For years, I used to blame politicians for our economic and social mess. That changed during the 1980s as a result of several lunches with Sen. Jesse Helms, R-N.C., which produced an epiphany of sorts.
At the time, I had written several columns highly critical of farm subsidies and handouts. Helms agreed, saying something should be done. Then he asked me whether I could tell him how he could vote against them and remain a senator from North Carolina. He said that if he voted against them, North Carolinians would vote him out of office and replace him with somebody probably worse. My epiphany came when I asked myself whether it was reasonable to expect a politician to commit what he considered to be political suicide — in a word, be dumb.
The Office of Management and Budget calculates that more than 40 percent of federal spending is for entitlements for the elderly in the forms of Social Security, Medicare, Medicaid, housing and other assistance programs. Total entitlement spending comes to about 62 percent of federal spending. The Congressional Budget Office estimates that entitlement spending will consume all federal tax revenue by 2048.
Only a dumb politician would argue that something must be done immediately about the main components of entitlement spending: Social Security, Medicare and Medicaid. Senior citizens indignantly would tell him that what they're receiving are not entitlements. It's their money that Congress put aside for them. They would attack any politician who told them that the only way they get Social Security and Medicare money is through taxes levied on current workers. The smart politician would go along with these people's vision that Social Security and Medicare are their money that the government was holding for them. The dumb politician, who is truthful about Social Security and Medicare and their devastating impact on our nation's future, would be run out of office.
Social Security and Medicare are by no means the only sources of unsustainable congressional spending.
Let's examine some statements of past Americans whom we've mistakenly called great but would be deemed both heartless and dumb if they were around today. In 1794, James Madison, the father of our Constitution, irate over a $15,000 congressional appropriation to assist some French refugees, said, "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents." He added, "Charity is no part of the legislative duty of the government."
In 1854, President Franklin Pierce vetoed a bill intended to help the mentally ill, saying, "I cannot find any authority in the Constitution for public charity" ... and to approve such spending "would be contrary to the letter and the spirit of the Constitution and subversive to the whole theory upon which the Union of these States is founded."
Grover Cleveland vetoed hundreds of congressional spending bills during his two terms as president in the late 1800s. His often stated veto message was, "I can find no warrant for such an appropriation in the Constitution."
If these men were around today, making similar statements, Americans would hold them in contempt and disqualify them from office. That's a sad commentary on how we've trashed our Constitution.
If Prof Williams is correct then a likely way out of the current mindset toward entitlement spending and gross fiscal mismanagement may come via a day of Reckoning. This may involve a dollar collapse and a financial restructuring imposed on the US by foreign creditors. Given the current US mindset and explosive total debt growth this is a very possible event and at current rates quite likely. Therefore, how can we prepare for this Day of Reckoning, or try every way possible to avert it?
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To maximum extent possible please champion free market capitalism as the best and proven path to economic prosperity. Strongly support political office candidates with this mindset. The US will then be in a stronger position to recovery from this Day of Reckoning and likely severe recession if not outright depression. Otherwise the US mindset will be largely void of private entrepreneurship activities that will be crucial to a strong recovery.
Also strongly support the revenue neutral Fair Tax as a solution to significantly improve the economy. The Fair Tax does not impact entitlement spending decisions. Entitlements can continue with no change. However, Fair Tax features such as zero personal and corporate income taxes by themselves will substantially increase private entrepreneurship and potentially reverse the growth of the nanny state.
The conundrum will continue until there is a national mindset change as described by RTE and this will finally occur when the dependency state no longer can stand because there are no more rich to pillage (or to sack and loot.)
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