COMMONWEALnThe Brave NewnWorld of PublicnPolicynby Richard D. LammnJohn Stuart Mill woke up one morningnand had this overwhelming feelingnthat the “answer to the question ofnthe ages” had come to him in thenmiddle of the night. But he forgot whatnit was. He then placed a quill and papernnext to his bed, and a few morningsnlater he awoke with a similar feeling; thisntime he found on the paper in his ownnhandwriting, “Think in differentnterms.”nWe are sailing into a new world ofnpublic policy, a world as strange andnnew as the one Columbus discovered. Itnis a worid where infinite governmentndemands have run straight into finitenresources. Most of our institutionalnmemories and political culture comenout of the 1960’s and 1970’s, whennAmerica had the industrial world’s highestnrate of productivity growth and wasndoubling its wealth every 30 to 40 years.nGovernment had a substantial yearlyngrowth dividend it could spend. Nownwe have the lowest rate of productivityngrowth in the industrial world, and itnwill take approximately 130 years tondouble our national wealth. We go intondebt to maintain current levels of gov­nVITAL SIGNSnernment. Being in government today isnlike sleeping with a blanket that is toonshort: we do not have the resources toncover all our needs.nIt is my belief that the old worid ofnpublic policy is dying and a new worldnof public policy is being born. Thenessence of this new world is that theneconomy of the 1990’s cannot supportnthe dreams of the 1960’s. Public policyncannot count on historic levels of revenuengrowth and thus cannot chasengeometric curves of public spending. Insuggest that this world of ever growingnpublic needs and shrinking resourcesnwill require us to reconceptualize muchnof what government does and how itndoes it. It will cause us to define what isnabsolutely fundamental in many of ournbasic institutions.nThis is not a matter of conservativenor liberal. It is not a matter of “won’t.”nIt is a matter of “can’t.” It is not anphilosophic difference between parties,nbut a resource limitation imposed by anneconomy increasingly under internationalnattack and not growing fastnenough to sustain programs alreadynundertaken, let alone new needs. Norncan they be met by reallocating existingnresources. This is not another argumentnagainst “waste in government.”nWaste cannot be justified, but it willnnot yield that much new money. Wenare going to have to decide what isnfundamental and what is superfluous.nIt is not a matter of the heart. It is anmatter of the wallet.nSpending on the elderly is one areanwhere considerable funds could benrefocused. The elderly are 12 percentnof America and receive 57 percent ofnall federal entitlements. “Retirees” getn65 percent of all federal entitlements,neven though studies show that theynhave the highest amount of discretionarynincome. America still thinks of thenelderiy as poor, but as a class they arendoing quite well. A child in America isnstill seven times more likely to be poornthan someone 65.nKen Dychtwald states that betweenn500,000 and 600,000 millionaires getna Social Security check every month.nnnand that half the millionaires in thencountry are over 65. Our society doesnhave the option of transferring moneynnow going to the rich elderiy to poornkids. It could be done through taxingnall Social Security and Medicare benefitsnor even by means testing SocialnSecurity. Social Security and Medicarenare tremendous transfer paymentsnfrom a younger to an older generation.nContrary to public myth, people arennot “getting their money back” innthese programs. The average personnretiring today receives back five timesnmore than he and his employer paidninto the system (plus interest). Thenaccrual benefits of Medicare are oftenn20 to 25 times what a retiree hasncontributed. This is appropriate fornmany of the elderly, but questionablenfor those elderly who have considerablenresources. Medicare and Medicaidnhave averaged 19 percent growth anyear since their inceptions, and clearlynwe cannot continue to fund them atnsuch rates.nPublic policy today amends Medicarento give heart transplants to thenelderiy, but 600,000 American womenngave birth last year with either little ornno prenatal care. That is not a correctndistribution of limited resources. Wenhave the highest life expectancy (80) ofnany country in the worid, but we aren20th in infant mortality. That is notnfair. Poverty in America wears diapers,nnot a hearing aid.nWe cannot be indiscriminately generous,nand therefore we need to developna sense of “compassionate austerity”nwhere we honor compassionatengoals but, perhaps, change the meansnwhereby we accomplish them. Takentransportation of the handicapped.nThe handicapped advocacy groupsnpush for a “barrier free society” andndemand a wheelchair lift on every busnin America. Studies show, however,nthat government can transport threentimes as many handicapped by vans forna fraction of what it costs to put anwheelchair lift on every bus. The futurenwill have enough money to meetncompassionate ends, but we must benNOVEMBER 1989/49n