Category Archives: national debt

One nation, under God, indivisible? No, I don’t think so.

We are as fundamentally divided as a people now in 2011 as we were in the 1850s, just prior to the Civil War.  Back then the division centered around the issues of racially-based slavery and the proper relationship between the state and federal governments.  Today the divide is defined by an economically based  servitude and the nature of the relationship between the individual and the coercive power of government of all levels.

In the 1850s there were people on both sides of the divide who saw the inherent dangers the our situation but they had no real solution,  proving helpless to prevent the drift toward the Civil War.  And as Shelby Foote, the eminent Civil War historian points out, the Civil War was the result of our failure to do what Americans had previously done so well, i.e. compromise.  There were back then two groups of irreconcilable ideologues, abolitionists who considered slavery a moral evil, not a political issue, and ardent states’-rights proponents who saw the power of Washington in any area of their lives as a threat to their sovereignty.  These people identified themselves more closely as members of a particular group (their state) than as American citizens. For them the form of bondage that most offended was the subservience of the South to the Northern bankers, shippers, and industrialists.  Today there are many Americans who have a greater allegiance to an ethnic, cultural, religious or economic interest than to our national interest.

It might be instructive for Americans, and especially our leaders, to go back and revisit the years from 1850 to the outbreak of hostilities in 1861.  I doubt they will bother.

Yet I believe that in some sense, perhaps only lightly felt, Americans realize the perilous nature of our present situation, at least to the extent that they understand we can’t stay on our present course. (In a July 10 Rasmussen poll, 68% of Americans surveyed said the Unites States was heading in the wrong direction, only 25% in the right direction.)

I believe that ordinary Americans are looking for someone, a leader who could transcend our entrenched interest group-centered attitudes and bring us together.  That was, after all, a part of Obama’s appeal in 2008 when he said “there is not a conservative America and a liberal America, there is the United States of America.  There is not a white America, a black America, a latino America or an Asian America, there is the United States of America.”

Whatever happened to that idea?  More and more it seems these words were just empty campaign rhetoric.The man whom so many hoped would take blue states and red states and turn them into a Purple Nation has become just another political Great Divider. And our divide is wider and seems more insurmountable than ever.

So here we are now, no longer One Nation, Indivisible.  And lacking the leaders with the courage to risk offending their various political bases.  In one sense, we are reaping just what we have been sowing for more than a generation.  We no longer imbue our children with a sense of commonly held ideals, we no longer tell them our National Story. The road to political power is now paved with the efforts to get our fellow citizens to see themselves as belonging to specific interest groups (white, black, latino, male, female, gay, lesbian, transgendered, liberal/progressive, conservative, senior citizens, union members, public service employees, gun owners, etc. etc.) and if enough members of these various groups can be convinced of their own victim-hood and entitlement, so much the better.  If enough of these interest groups can then be cobbled together into temporary electoral coalitions, you win.

Shared sacrifice?  Common purpose?  Those ideas are for chumps, quaint perhaps, but not really meaningful in our world today.

The Civil War was the greatest political calamity our nation has ever faced,  It is a pity we haven’t remembered its lessons.  The Great Depression of the 1930s was the worst economic calamity we have endured.  The economic collapse of 2008-09 was proof that we turned our backs on the harsh lessons the Depression taught us about economic safeguards and restraints, and about fiscal responsibility.

Both the Civil War and Great Depression severely tested the bonds of our nation and its people.  Putting the pieces back together in each instance was a long, painful, and sacrificial process.

Getting out of our current political, social, and economic mess will also be slow and painful, and it will certainly entail sacrifices.  Are we any longer up to the task?

My guess is no, not as we are presently disposed.  What will be required is a different type of political leadership, perhaps a different shared definition of both Fulfillment and Success, and the renewal of a sense of shared identity and purpose (if in fact these things any longer exist in America). Here’s hoping it is not already too late.

Living (and Dying) Beyond Our Means – pt.2

By A.D. 180 the Pax Romana was coming to an end. Emperor Marcus Aurelius had died and the following century was to see a succession of nearly 25 rulers, most of them either unable or unwilling to deal with the problems of Empire.

What historians refer to as the “Crisis of the 3rd Century” was not the end of the Roman Empire.  But it was most assuredly the beginning of the end.  This period in Roman history was characterized by a rapid growth in the Roman government, a growing unsustainablity of its military commitments, increased levels of taxation upon its citizens, an inability to control the Empire’s borders, a debasing of the currency, and a social deterioration fueled by a growing level of political corruption, economic decline, a decline in traditional religious beliefs, and a growing detachment from the shared ethic and values that had previously given such meaning to the term “Roman Citizen”.

Spinoza said “If you want the Present to be different from the Past, study the Past.” I realize that it is less fashionable these days to teach/study actual history. Our schools, both public and private, prefer the teaching of “social studies” and cultural diversity instead. But it would be wise for us to heed Spinoza at least to the point where we recognize the possibility that history can, indeed, repeat itself.

The U.S.A. in 2011 is not the Roman Empire. Yet the historical lessons of the Empire’s decline can be instructive.  Certainly the parallels are rather alarming.

Like Rome, America has seen a dramatic increase in the size and scope of its government. Even as the private sector of our economy lost more than 7 million jobs since 2008, employment by government at all levels actually increased until the current budget year, when the flow of federal “stimulus” money ended. (BTW, is it any wonder that the Obama Democrats directed more than $300 billion dollars in stimulus monies to the preservation of public sector jobs? After all, the public sector unions contributed more than $400 million dollars to Obama and the Democratic Party in the 2008 election cycle. What was sold to the American people as an economic stimulus bill could just as accurately be characterized as a political favor to the Democratic party’s most faithful source of campaign funds.)

Diocletian divided the Roman Empire in the late 4th century, and his move is often seen as a response to the perception that the Roman Empire was essentially too big to govern.  In fact, by 384 A.D. the Empire had shrunk considerably from its greatest expanse under Emperor Trajan in 117 A.D. What was wrong was not the size of the Empire so much as the way in which it was being governed, and the inability of the massively centralized government to respond effectively and flexibly to new challenges.

Flash ahead to our current situation in 2011, if you will. Like 3rd century Rome, we have a massive, centralized government that is unable or unwilling to recognize and respond to America’s problems (and to consider that part of a necessary response is not to become part of the problem itself).

Like Rome, our currency has been debased by inflationary monetary policies, trade imbalances, and out of control borrowing. (Since the founding of the Federal Reserve in 1913, the U.S. dollar has lost 96% of its value, mostly due to inflation.)

Like Rome, we are overextended militarily.  Currently, the US has troops stationed in 135 countries worldwide. We have more than 50,000 troops in Germany, 66 years after the end of World War II and 20 years after the end of the Cold War. We still have more than 35,000 troops in Japan, 28,500 troops in Korea more than half a century after the end of that conflict.  And we have 150,000 troops in Iran and Afghanistan as a result of those wars. The troops that Bill Clinton sent to both Bosnia and Haiti on short term missions in the 1990s are still there. Meanwhile, we are unwilling to secure our own borders closer to home. (I won’t even go into the lunacy of Operation Fast & Furious where the US government sold sophisticated automatic weapons to Mexican drug cartels – that’s for another column).

Like Rome, we maintain policies that discourage long term economic planning and risk taking. Forget about corporate jet tax breaks (which Obama and the Democrats included in the stimulus bill, BTW) – that’s just chump change. But why is the U.S. corporate tax rate a whopping 35%?  This is twice as high as Canada’s and well above the rates in EU member states. And the cost of business regulations and taxation discourages the creation of new jobs at a time when they are desperately needed.

Other aspects of our corporate tax codes are just as unfathomable to me.  How did GE get away with paying ZERO federal taxes last year? And why do we encourage further exportation of U.S. jobs by the imposition of uncompetitive regulations on domestic industries?

Obama is fond of saying that he inherited an economy that had been “driven into the ditch”. Well, you don’t get out of a ditch by digging a deeper hole.

The current brouhaha in Washington, D.C. is about increasing the ceiling for the national debt. But the “federal debt” only covers what the government owes to its creditors, both the investing public and foreign countries (read:China). When you take into account what is owed to senior citizens, veterans, and retired government employees, the federal government currently has more than $61.6 trillion dollars in unfunded obligations, approximately $534,000 per household. When you look just at government employees, the situation is even more unsustainable.  The federal government has promised pension and health benefits worth more than $700,000 per retired civil servant. The key asset supporting this obligation? Not invested contributions, no, it’s federal government I.O.U.s that our children and grandchildren will have to pay.

The current sideshow in Washington, D.C. is just political theater.  Face it folks, we are already broke, most Americans just don’t realize it yet.

The decline and fall of the Roman Empire was primarily economic in nature, abetted by cynical leadership that no longer really believed in the greatness of its enterprise and unwilling to take the steps that might have averted the Empire’s demise.

Are we headed in the same direction? Draw your own conclusion, but I’m just sayin’…

Before you dismiss me as one who is willing to complain about a problem without offering anything in the way of a solution, I will give you this:

What needs to be done?

1)  Americans need to stop thinking that every problem in their lives requires the application of a government-run solution. Sometimes government itself can be part of the problem.

2)  When, over a reasonable period of time, a government program is found to be ineffective, it should be scrapped, not enlarged. Diamonds are forever, but not government bureaucracies.

3)  We need to simplify and redefine our understanding of the proper role of the federal government, as follows:

  • To defend and protect the liberty of the American people by  a) ensuring the internal and external security of American and b) by securing our borders;
  • To maintain social justice by  a) ensuring equality of opportunity, not by imposing equality of results and  b) by ensuring equality before the law;
  • To foster conditions for economic progress and growth by  a) maintaining the strength and integrity of the currency and  b) by not incurring an immoral burden of debt that future generations of Americans must pay.

Then the government should get out of the way and set the energy and ingenuity of the American people free once again.

Living (and Dying) Beyond Our Means (Part 1)

There is an old adage that goes “Those who love their children plants flowers, those who love their grandchildren plant trees.” Along the same lines, the Six Nation/Iroquois cautioned their leaders that the effects of their choices needed to be considered “to the seventh generation.” The wisdom expressed in both cases should be self-evident.

But what can be said for a society that feeds both its needs and its desires by stealing from its children, grandchildren, etc. down to the seventh generation and even beyond? What can be said for leaders whose consideration of the future goes no further than the next election cycle and whose moral vision extends no further than the principles of politics and power?

This is where we are today, and the selfishness of our political leadership is reinforced  across every strata of society and every age group by an ethic of consumption that defines each of us not as citizens, nor as created beings, but only as consumers. Notions such as duty, honor, character, faith, and personal responsibility and accountability are often dismissed as at best quaint, and at worst as anachronistic signs of gullibility or simple-mindedness.  People who speak up for such notions are often ridiculed as “culturally backward”  and demeaned by those who listen to more “nuanced” voices.

Recent tests given by the National Assessment for Educational Progress clearly show that most Americans today have little understanding of how our nation was born nor of the values and shared ethic that brought it to greatness. I would add that most of my fellow Americans and especially our current leaders have less long term concern for the direction in which this nation is headed.  We have too many concerns and desires that need accommodation in this present moment to think the about the quality of all the tomorrows that await our progeny.

Over the past three years, our national debt has increased by more than $5 trillion dollars.  Those are real dollars, folks, the kind that have to eventually be  paid back. Within ten years, the INTEREST service alone on our national debt (never mind paying down the principal) will be the largest item in the federal budget, more than any social entitlement program, more than defense spending. By its owm estimate, the Obama administration says that by the end of a second Obama term, our national debt will be more than $24 trillion dollars. That’s an increase of over  $14 trillion dollars of debt in 8 years. And that assumes a rosy economic recovery and no major new social program expenditures!  The Bush administration that preceded it was liable for a $4.3 trillion debt increase in 8 years, so they have a share in this responsibility as well.

The current national debt is bad enough.  But the numbers on governmental financial obligations are even more staggering. But already, even before the beginning of ObamaCare, the government has added an additional $9 trillion in entitlement obligations for the next decade, to a grand total of $61.6 trillion in such obligations it is currently committed to pay.

The path we are on is not sustainable. It is not sustainable even if we tax all the millionaires at a rate of 100%. Like a fat man who just can’t stop eating, we consume more and more, expect more and more as our personal entitlements, and think less and less about the future implications.  But like a fat man on an eating binge, our long term health suffers with each day of excess.

This way of living is fundamentally dishonest as well as destructive. And it can only be publicly  justified by obfuscation and dishonestly on the part of our leaders whose actions are destructive of the very foundations of a moral, democratic society.

Those who try to point out these dangers become the targets of vested interests who first try to demagogue them into silence and then try to discredit them as alarmists.  Contrarily, the very massive social programs that are going to bankrupt our offspring are extolled and justified by their proponents as necessary to ensure a better future for our children. It’s perverse.

I love my children and my grandchildren. And if that means going without so that they can graduate from college debt free, so be it.  And if it means not passing any of my bills on to them to pay off after I am gone, so be it. If you love someone, don’t impose burdens on them that restrict their liberty and opportunity. I just wish my government and more of my countrymen would do the same.

More on this next week.