7 Things: Ways the United States Has Created Its Own Economic Decline – Part 1

There has been a lot of talk about the economy over the past few weeks. It’s a disaster. Everybody knows it. Everybody wants it fixed. And they want it fixed now. The Republicans blame the Democrats for not getting it done, the Democrats blame the Republicans for causing it in the first place, and we have a country full of fingers pointing firmly at Washington, D.C.

And why wouldn’t we? After all, the government is in the limelight and everyone is looking for the next Bill Clinton. Well, except for the wealthy of course. They’re looking for the highest fence they can find so they can create a barrier to keep the riffraff out once they turn everyone into riffraff and become the owners and rulers of all the land.

At a time when the “Let them eat cake” mentality of the Republican Party is so glaringly on display, I have to, sadly, mull over the fact that not even I can blame the Republicans and the rich alone – though, they certainly deserve a chunk of the blame. The thing is, they did some of it, not all of it.

We were there too.

Here are the first four of seven ways the U.S. has created its own economic decline – some of it done by our government without our consent, most of it with our fullest cooperation –

Way 7 – We bail sinking ships without first ensuring we are all invited to shore.

A leader knows, when it comes time to bail or to abandon, it’s all about the size of the hole. Some damaged vessels simply can’t be saved, and it’s better for everyone to hit the life rafts and paddle away instead of going down with the ship. Others can be rescued pail by pail, backbreaking haul by backbreaking haul.

The problem is that the question isn’t always “Can it be saved or should we let it sink?” Sometimes the question is the question no one knows to ask, which is “Will everyone on board make it to shore, or will the captain let them bail and then make the crew walk the plank and leave them to drown?”

This was the hard lesson learned from the bank bailouts. Now, everyone knows how those captains operate. Use the entire crew to save yourselves and your top mates and then toss the others out to sea.

It was a learned lesson, though, and bailing out the auto industry was far more successful.

Way 6 – We keep up with the Joneses.

Predatory lending practices.

Yipes!

Glad I didn’t fall victim.

This term is disturbingly accurate, because, indeed, the desire for money in this country does seem to trump the desire for food, for sex or for love. If money is the prey, a very large portion of the population is on the hunt.

Were banks doling out funds for houses that people couldn’t afford? Sure. Were they jacking interest rates, misleading borrowers about ARM loans and basically being total skeeves? Undoubtedly. Was the public duped? Maybe. Was the public victimized? Well…

Yes and no.

When my 92-year-old Aunt Mary had to declare bankruptcy a few years ago, it was because, unbeknownst to any of us, she had racked up $40,000 in credit card debt. Because Aunt Mary was a closet shopaholic? No. But because my sister found dozens of credit card letters that had been sent to Aunt Mary’s address with those little checks in them that say “If you cash this, you agree to this credit card at a fee of $79 per year” and unused credit cards all over the house that were racking up charges, though Aunt Mary had never charged a dime on any of them.

She was a victim.

When some other people I know bought a condo at the beach with no money down, using an ARM loan, and lost it because they couldn’t make the payments, it was because they were hoping to flip that second condo – yes, second – for profit.

Not victims.

As jobs were lost, people lost homes. I know that, and feel for those people. But I also know people who walked away from homes because they were losing value and they didn’t want to pay the mortgage. Not because they couldn’t.

There was a lot of bank greed and irresponsibility in the housing bust, but there was a lot of consumer greed and irresponsibility involved too.

Way 5 – We’ve made it more profitable for systems to fail than to succeed.

Two summers of severe droughts. Crops dying. Small farms who depend upon their crops for a living suffering.

But not those big farms. Not those commercial farms.

That’s what crop insurance is designed to prevent. Suffering.

Of course, many small-scale farmers invest in crop insurance too. Which is good. For the farmers.

It’s not good for us, the consumers. It’s not good for food prices. It’s not good for the economy. It’s not good to pay out money for a necessity that no one can use.

What is good is paying out money to protect what we absolutely need.

Medical insurers know that it’s better to pay for preventative care, instead of waiting to pay more for illness. Why don’t crop insurers know that it’s better to pay for more bodies, more people, to help on a farm to ensure that crops survive inclement weather, which benefits us all, instead of waiting to pay for a catastrophe that benefits no one?

Way 4 – We have social systems that don’t work.

Whoa, hold your hats. It’s going to be all right. I know this sounds disturbingly Republican, but it really isn’t.

We need our social systems. I have literally known not a single person in my life who has not benefited from a social system, and that includes the millionaires for whom I’ve worked. And there’ve been a few.

We can maintain our social systems so that they work.

But we don’t.

One job that I had in particular gave me a surprising inside look at what exactly is wrong with Medicare.

At this job, I ordered products for nursing homes for which the company billed Medicare, and there were two ways the nursing homes could pay for those services. The first was a monthly fee. The home paid the company a set rate, say $200, and we ordered the product and billed Medicare on their behalf. All reimbursements paid by Medicare went to the nursing home.

The second payment option – the better option… for the company – was the full-service option. In full-service, the nursing home signed up with the company to order products and bill Medicare for them, orders were placed automatically, and the nursing home never had to worry about any of it.

Including collecting their Medicare reimbursements.

That’s right, in the full-service option, the company ordered the products, had them shipped to the nursing home, billed Medicare and got to keep the reimbursements.

Sound harmless? I mean, after all, the company did pay for the products. Why shouldn’t they get the money back?

Reasonable question.

Upsetting answer.

You see, the company I worked for had a deal with another company – a medical supplier – who sold them products at a major discount, but Medicare has set payout rates for products. So, I would order a piece of tubing for $1.19, say, and then the company would bill Medicare $6.73. So that’s $5.54 per piece that does nothing for healthcare, nothing for seniors, and nothing for the people in society who need it the most.

I don’t know how much money this company made robbing Medicare, but I do know that, in the less than a year that I was there, I got $4,000 in bonuses, and I wasn’t even supposed to get the first bonus I received because I had been there less than six months at the time.

The woman with whom I shared an office, who had been there for years, got a large enough bonus to pay for her semester’s tuition, buy a new computer, and take a two-week vacation.

All paid for by Medicare.

System. Fail.