The prevailing sense of pessimism that afflicts Americans undoubtedly has many causes, chief among then, unemployment. When jobs are secure and people have financial security, they tend to be upbeat about most things. But it seems apparent that the current malaise goes even beyond employment concerns. People feel that the country is on the wrong path. They are worried about the future, not just their own, but that of their children and grandchildren.
They have ample reason for worry, given the size of the national debt. The service alone on this massive debt will place severe burdens on the next generations. There will be little left for defense and other discretionary spending. The size of the debt will imperil our status as a great power. If current trends continue, it will no longer be a question of whether, but rather when China overtakes us as the world’s foremost economy and military power. Our descendants will blame us for these things. They will think of us as incredibly selfish and reckless spendthrifts. They will be right.
How could this happen to the world’s largest economy and only superpower? Quite simply by repeated government overspending at all levels. For decades, federal, state and local governments have spent more than they have received in revenues. We have acknowledged, tacitly, that this cannot go on and still it does as if the inevitable day of reckoning can be put off indefinitely. It can’t.
We are addicted to spending. It’s what politicians do to stay in office. Most of the spending goes to pay the costs of massive government and transfer payments, now referred to as entitlements, like Social Security, Medicare, Medicaid, food stamps, aid to dependent children and a host of subsidy programs. There’s something about the term “entitlement” that sounds so permanent. But unless reforms are instituted, programs like Social Security and Medicare will be bankrupt.
We are, of course, not alone in this plight. The social democracies of Europe provide examples of what America is fast becoming. Citizens have demanded more and more of their governments and politicians have been willing to accommodate them in exchange for power. Some of the weaker economies in the European Union, notably Greece, are demonstrating now the eventual outcome of years of chronic government deficit spending. Others, including Portugal, Spain and Italy may not be far behind. Attempts by the Greek government to reign in spending and reduce benefits have produced demonstrations and riots, illustrating the difficulties governments face in dealing with these problems. But deal with them they must. Wealthier European nations like Germany and France, big social spenders themselves, are reluctant to finance Greece’s spending binge. Will the Chinese soon tire of financing ours?
The entitlement mentality has become entrenched in American society. Starting with Roosevelt’s New Deal and expanding with Johnson’s Great Society, we have created a culture of dependency on the government and have perpetuated welfare. This has greatly increased the size of government at all levels. Government workers are paid more now on average than non-government workers doing comparable tasks and their retirement programs and other benefits are more generous. Rather than reforming entitlement programs, we have expanded them. Progressives in the Obama Administration and the Democratic-controlled Congress seem to believe, moreover, that we can continue to increase entitlements and government services because this contributes to “equality” among Americans and is, therefore, “the right thing to do”, regardless of cost and our ability to pay for it.
The current course is unsustainable and only the financially illiterate can possibly believe that we can finance all of this simply through wealth transfers among Americans. But how do you break the entitlement addiction? Many politicians have run for office on the promise of fiscal reform. Few in either party have been successful. No one is going to run on the promise of cutting Social Security or Medicare. Unions and interest groups that fund political campaigns lobby successfully against cuts in retirement plans and other benefits.
There have been successful taxpayer revolts in the United States, with California’s Proposition 13 campaign capping real estate taxes being a model for others that followed. What is needed now is a popular revolt against government spending. The alternative is the specter of a once great nation increasingly struggling under a massive debt burden that stifles growth and reduces us to mediocrity.
Copyright 2010 J. F. Kelly, Jr.
