I’m no economist, but for the purpose of this article, I’m playing one on the Internet. Clearly, you don’t need me to tell you that there are some major economic problems in America today. Instead of playing the who’s-to-blame game, we should be looking for solutions to what caused this problem.

Most people point to the sub-prime mortgages and the housing collapse as being the instigator, as well as the current banking problems that have their own causes. But I think that people are overlooking two major issues that have put us where we are.

The root of these issues is that people as individuals were not able to afford things that the bought. Perhaps it was their house, perhaps it was a car. But the reason they couldn’t afford them is because of other necessities (at the time) that they had to pay for that put them in their financial predicament.

This doesn’t go for all people, but for a lot of Americans, there are two causes to their lack of money, and reform in these fields could be a major step in fixing the economy.

Again, it’s just my amateur opinion, but I think these two reforms could go a long way towards fixing individual family’s finances, which would go a long way towards fixing the economy as a whole.

College Tuition

How many people go to college, and pay their way through with student loans? A lot. College students all too happily pay $30,000 a year for a four year education, voluntarily putting themselves $120,000 in debt before they even get a job. Paying your way through college with loans and getting a degree in art history is going to leave you in debt for years and years. You will spend the rest of your life chasing back that money.

Since many colleges are private, there is nothing that can be forced on them to lower tuition costs, but for state schools, perhaps a little relief to students would help the economy. More government grants and scholarships could help keep those who need the loans to get through school out of debt, or at least less in debt.

Colleges receive a lot of funding for research. Finding a way to lower tuition, and giving high school students more affordable options for higher education could help keep the next generation from fighting a losing battle with student loans for the rest of their lives.

If you were to hypothetically forgive every student loan in the country, think of how much additional money would be spent on reviving the economy and/or getting mortgage and other payments in line. It’s not realistic to forgive these debts, but if we worked towards a goal of lessening the burden on graduating students, we’d be helping everyone who benefits from a strong economy.

Health Care Costs

Sure the catch phrase for every politician in “health care reform,” but I’m not talking about socializing medicine, and I’m not talking about fixing Medicare. I’m talking about making basic health care more affordable, with or without insurance.

A visit to the doctor for a cut on my hand should not cost me as much as it does. If you have no insurance, a trip to the family doc to get a script for Ammoxicilian shouldn’t be a major purchase.

And more importantly, one major health issue should not bankrupt you. All too often, people (even with insurance) are sent to financial hell with one catastrophic situation, either to them or a family member. Car accidents happen, as do diseases. One case of bad luck is enough to deal with physically, but it should not ruin your entire financial future.

I have a friend who needed an angioplasty. He was told that he needed to wait for up to a month to get approval from the insurance company to have the procedure. He ended up getting the surgery when he needed to be rushed to the hospital two weeks later. The insurance companies pissing around with “regulations” nearly cost him his life, and, as health care goes, the more dire the situation, the more costly.

I have another friend — a friend of my mother’s to be exact — who has breast cancer. She was recently diagnosed and was set to begin chemo this week. Then she got a call from her insurance company that said she can’t start chemo yet, as they want to investigate whether or not this was a preexisting condition (her insurance was only a year old). Do they really believe that someone would cover up their cancer, get new insurance, then go through the discovery and diagnoses stages again to trick the company? Maybe someone has done that, but the fact is they are delaying crucial treatment for a cancer patient to save themselves a few bucks (possibly), a move that could end up costing the patient far more money by delaying the treatment.

I understand that medical procedures are costly, and the equipment is costly, and the doctors need to be well paid. But why should a room at a hospital have increased 70 percent in the last 26 years?

The three major reason that are always given for why health care costs so much here is 1) overuse of resources by patients (ie. unnecessary MRI’s); 2) administrative and paperwork messes; and 3) fear of malpractice suits resulting in costly over-testing.

Cleaning up our health care industry could save people fortunes. Rather than socialized health care (which many people falsely believe to be the cure), we need to add large numbers of government subsidized free health clinics. When you have an infection, and you know you have an infection, everyone would be better off if you just went to the clinic to get a prescription, rather than a doctor’s office. The staff at the clinic would still be qualified to confirm your original belief, but also be qualified enough to tell you if you need to see a more capable office for more treatment. Eliminating the backup at doctor’s offices, as well as the large amounts of wasted paperwork on trivial conditions could do wonders for helping the medical economy issues.

There are far more changes that could be made to the medical industry, like cutting down the costs on major treatments, finding ways to cut prices on MRIs, anesthesia, hospital stays and other things could help keep one accident from killing all of your finances.

If the government wants to improve health care, and get everyone insured like they say they want, then why not allow private citizens to buy into the government’s health care program for their employees. Or why not create a new insurance system just for the uninsured? Some people are happy with their current health care and don’t want to wait 10 weeks for their tests, as they do in England, Canada or Cuba. Some people just want to not be bankrupt when they are done getting treatment.

Conclusion

Again, I’m not economist or doctor, but I think that these are two major causes for people not having money. Everyone is spending so much time placing blame on why the housing bubble burst or why the market collapsed, but they fail to ever mention the obvious — people were short on money. Once you acknowledge that, then it comes down to why they were short on money.

I think I’d be proven right if you asked people why they were in debt that a majority of Americans are in debt either because of student loans or health care costs.

Fixing those two issues would go a long way towards fixing the economy.

*****
Tuition photo by uwdigitalcollections
Doctor’s office photo by Brittany G

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