The Solution
Let Them Eat Cake
Part 1 of 2
 

Most Americans now view many personal problems as public problems to be solved by the government. Their attitude coincides perfectly with their training. For years they were sold the notion that big government would take care of them, personally.

whole generation of government officials bought stock in the same plan. They firmly believe in basing public policy on opinion polls. Politics today consists primarily of finding and staying near the politically correct center of the crowd, leaning left or right with each change in societal mood.

Without an anchor line tied to unalienable natural rights the nation drifts about in a democratic-socialist sea. National leaders follow the crowd and occasionally wander off in strange directions. Everyone seems to be living in a line from a Bob Seager song — “workin’ on mysteries without any clues.”

Failed centralized authoritarian rule disintegrated the Soviet Union. China moves toward capitalism. “The socialism that attempted to forbid the making of profit is clearly dead.”[1] Mounting evidence suggests that socialism designed to forbid or pay generous compensation for all losses will suffer a corresponding fate. Every nation that visits this fantasy land discovers the impossibility of living there. Eventually unconditional reality overwhelms them and bills come due. Strictly speaking, governments that print currency can never be insolvent, but they can and often do default on their promises. It amounts to the same thing.
 

Philosophy drives political systems; reality keeps the score. In an altruistic American society, government’s prime function is the redistribution of property. It implicitly assumed ownership or control of everything, including the lives of its citizens. Much of the working middle class vanished under well-intentioned but often irrational government policies. A few people, tagging along with the lawyer-politicians and manipulating the system, move into higher ranks. Most slip into the ranks of lower paid service workers as government policies evaporate their industrial jobs. The incomes of all are expropriated for the same reason Willie Sutton robbed banks — because “that’s where the money is.”

As tax revenues reached a point of diminishing returns, growth of the federal government did not stop. Its reckless expansion continued with more than five trillion dollars of deficit spending, money exploited through monetary policy or borrowed from the private sector. It violated the public trust, making fifteen trillion dollars worth of promises with no hope of keeping them all. Furthermore, the federal government imposed policy, regulations and programs on its political subdivisions and the private sector without concern for funding. Even if the total cost could be calculated, the current system cannot pay the bill. The collapse will come when there is nothing left to plunder.

Variations on this theme are plentiful. In The Great Reckoning, coauthors James Dale Davidson and Lord William Rees-Mogg show that changes in technology determine the exercise of power, “generat[ing] property rights shocks that radiate through the system for decades, resulting in massive malinvestment and the buil[d]-up of debt which must be liquidated.”[2] Robert Prechter and his associate Dave Allman, based on their studies of technical price movements, a theory known as “The Elliott Wave,” expect a severe depression in the 1990s with stock prices falling to levels comparable to the 1930s.[3] Dr. Cesare Marchetti, a physicist working in Austria, believes that saturation of post-World War II smokestack technology will maintain continued downward economic pressure on western societies until new technologies of equivalent market importance appear.[4]
 

In Bankruptcy 1995, Harry E. Figgie, Jr. and Gerald J. Swanson explain, in graphic detail, deficit spending, the national debt and the probable outcome without immediate corrective action. They say that “in every attempt to control their own irresponsibility in spending the public’s money, Washington officials in the White House and Congress have failed.”[5] Larry Burkett makes a good case in his book, What Ever Happened to the American Dream, that America’s debt and deficit problems are only symptoms.[6] In his view the real problem is the nation’s deteriorating value system, a decline that began during World War I with the importation of ‘amoral’ values from the European communities. Ross Perot examines the America Inc. balance sheet from his position as a one-share stockholder. He sees a company in serious financial trouble and ultimately traces the problem to lack of moral leadership at the highest levels. The result of his first third-party run for president, acquiring 19 percent of the popular vote, and the success of United We Stand America, Inc. suggest that many Americans agree.

These modern prophets of havoc derive their remarkably parallel forecasts from different viewpoints. Their opinions differ on some details but primarily on whether their projections are inevitable. Davidson and Rees-Mogg sit at one end of this spectrum and confidently calculate the decline of American power and influence relative to the rest of the world. They see the immediate cause as “massive malinvestment” and a “debt which must be liquidated.” By their reckoning, the primal cause is technological, the fractionization of military (and thus political) power, and essentially irrevocable. Perot sees the same problems from the other end of the spectrum. He is just as confident that Americans will get out, get under the hood and “fix it.”

Even the sketchy historical review of the nation’s monetary, fiscal and legal systems offered in previous chapters proves Pogo was right, “We have met the enemy and he is us.” Burkett correctly identifies the nation’s debt as symptomatic. The underlying problem is slavery, sacrificing the individual to the group — the means, indentured servitude; the mechanism, the adhesion contract.

Contemporary Americans get better government than they deserve. For more than two generations they consumed a rich inheritance in pursuit of an unobtainable utopia. Soon they must face the prospect of trying to live on a harvest of folly. Labeling the lawyer-politicians as villains vents some public anger but evades the question: How do we get out of this disgraceful mess? Now seems an appropriate time to take Ms. Peterson’s advice, “[S]top tinkering at the margins.”
 

1 James Dale Davidson and Lord William Rees-Mogg, The Great Reckoning (1993, Simon and Schuster, New York, NY), p. 488 
2 Ibid., p. 528 
3 Ibid., p. 529 
4 Ibid. 
5 Harry E. Figgie, Jr. with Gerald J. Swanson, Bankruptcy 1995 (1992, Little, Brown and Company, Boston), p. 45 
6 Larry Burkett, What Ever Happened to the American Dream (1993, Moody Press, Chicago), pp. 11–12