Every public spectacle begins with a bold lie…and ends in shame, regret and disaster.
Every world improver is a bold dissembler…and every crowd is a bunch of damned fools for listening to him.
The Medicare Drug Benefit program, enacted during Bush’s first term, was meant to cost $400 billion during its first 10 years. Turns out, the official estimates included 2004 and 2005, that is, two years before the program existed. The real 10-year cost of the program floated through this week’s news at $720 billion. Americans voted for their representatives in Congress and the White House…the politicians voted for the free drugs. Thus, it was the divine right of the majority — the brute power of the more to tell the few what to do — purified by the ballot box. The polite forms of democracy were respected. But the essential act was a sin and a crime. Why should some Americans get drugs at other Americans’ expense? Is it not larceny on the part of one and complicity on the part of the other? And how will those “others” pay for it; are they not already on the hook for $55 trillion in unfunded federal obligations?
But now the scam is the law of the land. And so we stumble along, as the great public spectacle develops from comedy, to farce to tragedy… with petty acts of tomfoolery and fraud.
George W. Bush wants to create an “ownership society.” But it is a strange form of ownership. More and more houses are really owned by mortgage finance companies. Cars are owned by GMAC and other auto financers. People expect to retire on the equity locked up in their houses. But at any minute, a single word from Japanese or Chinese central bankers would whoosh across America like a tornado, knocking down real estate prices from Santa Monica to South Beach. And Social Security? A forensic accountant could pore over the books for 1,000 years and never find a trace of the cash supposed stashed away for Americans’ retirement. It doesn’t exist!
Bush says he wants to change that. He wants Americans to own their own retirement funds — with private accounts invested in stocks. The young have caught on to the scam. There is no way they can get a decent return on investment in Social Security; they want out. The old are alarmed; they’re afraid that the something for nothing they’ve grown to expect will turn out to be more nothing than something. And the Bush Administration wants votes from both groups. So, it does what dissemblers always do — it embraces the humbug…and smooches on more deceit.
Enjoy the show.
What the country needs most is what it most hasn’t got: The courage to face up to the lies…and take the consequences. Americans have to stop spending so much…and save. Businesses need to invest billions in new equipment and new training; otherwise, relative standards of living will fall. The government needs to admit that it can’t deliver what has been promised. And investors have to realize that they won’t get 10% per year….
Of course, it’s not likely that the public will suddenly go sane. Still, we can dream…
Bill Bonner [send him mail] is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century.