Skip to comments.Is America Doomed to Become a Failed European-Style Welfare State?
Posted on 02/20/2014 11:18:56 AM PST by Kaslin
When I give speeches around the country, I often get asked whether its time to give up.
More specifically, has America reached a tipping point, with too many people riding in the wagon of government dependency and too few people creating wealth and pulling the wagon in the right direction?
These questions dont surprise me, particularly since my speeches frequently include very grimBIS, OECD, and IMF data showing that the long-run fiscal problem in the United States is larger than it is in some nations that already are facing fiscal crisis.
But that doesnt mean I have a good answer. I think there is a tipping point, to be sure, but Im not sure whether theres a single variable that tells us when weve reached the point of no return.
Is it when government spending consumes 50 percent of economic output? That would be a very bad development if the burden of government spending reached that level, but its not necessarily fatal. Back in the early 1990s, the public sector was that big in Canada, yet policy makers in that country were able to restrain budgetary growth and put the country on a positive path. Sweden is another nation that has turned the corner. Government spending peaked at 67 percent of GDP in the early 1990s, but is now down to 47 percent of GDP after years of free-market reforms.
Is it when a majority of households are getting government handouts? Thats also a worrisome development, especially if those folks see the state as a means of living off their fellow citizens. But taking a check from Uncle Sam doesnt automatically mean a statist mindset. As one of my favorite people opined, some government beneficiaries such as Social Security recipients spent their lives in the private sector and are taking benefits simply because they had no choice but to participate in the system.
Is it when a majority of people no longer pay income taxes, leaving a shrinking minority to bear all the burden of financing government? Its not healthy for society when most people think government is free, particularly if they perceive an incentive to impose even higher burdens on those who do pay. And theres no question that the overwhelming majority of the tax burden is borne by the top 10 percent. Theres little evidence, though, that the rest of the population thinks theres no cost to government perhaps because many of them pay heavy payroll taxes.
I explore these issues in this interview with Charles Payne.
Dan Mitchell Discussing the Tipping Point when America Becomes a Failed Welfare State
The main takeaway from the interview is that the tipping point is not a number, but a state of mind. Its the health of the nations social capital.
So for what its worth, the country will be in deep trouble if and when the spirit of self-reliance becomes a minority viewpoint. And the bad news is that were heading in that direction.
The good news is that were not close to the point of no return. There is some polling data, for instance, showing that Americans still have a much stronger belief in liberty than their European counterparts.
And weve even made a small bit of progress against big government in the past few years.
I speculated in the interview that we probably have a couple of decades to save the country, but it will become increasingly difficult to make the necessary changes such as entitlement reform andwelfare decentralization as we get closer to 2020 and 2030.
And if those changes dont occur ?
Thats a very grim subject. I fully understand why some Americans are thinking about the steps they should take to protect their families if reforms dont occur and a crisis occurs.
Indeed, this to me is one of the most compelling arguments against gun control. If America begins to suffer the chaos and disarray that weve seen in nations such as Greece, its better to well-armed.
Though maybe there will be some nations that remain stable as the worlds welfare states collapse. And if emigration is your preferred option, Id bet on Australia.
But wouldnt it be better to fix whats wrong and stay in America?
Considering the general state of knowledge, reason and motivation in America today, yes.
Support Trey Gowdy during the coming House Member Rebellion Election to be the new Speaker of the House by April 15, 2014.
Until CW-II, yes indeed.
It appears the american intelligentsia is not really very intelligent..
That our “smartest” ones are not very smart.
The “creme” has curdled.. the head authority has become bald.. the big fish are minnows..
The FREE have become slaves.. “THE”______ (well you know)..
we are in worse shape...the European countries don’t have to put up with the “diversity” that we do.....they’re one people....we are not....far from it...
Would it be CW-III?
Just thinking that the war of 1760 or so thru 1812, most heated during 1776 thru 1783, was somewhat a civil war (1/3 patriots versus 1/3 tories), somewhat a world war (England/France/etc - German Hessians, Dutch money...).
The proof of the tipping point for me was Obama being elected for a second term. The voting public voted for more economic destruction just to get more free stuff via government debt and taxation.
I fear most for the younger people of this country for they,unlike me,will never have an extended period of relative prosperity.
you mean we aren’t there yet?
At least Europeans are smart. They'll figure it out and adjust. Norway is already reforming, and they're doing it without much economic pressure. The country sits on a pile of money made selling oil from the North Sea.
The USA, OTOH, is being filled with morons who will make the same mistake over and over.
Your everyday South American socialist dictatorship is the model -- lots of poor people competing with each other to breed more poor people who all want someone else to take care of their families.
Not if we don’t surrender.
Never give-in, never give-up, never surrender!!
We don’t retreat, we reload!!
We are the resistance.
Now all of the GOPe need to be purged.
Fool me once, shame on you.
Fool me twice, shame on me.
I agree - the takers outnumber the makers. If we last long enough we can educate a new generation and maybe turn that around... but the takers are having babies, too.
If America falls, it will be because of Christians.
2 CHRONICLES 7:14
If My people, who are called by My name, will humble themselves and pray and seek My face and turn from their wicked ways, then I will hear from heaven, and I will forgive their sin and will heal their land.
No surrender. No retreat.