Nothing's simple save this: The need for mother's of invention
What happens in a democratic society when a majority of voters become dependent on a government job or a government subsidy for the essentials of their life? Today essentials include smart phone, high speed internet, cable or satellite TV, fast food, and gourmet coffee but that's another subject. Moving on, what's developed in other social democracies is massive debt because not only are a majority of voters dependent on support, half of all workers either work directly or indirectly for government. When government "stimulates" the economy that number goes up. All of this increases the basic economic engine's (government's) recursion. Government paying people to work, then collecting a minority of the payment in taxes then paying them again from those taxes but always in a downward spiral of income to expenses. The hope of course is the creation of more "true" jobs and a growing economy to offset some of the recursion. That's not happening or at least not fast enough. The speed of job creation would need to be rapid, indeed and the hope would be a lot of job creation would motivate people to work for private industry and the elimination of some of the recursion. Since that's not on any economic adviser's near horizon, it appears the United States of America is headed in the direction of France, Italy, Greece, and Spain. Which is just fine for most social democrats who have always wanted more social services, community health for all and economic equality for all. There is no need for an economic formula. Social truths are are true a-priori (by rule) and there's no need debating the a-posteriori realities (our economy can't currently support our spending requirements). Economics just don't matter when human lives and conditions are at stake. Core value beliefs not effected by any economic reality. From each according to his ability, to each according to his needs. And many ethical people are willing to go to their grave voting for and believing in such values. They are right by rule. Of course that's different from economic dependence on government but the one issue feeds the other. You don't need an absolute majority of people dependent on government as long as it's true by rule that we must spend whatever is necessary to help people. Thus the passing of the hurricane relief bill to spend billions we don't have. MOST citizens would borrow money to pay for the relief because the economic impact seems more theoretical than actual. We don't have the economic will to cut spending somewhere else to afford to do it. So unless our economy starts growing rather rapidly again (driven by a new technological boon no different than the rapid adoption of the internal combustion engine and a use for crude oil from a century ago) we're headed for insolvency. But that's no secret. The current promotion/solution to growing debt is to eat the rich, which is a common placard seen on the street by demonstrating true believers banging on drums and blowing whistles. This is also a revolutionary theme. Let's redistribute the wealth. I note that Gerard Depardieu is moving across the border from France to Belgium and applying for Russian citizenship as the French are now taking 75% of his total income to achieve the redistribution. Belgium will only take 25%. The recursion of collections will begin as more and more citizens who are taxed at higher and higher rates vote with their feet. It's also interesting to watch the effect of higher taxes on higher income. Some workers choose (or find themselves spending more than they earn normally) to work 60-80 hours a week and when they go into overtime begin to pay higher and higher tax rates the more they earn. Higher taxes to support social welfare help some and punish other non-rich people. But again, that's another subject.
Is there a point to this screed? No more so than that which is evident to most of us. There is a problem. But I do have a prediction. American voters have always been reasonably practical. As the economic policies of social democrats begin to cause more and more financial hardship for the country's balance of payments and as our credit rating declines, there will be a gradual shift toward more common sense economic values. Voters will hold politicians responsible for fiscal as well as social issues. But our economy is based on growth. Until a new paradigm (service economies are woeful when it comes to bringing in new true investment capital) emerges to drive economic growth, world wide recession likely will lead to some hard times which few of us are willing to accept. The downward spiral won't be arrested by spending cuts alone because there is recursion to those cuts as well. The recursion of collecting a percentage of taxes from government workers kicks the can down the road. The recursion of citizens with no jobs who pay no taxes but need food, shelter and housing is a more immediate problem, unless we're willing to watch people starve. We aren't. More government spending is required in either case and just cutting spending helps today but that alone won't bring about a thriving economy. Cut taxes? How can we afford to cut taxes when we can't pay our bills, some of which we earned by cutting taxes years ago to stimulate the economy? These aren't solutions, they're themes.
Nothing's simple. You can quote me on that. Luckily I'm not a politician who has to have simple answers.
Posited:
Our young people need to understand what actually drives our economy and encouraged to do everything they can do to help. They feel pretty good about protesting social ills, volunteering to feed the homeless and chasing dollars. Becoming doctors, lawyers, venture capitalists or teachers and bureaucrats. All well and good. But we badly need a new Steve Jobs or a Bill Gates (Thomas Edison, Henry Ford?) to give us the personal robot which will be demanded world wide. We need imaginative young people to develop new engines of power generation. To discover new sources of energy. To explore new worlds we only imagine today. We need to begin to produce something the world needs that we can export. To refine raw materials in a better way. To engineer a more elegant design. Social democrats say I am making their point. More government spending on better schools for all will bring us what we need. I think our teachers (who are quasi-governmental employees) could explain to our young people that until we reward practical, creative endeavor with meaningful value, indolence will thrive. Will government workers engender it in others even though they don't always practice it themselves? Some few do, of course. And I hope others start but realistically government isn't the solution. The current panacea of eating the rich is very temporary indeed. Market forces will realign pretty quickly to reduce those payments, ala Depardieu. After that "solution" what we badly need is hustle and initiative. If you are a teacher or a parent, teach that. Show that. And we need to start encouraging, hustling and inventing ways to reward others for their initiative. That's a good start. Where are you "new Steve?" Our future depends on you.
