How to Make America America Again
I don’t love a “theoretical” America.I love this country and everything it represents and stands for. I still regard the country as the Greatest Nation in the history of the world.
However I also love the America that was and can be again. A Free Market Oriented Limited Government Federalist/Decentralized Constitutional Republic.Today’s America is still vastly superior to the rest of the world,but not to what it once was and its founders vision for the nation.The Reforms outlined here will help Restore our Republic to our Founders intentions and reverse the Progressive Policies of the past 105 years.
These Reforms will help America be, well America. Not Norway, Denmark, Sweden, Europe, Canada, Australia or the Rest of the Developed World. But America.
Restoration of Economic Freedom:
To improve business freedom and forestall further erosion, U.S. policymakers need to:
- Repeal Dodd-Frank
- Drastically decrease the Number of Federal Regulations.
- Create a nonpartisan Congressional Regulation Office to review new regulations and their alternatives.
- Include a “sunset” date for all existing and new regulations, ensuring periodic review and requiring positive action for re-authorization and continuation of any regulation.
- Repeal stifling regulation of health care, the environment, financial institutions, and the Internet.
- A reduced regulatory burden that led to a 50 percent improvement in the World Banks Ease of Business Index would add 15.1 points to the U.S. business freedom score. Putting the US with a score of 99.5. The Highest Amounts of Business Freedom in the world above Singapore whom has a score of 95.1.
To improve trade freedom and ensure U.S. competitiveness, U.S. policymakers need to:
- Eliminate all remaining U.S. tariffs and import quotas. A scheduled phaseout over a decade would allow orderly adjustment in those sectors, like sugar and dairy, that are heavily subsidized by protectionism.
- Reform U.S. trade remedies to bring them into compliance with international trade rules. In particular, end the practice of “zeroing” in calculating dumping margins.
- End trade-distorting U.S. agricultural and energy subsidies, including subsidies for ethanol
- Implement Free Trade Agreements with Europe as well as The Asia Pacific.
- Eliminating tariffs would add 3.1 points to the U.S. trade freedom score, and eliminating subsidies and non-WTO-compliant trade remedies would boost the score another 5 points.
- Together, these reforms would increase the U.S. trade freedom score by a total of 8 points. The U.S. would jump from 18th place to 1st place in the trade freedom rankings with a score of 95
At a minimum, the U.S. needs to reduce its marginal personal and corporate income tax rates to maintain its position as an attractive destination for investment. Setting these rates at the world average levels of 29 percent and 25 percent, respectively, would increase the U.S. fiscal freedom score by 9.8 points. Bolder reform is required to move the U.S. into the top ranks of fiscally free countries. Long term to restore the Tax System to the way it was intended ,Such reform might include:
- Eliminate Direct Taxes such as Income Taxes and Corporate Income Tax
- Abolish the IRS
- End all Tax Burdens
- Establishing Indirect Taxes such as the excise tax and import duties. Giving the US a score of 99.9 on Tax Freedom. Putting America 1st in the world.
- Pass the Fair Tax Act
In our democratic political system, special-interest claims for subsidies and income transfers are almost irresistible without some sort of external discipline on the budget authorization process. To address this problem, Congress needs to:
- Enact a federal spending cap that limits overall federal spending to no more than 20 percent of U.S. GDP. If Congress refuses to act, the American people could impose such a cap through a constitutional amendment.
- Take entitlement spending off of autopilot and subject it to the discipline of the normal budgetary approval process. Entitlement spending must be forced to compete politically with other spending priorities, including spending for defense that has been projected to require no less than 4 percent of GDP.
- Devolve all federal transportation, antipoverty, economic development, agriculture, education, and criminal justice spending to state and local governments. The ability of state and local governments to tailor programs to needs more efficiently and to experiment with new approaches could reduce the overall combined cost of government while increasing its efficiency and accountability.
- The federal spending cap at 20 percent of GDP plus the increased efficiencies from returning significant spending responsibilities to state and local governments should limit overall government spending to 33 percent of GDP.This would:
- Provide a gain of 12.3 points in the U.S. government spending score. Improving Americas score to 67.3.
The Federal Reserve has been doing a good job of controlling U.S. inflation in recent years, but greater transparency in its operations would improve market stability and confidence. The Federal Reserve should therefore:
- Explore new and innovative ways to communicate to policymakers and the public what it is doing and why, ensuring that its principal decision-making criteria and overall targets are transparent and predictable.
- End price supports, production quotas, and regulatory interventions in housing, automotive, and financial markets that distort prices among competing producers. As well as Corporate Welfare federal subsidies for agriculture, health care, green energy and other special interests
- The end of federal interventions that distort market prices would result in an increase of 3 points in the U.S. monetary freedom score. The United States would have a score of 83.1 in Monetary Freedom
While restrictions on foreign investments that raise legitimate national security concerns are appropriate, many of the sectoral restrictions in areas like communications, banking, energy, and even air transport and shipping reflect concerns that have been overtaken by technological and market change. Their primary effect today is not to improve U.S. security but rather to restrain trade and give U.S. commercial interests a competitive advantage. Like other government interventions in favor of special interests, these investment restrictions reduce overall economic freedom and favor a few Americans at the expense of the general population. To improve U.S. competitiveness in attracting foreign direct investment, the U.S. government needs to:
- Remove all restrictions on foreign investment in banking, communications, and transportation and all restrictions on foreign ownership of land.
- Review restrictions in other sectors to ensure that they serve a real purpose in promoting national security and remove those that do not.
- Eliminating all anti-competitive non-defense-related restrictions on inward foreign direct investment and land ownership would raise the U.S. investment freedom score by 10 points. This would give the United States a score of 90 in terms of Investment Freedom as well as tie the United States in second with Hong Kong in terms of Investment Freedom.
Since the U.S. financial freedom score declined in 2010, a good first step in restoring America’s financial freedom would be to unwind the specific government interventions that have taken place since 2008. The U.S. government needs to:
- Abolish and unwind the TARP program.
- A more ambitious agenda that would move the U.S. to the top ranks of financially free countries would include, in addition to the above:
- Abolition of Freddie Mac and Fannie Mae and repeal of all U.S. government regulatory measures that interfere with mortgage markets.
- Repeal of the Sarbanes–Oxley Act, which discriminates against small firms and reduces competition.
- Unwinding the TARP programs and divesting assets acquired by the U.S. government would add 10 points to the U.S. financial freedom score. Abolition of Freddie Mac and Fannie Mae and repeal of the Sarbanes–Oxley Act would add an additional 10 points.
- The total gain in the U.S. financial freedom score would be 20 points.The U.S. financial freedom ranking would improve from 17th place to 1st place.
Fifth Amendment Integrity Reform
To reverse the increasing governmental undermining of property rights, the federal government needs to:
- Divest itself of all assets acquired in connection with the financial crisis and recession.
- Refrain from interfering in bankruptcy cases
- Overturn the Kelo decision and establish a principle of strict public use for property to be taken by government under eminent domain.
- Enact the Fifth Amendment Integrity Restoration Act which puts an End to Civil Asset Forfeiture.
- Eliminate government intrusion, involvement, or controls.
- Establish voluntary Property Taxes
- With these Reforms this would boost the U.S. property rights score by a total of 14 points. Giving the United States a score of 99. Such reforms would put the United States in first place in terms of Property Rights ahead of Singapore and New Zealand
The government needs to extract itself as soon as possible from involvement in commercial decision-making and the allocation of financial resources to individual firms. In this regard, the government needs to:
- Divest itself of all assets acquired in connection with the financial crisis and recession
- Full restoration of the public’s faith in the even-handedness of our government institutions will require more far-reaching reform. Congress should:
- Eliminate all congressional pork-barrel earmarks from legislation
- Enact term limits
- The elimination of congressional pork-barrel earmarks would be estimated to have a very positive impact on the public’s perception of Congress and lead to an improvement of 12 points in the U.S. Governments Integrity Score. The United States would score at 88 being third in the world.
While the American labor market is largely free, unions restrict the movement of workers into and out of organized companies and control wage levels, sometimes to the detriment of more productive workers. America could bring labor freedom to these companies by adopting provisions such as those contained in the Employment Contracts Act to provide freedom of choice regarding bargaining representation and the Rewarding Achievement and Incentivizing Successful Employees act to allow above-union wages for the best employees. Congress needs to
- Modify the National Labor Relations Act to give individual workers the freedom to choose whether or not they want a bargaining representative. If they do, they should have the freedom to choose who they want to represent them. This would allow unionized companies and employees to negotiate individually tailored contracts.
- Eliminate the federal minimum wage.
- Elimination of the federal minimum wage would leave some state minimum wage laws in effect, but a realistic estimate of its impact on the labor freedom score is:
- A gain of 8 points in the U.S. labor freedom score. An improvement in the U.S. labor freedom ranking from 2nd place to 1st place.
Using the Reforms Above Americas Economic Freedom ranking would skyrocket from 17th to 3rd.Americas score would be 85.5 and once again as it was in the first 241 years of its history be categorized as a “Free Economy” from 80–100 and not a “Mostly Free” economy as it was in the Obama era.
- Limit Regulations to Pre-Progressive Era Levels. As the Founding Fathers intended
- Keep Limited Regulations
- End Occupational Licensing
- Privatize all Existing Regulations
The bloated federal government and its regulatory regime also challenge the ideal of self-government and citizen autonomy celebrated in the Declaration and institutionalized in the Constitution. Just the Environmental Protection Agency alone enforces 7,000 rules that cost the economy $350 billion a year, and that doesn’t count Obama’s pending assault on coal-fired power plants. In 2012, the Federal Register, which publishes new rules and final changes to existing rules, weighed in at nearly 79,000 pages. The Code of Federal Regulations, which publishes permanent rules and regulations, totaled over 174,000, with over 1 million individual regulatory restrictions. The Competitive Enterprise Institute reckons the annual cost of obeying all these rules and regulations at $1.8 trillion a year. But more important than the cost of this regulatory behemoth backed by the coercive power of the government is the erosion of our freedom and autonomy, the very foundational principles of the Declaration. Indeed, it recalls the Declaration’s indictment of George III, who “erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.”
Regulation’s overall effect on output’s growth rate is negative and substantial.
Federal regulations added over the past fifty years have reduced real output growth by about two percentage points on average[annually] over the period 1949–2005. That reduction in the growth rate has led to an accumulated reduction in GDP of about $38.8 trillion as of the end of 2011. That is, GDP at the end of 2011 would have been $53.9 trillion instead of $15.1 trillion if regulation had remained at its 1949 level
As a result of the increase in federal regulations, the average American household receives about $277,000 less annually than it would have gotten in the absence of six decades of accumulated regulations a median household income of $330,000 instead of the $53,000 we get now.
But let’s say that the two economists have grossly overestimated how fast the economy could have grown in the absence of proliferating regulations. So instead let’s take the real average GDP growth rate between 1870 and 1900, before the Progressives jumpstarted the regulatory state and America still had its long Tradition of Limited Government. Economic growth in the last decades of the 19th century averaged 4.5 percent per year. Compounding that growth rate from the real 1949 GDP of $1.8 trillion to now would have yielded a total GDP in 2013 of around $31 trillion. Considerably lower than the $54 trillion estimated by Dawson and Seater, but nevertheless about double the size of our current GDP.
The Study Measured is not measuring 1890 level. Not even 1930 level.
- Legalizing Recreational and Medical Marijuana by Passing the Ending Federal Marijuana Prohibition Act of 2017
Other Drug Reform
- Decriminalize Heroin, Methamphetamine,Cocaine and all other Drugs following the example set forth in Portugal
Doing so would give the United States a score of 70 on the Free Existence Drug Freedom Index. Giving the United States the third highest Score in terms of Drug Freedom, compared to the current score of 47.
The arguments for drug legalization are numerous, however I will focus on one.A single question for which all self-described “conservatives” should have a fairly similar answer: what is the purpose of the government as the founders intended?
The Constitution crafted a decade after the Declaration brilliantly institutionalized the protection of freedom and autonomy at the same time it created a unified central government to perform the functions beyond the powers of the individual states. It did not create the federal government to “solve problems,” for local communities, families, civil society, and state governments were better suited for that task, as they were closer to and more intimate with the great variety of the American people and their mores, religious denominations, customs, and interests.
The federal government does not exist to make the world better. It’s not here to eliminate poverty. (Look at inner city ghettos to see how effective the Left’s efforts have been.) It’s not supposed to try and make sure that more people can buy homes. (Look at the economic crash of 2008.) The founders never intended a government which would require all citizens to buy health insurance. (Look into a crystal ball of how the next few years will turn out.) When government is shifted toward bringing about some form of utopia it fails.
The purpose of government is to protect a free society. It’s to allow for a country in which the individual is sovereign, in which every man and woman can pursue his own destiny as they see fit. If they want to create jobs and raise families they can. If they want to destroy themselves then that’s their freedom.
So how does throwing people into jail for growing and consuming a plant fit into this understanding of government? Thus it makes sense that Goldwater was hardly the only important conservative whose opinion of marijuana softened over the years. William F. Buckley, Jr went even further, advocating full-blown legalization in 2004.
The Conservative Movement is a political movement not a cultural movement. Its about Conserving the ideas of the founders not the Judeo-Christian, “traditional” culture of the founders? And if it is about preserving a traditional culture, is it going to use the tyrannical power of government to do it?
My answers to these questions should be obvious. I’m concerned about defeating the Left’s political machinations. And that should be the primary concern of conservatives. It’s not pot-smoking counterculturalists that are sending Guantanamo detainees to Illinois. The push for socialized medicine comes from leftists. (Harry Reid and Howard Dean are in no way “counterculture.”) And the political fight against these problems can only be won by a functioning coalition comprised of many peoples with many cultures who are united by a common political understanding of the role of government
A conservatism that can win is one which understands itself and defines itself as a political movement, not a cultural one. To do otherwise is to begin to destroy a functioning coalition that has been vital to defending America since Barry Goldwater, William F. Buckley Jr., and Ronald Reagan brought it together in the 20th century. Conservatism must take the same approach to culture as the Constitution does neutrality. Such an attitude worked for the document which has guided and protected our country for centuries and it will work for the Movement who has the same objective.
Second Amendment Restoration Reform:
- Eliminate All Gun Control Measures passed beginning in 1934. Including and not limited to the National Firearms Act of 1934, the Gun Control Act of 1968, the Firearm Owners Protection Act of 1986, and the proposed National Concealed Carry Reciprocity Act.
- Eliminate all State Violations of the Second Amendment as Unconstitutional. Use the Supremacy Clause to Restore American Gun Rights across all the 50 states
Doing so would restore American Gun Rights which existed for the first 143 years of our Republic. No state has any authority to infringe on the right of the people to keep and bear arms. All federal and state gun laws are a direct violation of the 2nd Amendment and are long overdue to be struck down.
Doing so would give the United States a 100 Score on the Free Existence Gun Rights Index, as our score would likely be in the first 143 years of our existence and not the 80 score we have today.
Dismantling of the Welfare State:
- Eliminate or Privatize Social Security, Medicare, Medicaid, farm subsidies, and other so-called assistance programs for the needy, the downtrodden, and the sick funded through taxation.
- Full Elimination of the Federal Government Run Safety Net
- End the War on Poverty
- Return to Charity as a means for helping the Poor, not Government Funded Programs such as in the first 150 years of our nation.
The Founding Fathers vigorously debated the role of the federal government and defined it in Article I, Section 8 spelling out the specific duties and obligations of the federal government. Most notably, this included providing a military for national security, coining money, establishing rules for immigration and citizenship, establishing rules for bankruptcy, setting up a postal system, establishing trademark and copyright rules, and setting up a legal system to resolves disputes, in addition to a handful of other matters.
Charity is not there. Congress began ignoring its lack of authority for charity before the ink dried on the Constitution. When Congress appropriated $15,000 to assist French refugees in 1792, James Madison — a Founding Father and principal author of the Constitution — wrote, “I cannot undertake to lay my finger on that article of the Constitution, which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.”
If something is not permitted under our Constitution, the federal government simply cannot do it. Period. Absent (unconstitutional) government programs, individuals and charitable organizations can, will and in many cases already do provide services to the needy. A limited government one that taxes only to fulfill its permissible duties would allow even more disposable time and money.
The Founding Fathers never intended for the modern Welfare State. The often-misunderstood general welfare clause simply outlines specific responsibilities and powers of the federal government, leaving all others to the states and to the people. James Madison, the principle author of the Constitution, said, “With respect to the words general welfare, I have always regarded them as qualified by the details of powers (enumerated in the Constitution) connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proof was not contemplated by its creators.”
President Pierce, in 1854, vetoed a bill meant to help the mentally ill, saying, “I cannot find any authority in the Constitution for public charity.” To approve such spending, he said, “would be contrary to the letter and the spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded.”
In 1887, President Cleveland vetoed a bill to send money to drought-stricken counties in Texas, saying: “I feel obliged to withhold my approval of the plan to indulge in benevolent and charitable sentiment through the appropriation of public funds. … I find no warrant for such an appropriation in the Constitution.”
What will Replace the Welfare State? Charity
Alexis de Tocqueville, the Frenchman who spent months studying America in the 19th century, wrote this about America’s charitable spirit: “Americans group together to hold fetes, found seminaries, build inns, construct churches, distribute books, dispatch missionaries to the antipodes. They establish hospitals, prisons, schools by the same method. Finally, if they wish to highlight a truth or develop an opinion by the encouragement of a great example, they form an association.”
As for why Americans donate so much to charity, Tocqueville considered it a matter of enlightened self-interest: “American moralists do not claim that one must sacrifice oneself for one’s fellows because it is a fine thing to do but they are bold enough to say that such sacrifices are as necessary to the man who makes them as to those gaining from them. … They do not, therefore, deny that every man can pursue his own self-interest but they turn themselves inside out to prove that it is in each man’s interest to be virtuous. … Enlightened self-love continually leads them to help one another and inclines them to devote freely a part of their time and wealth to the welfare of the state.”
During the Great Depression before the social programs that today we accept as givens (Social Security, Medicare, Medicaid)charitable giving increased dramatically. After FDR began signing social programs into law, charitable giving continued, but not at the same rate. People felt that they had given at the office and/or that government was “handling it.”
Government “charity” is simply less efficient than private charity. Every dollar extracted from taxpayers, sent to Washington, and then routed to the beneficiary “loses” about 70 cents in transfer costs salaries, rent and other expenses. The Salvation Army, by contrast, spends 2 cents in operating costs, with the remainder going to fundraising and the beneficiary. They achieve this, among other ways, by relying on volunteers to do much of the work.
Following Hurricane Katrina, private companies, including The Home Depot and Walmart, provided basic needs, such as water and shelter, faster than did government.
Does government welfare distort behavior and cause people to act irresponsibly? In 1964, President Lyndon Johnson launched a “War on Poverty.” “Anti-poverty” workers literally went door to door to inform women of their “right” to money and services — provided the recipients were unmarried and had no men living in their houses. Out-of-wedlock births skyrocketed. In 1960, before the “War on Poverty,” out-of-wedlock births accounted for 2 percent of white births and 22 percent of black births. By 1994 just three decades after Johnson began his “War” the rates had soared to 25 and 70 percent, respectively.
Numerous studies conclude that children of “broken homes” with absentee or nonexistent fathers are more likely to commit crimes, drop out of school, do drugs and produce out-of-wedlock children. In 1985, the Los Angeles Times asked both the poor and non-poor the following question: Do you think those on welfare have children to get on welfare? More poor people (64 percent) said “yes” to that proposition than did non-poor (44 percent).
If not taxation, how then?
In 1871, the city of Chicago burned to the ground. Contributions, with virtually no money from government, rebuilt the city. After 9/11, so many Americans gave money that the Red Cross used some contributions for non-9/11 purposes. Christianity Today wrote in January 2002: “Suddenly awash in a sea of money, relief agencies such as the Salvation Army need help. So much money $1.5 billion so far — has come in that charities are having a hard time spending it.” And Americans donated an even greater sum to those affected by hurricanes Katrina and Rita.
Three in four families donate to charity, averaging more than 3 percent of their income, with two-thirds going to secular charities. In total, Americans give more than $300 billion a year more than the gross domestic product of Finland or Ireland. More than half of families also donate their time.
People-to-people charity is more efficient, less costly, more humane and compassionate, and more likely to inspire change and self-sufficiency in the beneficiary. People can and would readily satisfy society’s “moral imperative.”
Life is not fair. But it is unfair to assume that an America without a government-provided safety net would turn its backs on the less fortunate. Charity is in America’s DNA.
John Adams warned, “A Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever.”
The Only Benefits Guaranteed to American Citizens are
- Pursuit of Happiness
- Full property ownership.
Every American is responsible for themselves and has the option of helping others. Each living soul gives accordingly to help others in need and receives the credit or gives the credit to his Maker and Provider.
Rebuild the Military of the United States
The military capabilities of the United States to protect America and its interests abroad have been significantly reduced. The risk to Americans everywhere posed by global terrorism, the eruption of conflicts in many regions of the world, and American retreat in the face of challenges have begun to show the American people what a world without America looks like. The ability of the United States to exercise leadership and protect its interests depends substantially on the strength of the U.S. armed forces. The new President and Congress need to allocate the necessary resources to strengthen U.S. military capabilities.
The Blueprint for Rebuilding the Military of the United States is outlined by the Heritage Foundation here.
Restore American Hegemony and Leadership:
The liberal world order that was created in the aftermath of the Second World War is today being challenged by a variety of forces by powerful authoritarian governments and anti-liberal fundamentalist movements, as well as by long-term shifts in the global economy. Great power competition has returned.
Only seven years ago, pundits were talking of a “post-American world,” with a declining United States and a remarkable “rise of the rest.” These days, however, that prognosis appears to have been at best premature.
America has substantially recovered from the Great Recession, while the once-heralded “rise of the rest” has stalled. Many around the world who once decried American overseas involvement as “hegemonic” now seek greater American engagement in international affairs.
During the Cold War, fear of the Soviet Union and international communism did not always produce agreement on policy but did provide an answer, for most, as to why the United States needed to play an international role and what that role should be. Today, our political leaders need to remind Americans that our fundamental interests are still best served by upholding the world order — economic, political, and strategic — that was established at the end of the Second World War and that was further strengthened and entrenched by the revolutions of 1989. Americans need to recognize their nation’s central role in maintaining the present international order and muster the will to use their still formidable power and influence to support that order against its inevitable challengers.
What will this require? Above all, it means working to shore up all three pillars politics, economics, security of what has made the American-led world order so remarkable. There is a tendency to separate politics, economics, and security “ideals” from “interests,” support for democracy from defense of security but in the present world order they have all been related.
Start with the reality that a world order that supports freedom will only be supported by free nations. Supporting democracy is not just a matter of keeping faith with our own values. It is a matter of national security. Americans and other free peoples who benefit from and support the present world order therefore have an interest in supporting democracy where it exists and in pressing for greater democratic reforms in the world’s authoritarian nations, including the two great power autocracies.
In their economic policies, Americans need to continue promoting and strengthening the international free trade and free market regime. This, of course, means setting their own economy back on a course of sustainable growth. It means doing a better job of educating and training Americans to compete with others in an increasingly competitive international economy. It means providing a healthy environment for technological innovation.
But it also means resisting protectionist temptations and using American influence, along with other free-trading nations, to push back against some of the tendencies of state capitalism in China and elsewhere. Gaining congressional approval of the Trans-Pacific Partnership, or TPP, and then moving to agreement on the Transatlantic Trade and Investment Partnership with Europe, are critical, and not only for their economic benefits. They also are a critical step in knitting the democratic world more closely together.
In Asia, especially, this is more much than a trade issue. Although the United States stands to benefit from the agreement, it is, above all, a strategic issue. The United States and China are locked in a competition across the spectrum of power and influence.
What has been true since the time of Rome remains true today: there can be no world order without power to preserve it, to shape its norms, uphold its institutions, defend the sinews of its economic system, and keep the peace. Military power can be abused, wielded unwisely and ineffectively. It can be deployed to answer problems that it cannot answer or that have no answer. But it is also essential. No nation or group of nations that renounced power could expect to maintain any kind of world order.
If the United States begins to look like a less reliable defender of the present order, that order will begin to unravel. It remains true today as it has since the Second World War that only the United States has the capacity and the unique geographical advantages to provide global security. There can be no stable balance of power in Europe or Asia without the United States. And while we can talk about soft power and smart power, they have been and always will be of limited value when confronting raw military power.
Despite all of the loose talk of American decline, it is in the military realm where U.S. advantages remain clearest. Even in other great power’s backyards, the United States retains the capacity, along with its powerful allies, to deter challenges to the security order. But without a U.S. willingness to play the role of providing balance in far-flung regions of the world, the system will buckle under the unrestrained military competition of regional powers.
Today, as a result of the Budget Control Act and a general unwillingness to spend adequately on defense, America’s ability to play this vital role is coming increasingly under question. Current defense spending has created a readiness crisis within the armed forces. Only a handful of Army brigades are available for use in a crisis.
The army is about to be forced to cut 40,000 soldiers from its active force. There are too few ships to provide a U.S. presence in the multiple hotspots that have sprouted up around the world. As the bipartisan, congressionally-mandated National Defense Panel has argued, the U.S. military must be able to deter or stop aggression in multiple theaters, not just one, even when engaged in a large-scale war. It needs to be able to fight ISIS and deter Iran in the Middle East, deter Russia in Europe and Syria, and in Asia deter North Korea and maintain stability in the face of a rising China.
Consider the threat now posed by Iran. Whatever one thinks about the recently-concluded nuclear deal, any serious strategy aimed at resisting Iranian domination also requires confronting Iran on the several fronts of the Middle East battlefield.
In Syria, it requires a determined policy to remove Iran’s close ally, Basher al-Assad, using U.S. air power to provide cover for civilians and creating a safe zone for Syrians willing to fight. In Iraq, it requires using American forces to push back and destroy the forces of the Islamic State so that we do not have to rely, de facto, on Iranian power to do the job.
Overall, it requires a greater U.S. military commitment to the region, a reversal of both the perceived and the real withdrawal of American power. And therefore it requires a reversal of the downward trend in U.S. defense spending, which has made it harder for the military even to think about addressing these challenges, should it be called upon to do so.
The challenge we face today is to decide whether this liberal world order is worth defending and whether the United States is still willing to play the role of its principal champion. The answer to both questions ought to be “yes,” but it will require a renewal of American leadership in the international system, economically, politically, and strategically.
It will also require a renewed understanding of how important and unique the present liberal world order is, both for Americans and for peoples all across the globe. The simple fact is that for all the difficulties and suffering of the past 70 years, the period since the end of World War II has been unique in the history of the human race.
There has been an unprecedented growth in prosperity. Billions have been lifted out of poverty. Democratic government, once rare, has spread to over 100 nations around the world, on every continent, for peoples of all races and religions. Although the period has been marked by war, peace among the great powers has been preserved. There has been no recurrence of the two devastating world wars of the first half of the 20th century.
This world order has been a boon for billions around the world, but it has also served American interests. Any other world order, one in which the United States had to cede power and influence to China and Russia, or what is more likely, a descent into disorder, is unlikely to serve Americans’ interests as well.
The price of ending our engagement would far outweigh its costs. The international order created by the United States today faces challenges greater than at any time since the height of the Cold War. Rising authoritarian powers in Asia and Europe threaten to undermine the security structures that have kept the peace since World War II. Russia invaded Ukraine and has seized some of its territory. In East Asia, an increasingly aggressive China seeks to control the sea lanes through which a large share of global commerce flows. In the Middle East, Iran pursues hegemony by supporting Hezbollah and Hamas and the bloody tyranny in Syria. The Islamic State controls more territory than any terrorist group in history, brutally imposing its extreme vision of Islam and striking at targets throughout the Middle East, North Africa and Europe.
None of these threats will simply go away. Nor will the United States be spared if the international order collapses, as it did twice in the 20th century. In the 21st century, oceans provide no security. Nor do walls along borders. Nor would cutting off the United States from the international economy by trashing trade agreements and erecting barriers to commerce.
A Reagan-style military buildup is therefore the best way to reassure allies, deter adversaries, and stiffen the hard-power backbone of the global order. “Peace through strength” is not a catchphrase; it is good strategy. And though not cheap, the price is affordable for a wealthy superpower that has benefited so much from its military primacy and certainly cheaper than the price of strategic insolvency.
The rebound of the 1980s depended upon the leadership of Ronald Reagan, who singlehandedly replaced an aura of gloom with one of national confidence and assertive internationalism. If the American people of 2017 are similar to those of 1981 in their receptivity to a more active and robust American presence on the international scene, then the next President should be able to convince them to move in a new foreign policy direction. It could be argued that the receptivity will be different in 2017 because of the rise of the Millennial Generation, which seems to have little interest in American leadership overseas. On the other hand, one could argue that the population of 1981 contained a similar generation in the Baby Boomers.
Instead of following the irresponsible counsel of demagogues, we need to restore a bipartisan foreign policy consensus around renewing U.S. global leadership. Despite predictions of a “post-American world,” U.S. capacities remain considerable. The U.S. economy remains the most dynamic in the world. The widely touted “rise of the rest” the idea that the United States was being overtaken by the economies of Brazil, Russia, India and China has proved to be a myth. The dollar remains the world’s reserve currency, and people across the globe seek U.S. investment and entrepreneurial skills to help their flagging economies. U.S. institutions of higher learning remain the world’s best and attract students from every corner of the globe. The political values that the United States stands for remain potent forces for change. Even at a time of resurgent autocracy, popular demands for greater freedom can be heard in Russia, China, Iran and elsewhere, and those peoples look to the United States for support, both moral and material. And our strategic position remains strong. The United States has more than 50 allies and partners around the world. Russia and China between them have no more than a handful.
The world has come to recognize that education, creativity and innovation are key to prosperity, and most see the United States as a leader in these areas. Other nations want access to the American market, American finance and American innovation. Businesspeople around the world seek to build up their own Silicon Valleys and other U.S.-style centers of entrepreneurship. The U.S. government can do a better job of working with the private sector in collaborating with developing countries. And Americans need to be more, not less, welcoming to immigrants. Students studying at our world-class universities, entrepreneurs innovating in our high-tech incubators and immigrants searching for new opportunities for their families strengthen the United States and show the world the opportunities offered by democracy.
Finally, the United States needs to do more to reassure allies that it will be there to back them up if they face aggression. Would-be adversaries need to know that they would do better by integrating themselves into the present international order than by trying to undermine it. Accomplishing this, however, requires ending budget sequestration and increasing spending on defense and on all the other tools of international affairs. This investment would be more than paid for by the global security it would provide.
All these efforts are interrelated, and, indeed, a key task for responsible political leaders will be to show how the pieces fit together: how trade enhances security, how military power undergirds prosperity and how providing access to American education strengthens the forces dedicated to a more open and freer world.
Above all, Americans need to be reminded what is at stake. Many millions around the world have benefited from an international order that has raised standards of living, opened political systems and preserved the general peace. But no nation and no people have benefited more than Americans. And no nation has a greater role to play in preserving this system for future generations.
Did the Founding Fathers, under Article I, Section 8, grant the federal government the power and duty to ensure “universal health care coverage”? The answer is no, and there are many historical examples that prove it.
Health care costs are not just soaring, they’re reaching unaffordable levels, meaning that we’ll have to look to managed care (again) or find a government solution, a prescription for rationing. With spiraling costs projected to continue, thereby doubling spending in the next 8 years, that choice will be made by 2014 unless we find a third option. What’s the cure? Congress needs to administer a strong dose of capitalism.
Businesses struggle to pay for health premiums, which have nearly doubled since 2000. It’s not simply corporate giants like GM that have trouble — only 61% of American companies offer their employees health insurance, down from 69% in 2000. Even insured Americans feel the pinch — though labor costs are up, median family income has dropped 2.6% over the past half decade, the largest decline since the last recession, in large part because soaring health premiums have swallowed up new money.
The situation will precipitously worsen in the next seven years as health spending is projected to rise to $4 trillion dollars a year, up from $2 trillion. Former Health and Human Services Secretary Tommy Thompson declares this unsustainable, noting that as a percentage of GDP, US spending will soar from 16 percent to 21 percent. 2013 holds more problems: Medicare will start drawing dollars from the U.S. Treasury.
But for employers, employees, and government officials already fretting the cost of health care, beware: you haven’t seen anything yet.
For years, the debate has been about 2 options for dealing with the cost crunch.
First, embrace HMOs. The idea faltered in the late 1990s but managed care held costs relatively stable in the mid-1990s (rising, for example, just 2 percent in 1996). But HMOs turn basic decisions over to bureaucrats, a paternalistic philosophy at odds with American values.
Second, convert to some type of government health care, an approach every other Western country has adopted. Though the idea grows in popularity — California legislators recently passed single payer legislation — socialized medicine is built on rationing care, forcing the sick and elderly to wait for even the most basic care in countries like Canada.
Is there another option? Look to capitalism, which governs the other five-sixth of the economy. Ultimately, we must choose market reforms.
To reduce costs in health care, or, for that matter, in any commodity, is to unleash the free market. Health care is particularly shackled by restrictions and regulations too numerous to mention. Health care just like cars, sweaters and smartphones is a commodity. But health care is one of our most regulated industries, a far cry from a free-market-based system.
Start with the supply of doctors. Because of regulations, the supply of doctors has been artificially limited. Economist Milton Friedman once compared the American Medical Association to a medieval guild that shuts out would-be practitioners and artificially protects the wages of doctors. In a piece called “American Medical Association: The Strongest Trade Union in the U.S.A.,” Mark Perry, a professor of economics and finance at the University of Michigan and an American Enterprise Institute scholar, writes:
“Between about 1970 and 1984, there was a significant increase in medical school graduates that pushed the number of new physicians from 4 per 100,000 Americans in 1970 to almost 7 per 100,000 by 1984. Since 1984, the number of medical school graduates has been relatively flat … while the population has continued to grow, causing the number of new physicians per 100,000 population to decline to only 5.3 per 100,000 by 2008, the same ratio as back in 1974. Over the last few years the number of medical school graduates has increased slightly, and the ratio of graduates per 100,000 increased to 5.56 last year, the highest in a decade.”
What’s wrong with this picture? An aging population, in need of more doctors, on a per capita basis, has fewer of them. Economics 101, supply and demand and plain common sense tell us the opposite should be happening.
This is the argument Republicans should be making. The true replacement plan should be loosening regulations that prevent would-be doctors from entering the field and prevent less-schooled and less-credentialed paraprofessionals from doing things that only licensed doctors can now do.
We train battlefield medics in Iraq and Afghanistan to deal with battlefield trauma, saving countless lives. The Oscar-nominated film “Hacksaw Ridge” depicted the true story of a medic with aspirations of becoming a doctor, whom the army trained to treat battlefield injuries. But that man, had he returned stateside and tried to set up a practice to treat victims of urban gun violence, would have been guilty of practicing medicine without a license.
There are many examples. In some states midwives cannot legally deliver babies, despite ample evidence that they possess the experience and ability. In his joint address to Congress, Trump criticized the lengthy and expensive process of getting a drug approved by the FDA. In some cases, drugs that could help people do not become available even when risks are known and desperate patients would be willing to assume these risks.
We strangle the health-care and insurance industries with regulations, licensure requirements and barriers to entry that artificially increase the cost of health care. We prevent people from buying health care across state lines.
We advise developing countries to follow the well-worn path to prosperity free markets, free trade, rule of law and property rights. Yet when it comes to nearly one-seventh of our economy health care we ignore our own advice. For health care, we don’t write ourselves the proper prescription.
That may sound easy enough, but for more than 60 years, government policy has drifted fitfully in the opposite direction. In the rest of the economy, we have moved away from regulations, price controls, and overreaching government agencies. Yet in health care, we have distorted the tax code, bulked up the Medicaid rolls, and let a million regulations bloom. Medicare alone has more than 100,000 pages of them. Price controls are endemic to Medicare and Medicaid. The result is a half-broken, semi-socialist system, low in satisfaction and high in cost.
How to employ market reforms? Here are five simple steps.
- Make health insurance more like other types of insurance. Health savings accounts, which passed as part of the Medicare reforms of 2003, were an important first step, separating smaller expenses from high-deductible insurance, for catastrophic events. However, the legislation is overly rigid. Congress must expand and revise the structure of HSAs, and level the tax playing field for those not covered by an employer plan.
- Foster competition. American health care is the most regulated sector in the economy. The result? A health insurance policy for a 30-year old man costs four times more in New York than in neighboring Connecticut because of the multitude of regulations in the Empire State. Americans can shop out-of-state for a mortgage; they should be able to do so for health insurance. Likewise, many laws intended to promote fairness end up reducing competition and thus innovation. Congress should reconsider such laws, beginning with the federal Emergency Medical Treatment and Active Labor Act (EMTALA).
- Reform Medicaid, using welfare reform as the template. Medicaid spending is spiraling up, now consuming more dollars at the state level than K-12 education. Like the old Aid to Families with Dependent Children, part of the problem stems from the fact that the program is shared between both the federal and state government — and is thus owned by neither. Congress should fund Medicaid with block grants to the states, and let them innovate.
- Revisit Medicare. Back in the late 1990s, a bipartisan commission approved a reasonable starting point for Medicare — junking the price controls, and using the Federal Employees Health Benefits Plan as a model. Elderly Americans would then have a choice among competing private plans. Given that the unfunded liability of Medicare is four times greater than that of social security, the time is right to experiment with this idea.
- Address prescription drug prices by pruning the size and scope of the FDA. It costs nearly a billion dollars for a prescription drug to reach the market, and roughly 40% of that is due to safety requirements. This is effectively a massive tax on pharmaceuticals. With new technology and focus, it would be possible to update the FDA, drawing from President George H. W. Bush’s experiments with contracting out certain approval steps to private organizations, which boasted lower costs and faster approval times.
None of these steps would be dramatic but all are important. Congress also slowly needs to weigh bigger issues: how to Privatize or Eliminate Medicare, create portability of health insurance, and foster a market for medical innovation.
America has been at the forefront of medical innovation: death by cardiovascular disease has plummeted by two-thirds in the last fifty years; polio is confined to the history books; childhood leukemia has gone from a death sentence to an eminently treatable condition. If we have achieved so much with medicine, the task of health care reform seems relatively modest.
The most effective way to lower healthcare costs and achieve quality universal coverage would be to promote the same free-market forces that have improved quality and lowered costs in almost every other industry from automobiles to computers to cell phones.
Free-market principles succeed not only in expanding the range of options available to people choosing health insurance plans, but also with regard to specific medical procedures
* Consider Lasik corrective eye surgery. Because most insurance providers — private and public alike — do not cover this procedure, the market is not distorted by excessive regulations. Providers of Lasik operate in a free market where technology is constantly advancing, price competition is significant, and the consumer can choose from a wide range of options.
* Between 1998 and 2008, more than 3 million Lasik procedures were performed in the United States. During that same period, the average price of Lasik eye surgery dropped by almost 40%, from $2,200 to $1,350 per eye.
- But Lasik is a rare exception to the general rule; in virtually every other area of healthcare, the government is heavily involved. As Sally Pipes summarizes: “[T]he key to lowering costs and expanding coverage is to expand the Lasik model. That means encouraging competition by decreasing government’s role in the health care marketplace.”
- Eliminate Benefit Mandates
- Benefit mandates are laws that compel insurance companies to offer one-size-fits-all plans which cover an ever-growing list of specified treatments; in many cases only a small segment of the population wants or needs these benefits.
- As noted earlier, benefit mandates drive up the cost of the insurance policies, making it difficult for insurers to offer inexpensive plans that meet the needs of young, healthy people seeking high-deductible policies that cover only a limited range of occurrences other than major illnesses or injuries.
2) Promote Private Ownership of Health Insurance Policies
- No one expects his or her employer to provide them directly with food, housing, clothing, life insurance, or automobile insurance. Yet because of what started as a historical accident — when WWII-era employers tried to circumvent wage controls by covering their workers’ health insurance premiums — many people have come to expect their employers to provide them with access to healthcare. This has many ramifications:
- It has caused many employees to become insulated from the real cost of going to a doctor and receiving treatment. They lack a clear understanding of the actual costs involved, and tend to view healthcare as something they are getting for free when in fact they are paying for it indirectly in the form of smaller paychecks. Rather than shopping around for the best or most suitable deal for themselves, they generally accept whatever plan their employers offer.
- It has been difficult for many people to leave their jobs — for fear of losing their insurance in addition to their paychecks. This, in turn, has reduced competition among employers seeking to attract talented workers, thus exerting downward pressure on the wages of those workers.
- It has stifled new business creation because many people — especially those with a chronic or pre-existing medical condition — have been unwilling to forego health insurance in order to pursue entrepreneurial ventures.
- It has caused insurance providers to become insulated from normal market pressures to keep customers satisfied and prices low.
- It has penalized individuals, who, unlike employers, have not had the option of purchasing health insurance for themselves with pre-tax dollars.
- Americans should be free to purchase their own policies and make them their private property, just like their other insurance policies or investment portfolios
3) Allow Consumers to Purchase Insurance Across State Lines
- Consumers in the U.S. have long been barred from purchasing healthcare policies from insurers in other states. This has dramatically reduced competition among insurers, and has kept the cost of premiums much higher than they would have been in a truly free marketplace.
- A standard insurance policy in one state could be several times more expensive than a standard policy in another state. For example, a 25-year-old male in California was traditionally able to buy an HMO plan for just one-fifth of what his counterpart in New York would pay for the same coverage.
4) Make Health Coverage Portable
- Workers should be able to take their healthcare plans with them from job to job, or city to city. This would free people from circumstances where they feel compelled to stay in an unsatisfactory job because they do not want to lose their health insurance.
5) Change the Tax Code
- Give individuals the same tax break that employers already receive when purchasing health coverage for their workers. This would empower individuals to be in charge of their own healthcare, rather than being beholden to the policies and preferences of their employers. Either of the following two changes could achieve this:
- Provide refundable tax credits $2,500 for individuals and $5,000 for families for people who purchase their own health insurance.
- Allow income-tax deductions for healthcare expenditures — $7,500 for individuals and $15,000 for families
6) Expand Health Savings Accounts
A Health Savings Account (HSA) is a tax-free, interest-accruing savings account that can be used to pay for routine medical expenses. It is purchased in tandem with an inexpensive, high-deductible insurance policy designed to cover major healthcare expenses associated with so-called “catastrophic” medical occurrence
- HSA holders, who numbered more than 6 million as of 2008, can spend their money tax-free on healthcare as they see fit, without needing permission from their insurance providers. If someone is generally healthy, the HSA funds build up over time — and can eventually function just like a retirement savings plan. (When an HSA holder reaches 65 or is disabled, the money can be withdrawn without a penalty for non-healthcare expenses, and it is taxed as ordinary income.)
- HSAs, which were created in 2003 and first implemented in 2004, do not vanish when a person is between jobs. And when a person faces an extremely costly health emergency, the high-deductible insurance policy covers his expenses while the HSA covers the deductible.
- As of 2010, individuals were allowed to contribute up to $3,050 each year to their HSAs, and families were permitted to contribute up to $6,150. By raising these limits, Congress could make HSAs even more appealing.
7) Support Retail Health Clinics
- In the early 2000s, retail health clinics began sprouting up all over the United States in large stores like Wal-Mart and Target, and in pharmacies like CVS. By the end of 2008, there were approximately 2,000 of these facilities nationwide. Patients generally need no appointment to visit these clinics, and they rarely have to wait more than a few minutes to receive treatment.
- Retail health clinics typically charge about $50 per visit (total price transparency), and most are open 24 hours per day.
- A 2007 Harris Interactive poll found that 22% of all visitors to these clinics were uninsured. Around that same time, Wal-Mart claimed that about half its clinic customers were uninsured.
8) Implement Tort Reform
- Each year, one out of eight physicians in the U.S. gets hit with a medical malpractice lawsuit. Specialty physicians must sometimes pay as much as $240,000 annually for malpractice insurance, and this is driving many doctors out of specialties like obstetrics and neurosurgery.
- Liability concerns tend to make physicians practice defensive medicine, ordering more procedures and tests than they otherwise would. This has added to the overall cost of healthcare in the United States, thereby adding some 3.4 million Americans to the rolls of the uninsured.
- Though doctors win about 90% of their cases in court when they are sued, their legal bills typically approach $100,000 per case.
- Some sensible reforms would include capping non-economic damage awards, allowing defendants to pay large awards in periodic installments, moving to a system of binding arbitration, and placing limits on attorneys’ fees.
- Another worthy reform would be to provide federal incentives for states to establish medical courts where the judges are experienced in medical issues, can distinguish true expert witnesses from hired charlatans, and can help juries arrive at fair and informed verdicts.
9) Provide Vouchers for the Working Poor and Chronically Uninsured
- To address the needs of those who fall through the proverbial “cracks” — i.e., individuals who earn too little to afford private insurance but too much to qualify for Medicaid — lawmakers could create a system of health-insurance vouchers, or electronically loaded debit cards, that allow people to purchase insurance from a private company, or through an already-established website like ehealthinsurance.com, or through a high-risk state pool. Such an innovation would allow society to address the problem of the uninsured, without entirely restructuring the most successful and innovative healthcare system in the history of mankind.
10) Raise the Eligibility Age for Medicare Benefits
- Medicare is going bankrupt because the payroll taxes of American workers are being used to fund the healthcare costs of an ever-growing number of older people. To remedy this problem, the Congressional Budget Office has suggested gradually raising the Medicare eligibility age by a month or two each year, until it reaches age 70 in 2043. Such a measure would be nearly imperceptible to anyone nearing retirement age, and could guide the system back toward financial solvency.
11) Establish High-Risk Pools
- States could create or improve high-risk pools to help consumers with pre-existing conditions and poor health.
Daniel Horowitz from the Conservative Review also put forth a list of Free Market Reforms:
We the people have a right to finally create a free market health care system that will do to the medical field what Uber, Apple, Amazon, Netflix, Walmart, FedEx, and UPS have all done to their respective industries.
Ever wonder why heart surgery costs $106,000 in America but only $1,583 in India? Do you find the lack of an “Uber style revolution” in health care absurd?
In so many ways, health care and health insurance and no, the two are not the same have missed the great technological revolution. The reason? Big, bad government.
It’s time to bust apart the regulatory state that enriches the big government-big business cartel. And we can start with these 20 ideas on a state and federal level that kick government to the curb and return the power to consumers, entrepreneurs, and health care providers:
1. End the medical malpractice boondoggle:
Medical malpractice is the 800-pound gorilla in the room when it comes to jacking up health care on the supply side, even before we get to insurance. Moving to a loser-pay system and capping non-economic damages will bring down the cost of medical malpractice insurance (which is passed down to the consumer) and the enormous gratuitous cost of defensive medicine. The extra margin of profit will decrease pressure on unsustainable hospital costs and allow doctors in out-patient clinics or offices to offer more bargains to their clients.
2. Allow hospitals to turn away non-urgent illegal aliens:
Hospitals account for 32 percent of all health care spending in America. Aside from the problems with Medicaid, one of the big problems driving up costs is the prevalence of illegal aliens and indigent people who use emergency rooms for primary care. Once again, the culprit is government. In 1986, Congress passed The Emergency Medical Treatment and Labor Act (EMTALA) which forced health care providers to offer care to anyone irrespective of their ability to pay. While we obviously want to care for anyone with an urgent need, hospitals must be given discretion to turn away those who do not have an urgent need. This provision was part of “The Patient Option Act,” (H.R. 2900) introduced by former Rep. Paul Broun (R-GA). Getting rid of this massive unfunded liability will curb skyrocketing hospital costs and improve access to emergency care.
3. Offer a tax deduction for those providing health care to indigents:
One of the ways for government to work with, not against, the market and civil society is to grant doctors the ability to write off any health care they provide to the indigent sick as a tax deduction.
4. Reform the FDA approval process … big time:
It takes years and well over a billion dollars for companies to develop a single drug due to the outdated FDA approval process. Aside from jacking up the price of drugs and preventing lifesaving cures, this process once again benefits large pharmaceuticals and serves as a bar for smaller companies to enter the field of R&D. The entire process needs to be streamlined, and the government needs to approve third-party certification organizations that would compete against each other in offering alternative certifications for medicines. They should also have an expedited process for approving drugs already in use in other developed countries. Furthermore, the FDA should create a parallel “preliminary approval” process for drugs that are not fully tested yet, but are given over to health care providers with the publicly advertised caveat that they are free to use at their own risk. See more FDA reforms in this article from The Heritage Foundation.
5. Make more drugs available over the counter:
Liberals love discussing marijuana legalization, but have supported needless regulations on basic drugs used for common ailments. Making more drugs available over the counter, such as cholesterol medication and contraception (yes, liberals, we’re looking at you), will drive down costs. Moreover, consumers would begin paying for more medicines out of pocket and be more cost conscious, which would have a further self-fulfilling deflationary effect on pricing.
6. Stop boxing out specialty hospitals with burdensome certifications:
Any health care provider who wants to innovate with specialty ideas or establish new hospitals are automatically confronted with the near-insurmountable “certificate of need” (CON), which requires them to undergo a cumbersome process of licensing. CON requirements exist on top of the regular licensing requirements and FDA regulations. Like most regulations and barriers to innovation in health care, they were created by the existing health care establishment and serve as a way to box out competition and new ideas.
7. Expand who can deliver care so health providers have to compete for the customer:
With the growth of health care extenders, such as physician assistants, nurse practitioners, pharmacists, and optometrists, there is the potential for a revolutionary second tier of access to health care that will lower costs across the board while still providing quality care for many basic health care needs. At the behest of the big medical lobbies, states have imposed gratuitous restrictions on the scope of practice for extenders, thereby denying consumers more choice, competition, and cheaper options, especially for the poor. Health care professionals must have the opportunity to practice in the field up to the scope of their training and education without limitations engendered by lobbyist-driven greed.
8. Promote telemedicine and other modern delivery systems:
Much like e-commerce and online schooling, there is no reason more aspects of healthcare can’t be delivered electronically. This can lower labor costs and foster more competition and innovative ideas. But once again, burdensome licensing requirements and other regulations, imposed by lobbyists to protect the status quo, serve as an impediment to creating such competition. Even states like Texas bar doctors from issuing prescriptions without in-person visits, which are often gratuitous and needlessly over-utilize service while inflating costs.
9. Break the AMA monopoly on medicine and prevention of for-profit health care:
One of the biggest problems driving up costs in health care is the shortage of doctors, which is expected to grow in the coming years. One of the reasons for this shortage is that the federal and state governments have given the American Medical Association a complete monopoly over medical school accreditation and physician licensing the same way they allowed the American Bar Association to control (and destroy) the legal profession. As my colleague, Logan Albright has written, “[T]hese boards effectively function like government regulatory agencies, with the important difference that they lack the opportunity for public comments, and thus are immune from any political pressure from citizens.” They are also largely responsible for the “certificate of need” regime, restrictions on scope of practice, and barriers to telemedicine.
One of the worst incumbency protection rackets promoted in most states by the AMA is the restriction on “Corporate Practice of Medicine.” This doctrine has essentially prohibited private corporations from practicing medicine or employing health care providers. In some states, it has prevented hospitals from employing physicians to provide out-patient services.
This has created a non-profit monopoly over healthcare and is probably one of the single most impactful factors in preventing the Uber-ization and Walmart-ization of health care. As Professor John Cochrane explains, “About 70% of hospitals and 85% of health-care employment is in non-profits, whose legal and regulatory treatment protects much inefficiency from competition. If United [Airlines] didn’t have to pay taxes, Southwest’s job would have been that much harder.” Imagine if liberal lobbyists got states to box out FedEx and require the use of the U.S. Postal Service. These regulations need to be loosened.
10. Repeal the HIPAA regulatory leviathan:
The entire accountability side of the 1996 HIPAA law was rooted in the provisions of Hillarycare. Under the guise of combating medical fraud and protecting privacy, this unconstitutional federal power grab has essentially criminalized basic medicine in so many ways and has created a labyrinth of regulations and paper work that drive up the cost of health care at every level of the supply side. Its overzealous privacy regulations are a big culprit in preventing innovation in healthcare mobile communications. Given the existence of the already onerous state regulations, it’s time for Congress to repeal many of these provisions at the federal level.
11. Encourage health care providers to post prices online:
One of the biggest impediments to health care working like a competitive free market is the lack of price transparency. This has been fostered by the existing socialist system, which obliterated any desire to peg the costs to services actually rendered. By implementing a number of the aforementioned health insurance reforms and fostering more choice, competition, and individualized cost-conscious consumers, the natural outcome would be that consumers would gradually force health care providers to advertise their prices.
HEALTH INSURANCE REFORMS
12. Tear down regulations:
Between Obamacare’s coverage mandates and the pre-ACA state and federal regulatory apparatus, the insurance market is not only regulated but severely limited in what in can offer. It’s time to tear down those walls and encourage states to do the same. Any insurer should be able to offer any type of plan under any circumstance to any individual or group.
Let insurance companies experiment with new ideas that solve issues like pre-existing conditions. The insurance regulatory regime should be focused solely on enforcing the contracts insurers make with consumers.
Keeping regulations to a minimum will lower costs, remove the bar to entry for start-up insurance companies, break the Big Government/Big Pharma monopoly on health care, and foster even more competition, choice, and cost transparency.
13. Promote health status insurance to deal with pre-existing conditions:
One specific area of insurance that the federal government should leave completely free of regulation is any idea to solve the problem of pre-existing conditions through the marketplace. One proposed solution is health status insurance, broadly popularized by University of Chicago Professor John Cochrane.
These plans would work much like life insurance: Consumers purchase an insurance plan to cover potential changes in their “health status” that would otherwise jack up premiums or make it hard to purchase new coverage. Parents could take out plans for children before they join the workforce — or even unborn babies — at dirt cheap rates. Let’s say Tom and his family have health status insurance. Tom’s daughter develops asthma and his wife is diagnosed with high blood pressure. Their health insurance rates go up. But, health status insurance kicks in to pay the higher premiums. Alternatively, Tom would receive a lump sum payout to be managed in a trust-style account to directly pay the health care costs. He could purchase specific options or riders for varying health anomalies (diabetes, heart disease, cancer). The options are endless.
Health status insurance will encourage insurance companies to offer tailor-made health plans or multi-year contracts that will protect those who later develop chronic conditions. Health insurance will become portable and untethered to employment decisions, a change in health status, relocation, or young adults moving off their parent’s plan.
14. Stop socially engineering employer-based insurance through the tax code and treat it the same as individual plans:
The original sin of government intervention in health care was the creation of the employer tax exclusion for health insurance. It is truly the pre-existing condition to most market inefficiencies in health care.
Born out of WWII-era wage controls, the federal government essentially codified insurance as part of salaries with a tax exemption for employer-provided health insurance officially created by a 1954 IRS reform bill. The distortion to both the labor market and the insurance market has been cataclysmic. Every year, roughly $275 billion is pumped into over-utilizing and distorting the product of health insurance rather than increasing wages.
Those who purchase insurance privately are at a disadvantage, and people are reliant on their employment situations for insurance. This kills entrepreneurship and discourages job mobility, especially for someone who develops health problems while grandfathered into an employer-provided plan.
Other forms of insurance let customers establish long-term relationships with the insurer and customers are eligible for discounts. Employer-based health insurance removes the personal element that tailors plans to the individual and could potentially encourage a healthy lifestyle.
Ideally, we would repeal this market distortion and remit the $275 billion in new revenue back in the form of an across-the-board business tax cut. This would create jobs, raise wages, decouple insurance from employment, massively reduce inflationary pressure on insurance, and flood the individual market with choice and competition. Politically speaking, however, people are so accustomed to getting their insurance “taken care of” by the employer that they might not appreciate the net benefit in earnings.
The next-best option is to grant individuals who purchase insurance in the private market the same tax deduction afforded to employer-sponsored insurance. This will 1) incentivize savings, 2) cut overutilization, 3) grow wages and jobs, 4) create downward pressure on prices and relieve those in the individual market, and 5) further lower prices by encouraging more people to purchase insurance. With lower prices and numerous options in the individual market, coupled with a tax deduction and expanded HSAs, many individuals will take their full salary from their employer and cost-consciously purchase their own private, portable plan.
15. Allow unlimited Health Savings Account (HSA) spending:
HSAs have been one of the few health care success stories in recent years. Customers are allowed to put up to $6,500 in tax-free income into an account that is then used to cover health care costs. Unfortunately, that limit is way too small, and HSAs cannot be used to cover premiums under current law. Allowing them to cover anything up to $12,000 for a family would go a long way towards forcing individuals to make cost conscious decisions, and would further decrease prices. This would represent a massive $9 trillion tax cut, and would reallocate money from inefficient, over-utilized fourth-party payers of insurance to cost-conscious consumers.
16. Let consumers and employers purchase health insurance plans across state lines:
If insurance is enough of an interstate commerce issue to regulate people into oblivion at a federal level, then the federal government should be able to invoke the Commerce Clause to tear down the barriers to purchasing insurance across state lines. Indeed the Supreme Court has said as much [United States v. South-Eastern Underwriters Association, 1944]. This will foster massive competition, make insurance portable, and together with individualizing insurance through equal tax treatment and expanded HSAs, will save many individuals who get sick later in life after moving to different states from the problem of pre-existing conditions.
Not only will this reform create a more competitive national market, but it will induce states with a costly regulatory burden to get with the program and relax their regulations to compete with the more pro-consumer states. It will also create momentum for states to ease regulations on tele-medicine from out-of-state providers.
17. Permit all individuals to pool together for group insurance:
One way to lure people away from the non-portable employer-based model is to allow individual neighbors and friends to create associations and negotiate directly with insurance companies just like employers do. Breaking down any such regulatory barrier will, in conjunction with the advent of a tax deduction for personal insurance, encourage many people to claim their full salary (without withholdings for employee-contribution to employer-provided insurance) and opt to buy their own private insurance, albeit with the improved negotiating power of pooled resources.
18. Change antitrust laws so Big Pharma’s stranglehold on competition is destroyed:
Leave it to government to regulate insurance to death but exempt the industry from the one regulation that is actually needed to foster a true free market. The McCarran-Ferguson Act of 1945 exempted the insurance industry from antitrust laws and made it almost impossible for insurance start-ups to open new businesses and compete. In conjunction with onerous regulations crafted by the few insurance companies and their lobbyists, the bar to entry is insurmountable and creates a pro-incumbency bias towards existing pharma lobbyists. Repealing the antitrust exemption while eliminating most other regulations is the perfect mix to foster maximum competition, cut lobbyists and government out of price controls, and allow consumers to control the market.
19. Make Medicaid work with the market, not destroy it:
Imagine what would happen to the price of home or auto insurance if the federal and state governments were responsible for 50 percent of the payments. Prices would skyrocket for those who want to pay for the policies on their own. That is exactly what has happened in health care — state and federal governments are responsible for over half of all insurance payments. While it’s hard to reform all of these programs in the span of one presidency, we must at least begin with Medicaid.
The combined federal-state expenditure for Medicaid is approaching $600 billion, and is responsible for 17 percent of health care spending. It is also responsible for inflating the cost of hospital care, which by itself is the single biggest cost to our health care system. The cost of covering an individual in the subpar Medicaid program was $3,247 per individual in 2011 before Obamacare was enacted. In 2015, according to data from the Department of Health and Human Services, the cost of enrolling an individual in Medicaid doubled to $6,366 per individual. And that is only for the second year of implementation. The cycle of regulations, public funding, overutilization, and an inability to peg the cost to the service has created a circuitous death spiral of unaffordable costs and unsustainable subsidies. It’s nothing but a handout to hospitals and insurers promoted by their lobbyists.
Converting Medicaid into a voucher program that allows low-income individuals to purchase the plan of their choice and rewards them for making cost-conscious choices will go a long way in curing the death spiral of costs. Then, giving Medicaid funds to states in a “block grant”one lump sum with no conditions attached will allow individual states to further innovate in cutting costs because they would no longer have the enticement of unlimited matching funds commensurate with their spending binge, but would be unshackled from the federal regulations.
20. Allow affluent seniors to opt out of Medicare:
This is one simple Medicare reform that is a political slam-dunk. Under current law, every senior must enroll in Medicare Part A (hospitalization) or forfeit their right to Social Security. It simply makes no sense to force wealthier seniors off private insurance if they are willing to forfeit a benefit and cut the federal budget while not contributing to the overutilization of health care.
Once government and the lobbyists they support are out of the way, there is no limit to the innovation that can take place. There are obviously some elements of health care that will never work exactly like Netflix or iPhones, but opening the market up to private sector innovative ideas and competition will create growing momentum for choice, competition, and efficiency. As with so many other aspects of the economy, consumers will be the ultimate winners.
There is no middle ground with this problem.
We either double down on the counterintuitive pursuit of universal coverage or we focus on lowering costs and restoring the concept of insurance to health insurance. Either we believe we can tax, regulate, mandate, and subsidize our way into solvency and prosperity or we marshal efficient modern market forces to innovate and grow wealth. After 70 years of trying the other side’s ideas, isn’t it time for a change?
Excessive regulation has caused the American healthcare system to become overpriced and unresponsive to consumer demands; that rather than expand the government’s role, we should reduce it and instead promote free-market competition to empower individual consumers rather than career politicians and unelected government bureaucrats. By this line of reasoning, the same economic forces that have improved quality and lowered costs in almost every other industry from automobiles to computers to cell phones should be permitted to flourish also in healthcare.
The Revolution was a struggle for the creation of America.
The Civil War was a struggle for the preservation of America.
Our struggle is for the restoration of America.