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April 22, 2006

In Our Hands

Charles Murray – ISBN 0844742236

Murray has done it again: another wise and interesting exploration of our current welfare problem. Or, rather, the problem of our welfare! His solution is Alexandrian. Instead of trying to untie the Gordian knot, he cuts thru it! This time he has an historic and riveting conclusion, and recommendations. His first work, Losing Ground was published in 1984. In it he explored our welfare system, reviewed its history, and pointed out its faults and appropriate remedies. In the 10th anniversary edition he acknowledged that little progress had been made, but that some of his suggestions were at least being discussed. Not insignificant strides have been taken since, culminating in the recent (Clinton administration) welfare reform bill which has nearly halved the number of people receiving welfare.

In his newest rendering he expands to include Welfare, Social Security, Medicare, Medicaid, health insurance, corporate welfare, etc. Essentially all government “wealth redistribution” programs would be eliminated and replaced by his plan. He explores all in relative depth considering the brevity of the book. He notes that government redistribution now approaches 1.5 trillion dollars annually; a staggering sum which is rising sharply, and will reach 2.6 trillion by 2020. That simply isn’t possible, even with our incredible economy. We are going bankrupt, and it’s time to actually do something about it. As before the current incentives are all wrong, except for a few recent changes which have impacted mightily. His plan outlines a near total renovation of incentives, and a creative approach to “redistribution.”

Debate has raged (literally) in the halls of congress over revamping Social Security and Medicare, and has now ceased because the parties will not agree. With leading Democrats in favor of continuing the same bankrupting program, and cowardly Republicans unwilling to bite the bullet, nothing will be done any time soon. The weakness is said to be that the government must guarantee ends, and not permit private investment. Most alternate calculations are made with the supposition that citizens will contribute like funds to private accounts, with yields calculated at 4% compound annually. This is neither good enough, nor safe enough, say the opponents. Murray points out, however, that if the stock market doesn’t yield the 4%, the government can’t meet the demand either. Thus to argue for “security” is a faux argument.

Instead, he suggests, explains and justifies “the plan,” which entails a distribution to every adult citizen (i.e. over 21) a sum of $10,000 per annum, in monthly aliquots deposited in their checking account, with the presumption that the first $3,000 will be set aside for health expenses, including insurance, which everyone will be required to have. And he has a revolutionary approach to insurance, as well.

Thus a minimum wage worker will have a take-home pay of at least $7,000 more than he would otherwise; a working couple would have twice that. For average working families, the plan would have a similar impact, since there is no adjustment to the $10,000 until each worker makes $25,000. Then it is incrementally adjusted by 20%. It never becomes less than a $5,000 distribution. (For many, the additional monies would permit one spouse to quit working, or work part time, thus augmenting child care and family time.)

You say that we can’t afford it? Look again. In less than four years the projected outlays of the current system will exceed those required for his plan. And the excess increases geometrically thereafter, while “the plan” is a near horizontal line with minimal incremental increases. The truth is that we can’t afford not to do it.

You’ll have to read the book to fully comprehend “the plan,” but I believe you will agree with it. Imagine this coupled with The Fair Tax!! Of course nothing will happen with either until a significant proportion of the voting public demands it. I’m not hopeful, though he is optimistic.

About the only counter-argument would be that free choice is involved, and its weakness is the governmental (yea, societal) tendency to cover the butts of even those who make dismal decisions and end up broke . . . still even then they would have $10,000 per year on which to exist, hopefully having learned a few lessons,

Chapter 8: “The Pursuit of Happiness in Advanced Societies,” is, alone, worth the purchase price of the book. Introducing the subject he notes that “The real problem advanced societies face has nothing to do with poverty, retirement, health care, or the underclass. . . . [it is] how to live a meaningful lives in an age of plenty and security."

For most all of man’s history just staying alive was the principal problem, followed by having and properly maintaining a family to, in turn, maintain you in your dotage. Sudden death was an all encompassing situation requiring attention to spiritual issues. Life now requires none of those things. This has left one with “a few friends, serial sex partners, earning a good living, having a good time, and dying in old age with no reason to think that one has done anything more significant than while away the time."

Small wonder that today the main question seems to be: "Is this all that there is?" He explores the importance of transcendental meaning in life, and its absence in the "advanced" European welfare states/societies. Brilliant! As is the next chapter wherein he gives voice to the importance of Vocation: the central satisfaction of doing something worthwhile . . . and well, and how nearly impossible that is in a European welfare state, questioning whether or not we really want to go there.

Posted by respeto at April 22, 2006 12:17 PM