Tag Archives: social safety net

Health Policy Costs Us All

For more years than I can count, opponents of “socialized medicine” (i.e., single-payer, universal health insurance) justified that opposition by assuring us that we were “number One!” American healthcare was the best in the world, thanks to the innovation that was made possible by our refusal to extend that healthcare to everyone who needed it.

As the world got smaller, and more Americans traveled abroad, we began to realize that we really weren’t number one–that in fact, those global indices that ranked us somewhere around 37th or 39th were onto something.

More recently still, medical tourism became a thing (at least, pre-pandemic, when we weren’t shut out of healthier countries.) Americans are traveling to have procedures–and babies!–in places where the care is just as good or better, but much cheaper. 

There’s a reason so many reasonably well-educated, reasonably well-meaning middle-class Americans were so slow to recognize the gargantuan flaws in America’s patchwork approach to medical care–and for that matter, all social services. So long as we remain lucky and privileged, accessing health insurance through our employers, not getting a rare or terribly expensive disease, not having to navigate a system designed to say “not you,”  there’s simply no way we could imagine the experience of those who aren’t so lucky or privileged.

For years, I fell into that “lucky and privileged” category. But many years ago, when a diagnosis meant that my oldest son was unable to work, I encountered the Byzantine world of Social Security disability. At the time, it took two lawyers (me and my youngest son) and a friend who headed a social services agency to navigate the process.

When I asked my oldest’s then-doctor what happened to people without family lawyers and savvy friends, he said simply, “They die.” 

Just over a week ago, we got another lesson. My oldest grandson and his wife had a very premature baby. Born at just over 26 weeks, she is in the NICU, life-lined and hooked up to a tangle of machines and devices. My grandson and his wife take turns being with this much-desired little girl (and when I say “little,” she was one pound five ounces at birth, and about the size of my grandson’s hand.) The stress they are experiencing is etched on their faces.

In addition to the helplessness we feel watching this unfold, the whole family has worried about costs that their insurance won’t cover. If there is anything they don’t need,  especially right now, it’s thousands of dollars in out-of-pocket expenses. My granddaughter-in-law’s sister was so worried she set up a Go Fund Me page, something that wouldn’t be needed–or even comprehensible–in “socialized medicine” countries. (I have a son who lives in the Netherlands and an adult granddaughter who lives in England, and both sing the praises of their healthcare systems.)

We were relieved–and surprised– to learn that there are government programs that  provide at least some measure of secondary insurance in these situations. It’s just that no one in our (reasonably well-educated) family knew they existed until now. And I’d be willing to wager that, unless you are a social services or health insurance worker, those of you reading this haven’t heard of them either.

There is an important public policy lesson here–not to mention a lesson about equity.

This country spends far more than any other country in the world on medical care–twice as much per capita as the next most expensive country. (But hey–“We’re number 37!”)  That includes significant amounts on a patchwork of low-profile programs that help eligible people who manage to find out about them, and still more on the bureaucracy that serves as a “gateway” to those programs.

Think how much we could save if we replaced that haphazard patchwork of complicated and under-inclusive programs with some version of Medicare-for-All. Of course, a simple, single-payer health insurance system with a common and comprehensible “entry point” would serve all citizens, not just empowered ones–maybe that’s why we don’t have one.

There is some evidence that American voters are beginning to catch on.  In a recent column for the Washington Post, E.J. Dionne wrote:

No matter how hard they tried, Republican politicians and their allies could not stop Missouri’s voters from expanding access to Medicaid under the Affordable Care Act.
They tried to rig the timing of the referendum by forcing the vote during a relatively low-turnout primary on Tuesday rather than in November. That failed. They played on racial prejudice and nativism by falsely claiming a yes vote would mean “illegal immigrants flooding Missouri hospitals . . . while we pay for it!” That failed, too.
 
And so did Missouri this week become the sixth state since 2017 — five of them staunchly Republican — where voters took the decision on the expansion of health coverage out of the hands of recalcitrant conservative politicians.

You shouldn’t have to have a social work degree (or a friend with one) in order to access government insurance against calamity.

And Republicans should stop kidding themselves–calamities don’t just happen to “those people.”

 

 

 

 

 

Why I Came To Support A UBI

As regular readers of this blog know, I recently published a book titled Living Together. After a survey of various elements of our society that I identified as “broken,” I drew on a variety of research to propose an expanded social contract. An important part of that new social contract was a Universal Basic Income.

The book was an exercise in utopianism–most of my proposals won’t be adopted in my lifetime, if ever. But a girl can dream…

Be warned: Even the following, abbreviated explanation will make this post longer than usual. (But hey–it’s a holiday…)

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Social scientists point to the ways in which America’s obsessive focus on individual responsibility and achievement obscures recognition of the equally important role played by the broader community within which we are embedded. A much-cited remark made by Elizabeth Warren during her first Senate campaign reminded listeners that communal infrastructure makes individual success and market economies possible:

“There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory… Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.”

The fact that Warren’s observation garnered so much attention suggests that Americans rarely see individual success stories as dependent upon the government’s ability to provide a physical and legal environment within which that success can occur.

The importance of hard work and individual talent should not be minimized, but neither should it be exaggerated. When the focus is entirely upon the individual, when successes of any sort are attributed solely to individual effort, the importance of that infrastructure–and the effects of social and legal structures that privilege certain groups and impede others– become less visible.

Policies intended to help less fortunate citizens can be delivered in ways that stoke resentments, or in ways that encourage national cohesion.  Consider public attitudes toward welfare programs aimed at impoverished communities, and contrast those attitudes with the overwhelming majorities that approve of Social Security and Medicare.

Social Security and Medicare are universal programs; virtually everyone contributes to them and everyone who lives long enough participates in their benefits. Just as we don’t generally hear accusations that “those people are driving on roads paid for by my taxes,” or sentiments begrudging a poor neighbor’s garbage pickup, beneficiaries of programs that include everyone (or almost everyone) are much more likely to escape stigma. In addition to the usual questions of efficacy and cost-effectiveness, policymakers in our diverse country should evaluate proposed programs by considering whether they are likely to unify or further divide Americans. Universal policies are far more likely to unify, an important and often overlooked argument favoring a Universal Basic Income.

What if the United States embraced a new social contract, beginning with the premise that all citizens are valued members of the American polity, and that (as the advertisement says) membership has its privileges?

Contracts are by definition mutual undertakings in which both sides offer consideration. In my imagined “Brave New World,” government would create an environment within which humans could flourish, an environment within which members would be guaranteed a basic livelihood, a substantive, excellent education, and an equal place at the civic table. In return, members (aka citizens) would pay their “dues:” taxes, a stint of public/civic service, and the consistent discharge of civic duties like voting and jury service.

In my Brave New World, government would provide both physical and social infrastructure.

We know the elements of physical infrastructure: streets, roads, bridges, utilities, parks, museums, public transportation, and the like; we might expand the definition to include common municipal services like police and fire protection, garbage collection and similar necessities and amenities of community life. Local governments across the country understand the importance of these assets and services, and struggle to provide them with the generally inadequate tax dollars collected from grudging but compliant citizens.

There is far less agreement on what the social infrastructure should look like and how it should be funded. The most consequential element of a new social infrastructure, and by far the most difficult to implement, would require significant changes to the deep-seated cultural assumptions on which the current economy rests. Its goals are to ease economic insecurities, reduce the gap between rich and poor, restore workers’ bargaining power and (not so incidentally) rescue market capitalism from its descent into corporatism and plutocracy. The two major pillars of that ambitious effort are a Universal Basic Income and single-payer health insurance.

The defects of existing American welfare policies are well-known. The nation has a patchwork of state and federal efforts and programs, with bureaucratic barriers and means tests that are expensive to administer and that operate to exclude most of the working poor. Those who do get welfare are routinely stigmatized by moralizing lawmakers pursuing punitive measures aimed at imagined “takers” and “Welfare Queens.” Current anti-poverty policies have not made an appreciable impact on poverty, but they have grown the bureaucracy and contributed significantly to stereotyping and socio-economic polarization; as a result, a number of economists and political thinkers now advocate replacing the existing patchwork with a Universal Basic Income.

A Universal Basic Income (UBI) is a stipend sent to every U.S. adult citizen, with no strings attached– no requirement to work, or to spend the money on certain items and not others. It’s a cash grant sufficient to insure basic sustenance; a number of proponents advocate $1000 per month. As Andy Stern, former President of the Service Employee’s International Union has written,

“A basic income is simple to administer, treats all people equally, rewards hard work and entrepreneurship, and trusts the poor to make their own decisions about what to do with their money. Because it only offers a floor, people are encouraged to make additional income through their own efforts… Welfare, on the other hand, discourages people from working because, if your income increases, you lose benefits,”

With a UBI, in contrast to welfare, there’s no phase-out, no marriage penalties, no people falsifying information–and no costly bureaucracy. Support for the concept is not limited to liberals and progressives. Milton Friedman famously proposed a “negative income tax,” and F.A. Hayek, the libertarian economist, wrote “There is no reason why in a free society government should not assure to all, protection against severe deprivation in the form of an assured minimum income, or a floor below which nobody need descend.” In 2016, Samuel Hammond of the libertarian Niskanen Center, noted the “ideal” features of a UBI: its unconditional structure avoids creating poverty traps; it sets a minimum income floor, raising worker bargaining power without wage or price controls; it decouples benefits from a particular workplace or jurisdiction; since it’s cash, it respects a diversity of needs and values; and it simplifies and streamlines a complex web of bureaucracy, eliminating rent seeking and other sources of inefficiency.

Hammond’s point about worker bargaining power is especially important. In today’s work
environment, characterized by dramatically-diminished unions and the growth of the “gig economy,” the erosion of employee bargaining power is confirmed by data showing that wages  have been effectively stagnant for years, despite significant growth in productivity. With a UBI and single payer health coverage, workers would have the freedom to leave abusive employers, unsafe work conditions, and uncompetitive pay scales. A UBI wouldn’t level the playing field, but it would dramatically reduce the tilt. And if the robots do come—if the predictions of jobs that will be lost to automation are even close to accurate—a UBI could act as a national safety-net, helping the country avoid massive civil turmoil.

It is also worth noting that a UBI would have much the same positive effect on economic growth as a higher minimum wage. When poor people get money, they spend it, increasing demand.

There have been several pilot projects meant to assess the pros and cons of UBIs. The Washington Post reported on an extensive experiment in Africa, which found positive results not just for those receiving the money, but for their communities. The Guardian recently reported equally positive results from an American pilot project in Stockton, California. As with earlier experiments, skeptical predictions were not borne out; the money was primarily spent on food, medicine and education. Studies have also reported a significant positive spillover on female empowerment, and large increases in psychological well-being of recipients.

An economist quoted in Forbes noted that when Native Americans opened casinos along the Rio Grande, they used the proceeds to deliver basic incomes to the tribal poor.

“Child abuse dropped drastically, crime dropped. Simply handing money to poor people was salutary. It really helped them. Being trapped in poverty, with the stress and insecurities associated with that, is progressively debilitating. Sometimes even the simplest kind of transfers can break the cycle.”

Counter-intuitive as it may seem, a significant body of research supports the
importance of a robust social safety net to market economies. As Will Wilkinson, vice-president for policy at the libertarian Niskanen Center, has put it:

“A sound and generous system of social insurance offers a certain peace of mind that makes the very real risks of increased economic dynamism seem tolerable to the democratic public, opening up the political possibility of stabilizing a big-government welfare state with growth-promoting economic liberalization.”

As Wilkinson argued in an article for the conservative National Review, contemporary arguments between self-defined capitalists and socialists misunderstand economic reality. The left fails to appreciate the role of capitalism and markets in producing abundance, and the right refuses to acknowledge the indispensable role safety nets play in placating the human, deeply-seated distaste for feelings of uncertainty and insecurity.

If we were a country that truly valued all citizens, these would be compelling arguments.

Tomorrow: how to pay for it.

Let’s Talk About Infrastructure

What is government for?

That is the question at the root of all political philosophy, and by extension, all punditry. After all, the way we evaluate how well a government is functioning is by comparing its operation with its mission: is the state doing what it is supposed to be doing? If so, how well?

I began my most recent book by cataloging the areas of “broken-ness” in American governance–what I (and most commenters to this blog) believe to be areas where our government is failing to perform. And that, of course, raised the question: what should government do? Why do humans need the collective mechanism we call government (at least, beyond restraining Leviathan, per Hobbes)?

My conclusion–with which, obviously, you all may differ–is that government is needed to provide necessary infrastructure–both physical and social.

The dictionary defines infrastructure as the “basic physical and organizational structures and facilities needed for the operation of a society or enterprise.”

Most of us are familiar with this definition in the context of physical infrastructure: roads, bridges, sewers, the electrical grid, public transportation, etc. Within the category of physical infrastructure I’d also include physical amenities like parks and bike lanes. Schools, libraries and museums probably fall somewhere between physical and social infrastructure. Purely social infrastructure includes laws that prevent the strong from preying on the weak, and the various programs that make up what we call the social safety net.

I have just returned from Europe where I attended a conference in Stockholm; on the way home, I stopped in Amsterdam to see my middle son, who now lives there. Sweden and the Netherlands vastly eclipse the U.S. when it comes to both kinds of infrastructure.

The academic conference I attended was on “Social Citizenship,” a concept commonplace in Europe and utterly foreign to Americans. (The conference was focused upon the effects of significantly increased migration on the social unity fostered by the European approach to social welfare–tribalism isn’t restricted to the U.S.and Europe is far more diverse than it was even a decade ago.)

Social citizenship and policies that support unity are topics that increasingly intrigue me; my most recent book focused on them and I routinely blog about them. But right now, I want to rant about physical infrastructure.

I took the subway in both Stockholm and Amsterdam (In Amsterdam, I rode their interconnected transit system, which includes trams, subway and buses). In both cities, the subway stations were immaculate, and there was lots of public art. Electronic signs informed passengers when the next train was due–usually, within 4-5 minutes. The cars themselves–and in Amsterdam, the trams–were shiny and clean, and looked new–although in Amsterdam, my son said they were several years old, and simply well-maintained.

Well-maintained. What a concept…

It wasn’t only public transportation. Streets and sidewalks looked equally well-tended; in Amsterdam, according to my son, sidewalks throughout the city are replaced every 30 years. Also in Amsterdam, where there are 1.3 bicycles for every resident and absolutely everyone bikes, protected bike lanes are everywhere–usually, they separate the sidewalks from the roadways.

Thanks to robust public transportation and the culture of biking, there were far fewer cars on the streets than there are here, and among those that were I saw numerous hybrids. Efforts to use clean energy were prominent. (Coincidentally, a friend just sent me an article about a European consortium that plans to deploy 1,000 fuel cell buses in European cities, and to provide the necessary hydrogen infrastructure.)

All in all, the clear impression was that we are a community, and we care. 

In these European cities, government’s approach to infrastructure provision appears to be a collective effort to ensure a workable, efficient and pleasant environment for all citizens–not a grudging and slapdash accommodation for those who cannot afford private vehicles.

I’m jealous.

 

 

“Trumped Up” Social Welfare Crises

There are two utterly incompatible approaches to the maintenance of social safety nets–and beliefs about the obligation of a society to its most vulnerable members.

On one side are those who recognize the obligation, who see the payment of taxes to support social programs and government services as the “dues” we owe to the “club” we call America. On the other side are those who reject that obligation, who insist that individual citizens (including, presumably, children, the elderly and the disabled) must be personally responsible for their own needs, and to the extent they are unable to do so, that private charity should fill the gap (despite copious evidence that charity is grossly insufficient to the task).

Those in the first category have legitimate differences about how we discharge our obligations to each other, about the efficiency of programs put in place, about the evidence we can reasonably require in order to separate out the truly needy from the merely greedy. But they understand that no society that ignores its neediest citizens can be “great” or even good–let alone stable.

Those in the second category tend to be financially comfortable (or better). Their incentive to ignore reality and the plight of others is rooted in their desire to keep more of what they have and their insistence that they have “earned” their good fortune and other folks could too if they really wanted to.

They are the ones who have controlled Congress. And as Robert Reich has written,

Republicans would love to get rid of Social Security and Medicare. But they can’t, because Social Security and Medicare are among the most popular of all federal programs. Besides, most Americans have been paying into them their whole working lives, and depend on them.

Since any overt attack on these programs would be politically suicidal, the Republicans have decided to do nothing–aggressively– to refrain from the “fixes” and accommodations to economic changes that all such programs require from time to time.

The trustees for Medicare and Social Security – of which I used to be one – say Medicare will run out of money by 2026, three years sooner than last projected, and Social Security will run out in 2034.

But this doesn’t have to be the case.

Here are three easy fixes to Social Security and Medicare that Republicans don’t want you to know about.

First: Raise the cap on income subject to Social Security payroll taxes.

This year, that cap is $128,400, meaning that every dollar earned above $128,400 isn’t subject to Social Security taxes.

As Reich points out,  the CEO of a big company making $15 million dollars a year pays Social Security taxes on just $128,400 of that, while the nurse practitioner taking home  $100,000 pays Social Security taxes on every dollar of his or her income.

Reich’s second “fix” addresses a situation that most of us find outrageous:

To help rein in Medicare costs, allow the government to use its huge bargaining power to negotiate lower drug prices.

Every other country negotiates these prices; that we do not is an unconscionable gift to big Pharma, which already benefits from the immense amounts through which taxpayers subsidize research. (Pharma already spends more on advertising, marketing, and lobbying than it does on research, so protests that lower profit margins would curtail research are disingenuous at best.)

Reich’s third “fix” is the least intuitive–and the most intriguing.

Third: To deal with a basic reason why Social Security and Medicare are running out of money, allow more young immigrants into the U.S.

The basic reason why Social Security and Medicare are running out of money is the American population continues to age and live longer – leaving a relatively smaller working population to pay into Social Security and Medicare.

What to do? Allow in more young immigrants. Immigrants and their children are the fastest growing segment of the working population, already contributing billions in payroll taxes every year. Instead of shutting immigrants out, allowing more immigrants into the country will help secure the future of Social Security and Medicare.

I have previously reported on the multiple benefits conferred by immigration; this is another.

If you belonged to a club in which some members refused to pay the dues that maintained the facility and its amenities, you’d terminate their membership. We can’t terminate the citizenship of people who are unwilling to pay their fair share, but we can save Social Security and Medicare. As Reich says,

Raise the cap, negotiate drug prices, and allow in more immigrants. Do these three things and you won’t have to worry about Social Security and Medicare not being there when you need it.

 

 

 

Talk About Cutting The Safety Net….

When you elect people who have very limited knowledge of government or the legal system, you get a lot of unanticipated and unfortunate consequences.

Trump is hardly the only self-proclaimed “genius” who is actually clueless; in fact, voters need to recognize that the real villain of this surreal moment we’re experiencing isn’t Trump–who is arguably too far out of it to even know what he’s doing–but the current in-over-their-heads gang of Congressional Republicans who are protecting and enabling him.

A recent, glaring example is in the combined impact of their much-touted tax “reform” bill and their proposals to dramatically cut America’s social safety net.

Republicans love to talk about the negative consequences of social welfare programs–the purported encouragement of “dependency,” the “unfairness” of taxing working folks to support laggards who are sitting at home eating bon-bons (and while they rarely say it out loud, there is usually a “wink wink” suggesting  that those laggards are disproportionately black or brown). Data and evidence–things foreign to their comprehension–dispel all of this, of course. For example, most adult food stamp recipients work full time, as do most non-disabled adults on Medicaid. There is absolutely no research supporting accusations that receipt of welfare produces dependency, and most people on welfare are white.

Even more irritating is Republicans’ repeated insistence that, if government would just get out of the way, poor people’s needs could be met by private and/or nonprofit charities, especially religious charities. When George W. Bush called on the “armies of compassion” to replace much of the welfare system as part of his “Faith-Based Initiative,” researchers (I was among them) pointed out that private charities didn’t have the resources to even come close to his goals–and most churches were barely keeping the pastor paid and the roof fixed.

As we’ve seen, facts are pretty irrelevant to this crew. Nevertheless, given their constant lip-service to American generosity and private-sector charity, you wouldn’t expect them to pass a tax bill that threatens to cripple those same efforts. After all, they are now proposing massive cuts to Social Security, Medicare and Medicaid–cuts they evidently assume will be made up by funds from the charities their tax bill is eviscerating, if they think about it at all.

Patrick Rooney is an economist at the Lilly School of Philanthropy at IUPUI, where I teach. (Full disclosure; I am adjunct faculty at the Lilly School.) I know  Patrick and his work, and he is a first-rate scholar. Here’s his analysis of what the tax bill means for charitable giving:

The tax-code overhaul that Republican lawmakers approved and Trump signed into law will raise the price of charitable giving for millions of Americans, surely reducing how much money the nation gives.

As an economist and a scholar of philanthropy who researches how public policies shape charitable giving, I anticipate that the tax tweaks will lead Americans and U.S. companies to donate roughly US$21 billion less per year to charity.

The link will take you to the article detailing the impact of the tax bill’s various provisions on incentives for charitable giving, and those details are instructive. But the real “take away” is the utter failure of Congressional Republicans either to connect the dots– or worse, to care about the harm they are doing to millions of Americans (most of whom are elderly or children) in order to further enrich their donors.

Those who aren’t “geniuses” like our President–aka mental midgets–are something even worse. They’re moral midgets.