What’s Wrong with America

By Miles Unterreiner

As the country heads into the second decade of an uncertain new millennium, talk of America’s geopolitical, economic, and cultural decline suffuses the airwaves, dominates television commentary from both sides of the ideological aisle, and lends a sharp edge to political debates about what appropriate national policy should look like. A rising Chinese dragon is spreading its wings as the American eagle falls dejectedly to earth, burdened with a crushing national debt, persistent unemployment, an unhealthy populace on which we spend more health care dollars per capita than any other industrialized nation (but with worse results), and students whose test scores continue to fall behind those of their contemporaries in India, South Korea, Singapore, and the countries of the European Union. Conservatives blame liberals, Democrats blame Republicans, and the voters blame politicians in general – but the one belief everyone seems to hold in common is a conviction that things have gone badly wrong, and, even more ominously, that they are likely to get much worse unless something is done and done quickly.

America’s decline is certainly worrisome – but it is also, thankfully, reversible. A comprehensive regimen of policy reform now, of which I will list what I believe to be a few important parts, can and must revive the nation’s faltering economic fortunes, resurrect a common faith in a shared national progress, and reestablish America’s once-exalted status as an economic powerhouse.

Health Care

Health care spending in the United States, both public and private, is one of the most pressing problems facing the American people today. Medicare spending continues to balloon with no apparent improvement in the level of care the elderly are receiving; we pour more money into hospitals and HMOs than any other industrialized nation, but have much sicker citizens; insurance premiums rise inexorably; and the children of this generation could be the first since the founding of the United States to have a shorter average lifespan than their parents.

Eliminate State-Level Restrictions on Health Insurance Providers

Health insurance and health care are not free markets in the United States, and the result has been grossly overinflated costs to both labor and to capital to working and commercial classes alike. With state governments allowed to determine which corporations may and may not sell insurance within their borders, oligopolistic pricing models developed by health insurance megacorporations inflate prices to consumers, who have no choice but to accept a limited number of providers in a constricted market wherein artificial barriers to entry preclude competition (and lower prices to individuals). This must change. The federal government should allow insurance providers to freely compete across state borders, lowering costs to consumers and reducing artificially high profit margins for the elite members of the state-level insurance oligopolies.

End the Employer Insurance Mandate

Laws mandating that employers purchase health insurance for their employees place immense burdens on small businesses while simultaneously limiting consumers’ choice of health care providers. Such laws should be scrapped. Employees should be free to choose any health insurance provider on the free and open market, and employers should be freed of the obligation to pay for large portions of their employees’ insurance premiums (though they may, of course, continue to voluntarily offer such coverage as additional benefits).

Government-Paid Health Insurance for All Children Under Age 21

The federal government should levy a Medicare-like national tax on income to pay for insurance, purchased in the free private market, for all children under the age of 21 born or naturalized in the United States. Whether a child lives or dies or has access to quality health care should not be dependent on the wealth, status, or the investment prudence of the parents to whom he or she is born. No infant should be punished because he or she was born to parents too poor to purchase health insurance, nor should an infant lucky enough to be born to rich parents reap benefits for which he or she did not work. Society has a moral obligation to care for those who cannot care for themselves; children fall under this heading. Once children reach 21, however, they should be held responsible for purchasing health insurance in the private market.

But there is more than a moral or principled reason for providing health care for all children; there is a perfectly pragmatic and economic rationale for doing so as well. Children denied health insurance by their parents’ inability to pay grow up unhealthy, poorly cared for, and much more likely to impose high costs upon society and upon the public health system later in life. Taking preventative care of everyone while they are young at low cost is preferable to curing everyone of diseases at a much higher cost after they age. It is inconceivable that we have Medicare for the elderly, who have had an entire lifetime to save and invest, but not for the very young, born into circumstances over which they have no control.

Means-Test (and Needs-Test) Medicare

Those who do not need Medicare should not be getting it. The government should cease to pay for the health care of the elderly rich, who are perfectly capable of paying for it themselves. This simple step alone would cut billions from the Medicare budget every year.

Second, persons who do not take care of themselves should not be permitted to place a burden upon the public insurance system. Medicare and Medicaid should not pay for costs caused by self-inflicted harms like lung cancer caused by smoking, obesity due to lack of exercise and unhealthy eating, or any other disease or condition caused by a failure of individual responsibility. It should continue, however, to care for the disabled and the elderly poor who suffer from congenital and unpreventable diseases – in other words, those whose problems were not their own fault, and those for whom society has an obligation to care.

Economic, Infrastructure, and Technology Reforms

Eliminate or Greatly Reduce the Federal Minimum Wage

Minimum wages, contrary to popular wisdom, do not benefit the least advantaged members of society. They benefit instead the relatively skilled; the biggest beneficiaries of the minimum wage are college students looking for summer jobs, not the poor and the unskilled. Minimum wages create unemployment as corporations find themselves unable to hire the number of workers they would hire at maximum market efficiency; the least skilled workers, meanwhile, find themselves out of a job as the number of work slots shrinks, and the fewer that remain go to those with superior skill sets. Minimum wage laws essentially represent a trade-off between employment and wages – the choice is either minimally higher-paying jobs for fewer people or minimally lower-paying jobs for more people. With employment currently hovering between nine and ten percent, the latter choice, at least at this point in time, is the right one.

Invest More Federal Dollars in Technological Research and Development

The United States spends less as a percentage of GDP on R&D than many other developed countries (though a larger sum in absolute terms). America must maintain its edge in technological innovation and reclaim a larger share of the burgeoning green energy market, in which we are rapidly falling behind. Private firms may shoulder a significant portion of the burden, but the government should also do what the government does best – allocating large sums of money to particularly important tasks, as it did with the national highway system – by feeding taxpayer dollars into projects that promote technological drive and innovation. It is a time-honored maxim in economics that only innovation can produce long-term economic growth; the government should stick to that adage.

Invest Federal Dollars in High-Speed Freight and Air Infrastructure

Any visit to Europe, Japan, or, at least recently, China will be enough to convince most anybody that American is falling woefully behind in our national commitment to public works and infrastructure. The country that built the world’s largest railroad network, constructed the national highway system, and erected the Hoover Dam is now unpaving roads to make way for cheaply maintained gravel and watching helplessly as the Chinese build high-speed rail across Tibet and the Germans and the Japanese zoom to work five times as fast as we drive. While travel over America’s long open distances may not be broadly conducive to high-speed rail for personal travel, the government should subsidize high-speed rail for freight transport (rail is the cheapest way to move goods other than by ship, and investment in infrastructure has significant positive externalities) and reinvigorate our inefficient, insecure, and poorly maintained airports.

Means-Test Social Security

Like Medicare, Social Security is a federal program that should be means-tested; the elderly rich should not be receiving checks from the government that they do not need. A small check from the government matters little to the owners of yachts and mansions, and it would be a simple and cost-effective step to means-test the country’s most expensive federal program.


I discussed education reform in my fall quarter article, and so I will not go into the specifics here. In short, a freer labor market for teachers (the reduction of union power), the recognition by society at large of the true difficulty and prestige of the unfairly derided teaching profession, and competitive national grants to state governments based on student performance would go a long way towards fixing an antiquated system that is leaving both students and teachers behind.

These are by no means all the problems facing America today, and by no means are my solutions the only ones or necessarily the right ones. But we must come up with the right ones soon – through reasoned debate, rational argument, and enthusiastic participation in civic institutions and public debates. We dare not let the promise of America fail us now.

This entry was posted in Articles for Volume 4, Issue 2, Winter 2011. Bookmark the permalink.

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