Sitaraman Ganesh - The public option: how to expand freedom, increase opportunity, and promote equality

The role of public institutions in our lives is so familiar that we mostly dont give them much thought. We stop by the local post office to mail a letter, without reflecting on the public support that makes it possible to send that letter anywhere in the country for less than a dollar. We drop off our kids at the public school and take the subway, train, or highway to work. Many of us have attended state universities, and many more have vacationed at a national park or cooled off at a public swimming pool. And we count on Social Security and Medicare to provide security for us after we retire.

Since the founding of our country, Americans have drawn on the power of public action to lay the foundations of the freedom and equality that we prize. These foundations are, in large measure, made up of the very institutions that we take so much for granted.

Its not a radical idea to acknowledge that public institutions, funded by the public and voted on by the public, play an essential role in our everyday lives. What is new, and what we focus on in this book, is that many beloved American institutions take a distinctive form that we call the public option. The public option refers to a government program with two features: it provides an important service at a reasonable cost, and it coexists, quite peaceably, with one or more private options offering the same service. You can mail a package via the U.S. Postal Service, or you can pay Federal Express to deliver it more quickly. You can vacation in Yosemite National Park for a moderate fee, or (if you can afford it) pay for fancier digs in a private resort. You can check out a book for free from the public library, or you can buy your own private copy at a bookstore or online.

As these examples suggest, the public option is often attractive because it offers a high-quality service for a reasonable price. But it is an option, competing directly with other options provided by the private marketa form of competition that can be beneficial to both the public and the private realm. This aspect of the public option makes it a very American institution; it leverages public resources without preempting private provision.

We believe that the public option has the potential to do even more. We show in this book that new public options could transform many different spheres of life, from child care to college, from banking to retirement, and beyond.

The idea of the public option has recently been in the news thanks to the debate about health care coverage. In the lead-up to the passage of the Affordable Care Act in 2010, policy makers struggled with how to guarantee universal coverage at a reasonable price. One promising proposal, though it was not enacted, was called the public optiona government health insurance program that would be offered alongside private plans and would ensure that anyone could buy coverage at a fixed, affordable price. The public option in health care has three big advantages. First, its public: the government (unlike a private company) can guarantee access to health care at a fixed price. Two, its an option: no one has to use it. If the public insurance plan is a good deal, well, then snap it up. But if you like the terms offered by Aetna or Blue Cross better, then sign up with them. Finally, because the public option exists alongside the private option, the private option has to compete to make a better productsomething especially important in highly concentrated sectors like health care.

The public option didnt make it into the Affordable Care Act, but it is a feature of many other institutions that are central to American life. The public school movement opened up the possibility of education to the American massesan option previously available only to families that could afford private tutors or schools. The Postal Service offers a public option in every neighborhood by providing a public mail service that exists alongsideand competes withprivate options like Federal Express and UPS. Public universities are public options, often providing excellent education at a price far below that of private schools. But families can choose the route that suits them.

Public options are everywhere, and they are some of the most celebrated, beloved, important, and effective parts of our society. Public libraries and national parks are obvious treasures, but the list goes on and on: public swimming pools, public golf courses, public housing, public broadcasting like NPR, public defenders in the courts, public highways and transit systems, public museums like the Smithsonian. Not to mention the humble neighborhood playground: you can take your child to play on the swing set at the public park down the streetor, if you prefer, you can choose to buy your own and put it in your private backyard.

The two of us were talking about how pervasive these public options are when we had our lightbulb moment: Why not try public options in other areas? we wondered. Our thoughts turned first to retirement. Both of us had been federal employees early in our careers, and so we knew firsthand that the government has an excellent retirement plan for its workers, providing safe investment options with low fees. Some policy wonks have proposed extending this program to all Americans, and we realized that this would amount to a public option for retirement funding.

The possibilities mushroomed as we brainstormed and began our research. Postal bankingthat is, a basic bank account offered via the postal serviceexists in many countries and actually existed in the United States for a big chunk of the twentieth century. Such a service could help address the precarious financial position of many low- and moderate-income families, who are not well served by private banks. And on we went. We knew wed have to think hard and put the idea through its paces, but it seemed incredibly promising then, and it seems even more so now that we have worked out our ideas in more detail.