Four Policy Papers for a Third-Party Economic Agenda
Practical reforms for health insurance, student debt, retirement savings, and capital gains
I now have four policy papers available on Kindle, addressing health insurance, student debt, retirement savings, and capital gains taxation. Although each paper examines a different policy problem, they share a common premise: the country needs an economically serious alternative to the programs offered by the two major parties.
Many Democratic proposals promise benefits that cannot realistically be enacted, financed, or sustained. Many Republican proposals respond to genuine fiscal problems with policies that are unnecessarily harsh, particularly toward households already struggling with medical expenses, student loans, or inadequate retirement savings. A credible third-party candidate should recognize both problems.
Economic efficiency is not an abstraction. Problems are unlimited, resources are scarce, and money is fungible. A dollar spent providing free college tuition to a family that can comfortably afford it is a dollar unavailable to help someone who lacks health insurance, cannot pay a medical bill, or reaches retirement with almost no savings.
These problems also interact. Medical debt and excessive student-loan payments prevent people from saving for retirement. Inadequate private savings then make Social Security reform politically more difficult because even modest benefit adjustments become threatening to households with no financial cushion. Policy cannot treat health care, education debt, retirement, and taxation as unrelated subjects.
The four papers propose reforms designed to make markets work better, concentrate public resources where they are most valuable, and protect people against risks they cannot reasonably bear themselves.
1. A Durable Path Forward on American Health Care
A Durable Path Forward on American Health Care proposes four reforms intended to improve coverage without attempting another politically impossible reconstruction of the entire health-care system.
The first is federal catastrophic reinsurance. The government would assume a large share of exceptionally high medical claims, reducing the risk borne by private insurers and lowering premiums throughout the individual market. The approach preserves private coverage while recognizing that rare, extraordinarily expensive cases are difficult for any private insurance pool to absorb.
The paper also proposes expanding portable, employee-owned health insurance. Employers could contribute toward coverage selected by the worker rather than requiring the worker to remain in a particular employer plan. Coverage could follow people between jobs, reducing the disruption caused by job changes, self-employment, or periods outside the conventional workforce.
A third reform would modernize health savings accounts and flexible spending accounts. Tax assistance would be made more useful to middle- and lower-income households, while the wasteful “use it or lose it” rule for flexible spending accounts would be eliminated.
Finally, the paper argues that Medicaid should be used where it provides coverage more efficiently than heavily subsidized private insurance. The objective is not to favor either public or private insurance ideologically, but to determine which arrangement delivers adequate coverage at the lowest reasonable cost.
The result is a health-care program that strengthens insurance against catastrophic risk, improves portability, encourages saving, and directs public subsidies where they accomplish the most.
2. A Better Approach to Student Debt
The student-debt policy paper rejects both indiscriminate loan forgiveness and repayment rules that can impose excessive burdens for decades.
Blanket forgiveness is poorly targeted. It provides large benefits to some borrowers with high incomes or valuable professional degrees while doing nothing for people who avoided college, repaid their loans, or need help with medical bills, housing, or retirement savings instead.
But the alternative cannot simply be to demand full payment regardless of circumstances. Poorly designed repayment systems can impose high marriage penalties, penalize additional work, and leave borrowers making payments for decades without substantially reducing principal.
The paper proposes a more balanced income-based repayment system. Payments would rise gradually with income, protections would be indexed rather than allowed to erode with inflation, and married couples would not face arbitrary penalties simply because they file jointly or combine their finances.
Borrowers who make sustained payments should also see meaningful progress toward eliminating principal. Long-term repayment should not become a permanent financial holding pattern in which borrowers pay year after year without a realistic route out of debt.
Targeted discharge protections should remain available for disability, school fraud, and other exceptional circumstances. The purpose is to distinguish between borrowers who can reasonably repay, borrowers who need more time, and borrowers whose debts cannot realistically be collected.
The broader objective is to prevent student debt from blocking household formation, homeownership, retirement saving, and productive risk-taking—without sending enormous untargeted checks to everyone who attended college.
3. Expanding Retirement Saving Without Abandoning Social Security
The retirement-savings policy paper begins with an uncomfortable reality: many households approach retirement with inadequate private savings and depend almost entirely on Social Security.
That makes Social Security reform more difficult. Changes that might be manageable for a household with substantial retirement assets can be devastating for someone with no savings at all. Strengthening private retirement security is therefore not a substitute for Social Security reform; it is one of the conditions necessary to make reform politically and economically possible.
The paper proposes broader access to retirement accounts, stronger protections for retirement assets, and simpler rules governing contributions and conversions. Workers should have access to low-cost investment choices rather than being trapped in expensive or poorly designed plans.
It also proposes a protected core of retirement savings that generally could not be withdrawn for ordinary pre-retirement spending. Current policy frequently describes accounts as retirement vehicles while allowing balances to be drained through loans, hardship withdrawals, and other exceptions. Some flexibility is necessary, but an account that is repeatedly emptied cannot provide retirement security.
Special assistance would be available for caregivers and spouses with limited earnings, who often lose both current income and future retirement benefits while providing socially valuable care.
The central principle is straightforward: government should encourage saving, make retirement accounts easier to use, protect accumulated assets, and target assistance toward households that otherwise would save too little—not merely provide larger tax advantages to people already capable of maximizing every available account.
4. Reforming Capital Gains, Inheritance, and Real-Estate Taxation
The capital-gains and tax-reconciliation paper addresses one of the most difficult areas of federal taxation: how to tax investment gains without discouraging realizations, rewarding avoidance, or allowing accumulated gains to disappear permanently.
The paper proposes lower statutory capital-gains rates combined with a broader and more consistent tax base. Lower rates would reduce the incentive to hold assets solely to avoid taxation, while base-broadening provisions would limit special rules that allow economically similar gains to receive very different treatment.
The proposal would prospectively end most new like-kind exchanges under Section 1031, which permit selected real-estate investors to defer gains repeatedly while other investors pay tax when they sell appreciated assets. Appropriate transition rules would protect existing arrangements while gradually moving toward uniform treatment.
At death, the proposal would replace the complete basis step-up with a partial adjustment. This would prevent all previously untaxed appreciation from disappearing while avoiding the liquidity and valuation problems created by taxing every unrealized gain immediately at death.
Lifetime gifts would retain the donor’s basis so that giving an appreciated asset to another person would not erase the gain. Improved basis reporting would make the system administrable and reduce disputes years after the original transfer.
The paper also proposes better treatment of inherited retirement accounts and a coordinated approach to the estate, gift, and generation-skipping taxes. These rules should be evaluated as a single system rather than as unrelated provisions added at different times for different political reasons.
The objective is not simply to raise or cut taxes. It is to produce a system with lower rates, fewer arbitrary distinctions, less lock-in, stronger reporting, and a broader tax base.
Why a Third Party Is Needed
The four papers do not fit comfortably within either party’s current platform.
Democrats too often begin by promising a universal benefit—free tuition, complete debt cancellation, larger subsidies, or another entitlement—and only later consider the cost or whether the assistance is reaching the people who most need it.
Republicans correctly criticize the cost and inefficiency of many Democratic proposals but frequently offer withdrawal, repeal, or abrupt benefit reductions instead of a workable replacement. Fiscal discipline is necessary, but simply transferring more risk to households that cannot bear it is not a sustainable governing philosophy.
A serious third party would begin somewhere else. It would insure people against catastrophic risks, preserve individual choice where markets can work, target assistance according to need, encourage work and saving, eliminate unjustified tax preferences, and acknowledge that every public dollar has an alternative use.
Each paper costs $5.99 on Kindle. Together, they offer the beginnings of an economic platform for a third-party candidate—or at least for voters who would like the existing parties to behave more responsibly.
And should these papers somehow generate $10 million in revenue, I will run for office.
That is, of course, a joke, a joke that was probably funnier prior to 2016. At $5.99 per paper, even economic policy has limits.