By: Herman Cain
May 21, 2012
One of the worst tendencies of Washington politicians is to purportedly “fix” big problems with small solutions.
Who can forget members of Congress, announcing at the conclusion of last
year’s debt-ceiling showdown that they had agreed to a deal that would
reduce the deficit by $1 trillion over 10 years? When you consider that
the forecast deficit for that same period is well over $10 trillion –
and even that’s assuming the phony “out year” spending cuts that never
actually happen – a reduction of $1 trillion is not much of an
That’s because Washington doesn’t solve problems. It tweaks things –
calling this “reform” – when these things need to be completely replaced
If you want to understand why Washington does this, consider the
reactions to Congressman Paul Ryan’s proposed entitlement restructuring,
or to Gov. Scott Walker’s changes in the collective bargaining rights
of public employees in Wisconsin. Democrats aired TV commercials
depicting Ryan dumping a wheelchair-bound old woman over a cliff. Unions
have successfully forced Walker into a recall election.
Most politicians, regardless of party, don’t want to deal with that kind
of political blowback. So they settle for weak half-measures that allow
them to say they “did something,” even though the actions taken don’t
really solve anything.
This, I fear, is what will happen with all three entitlement programs.
Politicians will tweak the programs and claim they have “reformed” them,
when they really haven’t done anything to prevent the long-term fiscal
train wreck that’s coming. It isn’t enough simply to tinker with the
benefit formulas or to adjust the way revenue is raised. Social Security
was created 80 years ago. Medicare and Medicaid were created nearly 50
years ago. The world was a different place back then, and basic facts of
life that might have applied in those days are not necessarily
applicable today. It makes no sense to cling to old models, and yet the
very same people who cry “FORWARD!” in their quest for re-election
insist on clinging to these models of the past.
America needs to stop thinking in terms of reform, an all-purpose term
that is too easily applied to meaningless gestures, and start thinking
in terms of replacing and restructuring outdated programs and processes
that simply cannot be salvaged.
I said during my campaign, and I still say today, that America should
look to the Chilean counterpart of Social Security, which relies much
more heavily on private accounts and gets better results without putting
the country in fiscal jeopardy. Yes, this is a very different kind of
idea. There’s nothing wrong with that. When President George W. Bush
proposed in 2005 that we go to partial privatization of Social Security,
you would have thought from the reaction in Washington that he’d
proposed to make seniors eat dog food for the rest of their days.
In fact, Bush’s proposal represented a good start but didn’t go nearly
far enough. Yet the change-averse culture of Washington had an absolute
meltdown over even such a limited reform as this. That’s pretty ironic
considering how many of these same people get elected and re-elected
squawking about “change blah blah blah.” Apparently change is a great
idea as long as you don’t actually try it.
Now let’s be honest. It’s not only in Washington where people deny the
need to replace and restructure models that don’t work anymore. Kodak
was once the king of the photography industry, but they refused to
accept that digital technology was about to revolutionize the industry,
and they didn’t get out in front of the change. Once they got so far
behind that they couldn’t catch up, they ended up in bankruptcy.
The newspaper industry has suffered in much the same way.
Forward-looking people were predicting nearly 20 years ago that the way
people get their news would change dramatically as a result of
technology. Most of the newspaper industry refused to believe it would
happen. Many newspapers invested in shiny new printing presses as
recently as seven or eight years ago – thinking it would save them to
have the color photos “pop” better on the printed page. Now they’re
trying to lease out capacity on those printing presses to coupon
companies while they desperately seek to catch up on their digital media
In both cases, it was a combination of short-sightedness and arrogance.
People thought their models would always work because they always had
worked. Why would that change? But of course, business models become
antiquated over time, and so do government programs. It’s not enough
just to change them. You need to completely replace the old model with a
If America is to deal with the challenges we face, we need to change our
mindset. Mere “reform” of outdated, antiquated models won’t get the job
done. When Social Security was created, it was unheard of for people to
have televisions in their homes. When Medicare and Medicaid were
created, only super-rich people had color TVs. These programs are relics
of another time, and yet we act as if they are sacrosanct and must be
kept in their original form forever – even though the numbers clearly
tell us they are going to bankrupt the country.
That makes no sense. America has never been a timid nation, so why are
we so afraid of accepting anything other than timid “reforms” when what
we really need is to restructure, and replace old models that no longer
make sense with no models that work and fit the times?
Forget reform. Replace and restructure! If we do not begin to seriously
replace and restructure the tax code, government programs and
regulations, then there will be nothing left to reform but a bankrupt