The Era of Entitlement

From Investor’s Business Daily: Using data mined from the Bureau of Economic Analysis, TrimTabs Investment Research has found that 35% of wages and salaries this year will be in the form of a government payment.  That’s up sharply from 2000, when it was 21%, which is more than double the rate of 1960.  The payouts are primarily Social Security and Medicare benefits, and unemployment checks.  But they are not limited to those programs.

So let’s be clear about this. A mere decade ago, when Bill Clinton left office, a fifth of the income of Americans came from government. Now more than a third of American income comes from the government.

Is it any wonder the economy is not growing?

A growing economy requires productivity. The manifestation of productivity is a widespread increase in income — not government-created inflation, but real income. With a third of the country now relying on government checks — Social Security or not — it’s not surprising that there’s less of that income being produced in the first place.

This is a very, very serious problem. Nobody can argue that a country can long survive this way. Imagine if you had a family member living with you. Last year, he took a quarter of his income from you and made the rest himself. This year, he’s taking a third from you. By the year after next, he’ll be living off of you for half of his income. How does this make you feel? And how moral is this, by any standard? And how economically viable is this — both for yourself, and for him? How long can this go on before somebody runs out of money, or somebody explodes with resentment?

Don’t minimize this issue because of Social Security, either. “Well, Americans are aging. Naturally there will be more Social Security checks as more people are eligible for the program.” Let’s leave aside how the program can possibly survive under these circumstances. Let’s just consider a scenario, say fifteen years down the road, where a huge number of American adults are now on Social Security — either through aging or through the continuing expansion of the welfare state of the last ten to twenty years. What then? How will it make people in their 40s feel to be paying for the income of retirees and others the government deems disabled? Does anyone seriously think Congress is actually going to reduce benefits or extend the age of eligibility?

Think of the words “welfare state.” Think of what these words actually mean. These words refer to a society in which the productive are forced to pay for the livelihood of the unproductive. Many of these old people will still be capable of providing for themselves, but under Social Security they’ll be getting checks anyway. The ones who were productive in their youths, and who in a sense earned those Social Security checks, were always capable of saving for their retirement. So they never needed that program. And the ones too foolish to save will be getting those checks no matter what, thanks to those who are willing to work for their sake.

Maybe you think the welfare state is just fine. Maybe you’ve heard all the arguments about how it’s OK for a society to take care of its own. Ask bankrupt Great Britain how well that’s working out for them. Actually, if you read a little history, Great Britain suffered terribly during World Wars I and II because of fiscal problems. They were barely able to defend themselves, because this was the period that they established the full welfare state that Obama is now imposing on the U.S. Not long before World War I, Britain had been the preeminent world power (including military power), surpassing all in human history — the same role the U.S. enjoys today. Yet had the U.S. not been there to rescue Britain and the rest of Europe, the outcomes of World Wars I and II would likely have been very different.

As the U.S. goes the way of Great Britain, the last great power to succumb to a massive welfare-regulatory state — what will happen to the world then? There is no up and coming great free nation, as there was the U.S. at the turn of the twentieth century. If you don’t like the decline of the United States in 2011, you can take little comfort in the growing influence of China, not to mention Russia. It’s not that these are truly great powers, because their governments have always treated their people terribly. But they are powers compared to what the U.S. will be if it stays on its current course, and the people in those countries have never lived as well as even the worst off of Americans. Americans are in for a rude awakening if they let the impoverishment and moral/economic weakening caused by rampant welfare statism set in.

We’re all taught that a great society takes care of its vulnerable. This may be true, in a rational and voluntary sense. But it’s not the definition of a great society. The things that make a society great, strong and wealthy are initiative, purpose, intelligence and hard work. America is drifting away from all these things. Why? So we can have permanent unemployment benefits. And Social Security. And Medicare. And ObamaCare. And the endless list to follow. It’s already underway and there’s clearly little these poor Republicans in Congress are able to do to stop it. Will a Republican President such as Mitt Romney, or Sarah Palin, reverse our course? Unlikely.

In the end, it will be up to the productive sectors of American society to wage an anti-Marxist revolution. Not a bloody one. Just one in which they refuse to work until the government starts leaving them alone. It may sound far-fetched, but in a way it’s already happening. The most productive members of American society are on a quiet strike, even a subconscious one. Under Obama and the hapless Congress, there’s less wealth being produced. Private investors are not investing. Why should they, only to help Obama become even more of a dictator than he’s already becoming? Good for them. Let the economy flounder until the government goes so broke that the welfare state must collapse. And good riddance to what history will refer to as the Era of Entitlement.