How to prepare your family to survive and thrive in todays uncertain world

The Silent Tyranny Of Government Largess

You’ll have to excuse me in this post, because I’m going to doom and gloom a bit.  In the past I’ve tried to stay away from current events, but like I said when I returned from my hiatus, that’s all changed now.

The fact of the matter is that I have less and less confidence in the ongoing stability of our way of life with every passing day.  If I am completely honest, I’d have to say that I have just about no confidence left at all.

Bluntly put, I believe that we are at a critical tipping point in the history of this country.  The great experiment, the shining city on the hill, these things are at very real risk today.

Yes, the economy is fragile, at best.  We’re seeing massive and blatant fraud in the mortgage securities industry.

We have a federal government that seems to believe that the best way to improve our lives is to completely destroy them.  It seems oddly like one of those psycho thrillers you see on late night TV where the neurotic killer is completely convinced that he’s helping the poor victim as he guts them alive with a butter knife.

Yet to me those things are not the biggest problem.  We are.  The American people are.

“A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Fascinating words.  Now nobody is completely sure if they were said by Alexis de Tocqueville or Alexander Fraser Tytler, but nonetheless they are fascinating and ring extremely true today.

In this country we have decided that it is moral and right to force people to support financially things that they not only do not believe in but often enough find completely morally reprehensible.  And when I say force, I mean force.  At the point of a gun. That gun may be invisible in our daily lives, but it’s there nonetheless.

We as a country have accepted the idea that we are our brothers keeper.  And not out of charity, but out of guilt and shame induced by manipulative politicians who know they can twist the right emotional buttons and make the average American do just about anything.

We have assembled a ridiculously unsustainable base of citizens who do not contribute much of anything to the tax coffers, but feel no compunction about taking out what they consider themselves to be entitled to.

What gives my neighbor the right to reach into my pocket when he is in need, backed up by the full force of the federal government?

Americans are the most generous people in the developed world.  Study after study shows that.  Yet somehow we have agreed that our generosity should be forced, and we should be compelled to give that money to things that our betters feel we should, instead of what we want.

I would, and have, give money to someone in honest need, who is down on their luck, or has simply had a few rough breaks.  I would wager that just about everyone reading this post would do the same.

Yet the government has decided that I should give money to the single mom down the street who has been on welfare for sixteen years, doesn’t have a job, pops out a kid now and then to keep the gravy train of government handouts coming.  I find that morally reprehensible and would never give money to someone who is unwilling to make an effort to help themselves, yet my tax dollars support her.  And chances are that most people in real need will never see a dime of it.

You can go on and on with this theme.  Welfare.  Social Security.  Medicare.  Medicaid.  Are there people who honestly need the assistance?  Absolutely.  But we don’t take care of them very well.  We ‘take care of’ people who could go out and do it themselves.

For political reasons our political class has made a concerted effort to expand the base of people that are dependent upon them for their very existence.  And they’ve been quite successful.  Today the entitlements from our government to the citizenry consumes over 60% of the annual U.S. Budget.

$0.60 out of every $1.00 our government spends goes directly to these entitlements.

And we don’t have the money for it.  The current annual deficit is about $1.5 Trillion.  And as of this year, our debt has increased more under the current administration than all other administrations.  Combined.  Think about that for a minute.

Anyone who has taken high school math knows how a compound interest function works.  You may have heard that the most powerful force in the universe is compound interest.  By it’s very nature, compound interest takes a small debt and snowballs it into a huge debt.  It’s called exponential growth, and everyone in their right mind knows that it can’t stay forever.

Within ten years interest payments alone on our national debt will consume every dime the government takes in taxes.  Ten years.  That’s not all that far off.  Think we’ll even get there?  I don’t.

But we let it happen.  Today we let it continue.  We pile on the money for every pet project conceivable and depend on an ever shrinking tax base for the money to pay for it.  Except, well, we just keep spending what we don’t have, because we’ve got a blank check, right?

Except math doesn’t lie.  Reality will not be swayed by good intentions.  There are simply some problems you can’t talk your way out of.  Compound interest happens to be one of them.  And when that tower of cards crumbles, forcing austerity, it won’t be pretty.  And it could be the end of this country as we know it.

I’ve ranted enough for tonight.  Look for another post coming soon to a blog near you where I talk about what I think may happen, and how I think we can get out of it.

But to tell you the truth, I think the powers that be will consider the cure worse than the sickness, and continue with business as usual.  This doesn’t exactly fill me with hope or confidence.

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6 Responses to The Silent Tyranny Of Government Largess

  1. Bravo Rudy. Well said. I’m glad you wrote on this as it is an issue that will be ultimately affect how my family and i will be living. So many continue to put their head in the sand, thinking we can pull out of this. OUr countries CURRENT debt and not the future entitielements that will be adding to it, is SO LARGE that it cannot be repaid. Of of 2 things will be happening in the future. Either the govt will end up defaulting on this huge debt (much like the Soviet Union did a few decades ago) or they will try to hyperinflate the debt away. Wow…what a choice. This existing debt, to put some scale on it, would require every american family to pay $31, 000 per year for 75 years to pay it. ANd that number is growing every day.

    I’ve seen no real political will to even address this honestly and thus, like you, am discouaraged and negative about the coming future. ANd that isn’t that far off. Maybe a year or so until the realitiy of this debt starts hitting the average american family? I for one think that that time will be a very ugly one. Preparing is very important now. Putting one’s head in the sand will just make them a victom when the piper needs to be paid….

    Thanks for the great work you are doing Rudy…

  2. The budget SURPLUS from 2000 went to two ‘pet projects’ – the conflicts in Iraq and Afghanistan.

    • Unfortunately there hasn’t been a real surplus for years. The surplus that was claimed by Bill Clinton and ol ‘W’ were just smoke and mirrors based on accounting tricks. If you ran a business with the accounting rules our government uses, you’d go to jail.

      Karl Denninger tells it more elegantly than I can, if you listen to the interview I just posted.

      While the two wars in the middle east chewed up a fair amount of money, they pale in comparison to the bailout bills that were started by W at the end of his term and kicked into high gear by O as soon as he got into the white house. Politicians owned by the banksters are a recipe for disaster.

      A pox on all of their houses.

  3. I completely agree with you when you say “We ‘take care of’ people who could go out and do it themselves.”

    This ticks me off beyond words can describe. I have worked, earned the money, and bought everything that I have. I do not get handouts, and I really do not want handouts.

    I have some friends…well, not really friends….acquaintances…that look for every single way possible that they can to get a government handout. Whether it be welfare, food stamps, WIC, housing assistance, … whatever.

    These people are very capable, and would not need the handouts if they would just try…

    And my big problem is that many of these people that I know are regular drug users. Drugs cost money, so I know that they have money or else they couldn’t buy their drugs…right? So, if they got their priorities right they would not need these handouts.

    If the government would require a clean drug test and a clean criminal record in order to receive the handout, many problems would be solved.

    If I have to pass a drug test and have a clean criminal record to get a job to earn “my” money, why don’t they have to pass a drug test and have a clean criminal record to use MY money?

    Nice post!

  4. The economic collapse was planned all along. The globalists and elitists have engineered this collapse in hopes of collapsing America and replacing the current system with a new one that will benifit the globalists agenda to fufill the idea of a “new world order”. It is a trap as most will not realize, that the ones who will be offering a solution will be the ones who caused the problem in the first place.