Like Hillary Clinton, John Kerry opposes health savings accounts that would give consumers their own pre-tax cash to buy health care. These HSAs would create an incentive for Americans to be parsimonious health-care shoppers, and would cause a transfer of power from the federal government to individuals and families. Money not used in an HSA in a given year can be channeled into a market-investment nest egg that will create wealth over time. Kerry and Clinton call this elitist, thinking that only rich people invest in the market. Of course, the 95 million strong investor class, where the majority of shareholders make less than $75,000 a year, would strongly disagree. HSAs are similar to 401(k)s, which over a period of 30 years exploded from zero to 42 million funds.
Kerry is also opposed to personal savings accounts as an alternative to the moribund Social Security system. He prefers that Social Security tax dollars still be used to finance federal spending, while Social Security beneficiaries make do with a sub-market investment return of less than 1 percent yearly. He?s saying, Let them eat cake, while we smart Ivy Leaguers run the country. Bush, however, knows that investment markets, not government, create retirement wealth.
The Democratic vision of Kerry and Clinton is one of state-coerced equality of results, a short stone?s throw away from Karl Marx?s original vision of 150 years ago. The Republican vision of Bush and Hastert is that equality of opportunity allows free people to make their own decisions and exercise their God-given talents in a competitive free-market economy. History suggests that this is the best way to make the economic pie grow larger. Some will inevitably do better than others, but the level of prosperity and wealth will steadily rise for everyone.
Bush?s ownership society includes personal savings accounts for Social Security, health savings accounts for medical care, new savings opportunities through the creation of retirement savings accounts (RSAs) and lifetime savings accounts (LSAs), and education savings accounts to propel school choice and vouchers. This moves us down the road toward real tax reform. These tax-free savings accounts will lead to a consumed-income-tax system that ends the multiple taxation of saving and investment -- the seed corn of economic growth. This is a Republican agenda that bespeaks of economic liberty and rejects the Democrats? heavy boot print of government control.
It?s a battle of clashing ideas that should be front and center in this year?s election debate.