We Share the Risk or We Do Without

[The Whiskey Priest]

The current campaign on Health Spending Accounts and Privatized Social Security Insurance (remember it is an insurance) is designed to make both health and retirement security self-funded. Boiled down “self-funded” means we each individually shoulder the cost.

Health Care: Currently 20% of the population incurs 80% of the cost. Most of 80% is incurred by those with long term illness and is directly related to maintenance. Another cost driver occurs during the days of life. The cost of utilizing advanced technology to extend or save a life is very expensive. Most of the American population does not have the wealth to handle this expense privately. Therefore; the proposition is whether we are going to share the risk or to go without. HSAs are the first step down the road to self-funding and going without.

Retirement: Most workers look forward to a few years when they can lay aside the toil of laboring. For some that time comes when an accident curtails their productive years. In the 30s it was decided that it was good social policy to insure all citizens against poverty when they longer worked. Towards that end the government enacted an insurance plan into which a worker and employer would contribute towards a plan that would afford the worker dignity at the end of their productive life.

What is being put forward by the Republicans is a plan whereby we would each stand the entire risk of covering the end of our productive life. They are offering a plan whereby the worker would contribute towards an account of investments. Those investments would be handled by the same people who brought us the recent stock market frauds.

We should look at how this plan would work to determine if it is a good system. During our productive years we would buy stocks, now when you have a lot of dollars chasing a limited population of stocks, the stock goes up. Now when we retire, it is assumed that we will live on those investments. So at that time we sell the stocks, now when a lot of people are selling, the stocks go down. All through this the stock brokers are taking their cut of all transactions and administration of our funds. We would be taking upon faith that the economy will be good when we are ready to sell and the investments we make will provide the funds for our retirement.

Social Security Insurance was meant to augment and assure that no one was assigned to poverty simply because they could not longer work. We need to share the risk, or stand to do without.