Jacob Hacker’s “universal insurance” proposal gives me pause. Mark Schmitt, among others, is very enthusiastic about the political promise of Hacker’s “risk shift” idée fixe and, being a straight-shooter, he believes that Hacker has hit upon a real problem. I’m not so sure. And again, I say this very tentatively. I’m a great admirer of Hacker and I’ve learned a great deal from his work on agenda-setting, the use of crafted language to advance substantively unpopular policies, and the size and scope of the invisible welfare state. He is a creative thinker and a credit to his field. So when I disagree with Hacker, I do it very, very cautiously.

Before elaborating on my concerns and questions, I’ll note that there are two extremely expensive social policy initiatives that I would strongly support. Matt Miller has championed them, first in his recent book and even more recently in a syndicated column, though I imagine he has different motivations and different end-states in mind.

The first is universal medical coverage. There are a number of sober, sensible, comprehensive proposals, all of which involve generous tax subsidies and some of which, including Hacker’s “Medicare Plus,” involve a revised version of the “play or pay” approach pursued in the first Clinton administration. My sense is that if we don’t move swiftly, the private health insurance system will collapse. Consider the detailed and persuasive scenario outlined by Mark Schmitt in January:

It makes you wonder if Bush has a secret plan to bring about socialist revolution. What would you do if you wanted to create a public uprising that would demand single-payer health care? First, you would destroy the private health insurance system. And the way to do that is with exactly the policy Bush just proposed: make catastrophic insurance fully tax-deductible, and couple it with health savings accounts. … Health savings accounts, combined with deductible premiums, are really just a giant bribe to better-off people to OPT OUT of the comprehensive health insurance system. What the administration is doing, first with health savings accounts, which are now the law, and then with this proposal, is to confer enormous tax advantages on a type of insurance that is already advantageous, but only for the relatively wealthy. But the consequence of it would be that, as young and healthy people withdraw from the standard, low-deductible insurance market, premiums in that market would go through the roof, insurers would desperately try to find ways to deny coverage to higher-risk people, and the whole delicate balance would surely collapse.

What better way to guarantee a government takeover, the very nightmare scenario small-government conservatives dread most? It could be that a “prophylactic intervention,” an effort to head off the socialist freight train at the pass before it gathers steam (mangled metaphors—my command of the idiomatic is iffy at best), is the best way to secure a broadly market-oriented, innovative health care sector.

The second pricey policy initiative I’d emphatically support—if compassionate conservatism means anything, and I think it does, this is the quintessential com-con idea—is a schedule of wage subsidies as proposed by Edmund Phelps in Rewarding Work. The basic idea is this: if you work full-time and stay out of trouble, you shouldn’t live in poverty. That seems straightforward enough.

Hacker’s proposal seems similarly pricey. We’re talking real money. Is it worth it? The first two proposals I've described deliver bang for the buck: they help very vulnerable people, and the money spent goes a long way. To what extent should middle-class families—again, those who aren’t subject to grinding poverty—be insulated from the vicissitudes of risk? Assuming there are limited resources for achieving various social policy goals, is this a sound place to make a large-scale commitment? There's no doubt in my mind that this would be popular, assuming voters don't blanch at the price tag: it'll turn countless families into willing clients (not that this is everywhere and always a bad thing).

A couple of questions (most, if not all of which, will be answered in Hacker’s forthcoming book):

(1) One assumes that a good deal of income volatility can be attributed to occupational mobility, and movement in and out of the labor force. The argument for unemployment insurance has been settled: it’s a good idea; perhaps it should be made more generous. Being laid off shouldn’t be a death sentence. But isn’t occupational mobility of this kind a great strength, the obverse side of robust job creation? Well, that’s not the point, Reihan. No one wants to impose rigidities on the labor market. We’re just saying that income fluctuations ought to be smoothed. Right. Isn’t it common for a spouse who is not the primary breadwinner to shift in and out of the formal labor market depending on circumstances or taste? I imagine that’s far more common now than it had been fifty years ago.

(2) Does it make sense to dull the returns to skill? To what extent does the increase in income volatility relate to the increasing returns to skill, and experience?

The bottom line is that while I’m sympathetic to the idea of a safety net, and very troubled by the plight of the poor and the near-poor in this country and in the world, it’s not clear to me that a sweeping economic security package embracing even the upper-middle-class (people who are in a position to save and prepare for the worst) strikes me as an “inefficient” use of resources, to use an unfortunate term.

P.S.- Kevin Drum ponders a crucial question: Was "Harold and Kumar" a dope-induced fantasy, or was it a gritty, true-to-life tale ripped from the mean streets of Dirty Jerz?

P.P.S.- I am obsessed with RISK. In German, it is known as RISIKO. My best friend and I would two-player risk, with fourteen neutral territories allocated by both players in turn, for hours on end. We generally went with a fixed allocation that paralleled the Cold War. Unlike the Cold War, this was a Hot War that would start off with a massive, apocalyptic battle waged across the Bering Strait. Eventually, my friend discovered the healing properties of natural sunlight. And I started playing one-player RISK. It was awesome. An added plus: I am now fluent in gnome-ese.