Aiming For An Ownership Society

In his classic poem Invictus, William Ernest Henley extols the invincibility of the human spirit with lines like, “I thank whatever Gods may be, for my unconquerable soul” and “my head is bloody, but unbowed.” The last two lines of the poem summarize: “I am the Master of my fate, I am the Captain of my soul!”

Henley’s Invictus could easily be the inspiration for public policy based upon the values of self-discipline, accountability and responsibility. President Bush is on record as naming Jesus Christ as his favorite philosopher, but it’s likely that Henley would rate near the top as well, especially considering the values at the base of the president’s promotion of an “Ownership Society,” a society based upon the premise that the more an individual is allowed to “own” — be responsible for — his or her future prosperity, health and overall well-being — the more positive will be the results. Fortunately, many of the components of that society are wellestablished or imminent. For example:

• Lower Taxes: The president has adamantly adhered to his schedule for ever lower taxes — income, capital gains, inheritance — and higher personal and family deductions. Closely related: higher limits for personal Individual Retirement Accounts (IRAs). The premise here is that taxpayers know better than the government how their money should be spent and what they need in their lives.

• High Home Ownership: Home ownership is made easier by continued mortgage interest deductibility, and by maintaining a stable economy with low inflation and low interest rates. Home ownership in America is at its highest point in history and, of course, is the essence of an ownership society. And more importantly, perhaps, home ownership is the symbol of the “American Dream.”

• Health Savings Plans: Something like a health IRA, health savings plans are available and becoming more popular. Unlike health insurance where there is no return on premiums unless a claim is filed, deductible deposits into a health savings account remain the property of the contributor, and if no disbursement for medical costs occur, the money is rolled over to the next year and the next. The money builds over time and remains in the account until, inevitably with age, funds are required for medical expenses. This provides incentive to stay in better health and to reduce frivolous, non-essential doctor visits. And like an IRA, the money becomes a part of the owner’s estate.

• Higher Bankruptcy Liability: The Senate just passed by a threefourths majority — and the House is likely to follow — amended bankruptcy law which requires a debtor to pay more to creditors than under the present law. How does this promote an “Ownership Society”? Current law allows a debtor to escape “ownership” of nearly all liability for debts by simply filing for bankruptcy. Even though there are some downside requirements, the debtor erases all responsibility for payment. There has been no requirement to “own up to” one’s debt.

• Personal Social Security Accounts: By now we should all be familiar with — as opposed to understand — the basics of the president’s proposal. Even though there is still controversy as to the cost impact on the system and other implementation issues, the “ownership” aspect is clear. We would all have the choice of investing a set maximum percentage of our Social Security contribution in an investment vehicle that would create higher returns than the current measly 1.9 percent. Simply investing in long-term certificates of deposit — the safest investment possible — would garner two or three times the current return. If one chooses to invest in stocks or bonds from a set selection, it promotes further ownership of corporate America; something millions of Americans are already doing through their 401Ks, IRAs and corporate pension plans. And perhaps the best part is we would own those investments. They would become part of our estate to be inherited by our heirs instead of simply disappearing, like our current contributions, should we die before age 62.

Clearly, the closer we can come to a total “Ownership Society” the better off we will be as individuals and as a country. We should be accountable and responsible for our own financial security, our health and our retirement.

There is a role for government, but much more limited than it has been. We should be “the masters of our fate” and “the captains of our souls,” and this administration is trying to make that happen.

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