The static twentieth-century entitlement and welfare model is undeniably failing, and Americans should no longer tolerate it.
Social Security pays hardworking Americans dismally low returns, yet still faces insolvency. Medicare unfairly limits options for seniors yet costs are still running out of control. Poverty remains as tragically rampant as it did at the outset of the “War on Poverty” welfare programs in the mid-1960s.
There are three radically divergent paths we can take today:
A Fantasy Path that maintains that nothing is wrong, Social Security and Medicare will survive without any structural reforms, and that there are no problems with the “Welfare Empire” that keeps nearly 50 million Americans in poverty.
An Austerity Path that concedes that our best days are behind us, then cuts benefits, rations care, and concedes that poverty will always be an inevitable facet of American life.
Finally, there is a Gingrich Growth and Innovation Path that rejects the two previous notions, and attests that incremental change is not enough to meet our current challenges.
This path insists that by unleashing choice and the power of the market, we can dramatically reduce inequality, create expansive opportunities for Americans of every income level, and overhaul our welfare and entitlement systems so that they are more secure, fairer, and can encourage even more economic growth.
Growth and innovation means securing and strengthening Social Security by empowering Americans with the option to invest in personal savings accounts. This gives Americans ownership over their retirement and the opportunity to unleash the power of the market to enjoy prosperous retirements beyond their most optimistic expectations. At the same time, this reform will wipe out all future liabilities in the Social Security system. We would build on the successful models in Galveston, TX and Chile, where workers contribute into personal accounts and receive double the benefits that they would have under traditional social security models.
Growth and innovation means liberating the poor from the trap of the Welfare Empire through new programs that are tailored to local communities, that promote work and that incentivize lifelong study. Building on the success of the 1996 welfare reforms, block-granting all federal means tested welfare programs back to the states would help millions move from dependency to prosperity while saving taxpayer trillions.
Growth and innovation means rejecting the centralized control and rationing of Obamacare, and creating a broad Patient Power system. When patients are empowered and information is transparent, the cost of healthcare will go down for all, while the quality will go up.
Growth and innovation means creating options beyond the current Medicare system for American seniors. Any individual who wants to remain in the current Medicare system should be allowed to do so, but we will also give Americans the option to purchase a wide variety of private insurance plans with a regular premium support payment. Unleashing competition will dramatically increase options for American seniors, while also lowering costs.
Moving Beyond Welfare State