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John Stiglich: The ownership society

BY JOHN STIGLICH

Published March 20, 2007

Regardless of what you say about the rancher in the White House, one aspect of the Bush presidency you have admire is his fortitude in the face of strong political head winds. During his tenure, Bush pushed for tax cuts at the beginning of the war against terrorism, even though his predecessors raised taxes under similar circumstances. He nominated a vocal United Nations critic, John Bolton, as the U.S. ambassador to the U.N. And with the chorus of opposition to America's continued involvement in Iraq growing louder everyday, Bush still has earplugs in.

Talk about a cowboy sticking to his guns.

Still, it appears that Bush's boldest policy program, the ownership society, will never materialize, because Democrats and the media have successfully sold government as a provider, not a protector, of rights.

The underlying philosophy of the ownership society - giving Americans a stake in the country by increasing economic freedom - should be a no-brainer for anyone who believes in the merits of capitalism. After all, what self-respecting American wants to live off of government-forced charity? However, a large and well-financed sectio=n of the Democratic Party seemingly disregards the old proverb "Give a man a fish; he'll eat for a day. Teach him how to fish; he'll eat for a lifetime." With all this free fish flying around, responsible Republicans recognize it's time to cut bait.

These American socialists idolize the welfare states of France and other European countries. Bush, despite all his faults, understands this ideology of laziness must be defeated if we are to save the free market.

The platform of the ownership society calls for an overhaul of federal entitlement programs - namely Social Security and Medicare/Medicaid - by moving away from government-centered models and toward free-market solutions. Together, spending on entitlement programs constitutes about 60 percent of the federal budget. Upon the retirement of the Baby Boomer generation, the programs will suck up nearly three-quarters of our nation's checkbook. With each passing day, this financial crisis is further exacerbated. Only in 2019, when the Social Security fund dries up, will the far-Left maybe, possibly, perhaps, recognize that a problem exists.

In the meantime, Democrats are content to scare Americans into believing that heartless Republicans want to eliminate their entitlements - anything to protect the bleeding-heart legacy of the party. But even the Democrats' most celebrated president, FDR, recognized in a 1935 letter to Congress that the Social Security system would need to eventually be privatized to make it sustainable. President Bush, by advocating for private annuities financed by our payroll tax dollars, offered the pro-market solution FDR envisioned decades before.

Why the delay? The problem for Bush is twofold; pro-market solutions are taboo in today's Democratic Party, and private accounts are too complex for the simpletons in the media to explain.

Bruised but not broken, Bush announced in his most recent State of the Union address that he wants to solve the health care problem by restructuring the tax code to make private insurance more affordable to low- and middle-income Americans. Bush's plan calls for treating employer-provided health care as taxable income and then offering a $15,000 per-family tax deduction, which Bush believes will encourage Americans to flood the private insurance market looking for a policy. These incentives are certainly better relative to the status quo, because families that find insurance policies that cost less than the deduction get to keep the difference as a tax refund.

Once again, Bush is calling on Americans to be personally responsible for one of life's necessities. And once again, the Democratic Party refuses to debate the issue. Now that the Democrats control Congress, they can tailor the legislative agenda to avoid exposing their lack of ideas on this critical policy issue.

I know you think I'm just another heartless conservative who would like nothing more than to take away grandma's pills, but entitlement programs are not, by design, economically sustainable. They are also liable to free-rider abuse and should be reformed so that those who truly need help can receive it.

In the next decade, we must decide if the solution to our entitlement problem will be encouraging personal responsibility through the free market or using old techniques like benefit cuts and tax hikes to delay the inevitable. Here's to hoping the American people will put aside their Bush-bashing and support a policy that makes economic sense.


John Stiglich can be reached at jcsgolf@umich.edu.


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