Answers - "How In The World Can We Ever Get Back To That Mindset?"

This posting serves as my summary response to the question from our Mid-west reader who asked "How in the world can we ever get back to that mindset?" referring to how Americans handled catastrophes without government aid for many decades after our founding.  I say summary response because every post answers the question to one degree or another.  See Sandy's Victims Should Look To Themselves For Help for details re the question.

 

Thanks to everyone who responded with their answer to the reader's question.

 

Several people responded by focusing on the 47% of people that Mitt Romney described as "dependent on government, believe they are victims entitled to government handouts, & pay no income tax."  The free enterprise system in America has been so badly deformed – virtually beyond recognition – that life has become desperate for far too many people that felt they had no alternative but to vote for BO who continues promising to take care of everybody. BO's policy positions are contrived to take free enterprise out of the equation for us all.  Reaching people in this 47% group is a start to getting back to the desired mindset & is mandatory or every national election from this point forward will be won by a statist.

 

One very thoughtful reader wrote "We can begin by educating our children to be responsible citizens. This would mean in schools and by the parents in the home. Children need to learn that our country was founded on principles of less government intrusion in our lives and that that means more freedom to become and achieve whatever you dream for yourself. Until parents demand this of their government school it won't happen."  Education of our children with parent involvement, as described by the writer, is the bedrock for the republic remaining strong & returning to our original libertarian principles.  If we reestablish the points the writer makes we will be back to the desired mindset in pretty short order. 

 

Our SC businessman writes that "we need a new term that does not have the negative connotation that Fascism does, yet explains what the government is really doing to us."  He hopes that this new one word term could reach the type of voter who gets his news accidently - meaning they were not looking for news but stumbled upon it for instance while watching a comedy show.

 

To understand how America went from the original mindset where people rebuilt cities that had been destroyed by fires, hurricanes, & earthquakes without asking for government assistance to a mindset of "I deserve, I'm entitled," & "its my right" we must start by seeing how government has increasingly crept into our lives over the decades since America's founding - & all for the worse.

 

To do this I divide America's history into approximate thirds summarized as follows: 1) from the Founding to the Civil War, 2) from the Civil War to the 1930s, & 3) from the 1930s to today. With these three divisions you can clearly see government's encroachment on our freedom. 

 

---From The Founding To The Civil War---

 

This was the liberty to abundance stage of our country in which liberty was cherished & even worshiped by all of the people including the elected representatives.  The only entitlement these people were looking for was the rights guaranteed by the Bill of Rights – summarized as the freedom from government intrusion in their lives.  Today rights are most often thought of as entitlements to something from government like the aid relief package from Sandy.  The problem with government programs that sound good is that they always disappoint.  In Sandy's case first our elected representatives loaded the relief bill with pork for every corner of America not touched by the super storm & then after relief legislation was passed only a small fraction of the money has even yet reached people who are waiting for help. (I am happy to say that the new SC senator Tim Scott voted against the relief legislation as of course did Jeff Flake, Rand Paul, & Mike Lee).

 

People living in the first third of our country's history never had problems waiting for relief packages because the government did not offer it in the first place & the people relied on themselves & were the better for it.

 

---From The Civil War To The 1930s---

 

This was the abundance to complacency stage of our country in which liberty started to be taken for granted.  In the 1880s Otto von Bismarck designed the first government pension system in Germany that was the basis of FDR's Social Security program in America.  But long before the Depression of the 1930s two gargantuan mistakes were made – 1)  ratification of the Sixteenth Amendment in February 1913 that allowed the income tax, & 2) the passing of the Federal Reserve Act in December 1913 that created the Federal Reserve System. 

 

The income tax system has damaged America because it taxes work, savings, & investment & as such is the basis of so many ill-advised incentives that have nothing to do with our prosperity except for destroying it.  The FairTax reverses these biases & is a major ingredient for returning America to the desired mindset. 

 

Since the Fed's creation the U.S. dollar has lost over 95% of its purchasing power.  1913 was a very bad year for America.

 

The economic hardships of the Great Depression of the 1930s were initially made worse by the Smoot-Hawley Tariff Act of 1930 in that the protective tariffs resulted in American exports & imports being reduced by more than half.  Further exacerbating the situation throughout the 1930s was the Fed's tight money policy – neither the tariffs or the Fed had anything to do with unfettered free enterprise but as the decade moved on people became more dependent on government. 

 

---From The 1930s To Today---

 

This period started as the complacency to apathy stage & with our very eyes we have seen our country move to the apathy to dependence stage & if we don't turn the current mindset around we will witness the dependence back into bondage final stage of the Death Of Democracy.

 

There are many features of WW II that ended the Great Depression but by the time the war ended many Americans were very used to & liked government dependence – whether they readily admitted it or not.  It was the wage & price freeze during the war that resulted in employers finding (with Congress's help) the loophole to provide medical insurance that would not count as wage increases that resulted in the insurance-dependent system we have today.  This loophole resulted in Medicare & Medicaid in the 1960s, ObamaCare in 2010, & ultimately will end in single payer insurance in the very near future.

 

Every time government gets bigger free enterprise principles are distorted thereby putting more of a drag on the entrepreneur – the creator of wealth & meaningful jobs that support a family - the foundation of the self-respect & dignity that not only promoted but naturally bred the country's original mindset. In 1930 federal government spending equaled 3% of GDP. Today federal government spending equals 24% of GDP & state & local government spending equals 17% of GDP for a government spending total of 41% of GDP.

 

To see how value producing jobs are created think of the world economy as a ladder with the U.S. currently on the top rung & developing nations with low tech labor intensive jobs like Bangladesh on the bottom rungs. The other countries are in between. All countries try to climb to the next rung. This works well if the topmost countries create new industries & products, thus adding another rung to the ladder like when we replaced horse drawn carriages that used buggy whips with cars. Older industries can move overseas while new jobs are generated @ home. It is when innovation stalls @ the highest rung that the portion of Americans near the bottom of the income distribution must compete with workers in developing countries. This is what we are facing today as far too many Americans are so poorly educated that they have skills so limited that no employer can use them which is exactly the plan BO is implementing in making people ever more dependent on government. Source of the ladder metaphor – Professor Robert Carbaugh of Central Washington University.

 

People have not gotten the message when companies run ads for a very few jobs & dozens or even hundreds of applications flood in. Instead of getting the necessary education & training to qualify for the few high paying jobs that may be available people are content to wait for the next run of the mill job to be offered or file for unemployment or disability, or move back with their parents or other roommates thereby not increasing our standard of living @ all with any of these alternatives.  Keeping current with the education & training required to get a job that can support a family is a never ending process. There really is no such thing as retirement from making a living.

 

The thoughtful writer above makes exactly the right point re education – until our schools teach America's founding principles again the country will continue to founder with wealth spend-down the rule until America is just another poor nation. Way too many people, even in their 30s, are on a path that will be hard to reverse & it's not because of a failure of the free enterprise system but rather the unintended consequences of government's meddling policies theoretically designed to promote fairness that have the exact opposite result than the one intended.

 

The problem with the ever growing government entitlement programs is that they are not sustainable. Medicare should shift to a premium support system & Social Security should calculate a retiree's initial benefit based on the CPI rather than the average real wage index & then adjust benefits annually by the CPI thereafter. These are not austerity measures like Greece is implementing – we have the time to start both of these programs for people not yet fifty-five.  To change the current mindset we must promote these remedies.

 

Part of our problem can be explained by the busy lives people live that does not allow time for them to know what is happening to themselves or our country. Most such people are uninformed & do not feel they have any skin in the game or even realize that a game is going on. Now it is human nature to not want to have skin in the game if you are able to play the game & either don't have any skin in the game or think you don't. But we all do & it is the job of those of us who know what our future holds to convince the uninformed that they really do have skin in the game in that their entire standard of existence is @ stake when the government gravy train stops abruptly.

 

You can see that I tied together all of the major points that people provided in answering our Mid-west readers question – particularly those focusing on both the 47% group & education.  Now there may not be one word or term that describes our predicament but there is one pledge that, if followed by us all, will cure it:

 

"I pledge by my life & my love of it, that I will never live for the sake of another man, nor ask another man to live for mine."  John Galt, Atlas Shrugged