Saturday, October 27, 2012
Things that aren't so
1. The growing national debt will eventually ruin the economy. It depends on who the creditors are. If China holds most of the national debt, that country will have a strangle hold on what American administrations can do to stimulate the American economy. The Chinese will insist that any American administration must stimulate the Chinese economy. However, if the debt is owed to American citizens, the economic effect is small. In this case the American government is not collecting enough revenue in taxes and must borrow money from those Americans who have a lot of it. With a better tax policy, those rich Americans would be paying the money in taxes instead of buying government bonds.
2. The world is full of enemies and we must maintain an invincible military system to protect ourselves. Before the great Communist scare after World War #2, the world was full of enemies. It was also full of friends. We, with our allies, had just defeated a monstrous enemy: the Hitler regime in Germany. We also defeated the Japanese. Because of our great fear of the Russians, we embarked on an arms race with Russia whose purpose was to wreck the Russian economy. The Russians finally withdrew from the arms race, not because it was wrecking their economy but because their political system was unraveling. The arms race and the Russian fear of the American menace actually held their system together for years. We have no possible enemies today to match or even come close to what we feared from Russia in the period 1950 to 1980. We have no need for a military system anywhere near as big as the one we now support.
3. Social Security must eventually fail because the ratio of retirees to workers will become less greater than one retiree for two workers. At some point the tax on the workers to support the retirees will become unsustainable. This argument is made by someone who assumes that Social Security will continue to be supported only by the payroll tax and that the average retirement age will remain at 65. People are now living longer. Many people now continue to work past the age of seventy. In fact, many retirees seek out work, either as paid workers or volunteers, as a means of avoiding the boredom of having nothing to do. If you ignore the tax problem and look at the economic situation, it is apparent, to me at least, that our economy can easily produce the surplus needed to support retirees in comfort without depriving all others of any of their pleasures. The problem is simply one of how to keep the books.
4. Universal health care is impractical because we can't afford it. With our present system of fee for service health care in which many doctors regard their practices as cash cows, the cost of all kinds of health care is rising faster than the rate of inflation. Other countries, many of whom have various forms of universal health care, manage to provide needed or adequate health care for half or less the cost to Americans of their health care. We have examples in this country of providers of health care that provide excellent care at a low cost. The best example is the Mayo Clinic in Minnesota. If we can persuade doctors to provide health care in that way, then we can certainly afford a means of providing good health care to everyone, regardless of wealth or poverty.