associated with the bloated Medicare cost. On the other hand, what about reviewing the benchmark for contribution to Social Security by employees and employers? Should there really be a one hundred and six thousand dollars income threshold rather than all earned incomes? And, is it necessary to have an exclusion clause on income threshold for any American when it comes to saving Social Security or Medicare?

With advancements in information technology, the government can go for gold: by collecting social security and Medicare from organizations that have now be defined as a person for political mischief? The focus is saving Social Security from bankruptcy, how about driving growth in the Social Security trust fund by collecting equitably contributions from all earned income generated by all factors of production?

Apart from all these issues addressed on the blog tonight, here are the following bullet points, preventing Republicans from achieving privatizing of two major social welfare programs that are criticized as contributing to the nation’s deficits:

  • An increasing application of statistics and accounting to explore correlation and causation factors bloating the implementation of these programs;
  • The concept of one jacket fits all, in the delusion that privatization will solve all the associated problems found in implementing the two social welfare programs;
  • An increasing desire to lambast government regulatory responsibility or involvement as detrimental to the free-market enterprise system;
  • Poor leadership tactics engaged in galvanizing the required votes from both isle of congress in support of privatization of the welfare programs; and,
  • The indisputable contribution of both and either of these programs from alleviating poverty among the disadvantaged and elderly among us.
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