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The
Economic Paradox No One Wants to Talk About
by Arnold
Ahlert
May 8, 2012
There is an
economic paradox that few people understand, much less wish to
acknowledge,
because to do so would reveal the level of societal deterioration that
has
caused it. In simple terms, there are two schools of economic thought:
one
posits that massive amounts of government spending, aka stimulus in all
its
odious forms, is the only way to save an economy.
The other
posits that until massive over-spending by government is brought under
control,
aka austerity, economies over-burdened by debts and deficits will
continue to
founder. Who’s right? There is merit to both arguments — but only
because we’ve
reached the aforementioned level of societal deterioration. Let me
explain.
For
decades, the growth of government, both here and in Europe, has been
inexorable.
For perspective’s sake, it should be noted that the last budget
submitted by
the Clinton administration for fiscal year 2001 was $1.9 trillion.
Exactly ten
years later, president Obama introduced a budget of $3.8 trillion. Thus
in the
space of a single decade, spending by the federal government doubled.
What has
such doubling produced? A myriad of things, but one of the foremost is
an
American public that has become more dependent on government, not just
for
benefits, but employment. This is no accident, since the more such
largesse
emanates from Washington, D.C., the greater the power that flows back
to
Congress and the president as a result. It is also no secret that one
political
party would like this particular dynamic to go on unimpeded, until the
nation
is driven into fiscal oblivion. Whether that ambition is the result of
ideological stupidity or a Machiavellian plan to create a totalitarian
state
full of Americans who can no longer function without the “benevolent”
hand of
government controlling every aspect of their lives, is one of the
prevailing
issues of the current election season.
Unfortunately,
we have reached sufficient levels of dependency, that the economic
paradox
occurs. We all know that $16 trillion of debt is a time bomb, and that
the only
way we can save ourselves — in the long run — is to bring revenues in
line with
expenditures first, and then have revenues exceed expenditures, so that
we can
begin paying down the mountain of debt we have already accumulated.
Hence, the
austerity argument is legitimized.
Except that
it isn’t, in the same way that taking a heroin junkie completely off
heroin all
at once will cause a pretty unpleasant experience for the junkie. Hence
we have
methadone clinics, created (ostensibly) to wean the junkie off drugs
incrementally. In economic terms, as we are seeing it played out in
Europe, the
attempt to wean entire societies of “junkies,” i.e. those addicted to
government largesse, off the government teat has created havoc.
Furthermore,
and this is where it gets to the nub, societies structured to live off
government, the ones where government is the major employer — even as
that
employment has driven those societies to fiscal insolvency — are now
faced with
the economic “ripple effect” that the laying off government employees
produces.
Ergo, in
step the progressive economists who can then posit that austerity is a
“failure,” because the unemployed government worker is no longer
capable of
buying goods and services from his private sector counterpart, who is
no longer
able to pay the taxes necessary to solve the government debt crisis
that
necessitated the layoffs of public sector workers in the first place.
Thus, the
progressives argue, it becomes imperative to continue “priming the
pump” with fiscal
stimulus, in order to avoid the economic contraction that austerity is
bringing
to people in Europe.
Sound good,
until one realizes that stimulus is nothing more than an increase in
the very
same government debt — and government dependency — that brought Europe
to its
knees in the first place. In short, fiscal stimulus is an effort to
kick the
can down the road, even as the debt load piled onto future generations
becomes
so obscene that it would take a miracle to get out from under it. The
progressive
“solution” to that problem? Tax the “rich,” which includes people
making $200K
a year and businesses making $250K — now. I say now because the
progressives’
dirty little secret is that that particular threshold will have to be
lowered
considerably in order to maintain the level of government spending,
interest
payments — and dependency — that those who wish to see as much power as
possible concentrated in government hands need to maintain that
concentration.
In other words, those currently suckered in by the siren song of class
warfare
have precious little idea how far down the income ladder the term
“rich” can be
extended to accommodate such ambitions.
Furthermore,
as some Americans have begun to notice, “priming the pump” is debasing
the hell
out of our currency.
The
responsible solution to this whole mess is the one that few people are
willing
to embrace: weaning people off government dependency as quickly as
possible,
and educating them as to why it is necessary. In other words, without
the
expansion of the “on your own” society that the current president and
his
fellow Marxist/socialist soulmates despise, we are doomed — or ripe for
a
government takeover.
In the
coming months, Americans will be bombarded by both fiscal arguments. It
is
important for them to remember that the argument against austerity is
only
legitimate because progressives have successfully turned a critical
mass of
people on both sides of the Atlantic into government-dependent lemmings
with
little or no ambition or dignity, even as they wholly embrace a giant
sense of
self-entitlement. It is a sense of self-entitlement so all-encompassing
that no
amount of economic reality — as in we’ve run out of other people’s
money to
spend — can penetrate it. That’s social deterioration in a nutshell.
Hence the
paradox — and the precipice.
Source:
canadafreepress.com
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