The richest and wisest man who ever lived, Solomon, counseled us in the Book of Proverbs that “the prosperity of fools will destroy them.” Notice that Solomon did not say prosperity will ruin anyone, but the fool only. So his wisdom is simple: If you have wealth, don’t be a fool with it and you will remain prosperous. If you want wealth, remain wise and not foolish and you will gain it, and hopefully keep it.
Now let us look at that foolish institution called the United States government.
Our great country grew from a late 18th century economic joke into the world’s super economy in a little more than a century, with much of the phenomenal growth coming in a 50-year period from 1865 until World War I. Using wise policies the United States led the globe in every conceivable economic category as the 20th century began, and all because of free market capitalism. The government was largely absent.
With all that prosperity, Washington could barely contain itself, and by the 1930s the feds believed they could manage the economy and the country’s wealth better than the free market. During the presidency of FDR, the great regulatory state began with scores of new bureaucratic agencies that are still with us today, grinding down economic growth.
The massive entitlement state also began with Social Security in 1936. Medicare came along in 1965, as did Medicaid, and many other anti-poverty programs. The results of government mismanagement are nothing short of horrible.
With no budget, an every year occurrence under Obama, spending numbers vary on what exactly Washington is doing with our money. But, at any rate, the news is not good. On average, Social Security, Medicare, and Medicaid cost us nearly $1.6 trillion a year, nearly 50 percent of the budget, and growing by leaps and bounds. Over the course of the next 5 years, just the Medicare and Social Security programs will increase by over $800 billion, as the Baby Boomers begin to collect en masse. Together those two programs total more than $100 trillion in unfunded liabilities – that is the money these two programs are projected to need. Without some major cuts, these programs will eat up 100 percent of the budget in the not-too-distant future.
With a sluggish economy, where’s that cash going to come from? Recent economic numbers are dismal: 90 million Americans out of the labor force; an economy that produced only 88,000 jobs in the month of March; more than 8.8 million people on disability, which has become a new welfare program, an increase of 1.3 million since Obama has been in office; other anti-poverty programs have increased dramatically, with a federal total of over $700 billion.
But we the working people are being fleeced in the process, not only by our misspent tax dollars but also the huge benefits paid to the wealthiest corporations and big banks. For example, it was recently reported by the Government Accountability Institute that JP Morgan, which processes the EBT cards for welfare benefits, pockets more than half a billion dollars as a result of its government contract. The bank’s contributions to Obama’s re-election campaign: more than $800,000. It’s all good work if you can find it but not so much for the American taxpayer.
The food stamp industry profits as well. There are now over 47 million Americans on food stamps, all to the tune of $75 billion a year, with the soda and junk food industries lobbying heavily to keep government restrictions at a minimum, caring little for Michelle’s “everybody eat healthy but me” campaign. Big money wins every time over liberal orthodoxy it seems.
Obama has also rewarded his favored constituents, such as the “green energy” sector, with billions of taxpayer dollars. His defenders tout his belief in the merits of affordable, clean energy, but the results of his programs tell a different story, with loads of free cash purchasing lots of bankruptcies.
Labor unions have also made out like bandits under this administration. The much-heralded auto bailout was one of Obama’s biggest re-election campaign bright spots, or so they made it seem. Yet it was the United Auto Workers that reaped billions in free taxpayer cash; the taxpayer, as usual, lost billions, some $23 billion to be exact.
To feed this growing beast, Obama is eyeing more taxes in his proposed budget, which will also target wealthy IRAs by limiting how much money can go into the accounts, thereby making more wealth available for taxation. This could very well be the start of a raid on 401Ks and other retirement accounts. Some liberals are urging the government to consider SEIZING ALL 401Ks, where $6-7 trillion has accumulated. Such power would make Marx envious.
Federal Reserve pumping is also a huge problem. During the 2008 financial crisis, the Fed printed $700 million per hour, providing trillions to banks, corporations, and financial institutions. Serious economists are waiting for the inflation shoe to drop, as many states look to gold as a new currency exchange. But the pumping continues, as the Fed now holds 16 percent of outstanding Treasury bonds.
Yet even with all this cash, America is in a deplorable condition – nearly $17 trillion in debt; millions of people in poverty and without jobs; a crumbling infrastructure; a weakened and worn out military. It will take trillions more to rebuild our country and our military, and all from a debauched treasury.
Sadly, we must face facts. We’ve turned the country’s prosperity over to fools and, just as Solomon warned, they have destroyed it. As for now, though, we should take solace in what Otto von Bismarck once said, “God protects fools, drunks, and the United States of America.” And thank God for it!
Laurel Leader Call, June 29, 2013