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Policy Recommendations
Social Security
Social Security is in crisis. Estimates show that by the year 2020
the social security trust fund will be bankrupt. If action is not taken
immediately future generations will suffer. A gradual
increase in the retirement age must be enacted. That combined with a
rise in the taxable income cap, and a reduction in total benefits paid
will allow the institution of social security to exist for future
generations.
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Health Care
Spending on public health care in the United States is
growing at an unsustainable rate due mostly to mandatory spending on
Medicare and Medicaid. The source of this growth is increasing costs,
increasing consumption, and program inefficiencies. We feel there are
several tiers on which to address this growth. The first is to
eliminate economic inefficiencies in the health care system by increasing information transparency, promoting research
and education, and finally by establishing an electronic national
medical database. The second tier of reform could eliminate
market failures that have led to excess cost growth; this
includes removing incentives that are currently caused by low-deductible
insurance plans, and
encouraging cost-consciousness (through HSAs). Here, government spending
on Medicare and Medicaid could be cut by making private plans more
affordable (shifting people off government aid) and discouraging the
over consumption of services. The final stage of health care reform is
to provide a basic level of health care and preventative care to all,
thus addressing both the quality and the cost of health care in the
United States. Through the Medicaid and Medicare programs, we as a
nation have already made a commitment to providing health care services
to those in need. The structure of these programs however, does not
allow the government to optimize health care expenditure. In order to
sustain public health care services, we recommend a collection of
reforms to achieve maximum health benefits at minimum costs: 1) free
preventive care, 2) match eligibility age with retirement age, 3)
modestly raise enrollee contributions, and 4) ration basic care from
government subsidized programs.
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Trade Deficits
Currently, United States faces massive trade deficits fueled by
projections of large federal deficits. If something is not done to impede the
growth of the nation’s trade deficits, the American economy will only
become more dependent on foreign nations, thus increasing the risks
of a rapid depreciation of the dollar and an ensuing recession. In order to
prevent such an occurrence, it is imperative that American policymakers
limit government spending and promote a healthier national savings rate.
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Fiscal Policy
In
order to correct our current fiscal situation, voters must demand
politicians to reform entitlement programs and the current tax system.
Politicians have to take an active role in breaking the partisan divide.
The people have to educate themselves and others on these issues.
Finally, constituents should encourage reforms that will distribute the
burden of paying for the debt equally between generations.
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Budget
Reform
History has shown that it takes bipartisan action to institute any real
change in the budget process. In short, politicians must overlook their
partisan passions in favor of cooperation. The best set of proposed
reforms includes automatic triggers that decrease benefits when outlays
begin to exceed revenues. When the Social Security trustees report such
a long-term imbalance, congress must act to gradually increase the
retirement age, and index benefits to prices instead of wages, over a
certain minimum. Budgetary reforms to Medicare would also involve
automatic triggers. If there is an imbalance in the revenues and
outlays of Medicare, congress will gradually decrease benefits. It goes
without saying that gradual change is preferable to sudden change.
Also, reform is not meant to be permanent. It is merely a way to
compensate for ever-changing economic and social conditions, and should
always be open for debate.
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