News & Analysis
Government Dependency Will End in Chaos
The media insists on characterizing statements about dependency on government handouts as controversial but in truth such statements are absolutely correct. It's not that nearly half of Americans are dependent on government; it's actually more than half. If one includes not just people on food stamps and welfare but also seniors on Medicare, Social Security and people employed by the government directly, the number is more like 165 million out of 308 million, which is 53%.
Some argue that Social Security and Medicare benefits are a right because people pay into these programs their whole lives, or that we need a government safety net in place for people who fall on hard times. However, this all becomes a moot point when the funds people depend on become worthless due to government default or rampant inflation.
This is less an issue of dignity or dependence on government, and more about the deceitfulness of government promises.
The Fed recently announced that it plans to keep interest rates near zero and keep buying near worthless assets from banks indefinitely. This enables Congress to spend without having to take deficits or the debt seriously and there is every indication they intend to spend with impunity until the system collapses. There are no brakes on the runaway train. The federal debt ceiling law does nothing to limit spending. The ceiling will have to be raised yet again perhaps before the year is out. What is happening in Greece with austerity measures and riots in the street will happen here within a decade according to some realistic estimates if we do not find some way to fiscally restrain our government.
There is little point in a debate about being entitled to healthcare or food or shelter from fellow taxpayers if the whole system has collapsed. And, with the way our politicians have taken over and mismanaged vast amounts of resources, collapse seems almost unavoidable. Yet the number of Americans who have significant dependency on government is dangerously high, and I honestly fear for them.
Worse, corporate welfare is also at an all time high with no signs of diminishing. Though it is hard to quantify, Tad Dehaven at Cato has estimated that the government spends nearly twice as much on corporate welfare than on social welfare. Both parties are equally guilty. More and more, the business sector is learning to rely on taxpayer largesse in one form or another. They used to be solely concerned with providing a better product to the consumer at a better price. Now, success on Wall Street depends entirely too much on having the best lobbyists on K Street. If one includes the employees of "private" businesses who depend on government contracts, grants or bailouts, there are even more people dependent on government in some way.
Government does not create resources when it taxes people and prints money; it merely redistributes the wealth, while supporting a massive, wasteful bureaucracy along the way. Government is a giant, blood-sucking parasite on our otherwise healthy economy. For too long we have entrusted too much economic power and influence to irresponsible politicians in Washington. It's the chaos that ensues after they run the system into the ground that will be so painful for so many people. But realigning our economy with the free market and away from government mandates and handouts must happen in order for it to thrive again.
The answer is not to keep asking government to do more. The answer is to extricate our economy and ourselves from the grasp of Washington DC as much as possible now, before our dependency becomes our downfall.
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Posted by taxesbyanyothername on 10/10/12 12:06 AM
@ColdHardTruth
I'm right there with you on refusing the money but since I am ten years younger there is even less of a chance that refusal will be necessary, or even possible. If they abolish SS on the day before I become eligible, I will be sorry that it took so long.
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Posted by ColdHardTruth on 10/09/12 11:05 PM
One of the biggest mistakes made was the implementation of Social Security. ANY attempt to reform the Ponzi scheme is certain to get any politician foolish enough to suggest it a permanent ticket home after the next election.
Let me see if I can simplify this enough that some people will get it.
You have been forced, with a government gun to your head, to participate in a monumental Pyramid scheme. The money you paid in over your lifetime was not used to ensure future benefits to you at some point in the future, but to pay off those who were "lucky" enough to get in on the scheme before you did.
As Bernie Madoff, and Ponzi himself, eventually discovered, eventually the Pyramid collapses, and nobody gets any payouts. Unless you were dumber than a box of rocks, you had to know that getting anything out of this system would depend on sheer dumb luck, and the continued perfidy of the slimeball politicians who found it easier to kick the can down the road than to risk losing their cushy jobs where they act as "American Royalty".
You also took steps to ensure that you weren't going to be dependent on such a morally bankrupt system. I made every attempt to provide for retirement without having to depend on Social Security, but as inflation has outstripped my attempts to do so, I've come to the conclusion that I will have to work until the day I die. Hopefully, when my time comes, it will come quickly, and not from a debilitating, wasting disease that allows the medical establishment and Big Pharma to drain my last resources while doing nothing more than treating my symptoms.
Just after the November election, I will turn 60. Yes, I know that I should be able to collect some Social Security benefits, but as I have tried my best to live my life as a man of integrity, I cannot, in good conscience, take money that isn't mine. I hope that I am not the only American who sees things this way, and that I will be joined by an army of men and women, who refused to be bought by the minions of the beast in Washington, D.C.
Reply from The Daily Bell
You are a strong person ...
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Posted by Chemist on 10/09/12 06:01 PM
I'm stunned how most Americans have their head tightly inserted into an orifice where the sun doesn't shine. Fantastically, they are breathing somehow. But that oxygen supply is running out. Once it does, the dependency of masses will indeed result in chaos. The rest will wonder why we didn't kick them into sobriety.
We had 2 chances to fix things, or at least elect the best person to try to fix things. We blew both opportunities. It seems as though we are destined to be punished for our inability to see the obvious. Our 2 choices, more welfare or more warfare, are not part of the solution set. Rome is burning! The emperor is buck naked!! The only solution is to follow the postulates of the Constitution back to greatness. But since the Constitution is also being trampled and eviscerated before our very eyes, there may be nothing left to help us escape out from under tyranny and chaos if we wait much longer. Our options are growing fewer. My these are dark times!
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Posted by taxesbyanyothername on 10/09/12 03:34 PM
Some mistakes can be corrected, some cannot. It was too late in 1913. You can take your pick of occurances in that year that individually presaged eventual disaster for America. Minimum wage, the 16th, the 17th, the fed, Wilson, the Rockefeller Foundation.
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Posted by jkluttz on 10/09/12 01:26 PM
"The answer is to extricate our economy and ourselves from the grasp of Washington DC as much as possible now, before our dependency becomes our downfall."
My conclusion is that nothing will be done until after the downfall. I would love to hear Dr. Paul's personal expectations about how the government default will occur. Will a new, devalued, currency be issued? Can the fed successfully inflate away the debt or will debt deflation win out? What are the warning signs of a final government panic (I'm assuming there is going to be one)?
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Posted by ghendric on 10/09/12 11:49 AM
Ron Paul should be our next President..
