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End Times

Wrong WaySince the time of FDR, maybe before, America has tried to develop a social contract to encourage the flow of resources back to the people. The idea was to develop an array of safety nets for those who were unable to fend for themselves, or who fell through the cracks of the free enterprise, capitalistic system.

Prof Walter Russell Meade of Bard College writes at length on the subject, saying in part . . . the institutions, ideas and expectations of contemporary liberalism, or blue model, was a system under which most blue collars/white collars held stable lifetime jobs with defined benefit pensions; gaps between classes held fairly constant in an industrial economy characterized by strong unions in stable government-brokered arrangements with large corporations – what Galbraith and others referred to as the Iron Triangle –  an increasing “social dividend” meanwhile accrued in various forms: longer vacations, cheaper state-supported education, earlier retirement, shorter work-weeks, more social and literal mobility, and more diverse forms of affordable entertainment .  .  

Blue modelAmerican business abandoned this blue model long ago, but the American government has not! Thomas B. Edsall states – costs are now exploding according to the immutable logic of demographic, actuarial facts; it’s clear government can’t pay them into the future.   

Under Obama the government itself is the primary facilitator for perpetuating this crumbling system, left over from yesteryear.

The last election revealed America moved from center-right Reaganism to center-left Obamanomics during the past 30yrs. Primary voting-blocs driving this: blacks@96%, browns@78%, Asians@73%, Jews@68%, single moms @63% and those upper middle-classers Joel Kotkin coins gentry progressives, who are largely white, well-educated, culturally liberal urbanites@80%+. These populate/propagate heavily throughout academia, media and entertainment in all its forms, giving a heavily 1-sided viewpoint to contemporary politics. Any semblance of neutrality is gone, even among journalists.

Kotkin continues in an article in Forbes . . . it’s obvious to all this progressive economy works well for the well-placed academics, trust-funders & hedge funders, but produces little opportunity for a better life for the vast majority.

The Obama-Bernanke-Geithner economy has done little to reverse the relative decline of the middle & working class, whose share of national income has fallen to record lows. Edsall contends if you don’t work for venture-backed tech firms, coddled money-for-almost-free Wall Street firms, or government, your income/standard of living probably declined since the middle of the last decade.

In Two Gorilla Surprise on this blog I present various cuts we could immediately implement to securitize social security and medicare. There’s a cost to be borne, yes, but almost exclusively by those making over $100,000+. Lower income’rs would pay more too, but this is their idea, their choice and their burden.

If you have a 900lb gorilla in your living-room, you don’t talk about the weather or sports: your whole focus is to remove it.

Bridge Out AheadThe signpost warning Bridge Out Ahead isn’t a college prank or someone’s joke. It’s the real deal, and we’re careening past at 100mph, hoping it’s a very short bridge! Worse still, other people are riding along with us, and it isn’t even our car! Daredevil types may smile at this, relishing the thrills and excitement, but we normal folk prefer a slower pace, and to obey the signs.

Those in the 2%, I believe, would rather pay 2-3% more in Fica & Medicare tax than as a general rate hike where their money goes into the tax revenue pool and becomes lost to specifics. If steps were taken to insure soc sec trust funds & funds for Medicare were safe from the hands of other government agencies, both would become solvent & sustainable long into the future.

 

Further, fixing these two alone would achieve a balanced budget, and political infighting could focus on other government inefficiencies and ineptitudes, of which we all know there are many.

Unfortunately, most of the politicians in Washington on both sides of the aisle don’t want to fix this. They’re happy to delay and procrastinate so someone else, some other congress, can make the hard choices. This is an enormous bluff, predicated on the assumption we can continue to borrow, the fed can continue printing money, the rich can be taxed even more, and the economy will slowly chug back to life. Additionally, many believe the debt is just an abstract number with little consequence.

If it climbs to $20Tril before reaching 3% growth, no big deal.

If interest rates blink, it will be a very big deal. Debt service will begin eating a bigger and bigger piece of the budget pie, putting virtually every federal program at risk. Either that, or we default on the debt, suffer a credit rating downgrade, and watch the value of the dollar sink by 20-30%.

There is not enough tax or rich people to promote the Blue Model. It’s anachronistic and leading to fiscal dilapidation.

It was born of progressive ideals at the turn of the last century, and intended to level the playing field, giving more people a shot at the American dream.

But it did not comport with the principles and goals of our founding, which was small limited government over a thriving capitalistic society. As the Blue Model asserted itself more and more, the workings of government moved farther away from the founder’s vision. It literally put the brakes on our burgeoning, expanding economy, which had been doing more to help the lower classes with jobs and income than this socialist platform could ever do.

An Iron Triangle still exists today, but now it’s comprised of strong, fiercely protective public-sector unions, government with its managers & politicians, and the growing progressive electorate. Anyone studying the recent results and accompanying majorities must see we’re in deep trouble. People who can vote themselves free stuff will do so, even at their own peril.

Thomas JeffersonThom Jefferson wrote – Democracy will cease to exist when you take away from those who work, and give to those who don’t. Also –  I predict future happiness for Americans if they can prevent government from wasting the labors of the people, under the pretense of taking care of them! And – It is incumbent on every generation to pay its own debts as it goes, a principle which if acted on would save one-half the wars in the world.

Finally – My reading of history convinces me that most bad government results from too much government.

Say what you will about Jefferson, he understood government and the great challenge that lay before his young nation as it struggled with the same age-old problems of many great empires and societies that had gone before, and brought their demise.

There is no free lunch. Our country is great because most of us are willing to work for our lot in life. We’re willing to pay for that privilege, but comes a point where the freight is too steep, owing to too many riders free on board. We’re happy to pay for society’s poor, elderly, sick & disturbed, normally at 20-25%. We’ll do this through government taxation/intervention and with our own generosity/benevolence, giving to religious, health & social bodies doing good works. But we’ll not pay for society’s dregs, deadbeats and malingerers, those who could and should work, but won’t.

47mil on food stamps, 50% paying no tax and welfare benefits giving single-moms w/babies more income and hand-outs than their working counter-parts, spell end times. It all goes against human logic, tolerance & affordability. Creating a welfare state where there’s no need, with out-of-control government. Make no mistake: these are End Times for our magnificent country.

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I’m Al Shane

Alvan I. Shane Author, The Day Liberty Wept 2270 N Euclid Ave Frequent Op-Ed Contributor Upland, Calif 91784 Political Donor to Cons Grps / Causes (909) 946-5104 Ex-Marine / California native info@shaneview.com Tax Accountant / Mar 43yrs / 1 son
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