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Wednesday, May 18, 2011

The Ghosts of America Haunt Social Security

In a country with a life expectancy almost as long as the lines at the offices of its bureaucracy, the scale and scope of health care spending is nothing to marvel at. But it is not so much the entitlements themselves that are expensive, as the cost of the liberal social policies that surround them.

Medicare and Social Security wouldn't be such economic bogeymen if the Baby Boomers had maintained the same birth rate as the Greatest Generation, instead of fragmenting into hedonism and high divorce rates, and if their Generation X children hadn't gone even further down the same road. But it is those liberal social values that make social security economically unsustainable.

General prosperity and the dramatic decline in infant mortality rates should have dramatically boosted the birth rate, outweighing the costs of increased life expectancy. Instead fertility rates went down by half in the 20th century, even as infant mortality rates went down by over 95 percent, but life expectancy went up by two decades. The average America today is older, lives alone or at most in a household with two people. As each generation's birth rate falls, it becomes unable to carry the cost of the larger generation before it, and its succeeding generation will be unable to do the same for it. Three people can pay for their own retirement. But they can't pay for the retirement of five people. And one person can't pay for their retirement.

Liberal social policies crafted for a country with a high birth rate and large families, have been undone by their own promotion of anti-family values. The falling birth rate and the decline of pooled family resources erodes the very tax base they need to keep the system going. The dual income family means a higher tax payday in the short run, but a deficit due to lower birth rates. Liberals have championed economic collectivism in the name of social individualism, 'join in to be able to do your own thing', and that contradiction is tearing apart their great society.

While liberal social values promoted irresponsible behavior, their government programs tied everyone into one interdependent loop. And the overseers of the loop behaved just as irresponsibly. In their hands, government ceased to be a means and became an end. Any spare revenue had to be spent immediately. New revenue sources had to be milked as soon as possible. There was no thought for the future. Social Security was no longer an end, it was a means for collecting money. The end was government spending. And that's where the end is now.

Social welfare programs that were meant to provide for worker retirement, were robbed by both parties to fund their big government programs. And the cost of those programs spilled over into high tax rates on individuals and companies, and into a regulatory framework that drove companies out of America and penalized businesses that could have provided the revenue they needed. The bigger that the government gets, the more it destroys its own long term feasibility. We are now approaching the point where government will outgrow the resources of the country and then it will no longer be, 'Too Big To Fail'.

A state in which the government supervises retirement savings is only feasible, if it doesn't use them as its own private piggy bank, while counting on fairies to repay the money it took. And subsidizing their health care is feasible, if it isn't at the same time also subsidizing everyone else's healthcare, day care centers, mortgages for minorities, wetland habitats for the spotted pink stoolhopper, farms, banks, food stamps and the interest on the debt that it takes to pay for all of these. And most importantly, generational subsidies don't work if the birth rate continues to decline and the generations aren't there.

Europe and America have tried to meet the welfare state birth rate gap with immigration. But immigration expands the welfare state at a higher rate, than it expands the tax base. Especially if you bring in poor people with few skills into a country where you need three degrees, five certificates and a union card to mop the floor. As long as immigrants were mainly young and put in more than they took out, the numbers were still workable. But not now when the age of the average immigrant is older than the age of the average American. When the average immigrant arrives 26 years away from retirement, the entitlement meltdown escalates.

It has always been understood throughout history that to have a comfortable old age, you need to raise a set number of children to provide it for you. But when the welfare state pooled that into a system, generations lost track of this simple wisdom. Birth rates went down leaving fewer children to take care of their elders. Families were discouraged and the breakup of the extended family was promoted. Children became more expensive and provided less long term value to their parents. Generational linkages forged throughout human history broke down as people failed to merge their self-interest into the collective welfare that would keep the system going.

The ghosts of aborted and missing children that were never born have become the specters haunting Europe. And not just Europe. First World nations as diverse as America and as uniform as Japan are in the same boat. The picture is tragic. Entire towns and villages vanishing. Cities overrun by immigrants from hostile cultures. Fewer and delayed marriages. Smaller numbers of children. And overseeing it all is a crumbling welfare state run by an entrenched bureaucracy determined to take everyone down with it.

Social Security spending is not the problem-- it is a symptom of a much worse problem. Civilization is vanishing. It is not hard to imagine that five hundred years from now, the original inhabitants of London or Paris will be as much a curiosity to the folk who live there now, as the Aztecs and Incas are to us. Nor is it hard to imagine the skyscrapers of New York or Boston in the hands of people who did not build them and cannot maintain them. We are nearly there now.

The health care system we have is only another symptom of the decline. The steep cost of health care should not be viewed in isolation, but in the context of countries that can no longer build cars, shop at supermarkets filled with junk from Guangzhou, Guangzhou and Dhaka, and watch enviously as backward countries that have won the oil lottery erect mile high skyscrapers, while they settle for housing projects and governments buildings for the expanding bureaucracy.

Why should we be able to provide quality affordable unsubsidized health care, when we can no longer do so in any other field. Our auto industries, banks, aircraft manufacturers and even telecoms are subsidized to a degree that most don't even want to think about. We have two types of industries, that have either moved to China or Mexico, or that are being paid by the government not to move fully to China and Mexico. Half of our defense spending is nothing more than subsidized factories and towns whose economy depends on local bases. Even much of our foreign aid is money doled out to be spent at those same factories.

Health care is one of the few things we have that can't be fully outsourced (not that it stops hospitals from outsourcing unimportant tasks like analyzing X-rays to radiologists in Singapore and India) and that everyone needs. And of course it's subsidized by the same dysfunctional government that kicks billions into entire industries, while regulating them so senselessly that they can't make a profit without it. In the health care debate, proponents of socialized medicine rub shoulders with lobbyists for massive HMO's looking for sweetheart deals. The mandate is the trade off between the socialists and the industry. Force everyone to buy from us and we'll give you a good deal.

The transformation of health care from a relationship to an industry and then into a bureaucracy is what has given us high tech, brilliant specialists and sophisticated techniques, surrounded by a vast moat of unions, regulations and paperwork that could be draped around the world a thousand times in just a single day. The volumes of research that expand the frontiers of medical science are as nothing compared to the volumes of regulations that everyone who passes through the health care maze, as doctors, nurses, assistants or patients, have to deal with.

The cost of health care is driven more by that moat, than by what is inside it. We can afford the doctors, it's the vast bureaucracy that we can't afford. It's the horrifying tangle of special interests, lobbies, corrupt companies, consultants, advocates, regulators and human fax machines creating a constantly changing marketplace and overregulating it to within an inch of its life. Health care no longer describes what a patient receives, but a system which exists to pass money and competitive advantages around in incomprehensible ways through a regulatory obstacle course designed to maximize the power of the regulators and minimize the value received by both sides in the doctor-patient relationship.

Liberal health care reform advocates have already seen the future. It's SEIU med techs using computers to 'automatically' diagnose problems and forwarding the results of ambiguous diagnoses for consultations to doctors in Singapore or China. It's a card which tracks your quality of life and allocates your level of allowable care based on your age, your health, how well you're taking care of yourself and whether you engage in anti-social behavior. Their system doesn't exist to deliver care to patients, it exists to employ the people who determine how much care can be delivered, who should be allowed to deliver it and how it should be delivered.

And here is the root of the problem. This is how all of government and everything it touches works. Health care, the military, the education system, the economy-- it's all the same thing. There are the people down in the trenches doing their job, some well and some badly, with little to no support. And a vast bureaucracy over their heads making contradictory policy and regulations that can't be ignored, but have to be ignored so that everyone can come in to work tomorrow. And another smaller army of lobbyists, influential friends, activists and consultants riding high overhead.

Above them are the thrones of politicians who are willing to hear them plead their cases in exchange for a generous donation and some speaking fees, doling out regulatory immunity, special privileges and more regulations piled on top of the ones that you need an entire department to deal with already.

We don't have a dysfunctional and unsustainable health care system. We have a dysfunctional and unsustainable everything. Health care just happens to be a vital pressure point, and when combined with the birth rate gap of retirees it turns into a nuclear bomb. But it's still a symptom of a much larger problem. And the problem is still government. Not just government, but Government.

A government is not as bad as the idea of Government, the capital notion that the only way to bring order to human affairs is to regulate them. No salvation outside Capitol Hill. Whether it's leftist radicals pushing socialized medicine or conservative managers pushing the mandate, they are both two sides of the same coin. The radicals apply their reforms, and the managers try to reform the reforms. The lunatics take over the asylum, and the doctors take them back to their cells and instead of clearing away what they did, try to make it work. A government is a consensus of the people. But Government is the consensus of the people who work in government. It is the consensus that they are the only answer.

In the crime of Government, the managers are worse than the radicals. Because the radicals at least have a plan. But the managers only plan to make the system work, without examining what is wrong with the system. The managers will impose new regulations or cut spending, but they can't see that all they are doing is applying band aids to a train wreck. They can add the numbers, but not see where the numbers come from. They expertly study the tree, but refuse to take a look at the forest.

11 comments:

HermitLion said...

Well said, Sultan. A well written description of a disastrous, entangled system, which most of us can't even begin to comprehend.

But your words always serve to clarify this red-tape&corruption mess, so, much appreciated.

Is there a way to make such a huge bureaucratic system change direction, or is it inevitably heading towards the edge of a cliff?

Daniel Greenfield @ the Sultan Knish blog said...

It would require a dramatic turn away from regulatory powermongering, and I'm not sure even that would repair the business culture. It didn't in the former Soviet Union

HermitLion said...

Dramatic being the key word here. Much like your earlier article, the burden of vigilance, responsibility, and call to action, lie with the people.

Anonymous said...

You got to the heart of the matter.

Daniel Greenfield @ the Sultan Knish blog said...

That's the underlying problem. The more complex a system become, the less sane it is. A massive system lacks the common sense of any single individual working within it. An insane system can go on working, but only at a higher cost to the people living under it.

careyrowland said...

God help us.

silentnomore9 said...

Daniel, I appreciate the clear description of the problem. I long for the clear description of the solution. The only one I know of is national repentance to the acknowledging of the truth, but I am overwhelmed at the reality that your description is more a prophecy than and solution. How do we reverse the mess? What are the steps that we can take to clean up the mess? We are facing the very real possibility of this horrible president being re-elected not because he is good for America, but because America has lost connection with the God who gave them a reason for their existence. So, there is no unity in resolving the problems because even though God's laws, statutes and judgments contain the answers, there is not enough people who know his laws, statutes and judgments to bring their wisdom and understanding to bear on the public conversations.

Keli Ata said...

You hit the nail on the head once again.

My thoughts on SS in general is that if people pay into it and the gov't denies it, well, isn't that called embezzelment?

Daniel Greenfield @ the Sultan Knish blog said...

exactly

and those responsible for spending the surpluses should be put on trial

Daniel Greenfield @ the Sultan Knish blog said...

silent,

it comes down to restoring common sense by putting individuals at the center of the decision making process instead of systems

and on a larger level, rebuilding a national ethos of accomplishment, and that means restoring the old definitions of ideas

Edward Cline said...

In truth, is it really the “fault” of Americans and Europeans that they allowed their birth rates to decline, to be offset by expedient but suicidal immigration policies, and then, in the case of Europe especially, to allow the mass immigration of the adherents of a religious ideology to swamp indigenous populations? The blame should be put square on the notion of a welfare state, and then on the shoulders of politicians of all stripes and persuasions to turn a blind eye to the consequences, economically and culturally, and who subsequently played political and budgetary legerdemain with tax revenues, not daring to even hint at first, exposing the fraudulent nature of social security, second, stressing that it employs force, and third, patronizing the millions of citizens who claim entitlements. I frankly don’t care about the gray panthers or the baby boomers. They had a chance to examine the fraud of social security, Medicare, and all the other programs that usurped their rights and confiscated their wealth. They can starve and do with less. It’s what they condemned me to do, and they’re of my generation. They believe it’s my duty to be a slave or indentured servant so that their “entitlements” can be paid. They’ve got another thing coming to them.

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