UNIVERSAL INSURANCE.. Bad news for the middle class in this new CAP report. Wages are flat, average job growth is one-fifth that of previous business cycles, the top five expenditures of most families (health care, housing, food, cars, and household operations) are racing upward, fewer than a third of families have savings that could weather three months of income loss (and that number is going down), and so job loss and health emergencies are more dangerous than ever. They don't call me Happy McSmiles for nothing!

All of which reminds me of an idea I've been meaning to plug. In his new book The Great Risk Shift, Jacob Hacker argues for a new scheme of economic protection he calls Universal Insurance. The plan is to have an all-purpose form of insurance that covers catastrophic expenses from health emergencies, job losses, or whatever. How much is covered depends on the extent of the loss -- did you take a pay cut or lose your job? -- and how high your income is. So a massive income drop for a low-income person will result in relatively generous benefits, while a moderate drop for a wealthy individual will attract less generous compensation.

This all-purpose economic security would protect families from the eventualities and unexpected events that they are, for now, clearly unprepared for, and in doing, would ease the need for bankruptcies, credit debt, and all manner of nasty compensation practices that are bad for both families and our economy. It's a clean, efficient idea for calming the rampant insecurity that threatens folks across our economy. Seems to me like something savvy politicians may want to take a look at.

--Ezra Klein