As this blog is being written, our representatives in Washington D.C. are about to craft a “debt ceiling” compromise. I’ll evaluate it in detail next week, but I am relatively certain that they will “kick the can down the hill” one more time.
The over-spending problem is endemic in the United States. With over 50% of the population receiving direct transfer payments from the Federal Government, and virtually 100% of Americans receiving largesse through tax loopholes and exemptions, everyone has a dog in this fight. While tea-party folks worship Ronald Reagan, the dramatic increase in Federal spending began on his watch. The national debt doubled during the Reagan administration.
The 800 pound gorilla in the spending cage is Medicare and Medicaid, which cannot be funded, period. Ninety trillion dollars under-funded, the promise of the “greatest generation” to give themselves and their children government healthcare beyond age 65 cannot be met. No matter how they spin it, politicians cannot deliver on Medicare. There’s hell to pay and it will take the form of a stripped down health care reality for seniors. No vote for any politician can change this; it’s a math problem.
Those who portend that all of this spending was a surprise and that the deficit was brought on by recession or other factors simply don’t have a leg to stand on. Companies that sell life insurance policies already know when their customers were born, their approximate life expectancy, and can determine how much to charge for a policy premium. Administrators in the Social Security System and at Medicare also know the numbers, but don’t worry that the premiums are insufficient premiums to cover the costs. After all, taxes will pay the deficiency!
In my opinion Barack Obama and Jimmy Carter are the most incompetent Presidents that I’ve seen in my lifetime. Obama has been a fiscal wrecking ball, wreaking substantial damage to our economy. However, Ronald Reagan and the Bush presidents were also culpable. Only Bill Clinton was well versed in economics (he studied the subject at Oxford University as a Rhodes Scholar). Clinton was also blessed by a boom economy during most of his presidency. He should be credited with the passage of the North American Free Trade Act and substantial welfare reform, both of which were pro free-market reforms.
All in all, I wonder if our democracy is workable. The French Philosopher Alexis deTocqueville said, “A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it. “ He also said, “The American Republic will endure until the day Congress discovers that it can bribe the public with the public’s money.”
Oh, my goodness, Alexis, America is already a log way down that road. Is there any way out of this mess?