While politicians pander to the public on the issue of rising gasoline prices, and analysts debate whether or not those high prices will help knock the GOP out of power, the real elephant in the living room continues to go unnoticed. Social Security and Medicare continue to head toward insolvency, according to the trustees. Will we ever face up to the fact that these programs are unsustainable in their current form? Will we ever hear a politician say that we need to raise taxes, cut benefits or some combination of the two to put these programs on a sound financial footing? Don't hold your breath. Even now, Senator Harry Reid (D-Nev.) touts the latest report as good news. You see, he says, Social Security is sound for decades to come. Of course it is. No one says it isn't. The real problem is that as we approach the insolvency date, which is 2040 according to this latest report, it becomes harder and harder to fix the problem. Moreover, well before we hit the insolvency date, we will begin to see the Social Security Administration tapping into the money that was transferred into the general fund during times of surplus. This will deprive the Federal Government of even more money that is currently being used for all sorts of other programs, which will require that these programs be cut, or taxes raised to fund them. Or, of course, we could go on borrowing even more money.

Medicare is in even worse shape, made all the more difficult because of the addition of the Prescription Drug Program, or Medicare, Part D. Expect the politicians to continue to try and pass the buck, in this case by paying providers even less for their services. These costs will then be transferred to other patients, resulting in even more upward pressure on health insurance prices, resulting in more companies dropping their coverage, or forcing their employees to pay a greater share.

How do we get out of this spiral? In terms of health care, the simplest, most effective answer is not the creation of a massive, government run health care system, or even just a massive, government run health insurance company. In both cases stingy (and justifiably so) taxpayers will starve the system of the funds necessary to provide top level health care, resulting in shortages and waiting lists. Hundreds of thousands of well paid health care workers will abandon their professions to find new lines of work, especially those with the most education and skills that can be transferred to other industries. No, the answer to our health insurance cost problem is to re-establish the connection between the consumer and the provider on the issue of price. If every American above a certain income level had to pay for health care directly out of pocket, this would create a massive market for those services, and it would cut out the middleman whose mountains of paperwork decrease efficiency and increase costs. If every American above a certain income were required to carry catastrophic health insurance, this would create a massive market for those policies. Only those Americans below a certain income level would need to be subsidized by the government, and health care providers and insurers, now relieved of the enormous inefficiencies of the current system, would be much better able to provide them free or low-cost care.

Too simple to work? You are free to choose your doctor based not only on competency, geography, specialty or availability, but also on affordability. Your doctor is able to choose you, without the insurance middleman. He or she can carry a certain number of poor patients, charge them less, and pass the costs on to the more affluent patients. I, for one, would rather pay extra for my doctor knowing it is going to help the poor people in my neighborhood than see the money leached off every step of the way by bureaucrats, both public and private.

As for Social Security, why can't we say that if you are 50 or older, you stay in the current system with no changes? If you are under 50, you can opt to stay in the system or buy into a private account, with a safety net to catch you if your investments go bad. Why can't we say that everyone who has an income over a million a year is automatically suspended from the rolls, until and unless their annual income falls below that level? Should millionaires really get Social Security, if the system is approaching insolvency?

Let's try it. It just might work.