Whats ahead for us now?
My wife and I have worked hard over the years to remain relatively debt free.
It’s not been easy sometimes, but now we can state we’ve been successful.
Our house is paid for, we have a small amount of debt remaining on a new vehicle we purchased last summer and that’s about it.
It feels good, I must admit.
Many of you have the same experience.
Worked hard all your lives and have tried to stay out of debt as much as possible.
How would you and your family feel if you woke up tomorrow and found yourself $455,000 in debt. I bet you’d be surprised and angry, to say the least.
Up until the 1930s, the federal government maintained a small presence focusing mostly on the limited number of things it was authorized by the Constitution to do.
Americans were responsible for their own food, clothing, and shelter and, if they could not take care of themselves, they got help from their families, neighbors, churches and local governments.
Charity back then didn’t mean being compelled by government to hand over a portion of your property to the state so it could pass it along to someone else.
At that time, Americans did not believe in spreading the wealth; they believed it was their responsibility to earn it.
There was no federal welfare state.
In fact, I’m convinced the word "charity" was changed to "welfare" to go along with the phrase "general welfare" in the Constitution lending some sort of imperative to it.
When I was in college more than a few years ago some of my fraternity brothers and I would sit around and complain about the "creeping socialism" we saw going on.
Now, it’s more than creeping. The first wave of liberal (socialist) reform was ushered in by President Franklin Roosevelt’s New Deal.
He oversaw policies that erected a rudimentary welfare state, undermined capitalism and embraced appeasement policies toward Nazi Germany. Conservatives have been unable to roll back New Deal liberalism and it has become interwoven into the American fabric of life.
There was a second wave of liberalism, and that took place in the 1960s under President Lyndon Johnson when he imposed the Great Society while ineptly managing the Vietnam War.
What resulted were massive entitlement programs, runaway inflation and our eventual defeat and humiliation in Southeast Asia.
As a result, Republicans enjoyed some electoral victories, but still were unable to unwind Big Government in spite of the Nixon and Reagan administrations. Big government was consolidated rather than repealed and conservatives succeeded only in nibbling around the edges of these programs.
It appears that a Barack Obama administration combined with a Democrat Congress is poised to usher in a sweeping liberal agenda.
Taxes will soar, social spending will skyrocket, health care may well be nationalized, the Supreme Court’s liberal majority will be expanded, abortion and gay rights will become entrenched, the traditional family will continue to decline, national defense will be cut back, Guantanamo will be closed, terrorists will be treated as civilians in our criminal courts and American foreign policy will be subordinated to the United Nations.
All of these things will make America into a second-rate social democracy and, I believe, an end of the American moment.
Let’s get back to that $455,000 per household debt I mentioned.
Back in the 1930s, the entire federal government spent only 3.4 percent of the gross domestic product, but because tax revenues equaled 4.2 percent of GDP, there was a federal budget surplus of .8 percent.
Within a decade things had changed dramatically. Under FDR the government grew threefold in spite of it being a time of peace.
Federal spending reached 9.8 percent of GDP and tax receipts were only 6.8 percent hence the Treasury had to borrow 3 percent to make up the difference.
By fiscal 2009, according to Office of Management and Budget figures, federal spending will have grown to 20.7 percent of GDP while tax revenue will be only 18 percent, so the Treasury will borrow 2.7 percent – much from foreign creditors.
This does not include the $700 billion to fund the financial industry bailout.
Yep, even before the current economic tsunami hit, the American welfare state was on an unsustainable track and the Government Accountability Office informed the Senate in January 2008 it estimated there was a $53 trillion gap between the entitlement benefits promised over the next 75 years to people now living and the tax revenue expected to pay for them.
Then-Comptroller David Walker stated that to cover this deficit the government would have to look to every American household to pony up about $455,000. So there you have it.
Your beneficent government has placed a mortgage on every American family for that amount of money. We didn’t get where we are because politicians were telling people they had to stand on their own two feet.
No, instead politicians were telling them they would get something for nothing.
When government borrows vast sums of money it’s taking away from future generations – our children and grandchildren.
Now politicians are telling us there is a need for more and they are willing to take out a second mortgage on top of the $455,000 they’ve already strapped to our backs.
America is headed, I fear, toward national bankruptcy and the only way out is to turn toward smaller government, self-reliance and freedom.