Saturday, May 10, 2008

From the new deal to a broken system

John Maynard Keynes warned that as soon as the depression was over the government would need to scale back government programs, and cut spending. He warned about what might happen if people took his economic policies too far.

FDR, too, was not a proponent of big government. He wanted to create programs that would help the poor until they were able to get back on their feet (welfare), and help the elderly with a program that was supposed to be self sufficient (social security).

However, both these programs have spun out of control by greedy politicians eager to get more and more control of your money. More accurately, these programs are run by greedy bureaucrats who are more concerned about getting their paychecks than taking care of the people they are supposed to be serving.

Politicians keep adding more and more benefits to these programs, and keep giving more and more power to the bureaucrats, and keep increasing your taxes to pay for them. Technically speaking, the majority of Americans get nothing in return for flipping the bill.

Social Security, the way FDR had written it, was supposed to be self sufficient. It has become anything but, while middle class workers of today have to pay the benefits of the workers of yesterday.

And, while Baby Boomers are starting to retire, the entire system is expected to go bankrupt in less than ten years. But, since most of the voters in the U.S. are the elderly, no politician wants to risk alienating these voters by making much needed changes. Unfortunately, people are afraid of change, even when change might be for the better.

So, what do politicians do? Instead of fixing the broken system, or scrapping the old and trying something new, they add more programs, as George Bush added the Prescription Drug Program to the welfare program so that elderly no longer have to pay for their medications. Sure, as all of the welfare program, it seems like a noble idea, but how do we pay for it?

Here’s how politicians pay for it: they raise the taxes on the middle class. You, my friends, are the ones who get shafted. Not only do you get your taxes increased, you get no guarantee that the benefits of these programs will be there when you need them most.

That’s right: it’s the middle class citizens who are losing out. Eighty percent of all the money in the economy is owned by the middle class. Thus, when the government needs more money to pay for more programs, you guys have to pay for it. We have to pay for it.

And while it’s the young in this country who will end up having to feel the most heat from programs that may no longer exist when they become sick or elderly, 80% of the people under the age of 35 do not vote. If they did, if they kept up on politics, politicians would be forced to do something about these failing programs.

However, as it stands, the programs keep getting bigger, and you keep getting taxed more, even though history has proven that increasing your taxes only increases revenue up to a certain point. At this point the system reaches a point of no return. And, if taxes are not cut, a recession will ensue. If you don’t believe me, just ask Hoover or Carter.

So, while the Social Security program, as written by FDR, was supposed to be totally self sufficient, it is anything but. And, while the welfare state was intended to help the poor, it has made circumstances for them worse. Not only are they poor, but many are trapped in poverty.

And, while programs aimed at ending poverty, such as the war on poverty, were supposed to reduce or even end poverty as we know it, the statistics do not show improvement. But what do our politicians do? They continue to fund them, and in many cases expand funding to them as though more money will make the problems go away.

It‘s to the point now that we have families living on the government dole for generations. These people have become dependant on government. When these people have children, they grow up knowing nothing else but how to live off the government, so they live that way too.

While social security may not be around when they retire, people are depending on it for their retirement instead of preparing for retirement on their own accord. While I have a nice plan that will allow me to retire when I’m 58, most people will have to work until the government says they can collect Social Security, which, for most people under 30, is now 72.

Who wants to HAVE TO work until they are 72. Not me. I want to be living in Florida in the winter and golfing for a living.

Here’s the deal: before the New Deal, poor people had to either work hard, or they would starve. This was their incentive to improve their lot in life. When times got hard, they had to work even harder. When times got touch, the government made a few minor changes, and stepped aside and let capitalism work. While there were a few recessions and depressions under this mindset, they were very short lived.

Since the New Deal, some people have become too comfortable getting that free check. Since they only get this money when they are not working, this ultimately takes away the incentive to work, and these people become lazy. When times get tough, as what occurred during the Great Depression, instead of working hard to make their lot better, they turn to Uncle Sam.

This, I am sure, FDR did not envision.

Imagine how great America would be today if, instead of creating big government, FDR would have simply assured the government would monitor big business, the stock market, banking and the like, and left Capitalism to do the rest of the work in ending the depression. I bet, and we may never know if I’m right, that the depression would have ended a lot earlier.

Not only that, but we wouldn’t have a bloated government about to burst apart at the seems. We wouldn't have poor people with no hope of ever getting out of poverty because they have no incentive to get off welfare. We wouldn't have retired people who go to the polls to make sure a broken Social Security system stays afloat, at least long enough for them to reap the benefits (who cares whether it will still be there for the kids).

Here’s a news flash: The government sucks at running a business. There is simply too much red tape and to many bureaucrats. When a good idea is thought up, by the time it gets to bureaucrat #22, that good idea is lost in the clutter on his desk, and forgotten forever.

Yes, it is great to want to help the poor, and the idea behind programs such as Medicaid, Medicare, Social Security and the Prescription Drug Program are very noble, especially for a government with an economy as rich as ours. But, as we have learned from history, the government sucks at running them.

Thus, the protective umbrella the government has placed over you and me once again has gaping holes in it. If FDR were alive, he’d be working on a concoction to solve this conundrum.

The current group of law writers seem to be more interested in getting re-elected and making money than doing what’s best for you and me. And I'm not just talking about liberals here, but many of the good men and women in Washington of both parties.

That, my friends, is the thought of the day


Lauren said...

I am starting to really like your brand of conservatism lol. Government by nature should take care of its people. This would entail a hand up to those down and out, rather than a hand out supporting someone for life as our system has become and you pointed out. The real beauty of the (ideal) system is when it helps someone get back into the system who can then help someone else get through the same ordeal, even if indirectly. Unfortunately, now we are just breeding a new generation of douchebags and low-lifes on our dime.

DB said...

Dude, that is my comment above (Loza). My wife has hijacked my laptop lately and I never remember to sign her off her account before I comment.