The recent discussions on Medicare remind me of the old saying that everyone wants to go to heaven but no one wants to die. In the case of Medicare everyone knows that the current structure is not sustainable. Current retirees will receive over $100,000 in benefits than they paid into the system. That difference grows each year. If left unchecked the federal budget by 2040 will go almost entirely to Medicare, Social Security and debt payments. Social Security is a simple problem that can be dealt with simply by gradually raising the age of full benefits. Note I did not say "the age of retirement" - a mistake made by almost everyone but me. You can retire anytime you wish. However, Social Security payments are made beginning at a certain age dictated by law. As to Medicare, there are currently two approaches. The Ryan approach is to address the issue now. The Administration approach is to criticize the Ryan plan without offering any other solution. What is interesting is that the press and the pundits also have their heads in the sand. They all are interpreting the recent democratic congressional victory in New York as a repudiation of Ryan. Nothing could be further from the truth. Polling indicated that voters understand the problems inherent in Medicare but also do not want the entitlement cut. Well the Ryan plan does not affect those 55 years old and older. So it does not cut their benefits. What it does is give a voucher to those under 55 when they reach the benefit stage. The voucher allows them to choose their medical provider and limits the budgetary drain of the current system. What is ironic is that Obamacare actually made Medicare worse off by taking $500 billion away. So the republicans should argue that they are addressing the budget problems, restoring the money taken away by the democrats and not taking away benefits. What is there not to like? Since they are not going to get help in the media that is not named Fox or talk radio, they need to hammer these points over and over. One day the message will get through. As I used to tell my students "the world is made up of three types of people: the 1 percent that makes things happen, the 4 percent that know whats happening and the 95 percent that haven't a clue as to whats happening." The challenge to the republicans is to move enough of that 95 percent who vote into the 4 percent category.
Harold A. Black is professor emeritus in the Department of Finance, University of Tennessee, Knoxville having retired after 24 years of service. He has served on the faculties of American University, Howard University, the University of North Carolina - Chapel Hill and the University of Florida. His government service includes the Office of the Comptroller of the Currency and as a Board Member of the National Credit Union Administration. He also has served on the boards of directors Home Savings of America and its parent company, H. F. Ahmanson & Co., Irwindale, California prior to its merger with Washington Mutual Savings Bank, on the board of New Century Financial Corporation, Irvine, California, then the nation’s largest real estate investment trust and as director and later chairman of the Nashville Branch of the Federal Reserve Bank of Atlanta. He writes an occasional article for the Knoxville News-Sentinel at http://www.knoxnews.com/staff/dr-harold-black/. His web page is haroldablackphd.com