"A Strong Safety Net Encourages Healthy Risk-Taking"

The social safety net is old, tattered, and in need of repair:

A Strong Safety Net Encourages Healthy Risk-Taking, by Jacob Hacker, Commentary, The American Prospect: Remember the "ownership society"? Just an election cycle ago, conservatives were urging Americans to give up their antiquated social-insurance programs--Social Security, Medicare, unemployment insurance--in favor of tax-subsidized individual accounts... Thankfully, the most extreme elements of that agenda failed, and the vision behind it ... is now discredited.

Yet while the ownership society was a practical and intellectual failure, it was more of a political success than commentators generally acknowledge. Even before the financial crisis, the broad set of economic protections that arose in the Great Depression and expanded in the decades after --sometimes called the "safety net,"...-- lay in tatters. ...

If ever there were a time for an alternative to the reigning orthodoxies of risk management, this is it. Now is the time to adopt a vision ... of all of us providing the common foundation for economic prosperity and advancement through smarter and broader sharing of risk..: a new public-private partnership that builds upon and extends the basic underlying principle of the New Deal. That principle ... is that security is not opposed to opportunity but essential to it. In a dynamic and flexible economy, well-designed policies of economic security are critical if workers are going to have the confidence they need to invest in and achieve the American dream. ...

In every facet of Americans' economic life -- their health care, their pension plans, their job security, their family finances -- risk and responsibility have shifted from the broad shoulders of government and corporations onto the fragile backs of workers and their families. In an era of partisan polarization and gridlock, we have failed to update our nation's safety net to reflect the changing economic and social realities of our nation. We still have strong benefits for the elderly, but we do very little to help the millions of young Americans struggling to gain a foothold in the job market or buy a home or start a business--the future of our economy and society. Our safety net emphasizes short-term exits from the work force, even though long-term job losses and the displacement and obsolescence of skills have become more common. And some of our social polices still embody the antiquated notions that family strains can be dealt with by a parent, usually a mother, who can easily leave the work force when there is a need for someone at home.

Above all, our safety net is based on the dying belief that job-based health and retirement benefits can easily fill the gaps left by public programs, when it is ever more clear that they cannot. ... Once again, economic common sense and social justice both argue for moving away from our present mess toward the broader and more direct pooling of risk. ...

"Risk" may be the word on people's lips today, but most understand it far too narrowly. Risk does not simply concern the breakdown of our nation's financial institutions; it concerns the breakdown of our nation's social contract. If we are to fix that contract -- and our economy -- we will have to do more than socialize risk for those at the top of the economic ladder. We will need to reclaim the twin ideals of security and opportunity for all Americans.