Whoa, hang on just a minute there. Sure, it's reasonable to suggest - as Senator Rubio did - that the vast majority of social programs be handled at state levels. But how does anyone really propose to do that? Presently, Washington struggles to fund or otherwise support more services than are presently possible at state levels. The fact remains that local and state governments do not yet have the additional means, coordination or resources in place, to be able to take over the process.
By trying to force this devolution through political channels instead of active negotiations, thousands of details would not be considered beforehand. Discussions with thousands of participants from all walks are life, are needed before such a process might actually proceed in designated locations. People need examples of services coordination alongside local education preparation over time, to see what works and what doesn't.
Let's hope no one will vote full scale services changes across the entire country at once. Indeed, the same complaints about rolling out Obamacare in each state at the same time, apply in this situation, as well. Without domestic summits and any real participation from the public, "solutions" would mostly look like the same special interest wealth capture as before. Those institutional incentives would only stretch state budgets even further, while making the actual services marketplace even smaller than the present.
In a podcast with James Pethokoukis, Oren Cass discusses a plan to consolidate assistance programs. The plan has also been endorsed by Senator Marco Rubio. Indeed, anyone with only a passing acquaintance with my posts might wonder, what is the problem here? Doesn't this blogger advocate for services coordination and accountability at local levels? The problem is the fact that no one is considering this potential sea change in an economic equilibrium context. How so?
States are more dependent on national monetary assets to services transmission, than they realize. People in many rural areas are especially reliant on national assistance for health care. What's presently lacking, is an understanding how income potential and economic access affect this process. Only consider the battles between economists, as to whether monetary equivalence for all participants even matters. If economists aren't making that connection between income and consumption potential, how can anyone expect states to be able to do so? There's no true context of accountability on the part of individual, state or community, yet. Any devolution of social programs to state levels now, would immediately put a lot of people in a world of hurt.
The primary issue in this regard is that only the budget context is being considered, and budgets are stretched out of recognition because of supplier to consumer realities, in services. Just as national government has been forced to dip into deep pockets to reimburse the suppliers of healthcare, state governments would presently be expected to do the same. What's more, the states would no longer have the backing of the entire monetary system behind them, to be able to do so. That means an immediate shift in terms of the population which has access to healthcare.
Consider pension obligations, particularly the "unmet" garden variety which lurk in the shadows of vulnerable municipalities everywhere. Unions! Lefties! Hmmm, but why exactly were those pension payouts getting so high in the first place? A working paper highlighted by Arnold Kling gives a few clues: "...we find that unfunded retiree healthcare liabilities are 1/2 the size of unfunded pension obligations." Arnold adds, "there are strong incentives for politicians to avoid transparent accounting."
They want to get reelected don't they? I certainly concur. Here's the thing. The problem for anyone who relies on social programs, is that sufficiency of vouchers and choice are wishful thinking. At least, so long as the person who seeks services has to rely on product which is essentially defined outside of the marketplace (with political favors). Healthcare providers in particular, are set up for the portion of the marketplace which contributes to their present structure. Many of them are far from ready, to accommodate those individuals who would be showing up with vouchers or the like. What's more, the most basic services people expect now at the national level are becoming strained, as this chart indicates for calls to the IRS since the Great Recession. Clearly governments are overwhelmed at all levels. Citizens need to begin coordinating services by more direct and informal means, in the years ahead.
Even though many social services tend to be associated with lower income, the fact remains that they are necessary to maintain for all levels of income. Even so, no economic balance is really possible, until those with lower incomes can move towards a future for themselves. They need dedicated spaces, where they can generate services based solutions in line with their actual needs and desires. But to do so, they need environments where they can break free of the constraints of special interests.
It is not easy for governments to break their exclusivity arrangements with suppliers, producers and providers, even though services provisions for lower incomes are now being curtailed. An apt example of this discrepancy, is the recent separation of the SNAP program from its former association with government agricultural programs. One would have expected these agricultural subsidies to have been rolled back as well, but the reality is that commitments between Washington and agriculture may only be growing stronger.
The agriculture example illustrates how governments aren't well positioned, to expect suppliers to to be accessible to all income categories. The best that can be hoped for is to designate areas where individuals are free to create product and services more in line with their income and resource capacity. As it becomes more difficult for any governments to provide services, the best road to sustainability for all concerned is to allow individuals to innovate - with legal backing. Over time, institutions of all kinds will need to adapt, for they are responsible for the broken equilibrium between income levels that caused the present dilemma.
Empires of wealth were recently built by healthcare and housing interests in the U.S. but these can no longer be maintained in their present status. Local governments supported these forms of wealth capture just as surely as national governments. Thus the idea of better sustainability minus national dictates won't get too far, so long as the same product restrictions and political favors remain in place.