Offering a more enlightened view of economic reality, Ronald Reagan and other pro-business, supply side-oriented politicians promised and delivered a competitive revival for the U.S. The remarkable rebound of the U.S. economy during the 1980’s after nearly two decades of utter stagnation came about as a direct result of the slashing of personal income tax and capital gains tax rates. Unfortunately, the long overdue need for government spending restraint was put off thirty years ago just as it is now. While Reagan was a pro-business supply side thinker, he was a politician first and an economic tactician second. Predictably, Reagan chose to fight hardest for the politically palatable elements of his pro-business policies. Accordingly, personal income and capital gains tax rate cuts were enacted immediately and these actions became economically effective almost immediately. Unfortunately, for the nation’s long term well-being the elimination and/or reform of woefully inefficient government programs that subsidize dependency on government were delayed indefinitely. This procrastination over the hard work of governing caused the malaise of the U.S. entitlement and borrowing mentality to continue unchecked even as the economy soared.
Predictably, the political realities of a cultural bias towards entitlement and borrowing continue to remain pretty simple as the dawn of the second decade of the 21st century arrives. Regardless of any purported philosophy held by any elected official, government rarely if ever says no to even the most ineffective program once it says yes to it. In 2010, signs that the majority of American citizens and their elected officials have fully embraced reliance on borrowing to fund the national sense of entitlement are unmistakable. Absent the one time flood of dot.com related capital gains tax revenue windfalls of the late 1990’s, U.S. government borrowing has escalated from a previously alarming hundreds of billions per year earlier in the first decade of the 21st century, to an astounding $1.75 trillion projection for 2010. And late in 2009 we saw indications that future attempts at reforming government borrowing will once again be left to yet another toothless “bi-partisan” commission that will be predictably ignored by the army of demagogues populating both sides of America’s so-called political spectrum.
When carefully considered, some seemingly obscure and unrelated symptoms offer compelling testimony to the pervasiveness of America’s naive acceptance of the entitlement mentality. Each day in America, manufacturers of motorized scooters, items that cost thousands of dollars to produce, are offered for “free.” While no precise details are provided in the marketing ads as to how these very expensive items can be given away, the implications are clear. A free scooter is readily available to any senior that is eligible for Medicare, even those seniors that clearly possess the means to pay for these products themselves. Accordingly, the rule of competing in the marketplace for discriminating customers is irrelevant. Instead, navigating through the nuances of the entitlement-driven diagnosis rules of the federal government has become a successful business formula. At the end of the day, the U.S. government borrows continuously to fund these types of means-ignoring entitlement policies in the Medicare and Medicaid systems.
The debt remediation business has also become a multi-billion dollar industry. Numerous organizations advertise their debt counseling services every day. And with debt-financed goods and/or services in hand, millions of consumers are encouraged to employ sophisticated legal tactics that will enable them to renege on otherwise binding contractual obligations. Ethical considerations are eschewed, the justification being that U.S. laws “entitle” consumers to employ these tactics. In Part III we will examine other examples of the entitlement and borrowing culture and put this scourge into global perspective.
A Culture of Entitlement & Borrowing Part II
Predictably, the political realities of a cultural bias towards entitlement and borrowing continue to remain pretty simple as the dawn of the second decade of the 21st century arrives. Regardless of any purported philosophy held by any elected official, government rarely if ever says no to even the most ineffective program once it says yes to it. In 2010, signs that the majority of American citizens and their elected officials have fully embraced reliance on borrowing to fund the national sense of entitlement are unmistakable. Absent the one time flood of dot.com related capital gains tax revenue windfalls of the late 1990’s, U.S. government borrowing has escalated from a previously alarming hundreds of billions per year earlier in the first decade of the 21st century, to an astounding $1.75 trillion projection for 2010. And late in 2009 we saw indications that future attempts at reforming government borrowing will once again be left to yet another toothless “bi-partisan” commission that will be predictably ignored by the army of demagogues populating both sides of America’s so-called political spectrum.
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1 comments:
Politicians have a clear understanding that by creating additions to welfare programs, entitlements and the like, they gain the ability to control people. It's that simple. And people line up like the proverbial sheep to the slaughter, without any consideration for what they are sacrificing for the perceived goodies. As long as people are too lazy to be self-sufficient and they are willing to live in bondage to the government and politicians, it will be very hard to change the culture.
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