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The Welfare State - A Historic Reckoning


 Democracy and Power 107:  Counting votes

Successful … politicians are insecure and intimidated men. They advance politically only as they placate, appease, bribe, seduce, bamboozle or otherwise manage to manipulate the demanding and threatening elements in their constituencies.
– Walter Lippmann (1889-1974), American Journalist and Author

In a democracy, the politician must favorably influence the majority of their voting constituents.  All political decisions a politician makes are calculated by how many votes are gained by money spent on an interest-group versus how many votes are lost.

 The Welfare State - A Historic Reckoning

The cost of the welfare state is the crux of the European debt crisis.  Europe cannot pay for all the promised welfare benefits.  Since World War II, European politicians have created an extensive welfare state.  Today, an acute reckoning is occurring.  European governments cannot financially pay the promised benefits and raising taxes will retard economic growth.  Don’t gloat America!  Robert Samuelson explanins in Real Clear Markets how the European dilemma is also America’s.

Following Europe, American government-spending increased exponentially.  Our big spending “safety net” instituted in the 60’s and 70’s are Social Security, Medicare, Medicaid, Food Stamps and Welfare.  In Real Clear Markets, Samuelson cogently states the obvious:

 It's ultimately a crisis of the welfare state, which has grown too large to be easily supported economically. … The American predicament is little different.

The welfare state is the transfer of money from working Americans to retired and low-income Americans.  This income transfer-scheme is doomed because massive debt retards economic growth, and there are too few workers today to support the recipients.  Samuelson questions if America’s political institutions have the ability to correct the problem:

The modern welfare state has reached a historic reckoning. As a political institution, it hasn't adapted to change. Politics and economics are at loggerheads. Vast populations in Europe and America expect promised benefits and, understandably, resent any hint that they will be cut. Elected politicians respond accordingly. But the resulting inertia poses an economic threat, one already realized in Europe. As deficits or taxes rise, the risk is that economic instability will increase, growth will decline, or both. Paying promised benefits becomes harder. Or austerity becomes unavoidable.

This year in America, there have been two serious attempts to address the looming crisis.  First, Representative Paul Ryan offered his Road Map to Prosperity.  Harmfully, despicable politics ensued.  President Obama invited Ryan to attend a speech and the President then ridiculed and lambasted the Road Map.  Then, the Democratic Party published an advertisement pushing an old lady in a wheelchair off a cliff as a depiction of Ryan's plan.   

Recently, FreedomWorks, with the help of thousands of Americans, produced the Tea Party Budget, which reduces $10 trillion in 10 years.  If you compare the real cuts of the Tea Party Budget  to the failed attempts of the Super Committee to reduce spending on $1.2 trillion in 10 years, it is obvious that  "politics as usual" is incompetent in America.

Inevitably, if politics as usual continues, America will decline economically, militarily, and culturally.  It is absolutely essential for We the People to actively and aggressively support The Road Map to Prosperity and the Tea Party Budget.  Only, We the People can force the changes necessary to preserve America’s exceptional governance that fosters freedom and prosperity.  We the People must enlist more Americans to endorse the Tea Party Budget.  Only We the People can save America.

[For more insight on Samuelson's point of view, read his article on Real Clear Markets