Is Socialism Coming Back to Haunt U.S.? 22 comments
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America is more than a country; it is the ideal of liberty. In economic terms, liberty translates into the entrepreneurial spirit of hard work, risk taking and self-reliance. And this spirit has made America rich beyond compare.
Unfortunately, over the past four decades, much has been undone. Under the guise of a new, “social” justice, political leaders have turned our native ethics upside down. Profit-taking is now seen as gouging; success is greed; businessmen are predators. This creeping socialist transformation of our culture has finally broken the back of the American economy.
The definitive fork in the road occurred in August 1971, when President Nixon ended the U.S. dollar's link to gold. The move allowed the U.S. government to issue money without the restraint imposed by gold-backed currency. For most countries, this would have unleashed a wave of monetary inflation and, consequently, skyrocketing prices. But, since the dollar remained the world's reserve currency, foreign central banks were compelled to subsidize U.S. expenditure, and our inflation was exported overseas.
With global funding secured, Congress offered increasingly generous entitlements to an increasingly dependent population. This has resulted in the decay of America's productive sectors and a massive depletion of accumulated wealth. Now, socialist America subsists on the whims of the capitalist powers of the East. American consumption is dependent on loans from nations who just 40 years ago were economic afterthoughts.
Rather than dissipating their wealth through spending and borrowing, these economies have undertaken the difficult work of wealth creation. Though nominally Communist, China has become an intensely pragmatic state. While Americans have grown complacent about their liberty, China has quietly, but with determination, expanded economic liberty: courts are becoming more efficient, land reform has introduced private ownership, and obstacles to entrepreneurship are decreasing.
Many countries, such as China and Japan, which export massively to the United States, resist converting their U.S. dollar surpluses into domestic currencies. They fear that, in doing so, they will force up their own currency relative to the U.S. dollar, making their exports less competitive. Therefore, they invest the bulk of their surpluses in “secure” U.S. Treasury bonds, satisfying America's appetite for imports and entitlements.
But this logic is economically flawed. Through their actions, Asian governments are transferring their citizens' wealth to the United States. When a Chinese business exports to the U.S., the dollars earned are exchanged in a Chinese bank for local currency. Those dollars are then recycled by the Chinese Central Bank to buy U.S. Treasuries. America then creates more dollars (inflation) so that it can redeem those outstanding Treasuries. This mechanism props up the dollar and holds down the RMB. As a result, the Chinese are poorer and America richer.
Unfortunately, many Asian governments are still too collectivist to cease robbing their citizens. If they would do so tomorrow, America would feel the full effects of years of federal profligacy at once.
What happens when half a century of socialism catches up with the “shining city on a hill”? Start with America losing its Triple-A credit rating, then the dollar free-falling, then interest rates rising into double-digits as a last-ditch effort to restore faith, which may lead to civil unrest — and certainly widespread misery.
Already the credibility of the U.S. dollar is being questioned by producer states. Any loss of its privileged “reserve” status would result in rapid diversification out of the U.S. dollar and U.S. Treasuries. In short order, the inflation gingerly spread around the world by the U.S. government would come back home to roost.
The outlook for the U.S. economy appears increasingly bleak. The final window for self-imposed reform has been forsaken, as both Democrats and Republicans have chosen to magnify the mistakes of the past. Huge investment losses experienced by investors worldwide may have forever tarnished the luster of U.S. stocks. Meanwhile, the threat of inflation and bank failure has discouraged domestic savings. Americans looking to preserve their wealth are turning to precious metals, commodities, and foreign shares denominated in the currencies of surplus countries.
Even in its most successful incarnations, socialism is a drag on a successful market economy. The U.S. has been able to have socialist entitlements within a relatively free-market only because the costs were borne by foreigners. But as the global economy strains under increasing weight, look for those funders to begin tending their own gardens.
This U.S. economy is now a runaway train, and anyone who has the courage to look out the window will likely want off. Short of the imposition of U.S. exchange controls (as during the last depression), American investment funds will flow toward countries that fuel their economies with America's depleted resource: liberty.
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On May 13 04:10 AM hondaicivic wrote:
> "Fascist".........you want to know what's fascist, The UNITED STATES
> OF AMERICA is a fascist country. It's a sad how you idiots think
> you're living in a free country like the USA when the PATRIOT ACT
> was passed 8 years ago by the fascist president bush and his fascist
> assistant Cheney. Oh yea, do you know also know about Gutanonamo
> bay? (you do know where it is right and what they do there?)....Not
> to mention the good ol USA has over 725 military bases in over 130
> different countries around the world (::IMPERIALISM::) while China
> doesn't have any military bases in ANY country. Also, tell me why
> good old "FREE" USA is allied with countries like Saudi Arabia (talk
> about opressive society) and have supported right wing dictators
> in Latin America and Africa for the past half century. I could go
> on and on buddy......just remember next time when you labeled anyone/anyplace
> fascist or "terrorist", go look in the mirror before you say anything.
>
>
> P.S. South Korea, Taiwan, Singapore were all under dictatorship when
> they were developing their economy for 25 years. Those countries/region
> today are not really democracy, especially Singapore.
>
Closer to the truth, to say that cheap money policies are the medicine thats kept this ponzi scheme alive. Politicians like the keynesian idea that government spending helps people. Voters respond well to benefits.
I think we've had partial socialism for years, just the shitty parts. Massive benefits go to favored constituencies, with little benefit to the productive classes. Socialisim requires methods to transfer wealth from the productive, & is likely to become totalitarian.
We are ruled by an Oligarchy of Lawyers, government workers and environmental organisations. They control energy and industrial policy on a case by case basis, at great profit. Their wealth allows them to influence politicains. Property rights have been hollowed out - people are deprived of the use their property without compensation. Only the very wealthy (people or corporations) can afford the lawyers and political clout to protect themselves. I'd rather have Stalin in charge - at least his totalitarian stupidity didn't have a profit motive behind it.
Impoverished and scared people vote for the party promising benefits. Roosevelt got elected four times, while doing very anti-business policy. People need to understand that "shitty end" socalism is the cause, not the cure.
Federal politicians should not be allowed to subsidize anything. Thats the basic method of buying popularity with tax money. Also, in the "information age" its not expensive to "get the message out".
Government should provide candidates with cheap info tech, then campaign finance law could be "it's illegal to give a politician money".
The only problem there ever was is that, as governments "manifest their destiny", they privatize all land within their domain (abrogating everyone's right of "free access to land" that is a prerequisite to maintaining the "unalienableness" of a "right to life"), leaving the capital-poor to choose between wage-slavery and extinction. Thus wages are too low, thus people wind up in debt, thus the big mess. Compensate everyone $1000 per month (of new, debt-free US govt money backed by all the property of which the USG is the actual de facto owner; actually that includes all us peons also) for the impairment and all the socialism becomes completely unnecessary. See the plan on the "alajac" page at u4prez.com.
> Socialism? Nonsense. While 4 years old this is one of the first Google
> references I found:
You miss the forest for one tree. The essence of socialism is that economic hardship is spread out (socialized) among the citizenry so that any one particular citizen doesn't get hurt as much. This can be done through transfer payments (i.e. Medicaid, TANF) or direct government ownership of some industries (i.e. Post Office, AmTrak). Politicians can promise these things and earn votes. In the long run, though, such safety nets require taxes and regulation, which stunt economic growth.
The federal government has socialized the losses of banks via the TARP and PPIP, thus spreading them from the bank employees and managers to the taxpaying public. Even if no tax increases are forthcoming to pay for these programs, the gargantuan increase in the money supply will ensure that inflation "taxes" eats away at Americans' purchasing power.
In the current cycle socialism is the expedient tool , so it is used. Earlier it may have been a debased form of financial capitalsm. When socialism is no longer the brand of the moment, it will be abandoned for some other "ism".
Expediency means promising a majority of voters(not necessarily a majority of citizens) that the political, financial and cultural elites will address and mitigate the deepest fears of the public(whatever they happen to be at any moment in response to the headlines of the day)in return for authority and control over national decision making and resource allocation.
This model of the propagation of the elitists via expediency , in 2009, is practically universal. It is the favored tool in Europe, Japan, India, China and Russia irrespective of the "official " ideology of the governing elites. It allows the elites to take something from capitalism, socialism, fascism, communism, corporatism and create a farrago of expedient public policies.
Expediency allows different rules for different people, companies and industries to co exist at the pleasure of the rulers. For the elitists ,the model of behavior is collusion but for the rest it is varying forms of competition. The elitists know full well that competition for 95% of Americans( or Chinese or Russians or Indians or Japanese), in some form, maximizes wealth and income creation, whilst collusion maximizes the share the elitists garner for themselves.
American elites have a lot more in common with the global elites than they do with the ordinary American.
Term limits, flat taxes (or consumption-based taxes) as opposed to progressive taxes, limits on the governments ability to borrow...these are the types of things that will be included in the constitution of the next great land of libery. The constitution, it seems, just didn't account for 'the people' asking that their own freedoms be usurped.
Personnally, I hope we find a way to fix America, but I fear we have missed numerous opportunities in the past 30 years and with each failure, the momentum away from freedom becomes more difficult to counter.
On May 13 06:21 AM User 353732 wrote:
> It seems to me the issue in America is Elitism rather than socialism....
fabien never stops. another key erosion point could be fdr. some might say the war between the states was over encroaching federalism. the formation of the federal reserve and the progressive income tax could be considered key points. it is the nature of govt. to seek power.
the price of freedom is eternal vigilance.
Socialism is a "spinn-off" from the French Revolution that took place in 1789 (Liberty, Equality and Community). The Bourgeoisie, The Calvinistic Middleclass, soon took over the power and restored and enhanced Capitalism by creating the Factories.
The only movement that was really Socialistic was the Cooperative Movement. It created Cooperative Banks and Insurance Companies all over Europe. The Cooperative Structure is in my opinion the best way to move out of this crisis.
hans.wyrdweb.eu/about-... (About the Cooperative).
What ushers in socialism? Unbridled capitalism aka capitalism gone wild.
"Unbridled capitalism" is not free market capitalism, but another form of government being in bed with extensive wealth and allowing it profligate behavior in return for power. The thing that socialists hate about so-called "unbridled capitalism" is that they're not the third one in the bed sharing in the fun. So, they conspire and plot a revolution to become the paramour of the party in bed who has the money. I see no difference between individual greed and collective greed. Both are just as destructive and pernicious to that form of wealth whereupon all things worth having dwell. Liberty.
using the residue of freedom that is left i have made this the best country in the world. that is in spite of all the social engineers and socialist politicians. i am my brothers keeper. both of them. they rarely need keeping as they have made themselves a pretty wonderful country.
don't have stairs but i shot the bugaboo under the bed.
my social responsibility is to try to harm no one. if i ever have it was accidental. my sense of charity has made me help a few on an individual basis. govt. is not capable of such judgements on who to help with the money i have earned.
Not sure how to even start a response, so I guess line-by-line is the best way:
"Oooooh! Socialism?!? That ol' bugaboo! And I wonder what lurks under your bed or under your stairs. Time to grow up." - I believe in personal freedom and personal responsibility. I practice the latter in every action I take. When you grow up, you will, also.
"You ARE your brother's keeper. We're all in this together." Unless we are truly free, we are not all in this together...we are just all in this.
"And no amount of declaring markets that are defined by government actions that favor power elites are "free" markets will ever make them so, except to the gullible." You are right. Socialist, centrally-planned, Communist, Facist, and on and on markets are not desirable. Free markets, which we don't have in America and haven't had for a long time, are the most efficient and equitable markets. Sometimes free markets are not socially acceptable, but the intervention, no matter how necessary, does not make the market more efficient; only more socially palatable.
"We need a land of mutual social responsibility, not arrogant, selfish, greedy materialism stacked in favor of big business." - I choose freedom and liberty. I don't want to go from one form of quasi-freedom to another. Let's try something new. We need a land of mutual PERSONAL responsibilty and respect of all living things.
"Quality of life is NOT just about the money." Hey - we agree on something!
"Let's make this "the best country in the world" -- as we continue to brag -- not just the one with the highest proportion of its citizens in prison!" - Ooops. There you go again. Well, it was fun while it lasted.
"The American Founders opposed dependency, feared the dominance of a majority faction, and saw the solution in constitutional self-government. They never imagined that a majority faction could be animated by a dependence on big government."
Subservience combined with the modern administrative state results in the despotism of dependency.
"And this spirit has made America rich beyond compare"
But what he intentionally fails to point out in his diatribe is that it has NOT made the average American anywhere near as comfortable financially as they were several decades ago, much less rich, and this loss of wealth of the middle class by a thousand cuts was not caused by socialism, but by an elite "corporatocracy" that has slowly, methodically and malevolently gained total control of our economy, our financial assets, and our politicians. And they have sold our once great economy that was replete with innovation and informed risk taking down the river and overseas under their twin lies known as "free" trade and "free" market capitalism, such wonderful sounding but hollow phrases that signify nothing, while all the while all they have really done is sucked the lifeblood out of the spirit of the American middle class who no longer have a stake in their game.
On May 13 02:14 AM PastTense wrote:
> Socialism? Nonsense. While 4 years old this is one of the first Google
> references I found:
>
> "Income inequality grew significantly in 2005, with the top 1 percent
> of Americans — those with incomes that year of more than $348,000
> — receiving their largest share of national income since 1928, analysis
> of newly released tax data shows.
>
>
> The top 10 percent, roughly those earning more than $100,000, also
> reached a level of income share not seen since before the Depression."
>
>
> www.nytimes.com/2007/0...
>
> The problem in the U.S. is not socialism; instead it it crony capitalism--the
> banking bailout being the most notorious example.
I gave you a positive on your comment, but you are missing something in your argument -- the growth of government over the last 80 years. Pre 1980, the average middle class American only had to work 1.4 months to pay their taxes because government only ate up 12% of the private sector economy. Fast forward today and the average American must now work over 5 months to pay all taxes (state and federal) because government spending now eats up 46% of our economy.
So what we have had over time is an expanding government corrupted by special interest groups such as big business like the financial sector which the taxpayer is bailing out in order to socialize their losses amongst the populus. True free markets don't exist in America. If it did exist here, then you would not have the Federal Reserve tinkering with interest rates and government shifting the burden of failed businesses onto the backs of taxpayers.
......meant to say pre 1930.
Fascist governments are ALSO large governments - and there is nothing "socialistic" about that.
Better to have one seventh of our economy under government administration than to have Medicare and Social Security go bankrupt, which they will under the Model O hybrid or the status quo. The fear of creeping socialism will not allow the Congressional Budget Office do a feasibility study to prove or disprove my contention.
'