Four Problems Undermining Future American Prosperity

If we're lucky, the recession is winding down, and life will start to feel a bit more comfortable before long. But that doesn't mean things will go back to the way they used to be.

The global recession that began in America's housing market has shaken the world's economic order and possibly knocked the United States down a notch or two. The spendthrift American consumer is out of money. American wages are flat. Despite some hopeful signs, the U.S. economy could muddle along for years.

Meanwhile, actions in China—rather than the United States—may have been the initial trigger for a global economic recovery. Many other nations will grow faster than the United States over the next few years and command an increasing share of the world's resources. "The message to Americans," says Mauro Guillen, an economist at the University of Pennsylvania's Wharton School, "is you need to redouble your efforts to be more competitive."

American innovation has solved daunting problems before and could again. But it would be a mistake to assume that American prosperity will continue on some preordained upward course. Nations rise and fall, often realizing what happened only in retrospect. Here are four problems that are undermining our future prosperity:

We don't like to work. Sure, now that jobs are scarce, everybody's willing to put in a few extra hours to stay ahead of the ax. But look around: We still expect easy money, hope to retire early, and embrace the oversimplistic message of bestsellers like The One Minute Millionaire and The 4-Hour Workweek. Unfortunately, the rest of the world isn't sending as much money our way as it used to, which makes it harder to do less with more.

White-collar jobs are now migrating overseas just like blue-collar ones. Kids in Asia spend the summer studying math and science while American mall rats are texting each other about Britney and Miley. "We need a different mind-set," says Guillen.

People need to invest more in their own future. Instead of buying stuff at the mall, spend the money on evening classes. Learn a language or skills you don't have.

I recently interviewed entrepreneur Gary Vaynerchuk, who transformed his father's neighborhood liquor store into a $60 million business anchored by the Web site winelibrarytv.com. An overnight success? Hardly. Vaynerchuk has big plans, and he works at least 16 hours a day to achieve them.

He says:

If you want to work eight hours a day, you're going to get eight-hour-a-day results. There's nothing wrong with that, but I don't want to hear you bitch about money if you're only willing to work eight hours a day.

Vaynerchuk is 33 and has something in common with John Bogle, the founder of the Vanguard mutual fund firm, who's 80. I talked to Bogle recently about how Americans need to change their approach to work and money. He told me this:

We need more caution, more savings, and we may have to work harder. Maybe we need more people who like to work and don't count down every day till retirement.

Nobody wants to sacrifice. Why should we? The government is standing by with stimulus money, banker bailouts, homeowner aid, cash for clunkers, expanded healthcare, and maybe more stimulus money. And most Americans will never have to pay an extra dime for any of this. Somehow, $9 trillion worth of government debt will just become somebody else's problem.

When he was campaigning, candidate Obama dabbled with the "personal responsibility" theme, and in his acceptance speech in November he called for a "new spirit of sacrifice." But now that he's in office, there's less interest in such quaint ideas. During his prime-time news conference about healthcare reform in July, a reporter asked Obama if ordinary Americans would have to give up anything in exchange for better, more widely available care. Obama's answer: "They're going to have to give up paying for things that don't make them healthier." Hooray! Something for nothing! He may as well have said, "Here's a magic pill that will make all your problems go away."

Obama's plan is to get a tiny portion of the American public—the wealthy—to pay higher taxes for the benefit of the majority. Hey, while we're at it, let's see if we can convince 1 percent of the population to bear the entire responsibility for fighting two open-ended wars that are supposedly in the interest of every American. It would just be too uncomfortable to tell the middle class that if they want something, they need to earn it themselves.

We're uninformed. The healthcare smackdown—sorry, "debate"—is Exhibits A, B, and C. The soaring cost of healthcare is a problem that affects most Americans. It's shrinking paychecks, squeezing small businesses, bankrupting families and swelling the national debt. Yet outraged Americans seem most concerned about fictions like death panels and government-enforced euthanasia, while clinging to the myth that our current system of selective availability and perverse incentives somehow represents capitalist ideals. But let's take a break from that burdensome issue to examine the likelihood that President Obama was born in a foreign country and hoodwinked America into believing he was eligible to run for president.

People who lack the sense to question Big Lies always end up in deep trouble. Being well informed takes work, even with the Internet. In a democracy, that's simply a civic burden. If we're too foolish or lazy to educate ourselves on healthcare, global warming, financial reform, and other complicated issues, then we're signing ourselves over to special interests who see nothing wrong with plundering our national—and personal—wealth.

iCulture. We may be chastened by the recession, but Americans still believe they deserve the best of everything—the best job, the best healthcare, the best education for our kids. And we want it at a discount—or better yet, free—which brings us back to the usual disconnect between what we want and what we're willing to pay for.

Rationing is a dirty word, so we can't have a system that officially rations something as vital as healthcare or education. Instead, we have unacknowledged, de facto rationing that directs the most resources to those with the best connections, the most money, or the savvy to game the system. What keeps the rest of us content is the illusion that we, too, will be able to game the system someday—as long as the government doesn't interfere.

Solutions that serve some public good—like Social Security and bank deposit insurance in the 1930s and Medicare in the 1960s—usually require everybody to give something to get something. If it works, the overall benefits outweigh the costs. Good programs leave individuals the option to pay more if they want more. Bad programs promise more than they can deliver. But often we don't know that until it's too late.

Disclosure: no positions

Comments

[VK9141:]

Great post.

I think everyone in the US ought to take note.

Even if you disagree with part or all of it, you should be wary of whether you work hard enough, sacrifice enough, are informed enough and are willing to acknowledge the common good.

Sep 03 05:25 AM

[User 353732:]

The culture of entitlements and instant gratification inevitably becomes a culture that prizes consuming over producing, borrowing over saving, importing over exporting, vapor jobs over real jobs and the parasitic and fantasy economies of Govt, Wall St and Media over the productive economy of the Middle Class.
These, inexorably, lead to the culture of overwhelming debt , corrosive transfer payments , collectivization and Denial that unjustifiable and unsustainable debts, transfer payments and centralized decision making will first erode and then painfully compress the very wealth creating capacity that made entitlements and instant gratification possible in the first place.

A culture, led by its corrupt and ravenous Bosses,, that turns consuming, reallocating and diminishing wealth into National obsessions rather than creating and enhancing wealth must, by its very patholgies, turn to deceit and debasement as norms of political, social, economic and financial behavior. The power and money elites initiate and ratify this behavior; the media elites glorify it .The majority of citizens, bewildered and confused but too uninformed and fearful to challenge the elites, acquiesce and then adopt these norms and tropes as their own.
The consequences of these norms ,then, become inescapable: debasement of the dollar until the dollar is no longer a global store of value and medium of exchange; loss of America's exceptionalism and stature as the moral, technological and economic leader of the world,enormous concentration of financial and political power, a deep ,steady decline in the material quality of life for 90% of Americans, and a repudiation of the Constitution and historical legacy that made Ammerica a special and successful idea and Nation.

As America rejects, mocks or simply forgets the foundations of its great ascent to global leadership, the World in turn will reject, mock and finally repudiate the USA. This is what 60 years of a steadily darkening and diminishing culture of entitlements and instant gratification lead to.
No outsider did this to us. It was all spawned from within. This, of course, is why there is considerable hope that the governing norms and tropes can be recognized for the evil they are , resisted and replaced with healthier, saner and nobler norms and traits.

Sep 03 05:57 AM

[Michael Clark:]

I disagree with the idea that Americans don't like to work. Americans LOVE to work. Travel to Europe and compare the work ethic of Americans and Europeans. Travel to Asia, and you will see that Asians talk about how hard they work -- but they don't work that hard. Americans are diven by the notorious Protestant work ethic -- and American immigrants work much harder even than most Americans, some holding 2-3 jobs at the same time....

I don't really think Americans are inherently lazy. But we've developed a lazy lifestyle, around the car and the sofa and the television -- and junk food. I think most Americans maxed out on debt because they simply played 'follow the leader' and the leaders all told them that they could have it all today, even though they knew they couldn't afford it. Our economists told us we could ship all our high-paying manufacturing jobs overseas and develop a clean information technology economy...everything would be fine. We were told it would be ok to send our jobs to Mexico. We're taking care of everything, our leaders said.

Big Business was pulling all the levers, the little man behind the screen. And now look where we are.

I'm not pessimistic about America's future....IF Americans start thinking for themselves, instead of believing with a kind of religious faith that their leaders (simply by invoking the concepts of 'patriotism' and 'religion') will never let them down. America's leaders HAVE LET THEM DOWN. It's time to wake up. It's time to begin THINKING again, instead of following by rote what the banker tells us is good for us and believing that keeping up with the Joneses is the only viable way to live.

Sep 03 07:06 AM

[Michael Clark:]

"Obama's plan is to get a tiny portion of the American public—the wealthy—to pay higher taxes for the benefit of the majority. Hey, while we're at it, let's see if we can convince 1 percent of the population to bear the entire responsibility for fighting two open-ended wars that are supposedly in the interest of every American. It would just be too uncomfortable to tell the middle class that if they want something, they need to earn it themselves."

This is a silly idea. The 80% of the poor have ALWAYS been fighting wars for the top 1% of the wealthy public. Maybe it's time for the wealthy 1% to start giving something back. Or we can let the rich 1% fight the next war by themselves.

Sep 03 07:17 AM

[Michael Clark:]

Another note on this same topic: the middle class is currently disappearing, because the top 1% of the population (the Filthy Rich) wanted MORE and MORE.

The idea that the top 1% of America is a VICTIM...please give me a break. If the richest pay a few more % in taxes it will NOT substantially diminsh their life style. What does it mean: one fewer beach house; one less trip to Europe each year; one yacht instead of two?

The top 1% owns the government, owns the lawyers, owns the stock market, owns the society. The most fortunate SHOULD be the most willing to repay a society that allowed them to take over almost everything.

No Health-care for the poor? Let them eat cake?

As for the rich? Let them eat dirt, instead of the food that the poor people grow for them.

Sep 03 07:29 AM

[user344210:]

The top 1% already pay significantly more, as a percentage of overall income tax, than they earn as a percentage of income. The reason for this, of course, is that there are many income earners who pay no tax.

Secondly, the author's point is that there are not enough rich people to support a broad middle-class entitlement for health care, based on either income or payroll taxes. The tax levels would have to be so high that they would be economically painful. Thus, like Social Security and Medicare, the middle class needs to put in its own money to support something that broad, just as neither SS nor Medicare could be supported by a payroll tax on just high-earners.


On Sep 03 07:29 AM Michael Clark wrote:

> Another note on this same topic: the middle class is currently disappearing,
> because the top 1% of the population (the Filthy Rich) wanted MORE
> and MORE.
>
> The idea that the top 1% of America is a VICTIM...please give me
> a break. If the richest pay a few more % in taxes it will NOT substantially
> diminsh their life style. What does it mean: one fewer beach house;
> one less trip to Europe each year; one yacht instead of two? <br/>
>
> The top 1% owns the government, owns the lawyers, owns the stock
> market, owns the society. The most fortunate SHOULD be the most
> willing to repay a society that allowed them to take over almost
> everything.
>
> No Health-care for the poor? Let them eat cake?
>
> As for the rich? Let them eat dirt, instead of the food that the
> poor people grow for them.

Sep 03 07:48 AM

[user344210:]

"Solutions that serve some public good—like Social Security and bank deposit insurance in the 1930s and Medicare in the 1960s—usually require everybody to give something to get something."

While bank insurance is a more complex topic, I think it's premature to say that Social Security and Medicare are "good" programs, especially with their unfunded liability structures. The original recipients of Social Security got an annualized return (SS income versus SS payroll taxes contributed) equivalent to something like 20%/year. This annual return metric has been declining to the point where for someone in Generation X, the return will likely be 1%/year. Similarly with Medicare, the amount paid in by those now collecting benefits (Medicare payroll taxes versus the amounts Medicare is reimbursing health care providers for those payroll tax payers' care) seems to indicate that the returns on those taxes are significant. I haven't seen these numbers anywhere, but I am making a logical deduction from the fact that Medicare is facing huge unfunded liabilities, meaning that it is not matching its assets and its liabilities very well. Politically, this is because it is difficult to raise Medicare taxes, and rightfully so. Again, for Generation X, Medicare is not likely to provide similar returns as it has for previous generations because A) the cupboard will be bare after the Boomers and B) what program there is left will probably be means-tested in such a way that a good chunk of Generation X will be ineligible for the program and C) providers' reimbursements will be so miniscule that they will refuse to see Medicare patients (already happening and will likely intensify) and D) even when providers do agree to see Medicare patients, the waits will be so long that for certain conditions, it will be just as useful as not seeing a provider.

So, like all Ponzi Schemes, these programs SEEM to be "good programs", but they are unsustainable over the long-term.

Sep 03 07:58 AM

[Jeez:]

When at it, why not look at the typical American mindset of "it is someone else's fault/responsibility".

Been to a PT (Parent-teacher) meeting lately? I have still to see one parent who is even to acknowledge that their child (and their parenting) has any shortcoming! Everything is teacher's responsibility. This is just a symptom. Look around the workplace - every young person has a prompt answer for everything that happens - invariably it is assignment of blame to something or someone.
Personal Responsibility anyone?

Sep 03 07:59 AM

[a fat panda:]

Number 5. We have a government that wants to increase in size faster than the GNP. This isn't just this year, it is the last 30. The cost of government bleeds through into everything that we produce. You want to talk about Asian kids. Look at Asian governments - do you think that they are passing subsidizes for poor kids to learn golf?

Sep 03 08:31 AM

[Value Added:]

Good thoughts. I'd add another factor: a vacuum of leadership. Which is, of course, really a vacuum of wisdom on the part of the electorate. Years ago when I read in the newspaper that a woman was voting for a certain candidate because he had "cute eyebrows", I knew the Republic was in trouble.

Sep 03 08:51 AM

[J Galt:]

"People who lack the sense to question Big Lies always end up in deep trouble. Being well informed takes work, even with the Internet. In a democracy, that's simply a civic burden."
I'm afraid the author is out of his element. The first part of the article is reasonable. The second descends into partisan hyperbole. If he had taken his own advise as quoted above he would have been in a position to have an opinion. The Government take over of health care is already a failure, just study the VA, Medicaid and Medicare a little deeper or without the rosy lenses. To suggest that the Government have more involvement in health care policy is very scary. Anyone that thinks we are rationed now had better take a look at what rationing is going on in the other nations that have embarked on a public option. 80% of Americans are very satisfied with their present health care; so lets try a new system, we haven't worked out the details but it will add multiple new layers of bureaucracy and cost much more. We will delay innovations where we don't prevent them entirely and we will spend most of the countries health care $ on people from ages 15-40, a group that is rarely sick. This sounds like a plan that you have to be nuts not to embrace. Then add in that old people have to be more tolerant of discomfort and pain and accept some suffering rather than using up resources. Oh you thought we wouldn't remember BO's statement and put it in context?

Sep 03 08:57 AM

[Speakeasy:]

I agree that because of our success, many have become lazy, complacent and assume that a high standard of living will always be there. I think this is true of the younger generations whose parents (because they were too busy with careers) indulged and spoiled their children. In my day, most of us had part time jobs and helped with everything from buying our own clothes to paying for college. Today, kids go off to school on dad & mom's tab and spend their time partying. So now we have the generation that expects life to be easy because everything was handed to them and the generations that became dependent and now feel entitled because our government, like a bad parent, made it easy for them to sit around and qualifiy for a govn. check.

As for the healthcare debate, its obvious you are not familiar with the 1,000 page bill (neither are most of our congressmen) - read Tom Daschle's book on healthcare rationing and you can why so many are concerned. Put simply, govn. made a mess of SS and medicaid - why trust them with more? Also remember that Ted Kennedy did not go to Canada or U.K. for healthcare infact, countless of foreignors come to U.S. for treatment!

Sep 03 09:01 AM

[Seeking Advice:]

What an interesting post, Rick!
I especially like, "Yet outraged Americans seem most concerned about fictions like death panels and government-enforced euthanasia, while clinging to the myth that our current system of selective availability and perverse incentives somehow represents capitalist ideals" and also "What keeps the rest of us content is the illusion that we, too, will be able to game the system someday—as long as the government doesn't interfere."

How true. Many of us have been sold by many special interests that we will be the privaleged few, and that the problem is all these other people who want to change the status quo. Of course, the status quo always benefits primarily those who already have or hold the power - that's why they work so hard to scare the majority from making any changes. It's sad, but still the U.S. is a great nation and will survive this malaise and the special interests. I do feel though that the high standard of living in the U.S. will necessarily get knocked down somewhat, but maybe some humility needed to come our way at some point?

Sep 03 09:15 AM

[Mike from NYC:]

How can the author accuse American workers of being lazy when time after time, surveys have shown that American workers work more hours per year than in any other 'industrialized' country including Japan which was thought to have the most 'hungry' workforce.

American workers and America can never be competitive with China because of China's manipulation of its currency and its horrendous trade practices. It will only be when Congress passes regulations that 'even the field' with China that America and American workers can be competitive. We can blame this problem on Wall Street, Congress and American companies who shipped factories and jobs out of America in the godly pursuit of PROFITS at all costs and which was cheered on by Wall Street.

I do agree that most Americans are clueless about what's is going on and Americans are becoming ever more ignorant.

As for healthcare. The cost and manner of delivery of healthcare (excepting Medicaid and Medicare) is inefficient and expensive. The cost of healthcare also makes many American companies uncompetitive in the global economy. The cost of healthcare also dampens job creation. I've been writing about this for many years but many just think I'm stupid and naive. The joke will be on them soon enough until Americans and Congress tackles the problem of reducing healthcare costs and cost saving measures.

Sep 03 09:20 AM

[MPT failed:]

Yes, who said Medicare is a "good program?" El Presidente says its costs are out of control. How could any Congress be dumb enough to pass and open ended program that says "We will pay for everything you, your family or your doctor wants--forever?" A 12 year old could have predicted that the costs would bankrupt the country. But nobody has the guts to say how we are going to limit the costs (you can call it rationing or death panels, but it is all about reducing costs). Instead they want to create a smokescreen of an all new healthcare system so they can sneak rationing in without ever having a public discussion. We need to turn out this entire Congress of Baby Kissers and put in smater, more honest people for limited terms.


On Sep 03 07:58 AM user344210 wrote:

> "Solutions that serve some public good—like Social Security and bank
> deposit insurance in the 1930s and Medicare in the 1960s—usually
> require everybody to give something to get something."
>
> While bank insurance is a more complex topic, I think it's premature
> to say that Social Security and Medicare are "good" programs, especially
> with their unfunded liability structures. The original recipients
> of Social Security got an annualized return (SS income versus SS
> payroll taxes contributed) equivalent to something like 20%/year.
> This annual return metric has been declining to the point where for
> someone in Generation X, the return will likely be 1%/year. Similarly
> with Medicare, the amount paid in by those now collecting benefits
> (Medicare payroll taxes versus the amounts Medicare is reimbursing
> health care providers for those payroll tax payers' care) seems to
> indicate that the returns on those taxes are significant. I haven't
> seen these numbers anywhere, but I am making a logical deduction
> from the fact that Medicare is facing huge unfunded liabilities,
> meaning that it is not matching its assets and its liabilities very
> well. Politically, this is because it is difficult to raise Medicare
> taxes, and rightfully so. Again, for Generation X, Medicare is not
> likely to provide similar returns as it has for previous generations
> because A) the cupboard will be bare after the Boomers and B) what
> program there is left will probably be means-tested in such a way
> that a good chunk of Generation X will be ineligible for the program
> and C) providers' reimbursements will be so miniscule that they will
> refuse to see Medicare patients (already happening and will likely
> intensify) and D) even when providers do agree to see Medicare patients,
> the waits will be so long that for certain conditions, it will be
> just as useful as not seeing a provider.
>
> So, like all Ponzi Schemes, these programs SEEM to be "good programs",
> but they are unsustainable over the long-term.

Sep 03 09:32 AM

[acttang:]

The hatred toward wealth, such as expressed here, was the root of the revolutions that swept half of the earth from the beginning to the middle of the last century. As long as the wealth is accumulated via legal ways, forced redistribution brings more problems than it solves, in a long run. It isn't a coincidence that almost all communist countries, formed as a result of forced wealth redistribution, typically headed by a passionate leader with misguided sense of social fairness, eventually disappeared. Because eventually, a sustainable and prosperous society is one that rewards the risk takers with wealth.

On Sep 03 07:29 AM Michael Clark wrote:

> Another note on this same topic: the middle class is currently disappearing,
> because the top 1% of the population (the Filthy Rich) wanted MORE
> and MORE.
>
> The idea that the top 1% of America is a VICTIM...please give me
> a break. If the richest pay a few more % in taxes it will NOT substantially
> diminsh their life style. What does it mean: one fewer beach house;
> one less trip to Europe each year; one yacht instead of two? <br/>
>
> The top 1% owns the government, owns the lawyers, owns the stock
> market, owns the society. The most fortunate SHOULD be the most
> willing to repay a society that allowed them to take over almost
> everything.
>
> No Health-care for the poor? Let them eat cake?
>
> As for the rich? Let them eat dirt, instead of the food that the
> poor people grow for them.

Sep 03 09:38 AM

[GeminiAtlas:]

I agree, replacing one deadly sin (greed) with another (envy) is not an improvement. However, I believe the problem stems from lack of a free market. The entrenched "rich" interests buy favorable legislation (with attendant complicated regulation that they wrote themselves) to keep any new competition down to a minimum. Therefore, they get gov't sanctioned virtual "monopolies" or at least the illusion of competition via cartels to keep profits up for the in-group and exclude any new entrants. Not that I blame them. They are just protecting their interests. If they can more easily do it in the political market than the free market, they will do it. Not only to make it easier on themselves, but also to pre-emptively co-opt the congress which would come up with even dumber ideas left to its own devices.
Basically, the problem is the the congress is not following the Constitution by guaranteeing "equal protection under the law" which of course would imply equal treatment under the law. Of course, special tax breaks, subsidies for some groups, surtaxes for others, different tax rates for different types of economic activity (saving vs. consuming vs. investing), heavy regulation for this industry, light regulation for that industry does not seem to be "equal treatment."


On Sep 03 09:38 AM acttang wrote:

> The hatred toward wealth, such as expressed here, was the root of
> the revolutions that swept half of the earth from the beginning to
> the middle of the last century. As long as the wealth is accumulated
> via legal ways, forced redistribution brings more problems than it
> solves, in a long run. It isn't a coincidence that almost all communist
> countries, formed as a result of forced wealth redistribution, typically
> headed by a passionate leader with misguided sense of social fairness,
> eventually disappeared. Because eventually, a sustainable and prosperous
> society is one that rewards the risk takers with wealth.
>
> On Sep 03 07:29 AM Michael Clark wrote:

Sep 03 10:22 AM

[farmer448:]

And don't forget the failure of leadership to point the way, inspire people be ethical instead of legal.
Instead as workers, leaders look at us as replaceable washers.

Sep 03 10:27 AM

[GeminiAtlas:]

I wouldn't say the Medicare/Medicaid/Social Security are good programs. They create a huge opportunity cost. What about the "forgotten man"? What things would the payers of the these taxes (and I mean taxes because I probably won't see any of that money again) spent the money on? What new enterprises would they create and build? How much could-have-been wealth has been destroyed because of these programs? And would if this wealth would have been created instead of "invested" in these programs? Would our combined wealth be much higher than it is even today? Probably much higher. And would it have made our healthcare cost less than it does now, comparatively speaking. Probably.

On Sep 03 09:32 AM MPT failed wrote:

> Yes, who said Medicare is a "good program?" El Presidente says its
> costs are out of control. How could any Congress be dumb enough to
> pass and open ended program that says "We will pay for everything
> you, your family or your doctor wants--forever?" A 12 year old could
> have predicted that the costs would bankrupt the country. But nobody
> has the guts to say how we are going to limit the costs (you can
> call it rationing or death panels, but it is all about reducing costs).
> Instead they want to create a smokescreen of an all new healthcare
> system so they can sneak rationing in without ever having a public
> discussion. We need to turn out this entire Congress of Baby Kissers
> and put in smater, more honest people for limited terms.

Sep 03 10:34 AM

[Bob 123:]

Of course he didn't. He had great health coverage as a U.S. senator -- a government run plan. Would that we all had such great health coverage.
Easily attainable really, if we weren't busy spending it all on military boondoggles. But then again, the so-called 1%'ers profit mightily from all that bloated military spending.
There is little profit in doing what's morally right for all citizens of this country.


On Sep 03 09:01 AM Speakeasy wrote:

... Also remember that Ted Kennedy did not
> go to Canada or U.K. for healthcare......

Sep 03 11:08 AM

[fjd10595:]

Good article, but too much emphasis on how the current administration is hurting us. Did you write much about how Reagan and Bush 2 destroyed our kid's futures with tax cuts and deficit spending. To hopefully make my point I am going to place comments below that I put on another blog this morning.

Driving to work this morning, I heard two commentators being interviewed, Paul Hankie, and John Ryding, economists, I think. In response to a question, Hankie said, "The obama administration is only interested in a redistribution of wealth", "we have gone from a bad administration to a worse one." The commentators then went on to criticize the current administration for raising taxes. Does Hankie understand and did he criticize the massive redistribution of wealth that occurred under recent republican administrations- Reagan and Bush 2. What I’m talking about are the tax cuts for the wealthy coupled with massive deficit spending to fund current programs. Wealth was transferred from, or stolen from, our descendents and given to those living today in the form of programs and tax cuts. Nice deal for the rich guy living today. He buys another yacht, and our children become indentured servants to pay for it (his tax cut). Unsustainable consumption of goods is a result.

Deficit spending redistributes wealth from our descendents to those presently living. It is abhorrent. I understand that it is being done by the current administration. They also have proposed reinstitution of ‘pay go’ which will unquestionably be opposed by republicans. I'm making this point because I see bias in the statements by public commentators like Hankie. The fact that democratic administrations spend money on programs and raise taxes is pointed out. The equal fact that republican administrations spend money and raise taxes on our children (through current tax cuts) is not pointed out. An understanding of this point is necessary if we are to obtain solutions to the economic and fiscal disaster that will fall to our descendents.

I would like to have been able to ask Hankie how what Obama is doing is different from what occurred under republican administrations and whether the philosophy of both major parties is at fault. What I've concluded over the past number of years is this: Democrats tax and spend, and republican’s tax cut and spend. Which is worse? Probably the republican way, since it steals from the future, it steals from our descendents who are not even born, who have no say in the poverty that they will endure while we enjoy a largess.

My solution would be to cut programs on a massive scale and limit government spending severely; save for what must be enforced by government, one item being science based environmental regulation. In summary, I would like to see a broader understanding of the inequities in our economy, and the fact that neither major political party offers solutions.

Sep 03 11:21 AM

[Jimbo:]

I have to agree with JGalt. the author began with some good points about our predicament but he has oversimplified his position on controversies such as health care. Before you dismiss the "death panel" controversy as a lie, go to the Investor's Business Daily and read their editorial about Ezekiel Emanuel, a physician who is the brother of the President's chief of staff. Dr. Emanuel has outlined , in carefully phrased professional language, how a government run health insurance program will deal with persons who are believed to be terminally ill. It is difficult trust the Redeemer in the White House. He has repeatedly said, THIS YEAR, that his plan would not interfere with present health insurance or physician choices. But I have seen several videotape clips from past years where he has said that a single payer plan "may take ten-twenty years" to install. He has invoked an incremental approach in other tapes. The deceit is palpable! It would also help if Congress, in creating programs such as Social Security(and its' very large disability aspect), would subject itself, and other Federal employees, to pay for the program. As far as I can determine, only members of the military pay FICA taxes. One previous commenter pointed out the way legislation is written to favor some and to screw others. Congress has been doing this to us for years.

Sep 03 12:18 PM

[Destin:]

On Sep 03 09:38 AM acttang wrote:

> As long as the wealth is accumulated
> via legal ways, forced redistribution brings more problems than it
> solves, in a long run.

Unfortunately legal does not equate to moral or ethical, especially when the top 1% controls the lawmakers who then ensure they are held to a different standard than everyone else.

fjd10595: I had never viewed deficit spending as a form of income redistribution from future to current generations. That is a fantastic way of putting it but only if you assume our government ever has any intention of repaying any of this debt.

Sep 03 01:22 PM

[fjd10595:]

If it doesnt' is still impacts our kids, won't they pay the price of devaluation.


On Sep 03 01:22 PM Destin wrote:

> On Sep 03 09:38 AM acttang wrote:

Sep 03 02:03 PM

[mhudd:]

ARE WE LAZY?
I started a small business over 30 years ago. I had as many as 7 employees at a given time. I paid more than the going wage for the profession, and tried to provide the best work environment as possible. I always believed that a happy worker was more productive.
The first 10 years ('79-89), things went pretty well, after that it became harder, and harder to find anyone who wanted to do anything besides collect a check.
The good workers had jobs, and the rest left about the time they were trained.
Most of the young workers of today have -0- job skills. It is a job just to get them to show up, and if you don't keep an eye on them, they will spend the day on the cell phone.
It used to make me feel good knowing that I was doing something to help workers suport thier families.
Now, I'm 57 and work 5-6 days a week (Church on Sunday) with no employees. I make just as much money, with less headaches.
We came from a generation that believed a good honest worker, was an honorable person, for some reason, we neglected to pass it on to our children.

Sep 05 03:53 AM

[GeminiAtlas:]

Exactty, we (or our children) will pay the piper one way or the other. Either way it is high taxes to pay back the debt. Inflation after all is just another hidden tax which punishes the most prudent (savers and investors) and let's the least prudent (debtors such as the federal government) off the hook.
But soon the devaluation way is the only way they will be able to go as the debt becomes unserviceable, unless other foreign governments start to demand that our public debts be denominated in their currencies. In one way (long term), that would be good if that happened as it would force some discipline on the Congress because they don't control the printing press of other countries. In the short term, it would have other more burdensome consequences.

On Sep 03 02:03 PM fjd10595 wrote:

> If it doesnt' is still impacts our kids, won't they pay the price
> of devaluation.

Sep 05 11:45 AM