Monday
Feb042008
Super Tuesday in a drowning nation
By Ellen Ratner
Twenty-four hour campaigning, 7,000 person rallies, political ads filling every TV and radio spot, political pundits spewing their latest guesstimates … overall, there is a lot of noise and promises, but no one is dealing with two of the biggest issues facing America – debt and health care crises.
In fairness, Ron Paul has attempted to elevate the debt crisis to the national scene, but he has been sidelined. And yes, the Democrats are talking about health care for all, and even Mitt Romney is touting his Massachusetts health care plan, but neither party is taking a hard look at the facts with debt or health care.
According to Demos and the Center for Responsible Lending, credit card debt has almost tripled since 1989 and risen 31 percent in the last three years. Many people are using credit cards as safety nets instead of relying on savings. Low and middle-income households have an average $8,650 in credit-card debt. Most people with this amount of debt have carried it for more than one year. Almost half of all card debtors have used their credit cards to pay for automobile repair. Not just paying the minimums, most people in this study paid $700 last month and are making a median payment of $300 per month. This kind of debt for so many Americans is clearly unsustainable.
On the health care front, the issue has been focused on the ability of people to purchase health insurance policies. Mitt Romney worked with the Democrats in his state to fine people who did not buy health insurance policies and to underwrite part of the costs for people who could not afford it. Hillary Clinton and Barack Obama each have plans to get the majority of Americans to be able to purchase health insurance. None of the candidates are discussing the real problem – the cost of health care, whether it is paid by insurance or the government, is going to rise astronomically. Insurance is not going to pay these rising costs because they will go broke doing so. Health care is now almost 17 percent of our GDP, up from 13 percent in 2000, and it is rising about a percentage point a year.
You do not have to be a Nobel laureate in economics to know that these numbers are unsustainable – health care will not be affordable to individuals or taxpayers as it takes a larger and larger chunk out of our overall economy.
Even though the candidates don't want to address these problems, there are solutions. First, on the credit crisis, we can provide real incentives for people to save by providing some kind of matching program in the same way that we are giving out treasury checks in the stimulus program. Congress can support legislation that would provide a tax break to those who save. Second, start making some deals with the credit card companies in the form of tax savings if they stop handing out easy credit and start reducing the monthly interest rates for people with high debt.
In addition, Demos and the Center for Responsible Lending recommend that credit card companies be required to disclose the overall cost of minimum payments and require meaningful underwriting standards so that credit card limits are not pushed beyond what they know can be paid for by the consumer.
With health care taking such a bite out of our GDP, the only solution is to turn the rising health technology costs into a plus on our national balance sheet. Other countries recognize our expertise. Johns Hopkins and the Cleveland Clinic are going to be managing hospitals in the United Arab Emirates. With our advances in equipment and other technology, there is no reason why we can't pay for our increasing health care bill by supporting research and exporting it. We have given tax breaks to tobacco companies to export their products, why not the same for health care innovators and providers?
The above are just a few solutions to major economic problems but nary a word from the major presidential hopefuls. You have to dig deep on their websites to find any in-depth thinking and forget about policy specifics. They are convinced that the American people don't want to hear anything but sound bites. If you don't believe that, watch one of the debates. They simply respond to one generality with another unless it's about "who" said or did "what" "when," and then the exchange becomes so sophomoric, as it did with Sen. McCain attacking Romney last week, that the other candidates have to redirect the focus to real issues when moderator Anderson Cooper lost control.
President Bush is no different than the candidates. He prefers to fly in the stratosphere on issues versus rolling up his sleeves and addressing root causes. He signed an executive order to put together a panel on increasing financial literacy for the greater population; that is great, but it hardly helps people caught in the vise now. Americans aren't dumb; they want real talk about real solutions. Too bad Super Tuesday won't move the candidates to enter into the discussion.
Twenty-four hour campaigning, 7,000 person rallies, political ads filling every TV and radio spot, political pundits spewing their latest guesstimates … overall, there is a lot of noise and promises, but no one is dealing with two of the biggest issues facing America – debt and health care crises.
In fairness, Ron Paul has attempted to elevate the debt crisis to the national scene, but he has been sidelined. And yes, the Democrats are talking about health care for all, and even Mitt Romney is touting his Massachusetts health care plan, but neither party is taking a hard look at the facts with debt or health care.
According to Demos and the Center for Responsible Lending, credit card debt has almost tripled since 1989 and risen 31 percent in the last three years. Many people are using credit cards as safety nets instead of relying on savings. Low and middle-income households have an average $8,650 in credit-card debt. Most people with this amount of debt have carried it for more than one year. Almost half of all card debtors have used their credit cards to pay for automobile repair. Not just paying the minimums, most people in this study paid $700 last month and are making a median payment of $300 per month. This kind of debt for so many Americans is clearly unsustainable.
On the health care front, the issue has been focused on the ability of people to purchase health insurance policies. Mitt Romney worked with the Democrats in his state to fine people who did not buy health insurance policies and to underwrite part of the costs for people who could not afford it. Hillary Clinton and Barack Obama each have plans to get the majority of Americans to be able to purchase health insurance. None of the candidates are discussing the real problem – the cost of health care, whether it is paid by insurance or the government, is going to rise astronomically. Insurance is not going to pay these rising costs because they will go broke doing so. Health care is now almost 17 percent of our GDP, up from 13 percent in 2000, and it is rising about a percentage point a year.
You do not have to be a Nobel laureate in economics to know that these numbers are unsustainable – health care will not be affordable to individuals or taxpayers as it takes a larger and larger chunk out of our overall economy.
Even though the candidates don't want to address these problems, there are solutions. First, on the credit crisis, we can provide real incentives for people to save by providing some kind of matching program in the same way that we are giving out treasury checks in the stimulus program. Congress can support legislation that would provide a tax break to those who save. Second, start making some deals with the credit card companies in the form of tax savings if they stop handing out easy credit and start reducing the monthly interest rates for people with high debt.
In addition, Demos and the Center for Responsible Lending recommend that credit card companies be required to disclose the overall cost of minimum payments and require meaningful underwriting standards so that credit card limits are not pushed beyond what they know can be paid for by the consumer.
With health care taking such a bite out of our GDP, the only solution is to turn the rising health technology costs into a plus on our national balance sheet. Other countries recognize our expertise. Johns Hopkins and the Cleveland Clinic are going to be managing hospitals in the United Arab Emirates. With our advances in equipment and other technology, there is no reason why we can't pay for our increasing health care bill by supporting research and exporting it. We have given tax breaks to tobacco companies to export their products, why not the same for health care innovators and providers?
The above are just a few solutions to major economic problems but nary a word from the major presidential hopefuls. You have to dig deep on their websites to find any in-depth thinking and forget about policy specifics. They are convinced that the American people don't want to hear anything but sound bites. If you don't believe that, watch one of the debates. They simply respond to one generality with another unless it's about "who" said or did "what" "when," and then the exchange becomes so sophomoric, as it did with Sen. McCain attacking Romney last week, that the other candidates have to redirect the focus to real issues when moderator Anderson Cooper lost control.
President Bush is no different than the candidates. He prefers to fly in the stratosphere on issues versus rolling up his sleeves and addressing root causes. He signed an executive order to put together a panel on increasing financial literacy for the greater population; that is great, but it hardly helps people caught in the vise now. Americans aren't dumb; they want real talk about real solutions. Too bad Super Tuesday won't move the candidates to enter into the discussion.
tagged 
Anderson Cooper., Health Care, Ron Paul, UAE, debt, gdp, mccain, obama, romney, super tuesday, tax breaks in News/Commentary
Anderson Cooper., Health Care, Ron Paul, UAE, debt, gdp, mccain, obama, romney, super tuesday, tax breaks in News/Commentary
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