The Hunger Games of Romney-Ryan Plan

Republican presidential nominee Mitt Romney said he’s been reading “The Hunger Games” to relax. Me, too. Romney is reading the novel by Suzanne Collins. I’m reading the budget by Paul Ryan. They are remarkably similar.

Novels, of course, are fiction and don’t really happen. Budgets also distort reality and don’t really happen.

“The Hunger Games” is a novel about a country where the government has created a food shortage to keep the people in line. Each year, two dozen children are placed in an arena on a reality TV show where their objective is to fight for food, kill the others and be the lone survivor.

The Republican Romney Ryan plan – or TripleR, which sounds rather Reagan-esque, doesn’t it? – is also a reality show about whether the United States should continue to provide a social safety net for the elderly and the poor. To those affected, it is about survival.

TripleR is a quick read, at fewer than 90 pages long. It is mostly about what’s wrong with our national financial mess and is peppered with some really bold proposals that radically change the national approach to providing a safety net for those in need. Like most novels, TripleR ends in the future—30 years from now—when the budget is finally balanced, the nation is prosperous and everyone lives happily ever after. Of course, by then, most baby boomers will have met their maker, and the elderly population will be in decline.

Like Herman Cain’s 9-9-9 idea that simple is good and solutions are easy, TripleR proposes four simple steps: cut taxes, convert Social Security to a private savings plan, give seniors a voucher to buy their own health insurance and give states block grants for Medicaid to serve the poor and disabled.

TripleR avoided the rigor of being “scored” by the non-partisan Congressional Budget Office that estimates the economic impact of new laws and budgets. Instead, TripleR created its own assumptions and reached its own conclusions. (I could do that. After all, I am a CPA. Accountant jokes are rare, but one fits in this case. A client has a question for his accountant who answers, “Tell me what you want and I’ll make it come out.”)

So, here’s the plan. Decide whether it’s fact or fiction.

First, cut taxes to the lowest rate in 80 years. Revenues will increase because everyone will work harder and invest more, knowing they can keep more of their income.

Second, convert social security to a personal savings plan. So, suppose the average family and employer invests the same 12.4 percent now paid into Social Security, or about $6,000 per year. For today’s twenty-somethings, that would add up to $600,000 over 40 years and provide a $3,500 monthly pension. Sounds good, but what about inflation? In 40 years, that $3,500 per month will be like $750 today. Put another way, and ignoring inflation, if you save 12 percent of your income every month, say $500 for 40 years, can you then live on, say, $1,000 per month (24 percent of today’s income) for the following 20 years?

Third, give seniors a voucher of $700 per month to buy their own insurance. I am 63, and if in perfect health, could buy insurance for about $700 per month after paying the first $3,500 each year. Like many my age, I’ve had some health issues. So, my insurance is already double that. My 78-year-old father-in-law had a heart attack 15 years ago and now has a pace maker which cost $30,000. Ann Romney, Mitt’s wife, has had cancer and has multiple sclerosis. What insurance company is going to sell any of us a policy for $700 per month? Buying my own insurance is also supposed to make me a better health care shopper since I won’t buy it unless I really need it. That would make me my own death panel.

Fourth, give states a “block” grant to cover Medicaid for the poor and disabled. That would save the federal government billions by shifting the entire risk of increasing health care costs and increased poverty rates to the states. Health care costs have risen three times faster than inflation for more than 20 years, and the number of poor people qualifying for Medicaid has increased dramatically. States are broke. How will they bear that burden? Maybe the poor will move to states with better benefits.

That’s TripleR. Individual responsibility, reduced retirement benefits and less health care for the elderly and poor.

Now, that really does sound like “The Hunger Games,” doesn’t it?