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Security vs. Freedom/Opportunity Part 2

30 March 2010 7 Comments

This is a continuation from a previous article.   Read Part 1.

In yesterday’s article, I went through the three factors that I believe have contributed to Americans preferring security over freedom & opportunity.  These factors were generational, the education system and the political scene.  Today, I want to continue the discussion.

Entitlement Society

For decades, America has been slowly moving towards an entitlement society.  Even the Republicans or conservatives are a far cry from the Founding Fathers’ vision of strictly limited government.  The Founding Fathers were terrified of a growing government.  They did everything possible to put in palce a structure to limit the possibility of government being the provider of “prosperity” or security.  I believe they knew, however, that if the people did not want a restrained government in the future, then despite the Consitution, the government would not be restrained.  This is exactly what we see today.

Scottish historian Alexander Tytler, back in approximately 1770, identified the following quotes and the following  phases of democracy:

‘A democracy is always temporary in nature; it simply cannot exist as a
permanent form of government.’

‘A democracy will continue to exist up until the time that voters discover
they can vote themselves generous gifts from the public treasury.’

‘From that moment on, the majority always vote for the candidates who
promise the most benefits from the public treasury, with the result that every
democracy will finally collapse due to loose fiscal policy, which is always
followed by a dictatorship.’

‘The average age of the world’s greatest civilizations from the beginning
of history, has been about 200 years’

‘During those 200 years, those nations always progressed through the
following sequence:
1. From bondage to spiritual faith;
2. From spiritual faith to great courage;
3. From courage to liberty;
4. From liberty to abundance;
5. From abundance to complacency;
6. From complacency to apathy;
7. From apathy to dependence;
8. From dependence back into bondage’

If the above quotes don’t hit home, I don’t know what will. The reality is that these quotes from hundreds of years ago very much apply to modern day America. I would guess that we’re either in the 7th or 8th stages. Apathetic and dependent. Moving towards bondage?

If you cite Western Europe or Japan as nations that have been able to balance the social welfare state / entitlement society with some level of economic stability, just hold your breath because both Western European countries and Japan are in such awful fiscal shape that they will likely look a great deal different in the years ahead.  Demographically, the aging populations content and secure with social welfare programs will find it hard to fund these entitlements with a diminishing work force amidst diminishing economic activity.  The debt loads of these countries, like the United States will also move these nations toward default.  A collapse of the Euro is not only possible, some view it likely – i.e. Jim Rogers (expert currency investor/speculator).

The Terrible Financial Shape Of Americans & America

Why are Americans dependent?  Well, for one, Americans are broke.  We traded self reliance and financial health for bigger homes, flat screen TVs, boats, jetskis, vacations to Disney World.  Why?  Well, because we deserve a high standard of living!

The harsh reality today is that the American middle class is primarily without any wealth.  While the politicians will point to the opposing political party as the cause of this hollowed out middle class, the finger should be pointed right back at the broke people.  You decided to cash out of your inflated home to buy a new car.  You decided to take your family to Hawaii instead of saving for your family’s future.

We’re broke and in need.  Thus, dependence.

Furthermore, America as a nation is broke.  Every additional program including health care reform will be financed by borrowing and printing money.  Don’t be stupid and naive about the health care helping the deficit.  That is so ridiculous that it doesn’t warrant a response.  It will hurt the deficit.  Just like every other entitlement program ever signed into law.

Looking Ahead

I believe Americans are going to have to get used to a lower standard of living.  The biggest bubble in the history of the world has popped and while government will do everything possible to push your standard of living back towards what it was at the peak of the credit bubble, the efforts cannot work in the end.  They might delay the decrease, but they cannot stop it.

By attempting to fix things today, things will be much worse down the road.  The continuous build up of debt in the public sector will weigh down future growth and opportunity.  And yes, security as well. For example, how secure do you think people will feel during times of high inflation?

So as part of the country celebrates over the new entitlement we are adding to America and the other part yells and screams about it, I grieve over the direction the American people have chosen.  The direction is one where people no longer have faith in themselves to make things better for themselves.  The direction is one where we demand more today even if it means less for our children.

The direction is clear and although I passionately oppose the direction, I’m in the minority.  As such, I will prepare for what I believe will be the consequences and ramifications of this direction.  My views are clear on this blog.  I believe stagnant economic growth and a troubled currency are in our future.  By then, we’ll probably have free health care, free housing, and free education but will it be worth it?  We shall see.

7 Comments »

  • Wingtipwalker said:

    FYI, Love the Tytler "quotes" but there is some scholarly disagreement that they actually came from him. Doesn't make it any less true, but it seems that the Tytler attribution was added for effect and credibility.

  • 20smoney said:

    yes i saw that they aren't sure of the source. Either way, I think its interesting.

  • simple in france said:

    I don't know enough about Japan to say, but I do know that Europe is in plenty of debt–I live in France . . .more debt here than in Greece (at least debt the government admits to).

    But despite some of the excesses (I just heard that the unemployment office here in France will give you a 'free' computer if you sign up to take a computer class AHHHH–this is why we're in debt people!) I think that the French and other Western Europeans have something to show for their spending–nearly free medical schools, affordable health care (20 euros per doctors visit before insurance is not bad) and a longer life expectancy just to name a few.

    In the US, it seems we have McMansions and jet skis in exchange for our debts. So, I'd say it's not exactly the same.

  • 20smoney said:

    Interesting points. Thanks for the comments!