Selfishness fuels economic calamity

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There can be little doubt that our economy is increasingly out of control. Government bailouts of Wall Street, banks and auto companies have been growing.

Federal Reserve Chairman Ben S. Bernanke said in early June that the nation needs to begin planning now to eventually bring taxes and spending in line; he warned that large budget deficits, if sustained, could deepen the financial crisis and choke off the economy. His statement reflects the growing concern among economists and investors that the nation's long-term fiscal imbalances could stand in the way of economic recovery by driving up the interest rates that the government, business and consumers pay to borrow money.

The national debt is projected to double from about 41 percent of the economy last year to more than 82 percent by the end of the next decade. After that, things will get worse, budget analysts say, as more and more members of the Baby Boom generation receive benefits from Social Security and Medicare.

When you have a huge budget deficit and need to reduce it, you have only two options: cut spending or raise taxes. Our politicians do not want to do either. They do not want to raise taxes because that would antagonize the voters, especially those who trusted "no new tax" pledges. And politicians have a vested interest in continued increases in spending -- not in cuts.

Members of Congress subsidize, in one form or another, a host of special interests -- farmers, businessmen, universities, labor unions, welfare recipients -- and each group has a special Political Action Committee (PAC) that contributes to members' campaigns. Cuts in the subsidy will provoke cuts in the contributions. The result: Every group gets what it wants, and budget deficits skyrocket. Added to all of this business-as-usual subsidization are the bailouts of failed banks, Wall Street firms and auto companies -- turning traditional ideas of free enterprise on their head. Sadly, both Republicans and Democrats have been co-conspirators in this undertaking.

We have, in fact, created in America a permanent political class that has an interest in ever-expanding government. The kind of activist government we have now -- involved in every aspect of people's lives, now even running an automobile company -- is the opposite of what the Founding Fathers had in mind.

From the beginning of history, the great philosophers predicted that democratic government would not long preserve freedom. Plato, Aristotle and, more recently, De Tocqueville, Lord Bryce and Macaulay, predicted that men would give away their freedom voluntarily for what they perceived as greater security.

Voters say that they are against big government and oppose inflation and deficit spending, but when it comes to their own particular share, they act in a different way entirely. Long-time Minnesota Congressman Walter Judd once recalled that a Republican businessman from his district "who normally decried deficit spending berated me for voting against a bill which would have brought several million federal dollars into our city. My answer was, 'Where do you think federal funds for Minneapolis come from? People in St. Paul?' ... My years in public life have taught me that politicians and citizens alike invariably claim that government spending should be restrained, except where the restraints cut off federal dollars flowing into their cities, their business, or their pocketbooks."

If each group curbed its demands upon government, it would not be difficult to balance the budget and restore health to the economy. Human nature, however, leads to the unfortunate situation in which, under representative government, people have learned that they can vote funds for themselves that have, in fact, been earned by the hard work of others.

The point was made 200 years ago by British historian Alexander Tytler: "A democracy cannot exist as a permanent form of government. It can only exist until the voters discover they can vote themselves largess out of the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury -- with the result that democracy collapses over a loose fiscal policy, always to be followed by dictatorship."

The Founding Fathers never envisioned the creation of a permanent political class such as the one we have now. They believed that men would be farmers, businessmen, doctors, lawyers, teachers -- and would devote several years of their lives to public service and then go home to continue their careers. Today, however, we have professional politicians -- men and women who support their families by holding political office and intend to do so for many years. Their motivation is clearly whatever will permit them to do so, not the long-run best interest of the country.

Still, we must keep in mind that members of Congress respond to our demands. As long as we seek to be subsidized by government, the politicians of both parties will comply. In this sense, our own selfishness -- as well as theirs -- is the culprit.

Allan C. Brownfeld is the author of five books. The Conservative Curmudgeon is copyright 2009 by Allan C. Brownfeld and the Fitzgerald Griffin Foundation, www.fgfbooks.com. All rights reserved.

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