Monday, January 24, 2011

The End of US Entitlements...

It's time to put all US Federal Entitlement programs on the chopping block - and schedule their removal. The question is how?

To start with, Social Security has an easy, but long term, method to remove it. Take an age - say 30 (I fall in this group) or 15 or whatever - and say "You will never receive Social Security benefits". Hold to it (e.g. the age goes up every year following the group), and then close down the program as fewer people receive it. But also require that once it is shut down that all remaining funds are directly applied to the Federal Deficit if it still exists (highly likely) or should it no longer exist get paid back to everyone in the nation via a tax refund that is equally given out to everyone. (Of course you could also be generous and say just the those below a certain income level too.)

Note: If you're wondering why I chose those methods of paying it back to the people it is because it would be very hard to ensure that everyone gets paid back what they put in. So an equitable solution must be found. Of course, it also assumes there will still be money left in the Social Security coffers, which there may not be.

So there's Social Security - gone. One program down.

But what to do with everything else? What about Medicaid? Medicare? Welfare? All these programs are highly problematic to start with in how they are currently run. So let's just go ahead and shut them all down now, but we'll replace them with a single program designed to do what is at the core of those programs - helping out the needy and the poor. We'll call this program "PrimeCare". That said, here's what PrimeCare will do:

(i) if you're out of work, it'll help you get a job.
(ii) if you can't afford food, it'll help you get enough food every day - but you won't be able to go grocery shopping for it. You'll have to go to a PrimeCare facility. Transportation, if needed, will be provided as well; or in the alternative the food and supplies will be delivered to you.
(iii) if you need medical support, then PrimeCare will provide several insurance equivalent options.
(iv) if you're having trouble paying your bills, then PrimeCare will help you through debt management and bankruptcy if necessary, possibly even temporary low interest loans if necessary.

What's the purpose? To provide for the needs of those that can't otherwise afford it.

What do you need to qualify?

Well, mostly you'll have to be poor and unable to provide for yourself and your family. You'll also be required to give up spending on certain things, like CableTV, etc - things that you do not need to survive. You'll also be required to file the normal tax documents.

What's the goal?

To help them get to the point where they can pay their own way, and to provide for those that simply cannot (e.g. elderly, severely handicapped, etc.).

How do we pay for it?

If we were to take a lesson from the Bible, then we'd take an easy 10% out of everyone's paycheck. However, you would actually end up paying less in taxes than you do now - where you take out 7% for unemployment, 2-4% for medicare/medicaide, 7% for Social Security, and more. All those things go away and instead it all gets replaced by a solid 10% for everyone. If you want to make it progressive, then it could be:
(a) 0% up to poverty level (defined solely be the Bureau of Labor and Statistics)
(b) 0.05*personal income*M where 'm' ranges of whole numbers from 1 to 4 and is determined by a simple table of income levels (defined by IRS) in:
(b.1) '1' is up to the national average income of the previous year
(b.2) '2' is up to the twice the national average income of the previous year
(b.2) '3' is up to the four the national average income of the previous year
(b.2) '4' is for everyone else

That, of course, means removing the entitlements and reinventing them as aid for those that need it, providing a way and incentive to get out of the incentives. It also means that we must be willing to let those who are not willing to participate in the program, or to continuously do what is necessary to continue receiving aid, to exit the program without receiving aid even if they are unable to provide for themselves otherwise. Why are such incentives and requirements necessary? To help deter people from abusing the programs like our current programs are.

Now for the Medicaid, Medicare replacement to really work we also have to change the whole health insurance industry - but this post is already enough, so I'll write about that another time.