Where Socialism and Capitalism Co-Exist

Many in this country want socialism. The main proponent is Bernie Sanders. He proposed having a single payer system so that the government controls much of our economy. He also wants all state universities to be free. This seems appealing to some, especially those who do not have coverage now, don’t want to accrue college debt or aren’t seeing the inherent problems.

The pro-socialists point to the problems with capitalism. Capitalisam caused the crash of 2008, the outsourcing of manufacturing jobs, the bottom 40% of our socio-economic Americans who can’t pay taxes and live in substandard conditions. Our black and Hispanic populations are disproportionally in this group. 

The socialist backers cite the Declaration of Independence which says “all men are created equal” something that the founding fathers never believed. They didn’t believe that blacks, American Indians and women were equal to white, Christian landowners. What they might have meant is all people are equally human. Still this group clings to this falsehood maintaining that if we were all equal, shouldn’t we all have equal living conditions. They oppose the theory of evolution which says that evolution relies on the survival of the fittest.

They don’t look at the failure of socialist countries. There is Cuba, North Korea, China , the USSR, East Germany, Venezuela as examples of the effect of socialism. They disregard the contrast between North Korea and South Korea or of East Germany versus West Germany or of Venezuela and Brazil.

Those who favor capitalism point to the need for competition to produce the best product for the lowest price. They believe that their system motivates people to do their best in order to succeed. They remind us that capitalism made our country the richest and most prosperus in the world. They believe in survival of the fittest. They overlook the dishonesty of our banks, the attempts at monopoly, and the massive gap between the richest and the poorest leading to violent crime. They disregard the difference in pay between men and women doing the same work. They do not shed a tear for those who are not successful and turn to crime and substance abuse.

So who’s right? What should we be, socialist or capitalist? I suggest a balance of both. The government can motivate companies to hire Americans by imposing taxes or tarrifs on products made by American companies overseas.

The country could make community colleges free so everyone desiring more that a high school education could get one for the first two years. Then those who cannot afford a four year college could get their remaining 60 units by using on-line education for less than $4,000 to get their college degree. 

The government can change the tax code eliminating all itemized deductions which overwhelmingly favor the rich. They could offer a standard deduction instead. They could tax those making more than one million a straight 35% , those making more than $5 million an extra 5% and those making more than $10 million an extra 10% or a total of 45%.

The government could take action on companies that pay women less than men for the same work. Government agencies already have this parity. 

Currently about three million Americans have healthcare coverage through their employers or from Medicare, Medicaid or VA. About 30 million lack this coverage. Some who have coverage have high deductibles or premiums. 

So there can be a balance between socialism and capitalism. Almost half of get their coverage because of capitalism and half from socialism.  But what about those who don’t have coverage or are paying too much or too high premiums? Should we all have socialised medicine? The Affordable Care Act tried to answer that question and failed. It failed because it tried to force Americans to sign up for the ACA or face penalties. It failed because it insisted that plans include everything, even if the applicant didn’t want or need some of the mandatory options. It failed because it didn’t realize that one unhealthy applicant could cost as much as hundreds of healthy ones. Five percent of the population spends 50% of the country’s health care costs. One prescription drug can cost $60,000 a year meaning just for the drug costs ten healthy people must pay for it. I have a health problerm for which I was billed more than $1.5 million this year. My health insuance paid all but a few hundred dollars that I was charged. How many healthy people paying $6,000  a year are needed just to pay for me, 250? What if there are 20 like me or 200? The other unforseen problem was that insurers dropped out because of huge losses even with billions in government subsidies. This left one in five people with only one company to select from, charging its captive audience more. A total of 19 states refused to expand Medicaid coverage leaving many of our neediest without coverage.

So how do we correct the problems created by capitalism without abandoning it?

The government can control the excesses of the bankiung system by enacting laws like the Glass-Seigal. It would make retail banks separate from investment ones. It could and does control monopolies. 

But what about health coverage? Should that be socialized so that everyone can have coverage? The top 60% would see their taxes increase dramatically and get no benefit from the plan, only the bottom 40% who pay no taxes now might see an improvement.

So how can health care coverage be both socialized and capitalistic?

Let companies and government agencies continue to offer their employees private health care coverage but with no deductibles. Make signing up for ACA voluntary and therefore without penalties which some call taxes. Let private insurers deny coverage to people with expensive medical problems. Those denied coverage would immediately be eligible to the “public option.” And let those whose states refused to offer expanded Medicaid elibility also get this option. It would be a federal program like Medicare not dependent on states to agree to it and it would have a shsare of cost depending on income. Let private and public insurers offer a less expensive plan that only covers needed hospitalization, presciption drugs, lab tests and doctors’ visits. 

Private ACA insurers would come back to the market and compete for the millions of healthy applicants. They would not have deductibles and would have a share of cost depending on incomes.

Therefore there would be both a socialist and capitalist solution. There would be maybe five million more people on the government program and few million more getting private insurance coverage.

Then everyone who wants healthcare coverage could get it at affordable prices.

But where the extra money come from under this arrangement?

The govenment would stop paying billions of dollars in subsidies to private insurers. Waste and fraud in health care amounting to more than $100 billion could be much more tightly controlled. Also money could come from the changes in the tax code mentioned above and by looking at other areas of wasted government  money. We could close many of our 800 foreign military bases or have host countries pay our costs to remain. We could cut foreign aid to Pakistan, Egypt, Palestine and maybe even to Israel, which uses our money to build unlawful settements in the West Bank.  

All these cited problems can be solved with a coexistence of capitalism and socialism.