- - Wednesday, August 13, 2014

The Swiss welfare state appears to be more restricted than the current U.S. welfare configuration. In the United States, more power has been transferred to the federal government and therefore been centralized, and the basic entitlements of Medicare and Social Security have been based on the Ponzi model.

The Swiss system is tiered in both health care and social security. The bottom tier is Ponzi, but as you progress from the bottom up, real insurance principles are employed and cost feedback via real markets come into play to provide the coverage. The result involves markets, profits and competition, leading to improvements in coverage and real cost control.

The structure of the Swiss model actually gives it the ability to evolve. That is what markets provide. The U.S. model has been basically determined by the Democratic Party as a power-aggrandizing scheme. This is why you have present-value unfunded liabilities of $100 trillion or more. There is no means of satisfying this liability with political programs amounting to Ponzi schemes.

Either the electorate wakes up and becomes sophisticated enough to define the difference between the Swiss and the U.S. systems, or we will continue to go from one financial implosion to another. So far about the only thing the U.S. welfare state has accomplished is centralizing power and spacing out the financial debacles.

You might be able to continue to rob your children to pay for your cherished entitlements in the U.S. system before you expire, but apparently the Swiss have charted a more ethical path.

SAMUEL BURKEEN

Reston