Thursday, 5 March 2009

“Putting Our House In Order”, by George P. Schultz & John B. Shoven (W.W. Norton)

Schultz&Shoven-PuttingOurHouseInOrder

Following an election which, in part, focused on proposals for reforming America’s largest entitlement programs – Social Security and Medicaid, and a new president who has spoken often and forcefully about his plans to reform these programs, Putting Our House In Order offers an agenda for getting these programs solvent.

Taking a look at plans already on offer by legislators, academics and pundits, Shultz and Shoven chart a potential course to provide livable-income to the elderly and universal access to affordable healthcare. Given that, when discussing the state of the American economy, the cost of these entitlements are considered to be the largest and potentially disastrous fiscal commitments, Schultz and Shoven argue that it is essential for these problems to be solved. Couple this with the simple fact that people are living longer, it is incredible that more progress has not been made to make these programs sustainable.

The authors don’t offer guarantees or even final solutions, but rather “to help find a way to make progress on this most important problem.” Little attention is paid to other nations who have managed to create successful, affordable healthcare systems, and the authors certainly subscribe to the Republican “government should get out of the way” ideology. They rightly point out that the “staggering” costs of the programs mean “inaction is not an option”, and indeed that reforms are long overdue; the poor accounting for the fund is another issue that the authors touch upon. Some suggestions also don’t really make a whole lot of sense. For example, why raise the tax that pays for Social Security (FICA), but put the money in a separate account? Why not put it into Social Security? It seems a bit pointless to create all the extra paperwork and administration that would likely end up costing even more. With the current state of the stock market, it’s unlikely that personal-/single-payer accounts will receive much support – why tie your social security money to something that’s not performing very well at the moment (though, sure, I believe it will recover, eventually). The voucher system proposed for Medicaid isn’t a bad idea, but I can’t see it being feasible in the long run. I admit, this might be because my understanding of the various taxation and financing systems discussed are way beyond my Social Science-educated mind… (This might explain why I’ve been stumped by the above two examples – happy to be put right.)

For those interested in, and well-read on the subject, Putting Our House In Order will provide an interesting alternative text to use, with some interesting propositions and a measured argument. For those interested in the subject, but without much current knowledge, this book will work as an introduction to various issues and perspectives already floating around the political world. It’s a wonkish book, which makes it a bit too dense for the casual reader, but there’s still plenty in here that will get you thinking.

A cautiously optimistic book, whether you agree with the authors or not, it’s worth a read.

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