Sam Uretsky

Government is Not the Enemy

Lately we’ve been fixated on the deficit. Any Progressive could solve the deficit problem, long and short term, fairly easily.

The problem is that conservatives dig in their heels and refuse to even consider some of the possibilities that would fix things, either because they don’t understand elementary economics or because they’re afraid that Grover Norquist is hiding under the bed waiting to primary them. The short term stuff is easy: raise taxes on those who can afford them, create a real jobs program, the kind we should have had in 2009, and get out of Afghanistan and anywhere else we have no reason to be.

Raising taxes on the rich isn’t class warfare – it’s simply asking them to do their patriotic duty. In a recession, what’s needed is increased demand, more spending. If a hedge fund manager making $1 billion a year can’t spend it all, an appreciative citizenry should step in and be willing to help out.

The big problem is the projected increase in health care costs, but it’s also the simplest to resolve once we get over the fear of Socialized Medicine: European (or Canadian, or Japanese) style single payer health care would give better results while cutting costs by 33% to 50%.

It’s helpful to keep in mind that the Central Intelligence Agency uses the infant mortality rate as a surrogate measure of the quality of health care, and the United States, with 6.06 infant deaths in the first year of life, is 46th on the list of nations, while Sweden and Japan at 2.74 and 2.78 are 4th and 5th respectively.

The top three are tiny nations, Monaco, Singapore and Bermuda, so skip those. For those people who have shown concern about savings babies, the chance to save the lives of infants and reduce federal spending should be win-win.

The real challenge is Social Security. Social Security was never meant to be a national pension system. It was to be combined with private savings and pensions to provide people with a dignified old age. Unfortunately, things didn’t work out as planned. The Baby Boomers didn’t do a very good job of saving, and much of the money that was saved was invested in stocks, which were unreliable. People who saved diligently saw their investments disappear in the crashes of 2008 and 2011, but because of the low bank interest rates there was really no other way to accumulate a reasonable nest egg.

Robert Samuelson of the Washington Post wrote a column headlined “Why are we in this debt fix? It’s the elderly, stupid.” Mr. Samuelson reports that in 2010 “25%” of people over the age of 65 “had savings and retirement accounts averaging $207,000 or more.”

The Center on Budget and Policy Priorities estimates that with Social Security at present level 10% of the elderly are living in poverty, but without Social Security, that would rise to 45%. Every proposal for stabilizing Social Security focuses on cutting benefits. The problem is, just like bringing the economy back from the recession, we need spending to maintain the economy, so that cutting benefits will reduce demand. The rational approach isn’t to shrink Social Security, it’s to expand it. According to Thomas Geoghegan in the New York Times: “A recent Harris poll found that 34% of Americans have nothing saved for retirement — not even a hundred bucks. In this lost decade, that percentage is sure to go up. At retirement the lucky few with a 401(k) typically have $98,000. As an annuity that’s about $600 a month — not exactly an upper-middle-class lifestyle.”

People approaching retirement this year, with their retirement funds heavily invested in equities, were knocked down badly this August.

To eliminate the risk of having millions more people in poverty, expand Social Security. Make it a real national retirement plan. Collect more but also pay more. Yes, it’s a tax increase, but it’s a form of savings and insurance with a real return to the person paying in. Increasing Social Security reduces the need for personal savings and the risk that goes with it.

None of this is difficult. The only requirement is to stop thinking of government as the enemy and think of it as people working together for the common good – that’s all it takes.

Sam Uretsky writes and practices pharmacy on Long Island, N.Y. Email him at

From The Progressive Populist, September 15, 2011

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