Is Everybody Happy?
by Michael S. Rozeff
by Michael S. Rozeff
In the words of Geddy Lee and Alex Lifeson of the group Rush:
I get up at seven, yeah
And I go to work at nine
I got no time for livin'
Yeah, I'm workin' all the time
It seems to me
I could live my life
A lot better than I think I am
I guess that's why they call me,
They call me the workin' man
How can the "workin' man" make life "a lot better" for himself? One essential way is to stay out of debt, cut back on things that are not essential, and save. After building up a nestegg, one can borrow from it and repay one's own account with interest. One can pay oneself interest rather than pay a bank or finance company.
But this article points out a societal affliction that affects all working Americans, namely, the Federal government. The song suggests the working man yearns to "live his life" in his own way and can't seem to, but this affliction mirrors our beliefs, values, and assent, to some extent. If working Americans make our government, then to unmake it, we will not only have to stop listening to and believing the tall tales of the masters at all levels of government, we will have to support a different form of government. Sound unreal? It isn't, not in the long run. Getting where we are took a long time. The government changed a lot just in the last 50 years, and we will not be locked into the current position forever either.
Who gets the $17,430?
Directly and indirectly, $17,430 is what the Federal government takes each year, on average, from each American who works, not to mention the big chunk out of their lives taken through regulation. Who gets this $17,430 after it is extracted from working men and women?
- $3,690 goes to people on Social Security and Disability.
- $3,492 goes to people in war industries.
- $2,166 goes to people on Medicare.
- $1,767 goes to people on Medicaid.
- $1,505 goes to people on food stamps, welfare (assistance), housing, and income payments.
- $1,297 goes to lenders for interest.
- $1,028 goes to people in transportation, environmental, space, science, and regional building industries.
- $ 708 goes to Federal employees for their retirement.
- $ 688 goes to people in educational industries.
- $ 495 goes to veterans.
- $ 402 goes to people in the Federal government for their services.
- $ 244 goes to people overseas.
- $ 187 goes to people in agricultural industries.
The figures add to $17,669 because, for one thing, the government borrows more than it takes in. In addition, deciphering and reconciling the government's various publications and categories introduce fuzziness into the numbers.
Since the numbers apply to the average employed person at all income levels, they don't apply to every individual. Yet they do apply to all of us as a group.
Is everybody happy?
The numbers, while not 100 percent accurate, are good enough to suggest that most of the taxes paid do not come back to the men and women who work. Most of the spending does not benefit them even indirectly. How many taxpayers would choose this pattern of spending on their own? How many would tax and mortgage themselves heavily in order to support each of these expenditures?
Obviously working Americans do not get their money's worth. Both political parties go after their votes, but neither one delivers or can deliver what Americans individually value. Such a thing is impossible when money is pooled and spent by Congress via a complex political process of influence-peddling, logrolling, haggling, and power.
In some fashion, working Americans have cast their votes for this pattern of spending, imposing a large collective spending pattern on themselves. In some fashion, they have endorsed the outcome. But it is na´ve to conclude that the result is what Americans 100 percent want or deserve, if only because the current generation did not construct this system, which we all know to be hard to change, and the results are subject to interest group politics and the whims of politicians.
No matter how we got here or how much we like or dislike the result, we need to ask several questions. Is our governmental system a proper and morally right way to build a just and healthy society? Are we behaving properly toward each other in the relations we have through our governing system? Is our system of government itself responsible for many of our societal ills? Does an ill-formed government and an unhealthy society reflect our own mistaken philosophies? And finally, as Ted Lewis used to ask, "Is everybody happy?"
The biggest hands in the till
Each working man or woman is on average forced to pay $3,690 to Social Security and Disability payments. This money is lost to them. There is no bank account or trust fund that holds this money or invests it for anyone's retirement. The current retirees get all the money and always have. It goes out as fast as it comes in.
And why should these retirees get this money? By what right? They should have provided for their own retirement, not forced it out of each other and their sons and daughters collectively. Moral obligations to parents, the needy, the unfortunate, and the elderly should be met with compassion by each of us. They should not be enforced by the state's sword.
Out of every 10 people in the U.S., about 4.75 work and 1.25 are of age 65 or older. This means there are 3.8 workers for each retiree (4.75/1.25 = 3.8). These 3.8 workers are made to pay $3,690 each to support one retiree. That retiree receives a little over $14,000 a year. This so-called entitlement is disguised bondage for the payers.
Today's working man will not receive his Social Security payments until taxes are extracted from the next following several generations of workers, of which there are fewer and fewer compared to the number of retirees. Which is more secure, saving for your own retirement in a stable currency, or depending on the government to collect a constantly depreciating money for you from a decreasing pool of workers? How does it feel to need retirement money and to know that you cannot get it unless you pick the pockets of those still working? Is this what freedom means? Is this an example of liberty and justice for all?
Is everybody happy with the Pentagon taking $3,492 a year? The money goes mainly to pay servicemen (our own and foreign), to pay for training soldiers (our own and foreign), to pay for aid and rebuilding of foreign countries we have wrecked, to pay military contractors for weapons, bases, and weapons development, and to pay for all the other expenses of foreign wars such as transportation, communications, vehicles, maintenance, supplies, and intelligence.
Much of the working man's money going to war industries is spent in habitual foreign adventures such as Korea, Vietnam, Afghanistan, Kosova, Somalia, and Iraq. Both parties plan more such wars.
How much of defense spending is sheer waste? We are, after all, supposed to be buying defense, not war amusements. How is it that dozens of countries in the world spend less than $100 per citizen for military spending while the U.S. spends over $1,600 per person? Canada spends less than $300 per person. Mexico spends less than $50 per person. They are no less secure against invasion than we are. In fact, they are more secure. Terrorists are not threatening Mexico or Chile with nuclear and biological catastrophes. They aren't busy abrogating rights in order to save them.
Does militarism make us happy?
Why do we build up the military and go to war so often? I can only theorize. Wealth is a necessary condition. Is it sufficient? Do most wealthy nations go through a stage of empire and expansion? The ability of the Federal government to tax us almost at will and collect the money is a necessary condition. Is militarism a cultural habit? By now, war has become entrenched in the American way of life and thought. Every so often we go on the wagon, but then we fall right off again.
I think that we were set on a course of empire and expansion at the time the Constitution was adopted. The Founding Fathers spoke of empire and expansion. They wanted to clear the continent of foreign powers. They foresaw American growth and might. By 1865, once the Federal government ruled supreme over the states, the way was clear for a continental empire. Then manifest destiny was not enough. By 1898 we kept going, beyond the seas that border us. At that point, I think we accepted militarism because war industries lobbied Congress, because military interests lobbied Congress, because commercial and banking interests benefited from war, and because influential intellectuals and powerful Americans believed in war and took us into wars. They still do.
Americans at large have been prone to war fever, fears and insecurity, paranoia, and appeals to idealism. The average American has had an excess of patriotism and credulously swallowed the propaganda put out by the war interests.
We are now militaristic because we want to be. We think it's our turn to lead the world, that it's our responsibility. We mistakenly think that militarism is the right way to lead the world when our own history shows that freedom, free and open markets, property rights, biblical ethics, and the rule of a limited law were the keys to our earlier successes.
Most of the items on the list of government spending categories did not even exist during the period when America's standards of living rose most rapidly, and those that did were trivial in amount. It was no coincidence that at that time the currency was stable in value, and both taxes and debt were low.
If we're now happy with our state of affairs, if this is what we now want, then we need our heads examined. Given the dismal plight of psychiatry, we can't look for a cure in that direction. A new drug won't bring down excessive fears of Islamo-Fascism, hubris, or war fever. It won't cure interest groups. It won't cure the wrong ethics that are now built into our public lives.
The social spending pit
Medicare, Medicaid, and welfare spending make for a very deep and ravenous pit that can absorb any amount of spending we might toss in without its ever getting filled up. Medicare pays out money to the elderly who use medical services. In order to pay the medical expenses of the soon-to-retire baby boom generation, working people will soon have to pay roughly 4 to 5 times as much as they are now paying. They will have to pay $8,000 to $10,000 a year per worker. This, of course, is prohibitive and won't happen. Instead, the government will raise the Medicare taxes somewhat, raise the elderly's payments, cut their benefits, borrow more if it can, raise other taxes, and cut other programs. This will begin to happen in about 5 years, creating political turmoil. The effects on both health care and American wealth will not be pretty, but there are some mules that need to be hit over the head with a plank.
Merle Haggard's Working Man Blues said
"Hey hey, the working man, the working man like me
I ain't never been on welfare, that's one place I won't be"
Not everyone is singing this song. The infamous welfare payments that President Clinton supposedly reformed have not gone away. The government budget categories now roll up a variety of programs such as Medicaid, food stamps, housing programs, family assistance, and SSI into the terms "health security" and "income security." The war on poverty has not yet been won and can't be won. There are some problems that not only eat money, they thrive on it.
Although plenty of articles have been written that have proven beyond any doubt that the war on poverty is and was a gigantic mistake, this conclusion has not yet penetrated the broad American consciousness. A new generation of Republicans has joined Democrats in perpetuating this war. Both are busy extending it domestically and overseas.
One driving force behind this continued push are the American universities that graduate thousands and thousands of ready-made civil service and social workers annually. They people the departments involved with human resources, psychology, education, health, the aged, children and families, birth control, etc. They provide an intellectual background and support for social spending that permeates society. This leads me to...
The con and Social Fascism
We are entering a truly horrible age when government through social technocrats aims to control the population from birth to death. We are seeing technocrats attempt to remold the human mind and control it from an early age. Ritalin is symbolic of this effort, as is the diagnosis that 3—7 percent of young children should take this drug. The age of Social Fascism is upon us.
The general ploy or stratagem by which the social fascists are extending their hold over Americans is simple. They tell us we are sick and that we need their help. They then offer the help we think we need and we accept it. But this is not done in a free market. The control is insinuated via government policies, directives, rules, monies, and power. It is also done gradually. It is done in nice-sounding phrases that do not appear to threaten anyone. The very opposite — they are designed to comfort and they promise alleviation of ills.
For example, here is a quote from the website of the National Association of Social Workers: "Nearly 50% of the U.S. population, ages 15 to 54, report having a least one psychiatric disorder. Both severe and persistent mental disorders, including addictions, can have profound consequences for individuals, their families, and society, affecting their ability to learn, to grow into healthy adults, to nurture children, to work, to secure housing, and to engage in other routines of living. Recognizing the prevalence of mental disorders and the costs they exact from society, social workers provide more than 40% of all mental health services available to Americans."
The social workers think nothing of telling us that half of us are mentally ill! Preposterous! They control the definition of psychiatric disorder, you see, and they write the prescriptions. Of course, they stand ready to rescue us from our inept methods of coping with modern life.
This con game is a standard government trick. It is always the same. "The elderly are starving in the streets. We will solve that problem for you at a very low cost. We will give you Social Security." "The poor are suffering every social ill imaginable. We will raise them up. You will not have to worry about them rioting or spreading disease. We will give you a war on poverty." "The Islamo-Fascists are out to destroy the free world. They hate us. We will save you. We will give you Homeland Security. We will give you a war on terrorism."
Is everybody happy? Of course not. You have problems. I have problems. If we do not have problems, no matter. The social fascists will inform you that you do have problems. And then they'll tell you they can solve them for you.
Expanding government relies upon a basic confidence game. W.C. Fields (who created Larsen E. Whipsnade) said "You can't cheat an honest man." It takes two to tango, the government and the obliging public. The same thing goes on in the free market, but we have a far easier time of it extricating ourselves from our mistakes. And knowing this and that they face competition and can't force us into anything, businesses behave better. They simply cannot tie us up the way government can with its ability to make law.
The rest of the list
The U.S. has already wasted (spent) huge amounts of money that it borrowed in the past rather than taxed. It must now tax working Americans to pay the interest on that debt the government signed off on. The taxes to pay interest amount at present to $1,297 a year per worker. It will keep rising as long as the government keeps running deficits. If the borrowed money had been spent on goods that benefited those who are now paying the interest, the borrowing would have had at least a chance at being fair. But when generations borrow money and spend it on fruitless projects, leaving their children and grandchildren to pay the interest on the debt, they behave immorally.
Apart from payments to veterans, a form of military spending, the remaining items on the list are in two categories. One is aid (pay) to government workers and the other is aid to dependent industries. The government workers get a substantial $1,110. The dependent industries snare a total of $2,147. These industries include education, agriculture, technology, foreign governments, transportation, space, etc. Their receipts are sold to the public as essential projects or investments or infrastructure. Each industry puts out a steady stream of propaganda about how we need them. Farmers tell us we'd starve if they didn't get subsidies. Teachers tell us more and more money is needed for education or else our children will be dolts. Are these the same con games? Yes. Are Americans gullible and fooled? Yes. In reality, all this spending adds up to a great big pork barrel.
Working Americans should stop permitting the Federal government to take an average of $17,430 a year from them. We allow a big Federal government because we accept a national ethics that many, I would hope most, of us would never permit in our personal relationships. We allow a big Federal government because we have inherited it and a system that permits it, but also because we have augmented it and cheered on its augmentation. We allow a big Federal government because we foolishly and greedily accept the confidence man's story that we need his help and he'll give it to us for nothing.
We do nothing about the problem of big government because we feel helpless to change the system. We are not helpless. We have to recognize that major changes take time. Just as charity begins at home, so does reform. We cannot rearrange our governmental structure until we clearly understand that it is ethically flawed. We need to understand why it is flawed. We need to teach coming generations, one person at a time, the proper ethics to build a society upon. A few souls can make a large difference. In time as attitudes change, we and they will find ways to change government.
Time is short, however. Changes are going to be thrust upon Americans discontinuously. The system is going to be shaken suddenly and severely at some points. We will be given opportunities at those times, forks in the road. The correct choices at those times should be sound biblically-based law and ethics, free markets including the market for money, respect for property rights, and a sharply decreased role of governments accompanied by a maximum of decentralized self-government. If none of this seems realistic at present, we need to make it realistic, for consider the alternative. If Americans instead choose enhanced Federal power, more regulations and taxes, emergency powers, capital and currency controls, and other such draconian measures, then this nation will start to come apart at the seams even as it is transformed further into a totalitarian nightmare. More repression will bring armed rebellions and uprisings. History shows that such uprisings usually fail, are put down bloodily, and lead to even more repression.
November 27, 2006
Michael S. Rozeff [send him mail] is the Louis M. Jacobs Professor of Finance at University at Buffalo.
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