September 2004

Collections and Exhibits

The Ownership Society


"A Guided Tour of the 'Ownership Society'"
-- Michael Kinsley in The Los Angeles Times, 9/5/04:

At the moment, we are a Debtorship Society. The government is spending far more than it is bringing in. And even so, our commitments, primarily to supply pensions and healthcare to the elderly, exceed the amounts we are putting aside to pay for them. Then there's the rhetorical commitment of all politicians to do something about the nearly 45 million Americans with no health insurance.

Bush proposes "ownership" as a cure for debtorship. As a general concept, it's fine: Assets are empowering, people spend their own money more carefully than other people's, and market forces promote efficiency. But how does all this apply to the specific problems we face?

Taxes. Our complex tax system is costly in itself and messes up the economy with perverse incentives. Bush says he wants to simplify taxes, and everyone likes tax simplification in the abstract. But people also like deductions. Bush has already promised to protect charity and home mortgage interest deductions. And, he wants to introduce new deductions for healthcare savings accounts and whatnot.

Any change in the tax system that raises the same amount of money means higher taxes for some and lower taxes for others. Are you still for tax simplification if it means higher taxes for you? Bush will probably try to hide this effect by combining simplification with a tax cut. But these are different issues. You can have a tax cut with or without simplification. Are you still for simplification if it makes your tax cut smaller?

Healthcare. This is one area where the ideas grouped under the label "ownership society" hold some real promise. There are vast inefficiencies in the current healthcare system and vast potential for improvement by using market forces -- putting the money in people's hands and letting them make more of the decisions is one way to do this.

However, no one seriously believes that improving the efficiency of healthcare delivery will be enough to pay for our healthcare commitments and goals. There are important limits on market forces in healthcare. You're not going to price-shop for a brain surgeon or negotiate for a visit to an emergency room. There's also a basic conflict between the "ownership society" notion that people should shoulder more of their own risks and the basic idea of insurance, which is to protect you from risks. The more that market forces are built into healthcare, the more people will not have access to the healthcare they need. The more you protect people from that, the harder it is to create market incentives.

Social Security. Here, the "ownership society" solution is a simple mathematical fraud. The concept: Government lets you keep some portion of the taxes you now pay into the Social Security trust fund, you invest those dollars and end up with more than you would have in the form of government benefits, and then (the rarely mentioned third step) your Social Security benefits are cut because you're doing so well. Basically, the idea is that profits on private investments will close the gap between projected Social Security revenues and payments.

The problem is this: The money in the Social Security trust fund is invested in government bonds. This money helps to finance the deficit. Every dollar of Social Security tax revenue that gets siphoned away to private retirement accounts would require the government to borrow one more dollar from the private sector in some other way. Of course, the government could also spend less, but (as with tax simplification) it could also just spend less and not bother with Social Security privatization. Privatization by itself doesn't add to the total pool of capital in the economy or reduce the amount claimed by the government.

Bush Guard Service: Summary of Disappeared Records


"Bush's National Guard File Missing Records"
-- Matt Kelley (AP) at news.yahoo.com, 9/5/04:

Records of Bush's service have significant gaps, starting in 1972. Bush has said he left Texas that year to work on the unsuccessful Senate campaign in Alabama of family friend Winton Blount.

The five kinds of missing files are:

-- A report from the Texas Air National Guard to Bush's local draft board certifying that Bush remained in good standing. The government has released copies of those DD Form 44 documents for Bush for 1971 and earlier years but not for 1972 or 1973. Records from Bush's draft board in Houston do not show his draft status changed after he joined the guard in 1968. The AP obtained the draft board records Aug. 27 under the Freedom of Information Act.

-- Records of a required investigation into why Bush lost flight status. When Bush skipped his 1972 physical, regulations required his Texas commanders to "direct an investigation as to why the individual failed to accomplish the medical examination," according to the Air Force manual at the time. An investigative report was supposed to be forwarded "with the command recommendation" to Air Force officials "for final determination."

Bush's spokesmen have said he skipped the exam because he knew he would be doing desk duty in Alabama. But Bush was required to take the physical by the end of July 1972, more than a month before he won final approval to train in Alabama.

-- A written acknowledgment from Bush that he had received the orders grounding him. His Texas commanders were ordered to have Bush sign such a document; but none has been released.

-- Reports of formal counseling sessions Bush was required to have after missing more than three training sessions. Bush missed at least five months' worth of National Guard training in 1972. No documents have surfaced indicating Bush was counseled or had written authorization to skip that training or make it up later. Commanders did have broad discretion to allow guardsmen to make up for missed training sessions, said Weaver and Lawrence Korb, Pentagon . . . personnel chief during the Reagan administration from 1981 to 1985.

"If you missed it, you could make it up," said Korb, who now works for the Center for American Progress, which supports Kerry.

-- A signed statement from Bush acknowledging he could be called to active duty if he did not promptly transfer to another guard unit after leaving Texas. The statement was required as part of a Vietnam-era crackdown on no-show guardsmen. Bush was approved in September 1972 to train with the Alabama unit, more than four months after he left Texas.