INSURANCE

Insurance is mutual risk sharing.  It is a concept whereby individuals and/or businesses band together to reduce an uncertain possible catestropic loss.
The uncertainty can be the time such as in life insurance or in an event such as in  fire insurance.

This desire to provide for future security has expanded to areas from retirement to health and has produced confusion and polarized debate.  It has also produced an issue of entitlement or inividual responsibiity.

Is financial security for retirement an insurable risk?   It is catostropic  for the individual  that could no longer work to support his or her self  and it is catostropic for  a country (government)  that was unable to care for  these individuals.

In the wake of WWI, the government decided that the  loss  of life  for elderly individuals who could no longer support themselves for BASIC needs was a catestropic loss for the whole country and passed the Social Security Act where ALL individuals were required to purchase BASIC retirement insurance that all would collect at age 65.  Because everyone shared this cost which did not include the cost of Private Enterprise profit, it was affordable for everyone.  It was found that there were a number of catestropic events such as handicaps, accidents and health impairments for those unable to handle the financial burden that these hazards demanded, were catestropic losses for the whole country  and were added  to the Social Security enactment.

The current polarized "debate"  concerns  HEALTH  and appears to go beyond the basic and catestropic concepts.  In the case of health, would the individual be responsible for their own basic health care?  Children, of course,  are the wards of the STATE and therefore would the State be resposible for their basic health care?  On the other hand,  should  an able bodied adult be responsible for their own basic health care?   Could catostropic  health  care  for  an able  adult be  a government resonsiblilty? and what is an able adult?  What is the government responsibility for disabled adults?

Private enterprise has found that  accident insurance  and other health care benefits could be  offered  at an acceptable price that  would afford a  profit.
But  great advances in health care  have expanded the costs in this area to the point where AFFORDABILITY  must be a consideration in the debate.

The immature approach of just slashing costs will only aceserbate the problem,. Waste and corruption must be curbed, but to cut survival costs
would cause hardship and impede recovery.  Education, Infrastructure. Roads and Bridges, Law Enforcement, Emergency Rescue,  Civil Service Agencies, and the like are  absolutely essenial to surival, recovery  and successful business enterprise to produce jobs that would accelrate the recovery.  To cut basic suival costs and expect business to  suceed and produce jobs to aid the recovery is a no brainer in the true sense of the word.  Insurance is a valuable management tool but it has its limitations.  It is not an entitlement.  It requires both individual and government responsibility.

THE USA WILL SURVIVE!

Regardless of which party is in power,  The US will survive.  Whether the top 1% pay their share of the taxes or the bottom 50% pay their share, the  US will survive.   Whether  entitlements  are not cut to the bone  or  corruption  remains out of control, the US will survive.

How long it will take to bring down unemployment and how much of a hardship will be born by the middle class and the poor may depend upon the management and policies of the party in power, but the US will survive,

The Government could end the crisis with all citizens contruibuting a fare share if Congress were to lend a hand and cooperate by enforcing only needed regulations and cracking down on mismanagement and corruption.

If deams could come true the Federal Reserve could gradualy issue dollars to pay off debtors,  devaluating   the dollar  and causing inflation that would increase prices which would also increase wages and taxes, all born fairly by consumers and businesses alike in the purchase of goods and services..

Real Estate and Capital Wealth would retain their value through appreciation.  The only losses would come from large amounts of uninvested dollars in corporations and banks. (and also of course, cash horded under mattresses)

Higher prices would be offset by corresponding higher wages and business would not be effected.  The possibility of low income consumers unable to save for down payment on a first home could be offset by government backed, low interest, capped mortgages that could also help small business entrepreneurs in need of capital for start-up and/or expansion.

Any change would be opposed by those satisfied with the statis quo.  Even if the tax break for the top 1% was ended, it wouldn't be much of a hardship for them.  However, massive cuts in entitlements and health care would tragically reduce the standard of living level for millions of  middle class with millions of the poor living at a third world level.  Continued cuts in  education would greatly jeopardize our future leadership role in the world.  Neglect in maintaining the infrastructure and public service will impede progress and result in choas.  The budget challenges today are astronomical!

The effect on foreign trade would vary according to the financial adjustments made by the countries involved, but basically prices on imported goods would be higher with lower prices on exported goods.  This would be good for our economy as this would promote more demand for domestic goods.  Admittedly, this may reduce profits for outsourced domestic corporations.

 If you think that the doubling of prices and wages would never happen, consider the prices and wages from 1960to 2000 and we still surived.