Saturday, July 14, 2012

It's Social Marketplaces, not spending or revenues.

The US (as well as many other nations) doesn’t have a spending or revenue problem, they have a Social Marketplace problem. The perpetual “spending versus revenue” debate is a misdiagnosis of the problem. The problem is centralized politically driven social marketplaces are inherently fiscally, as well as morally, unstable and lead to eventual fiscal as well as moral bankruptcy. No amount of adjustments to spending or revenue will treat this cancer.

Instead of defining the various social marketplaces (education, health care, housing, pensions, etc) to be individually driven according to marketplace rules, with prudent self adjusting accommodations for those of limited means, politicians have tried to play Santa Claus buying votes for this or that Social Marketplace program, generally at the expense of future generations as well as the general prosperity of today’s economy.

Any solution that doesn’t address taking the centralized and special interest politics out of these various social marketplaces is doomed to be little more than a temporary fix on a long downhill slide into some sort of economic abyss.

There are plenty of options, as well as examples, of how the various social marketplaces can be redefined toward individually driven social marketplaces. Chile provides an example of how personalized retirement plans work. There are others. There are pockets of HSA health care coverage that are working fine in the US even given the straightjackets politicians have encumbered them with — if they’re not killed by Obamacare. There are other examples around the world such as Singapore. Similar sorts of models can be applied to education and other social marketplaces.

What is needed is recognition that government’s proper role isn’t to provide these various Social Marketplaces via some central command and control system. Government’s proper role is to define and implement individually driven, Social Marketplaces that are sensitive to marketplace whims, while also providing structures for those of limited means — with a natural unassailable check and balance against perverse expansion of ‘limited means’ to larger and larger populations via politicians buying votes as Santa Claus.

How the US got here is simple — During FDRs days, politicians determined that the Preamble to the Constitution was irrelevant and started to ignore the guidelines it provides for how the powers of the Federal Government are to be used. As a result, instead of promoting the general welfare, politicians have pushed providing special interest welfare over promoting the general welfare — this buys votes… They also ignore preserving liberty for our posterity (future generations) by buy votes today for goodies that future generations will have to pay back. Then there’s the shadow government of federal bureaucracies that basically write law without regards to Congress or the Constitution and the Preamble — taking liberty away one regulation at a time, many regulations each day…

Judges, politicians and many of the population have bought into this extra-Constitutional fantasy of a cradle to grave worship of big government that will solve all problems, big and small. It does no such thing — government is the problem, not solution. The solution isn’t smaller government, it’s developing and implementing individually driven compassionate social marketplaces. Individually driven social marketplaces will result in a smaller government that also provides access to a vibrant and healthy set of social marketplaces for all.

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