We face some harsh economic realities | PostIndependent.com

We face some harsh economic realities

Hal Sundin
Post Independent
Glenwood Springs, CO Colorado
As I See it

Our nation’s economy is facing some daunting challenges in the decade ahead related to unemployment, the mounting national debt and health care, and current harsh realities offer little encouragement.

Unemployment tends to spread like the ripples from a stone thrown into a pond. Reduced spending by the unemployed, underemployed, and those fearful about their jobs is impacting businesses across the entire spectrum, resulting in still more job losses. Layoffs because of reduced tax receipts by schools and state and local governments further increase unemployment. And a massive layoff of federal employees would add more millions of unemployed. All of this is in the face of the disturbing fact that productivity has increased to the point that we can produce more than the market can absorb with fewer and fewer workers, with a resultant shrinkage in the underlying job market. And modest recovery in some sectors of the economy is not producing much job recovery as businesses are avoiding expanding their work force by demanding more work from their present employees.

Our national debt has been in runaway mode for most o the past three decades, driven by the demands of Social Security, Medicare and excessive military expenditures. Historically, nations have collapsed because they have spent beyond their means and gotten into wars they could not afford. That should sound an alarm. The amount of trimming we have to do to get our financial house in order is so great that it can be accomplished only by major cuts in these three largest expenditures – Social Security, Medicare and the military.

For Social Security and Medicare, that means a major reduction in payouts to match income, and that can be accomplished only by “means testing” – reducing or eliminating payments to those whose incomes are large enough that they can live in comfort without a portion or all of current benefits.

The military must undergo a comprehensive overview of its spending habits, replacing massive expenditures for grandiose weapons designed for nation-versus-nation wars of the past with lean strategies geared to the present and future threats of diffuse insurgency and terrorist groups. This means increased diplomatic effort to get the world’s principal powers to cooperate in their own self-interest to create a united front against those groups and the rogue nations that harbor them. The cost of such a program would be insignificant compared with current military expenditures. Of course there would be an unemployment fallout, but that would be far outweighed by the reduction in spending.

Finally we come to health care. We currently have the best health care in the world for those who have adequate insurance coverage, and a dysfunctional way of providing it for all who need it. Unless Congress enacts sweeping health care reform legislation (which it has not done), as a result of the buying of Congress by intense lobbying and generous campaign contributions, health care expenditures will continue to include an extra 20-25 percent for the insurance companies, which will continue to raise their premiums (just recently by as much as 30 percent) and increase deductibles, and employers will be forced to pass increasing portions of the cost of health care coverage on to their employees or drop coverage altogether. It is obvious that if the cost of health care is to be affordable for all, it must be universal with everyone (including the young and healthy) paying into it – just like Medicare and Social Security. Where would those programs be if people didn’t have to pay into them until they felt they were approaching the age when they feel they are likely to be needed?

The reality is that if the United States is to once again be on a sound financial footing, we are all going to have to tighten our belts a little, do without a little, and be willing to pay a little more in taxes to begin to reverse the profligacy that has created the monstrous burden of debt we have incurred. Our society has to mature enough to realize that we can no longer have things we are unwilling to pay for.

– Glenwood Springs resident Hal Sundin’s column runs every other Thursday in the Post Independent.

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