LETTER: Fiscal gap should be Washington's top priority
In 1872, Lewis Carroll went "Through the Looking Glass" and discovered something dangerous. "Beware the Jabberwock!" he warned. If Carroll went through the looking glass today into the U.S. government's budgetary fantasy world, he'd discover some...
In 1872, Lewis Carroll went "Through the Looking Glass" and discovered something dangerous. "Beware the Jabberwock!" he warned.
If Carroll went through the looking glass today into the U.S. government's budgetary fantasy world, he'd discover something even more dangerous: the fiscal gap. Economists warn of a growing gap between the federal government's future spending obligations and its expected tax revenues.
The main driver of the fiscal gap is the soaring cost of Medicare, Medicaid and Social Security. In time, these programs will consume all tax revenues.
President Barack Obama's $4.1 trillion 2016 budget allocates $1.1 trillion for Medicare and other health programs. The fiscal gap would shrink greatly if we could rid the budget of such programs.
Perhaps we can. We can redirect the $1.1 trillion into a program that lets all Americans buy insurance with vouchers.
A tax hike can provide another $1 trillion, for a total voucher fund of $2.1 trillion. Dividing this by a population of 320 million yields $6,563 for every adult and child. That would amount to $26,250 for a family of four.
In practice, the amount of each voucher would reflect the recipient's age. Older Americans would get larger vouchers to compensate insurers for insuring riskier clients.
A $1 trillion tax hike sounds stiff. But it should not depress consumer spending, because checking accounts would bulge with cash formerly spent on premiums. In the new system, Americans would pay the insurer of their choice with a voucher.
To curb premium creep, we should increase funding for sections of the Affordable Care Act that address soaring health care costs.
One thing is clear: We must slash the fiscal gap. If we don't, the Jabberwock will be the least of our problems.