Discouraging Savings
Interesting point from Nathan Newman:
Why don't Americans save?
Because we punish people for having assets.
Take long term care for the elderly. Many families exhaust their savings paying for it, making all the hard work of saving during their lifetime a waste as Medicaid takes over those costs. Some elderly get around this problem by giving away their assets to children so that the savings do not all disappear.
But given expanding Medicaid costs, the government is likely to make that harder.
But the core problem is obvious. We don't extend long term care to all citizens regardless of income. By only extending long term care to the penniless, we de facto create a disincentive to save.
The irony is that an edministration that promotes eliminating the estate tax for the very wealthy is supporting policies that will strip working class families of their remaining assets as their families sicken in their old age.
But then what else is new? Conservatives talk a good game, but whether it's their failure to eliminate the marriage penalty for the working poor (via the EITC) or this attack on the assets of working families via "Medicaid reform", the lesson is simple. It's all about helping the wealthy. Nothing more.
posted by Luke Francl @ 11:33 PM |
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6 Comments:
Having gone through the sickly, aged parent two step. I would not change the system much. The ultimate question is when should the goverment step in? Do we give aid to those who still have assets (money), when there are others who have already spent thiers? If so at what point?
Or it can be looked at another way, your savings are there too support you when you can no longer generate income. Once you reach that point going broke is inevitable for most, it is just a matter of how long the savings will last. Proper preparation and some luck can extend that time line to allow you die first and leave something behind. I feel that that is the best we can get out of this world.
Retirement, estate, and aged care planning and preparation are things that should be done many, many years before getting to that point. Ideally retirement preparation should start with your first paycheck and continue through every single one thereafter. Sadly too many fail to understand or ignore this basic priciple.
It is my opinion that the push for Socially Securty private accounts is one way to drive home this fundamental principle. Social security will not provide you with the level of income so many falsely believe they will get. It is no more than a foundation to build upon with your lifetime of savings to give you a level of confort in your senior years.
Dave
You do realize, Dave, that what you're basically saying is the system provides incentives not to save any money?
Is your proposed solution to eliminate all government support for the elderly? Then everyone would have an incentive to save...but if you're poor, you're screwed.
Which is the reason we created Social Security in the first place.
What Nathan Newman suggests is to go the other way: extend health care to everyone, so that you are not encouraged to be poor in order to afford health care.
False dilemma.
Universal healthcare doesn't need to accompany estate tax relief.
_Censored
What the hell are you talking about?
PS: Your concern for Paris Hilton and her pultocratic ilk is touching.
(Sigh)
Luke,
Your point about Paris Hilton applies equally to Univeral Healthcare etc.
The fact of the matter is that if you want to encourage people to be productive and prosperous, you need to allow them to become rich. And having become rich, you need to allow them to spend in accordance with their desires. Among the most common desires of people is to provide for their children and families.
That aside, a "false dilemma" is a situation where there is a choice, but the choice presented doesn't include all the options that are actually available.
For example, "Give me your lunch money or I'll kick your ass." This is a false dilemma because you actually have other choices. For instance you might run away or ask the security council to protect you (or send bandaids after you did get your ass kicked, where upon they would remind you that you had it coming.) Another example of why that's a false dilemma is because I might elect to kick the crap out of the guy threatening me.
You see, the statement was, "Give me your lunch money or I'll kick your ass." Its a false dilemma because I could choose another option that wasn't offered as a choice.
In the same way "Universal heathcare OR Estate Tax" expressed as "Estate tax relief requires universal healthcare" is also a false dilemma. There two items are not mutually inclusive.
-Censored
I'm not even talking about the estate tax (which really ought to be called the aristocracy tax).
I'm talking about incentives. If you're going to burn through your money on chronic condition health care OR the government will pay for it if you don't have any money, you have an incentive to get rid of your money...or just never save any to begin with.
There are two ways to remove that incentive:
1. The government can stop paying for poor people's health care.
2. The government can pay for everyone's health care.
Option #1 is immoral, in my eyes.
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