The American Dilemma and How We Can Fix It

Archive for the ‘National Debt’ Category

THE WAR ON POVERTY AND THE NATIONAL DEBT

If there is any statement that we can make on America’s fifty year long “War On Poverty” on which all of us might agree it is that we have spent a great deal of money waging this battle.  In fact, we have spent $11 Trillion fighting the war – a war that by virtually every metric has been a failure.  As I write this, the classic cartoon Pogo came to mind:

 

 

 

For those who still see doing math as a worthwhile enterprise, I did a little bit of calculating of the amount of interest that is attributable to that large expenditure.  And adjusting for the various rates of interest that were current during that half century time span, one way of looking at both the War On Poverty and the National Debt is that if we had never engaged in this losing onslaught, there would be virtually no National Debt.  We’ve spent about $3 Trillion in interest to fund this project.  Of our official $17 Trillion National Debt, we can attribute a total of $14 Trillion to the War On Poverty.

It is rather mind boggling, but even at today’s near zero interest rate, the United States (or more exactly the citizens of the United States) accrue interest on this debt at the rate of an astounding one million dollars a second.  Of this, $820,000 is attributable to the money spent and interest accrued funding the War On Poverty.  Put another way, if we had never engaged in this futile effort in social engineering and justice, we could give a cash award of over three quarters of a million dollars to 86,400 Americans a day and in eleven years we would have distributed that to every American, man, woman or child, irrespective of their financial circumstances.  A reasonable person might argue – that would end the War On Poverty by ending poverty – or would it?

Only infrequently is mankind blessed with the birth of a Mozart.  But it is a common happenstance that we give birth to people who are tone deaf – the existence of karaoke being evident proof of that statement.  Seldom do we find people who have the genius and determination of a Thomas Edison or a Henry Ford, possessed of a vision and who worked to create a workable plan to transform the human experience, making a great deal of money in the process.  And seldom do we have people who understand how to make their money multiply many times over in order to assure a secure future for themselves and their posterity.

If the grand plan of distributing this three quarter million “dividend” to every American had in fact been implemented, I suspect we would see the same thing that we have seen repeatedly throughout human history.  Ten years later, a small percentage of those recipients would be incredibly wealthy; a significant portion of people would have a bit more than the original grant or slightly less; and a large portion of those who received this check would be dead broke and demand that they be taken care of by the government, just as is the case today.

Much of the talk about the cause of poverty is that it is a direct outgrowth of ignorance.  I agree with this premise but it is not the only factor.  In the old days, many workers were paid on the basis of “piece work.”  The greater the number of widgets a worker produced, the more he was paid.  If two workers, both illiterate grammar school dropouts, worked side by side and the first of these produced twice as many widgets as the second, his compensation, even though modest, would be twice the amount the second worker was paid.  So we see from this example that while ignorance is an impediment to success there are ways to overcome a lack of school learning or at least to mollify it.  A person’s willingness to work or work harder than his counterpart also plays a role in his success or failure.  And by inference, a refusal to work – to do something to improve a person’s own situation, is a virtual guarantee that person will be doomed, not by society, but by his own actions, to a life of poverty and need.

If there is a cure for poverty it might lie with science.  Perhaps some genius will be able to isolate the gene that contains the “Protestant work ethic” and implant it in all new embryos.  Or, even better, perhaps they can fuse it into nanobots and give us an injection which will, within a short time, instill that philosophy into each recipient.  Even better, perhaps they can lay their hands on the “common sense” gene.  If that were to come to pass, I suggest they begin the injections on Capitol Hill.

THE HAPPY HOOKAH

The year was 1971 and Xavier Hollander published her memoir, “The Happy Hooker,” the recounting of her life as a call girl and madam.  The book caused quite a stir since polite people didn’t want to acknowledge the existence of the world’s oldest profession let alone be confronted with a description of a real person’s life as a prostitute.  If the book were published today, it would probably only receive a ho hum reception.  We’ve got far more juicy topics to appeal to our prurient interests.

Society has changed.  Mass shootings only occurred in wars, not schools and movie theaters.  Gay men frequently got married in order to cloak their true sexual orientation and found sexual partners in public bathrooms and bathhouses.  Smoking tobacco was viewed as a chic habit in which sophisticated ladies engaged and was part of being a macho guy.  And marijuana was something that was viewed exclusively as a habit in which only the nation’s hippies engaged.

In 1971 the United States was the world’s leader in steel production, although Japan was rapidly nipping at our heels.  Today the United States has slipped to third.  We are now behind Japan and produce only fifteen percent the amount that China makes each year.  Our national debt in 1971 was $400 Billion, about one-third of our $1.2 Trillion GDP.  Today we are over $17 Trillion in debt with a GDP of only $15.27 Trillion.  That number is the “official” level of the debt – although estimates which include our unfunded liabilities for Medicare and Social Security put the total closer to $100 Trillion.  Does any of this matter to your average American?

The answer, were you to ask your average Joe Citizen probably would be, “No.”  That should not surprise us.  A large segment of our population cannot tell you the year in which the colonies declared their independence, the country from which we separated or the name of the first president of the United States.  When you have teenagers and young adults who think that one of our three branches of government is the DMV, something as arcane as the National Debt is unlikely to garner much attention.

Perhaps the greatest evidence of the public’s apathy toward our debt is the fact that we regularly re-elect individuals to Congress and the White House who are equally oblivious to the problem – or at least a person could surmise as much from the fact that they continue the same policies which have led to these increases.  In fact, they have escalated them.

There should be one lesson that each of us can take from preparing our tax returns and that is that the government has no money of its own – only what it is able to take from its citizens.

“Look, if you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.  I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.  It must be because I worked harder than everybody else.  Let me tell you something – there are a whole bunch of hardworking people out there..”

“If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.  If you’ve got a business – you didn’t build that.  Somebody else made that happen.”

– President Obama in a speech in Roanoke, VA, July 14, 2012

Recently, the CBO suggested that Obamacare might cut an additional two million jobs out of the economy.  Most people would construe that as a bad thing since having a job eliminates a person from the pool of the jobless who collect unemployment benefits which adds to the National Debt and causes them to pay income taxes which should help reduce it.  But not the crafters of the law – especially the former Speaker of the House, Nancy Pelosi (D – CA).

“Yesterday, the CBO projected that by 2021, the Affordable Care Act will enable more than 2 million workers to escape ‘job-lock’ — the situation where workers remain tied to employers for access to health insurance benefits.”

The former Speaker went on to extoll how this would free a person to go out and fulfill their inner dreams – to become a poet or painter.  And if we believe the president’s statement that “they didn’t do that on their own” we realize that he was correct.  They will only be able to be free to explore their inner genie because those remaining on the tax rolls will be funding them.

There were both in Chicago where I lived and in Las Vegas, cities with significant Middle Eastern populations, a number of hookah bars where friends would gather to smoke tobacco using these ancient water pipes and share news of their families and their businesses with their friends.

While currently only Washington state and Colorado have legalized marijuana for recreational use, I believe that D. C. is the next logical candidate for legalization.  If our elected officials were seen coming out of a marijuana hookah bar at least we would have a cogent reason for understanding how they can continue to endorse and promote policies that epitomize total obtuseness.

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