Essay: The Coming Collapse of the American RepublicMarch 2010
Permission to forward, post or re-print this essay is granted by the author. It was a great country while it lasted. Nothing tangible lasts forever, not stars, or planets, or people or flowers or birds. Certainly not political systems. We can be certain that the American Republic will have an ending as surely as it had a beginning. But when? Predicting the future is fraught with risk. In the hundreds of opinion pieces I’ve published over the years, I’ve had some notable success doing so. In 1998, three years before 9/11, I published a column headed, “America’s War on Terror will be long, slow and cruel.” In that column I wrote that terrorists now had the power to destroy large buildings. Pretty prescient, yes, but I’ve made my share of predictions that were completely off the mark. Emerging trends or sudden events can completely alter what looked to be inevitable. The death of a key leader, a new technology, a natural disaster striking your country — or your opponent’s — all can alter the seemingly-inevitable future. Certainly the American Republic has been both resilient and flexible since its improbable emergence from the fire of revolution. It survived a terrible civil war, an outcome that seemed highly unlikely at the time. It survived the Great Depression. It led and won the fight against global tyranny in WWII, a victory that may appear inevitable now, but was a damn near run thing at the time. And it faced down the monster of soulless Communism, despite the infatuation of large numbers of our vapid intellectual class with the joys of collectivism, as seen from afar. And yet, despite this history of resilience and triumph, I think that there is about an 80% certainty that the American Republic will collapse within the next twenty years, and be replaced with something else — perhaps several entities. They will not be models of classical liberal democracy. That this will be accompanied by economic privation, great violence and mass suffering I consider inevitable. That the surviving citizens of the new entity or entities will enjoy anything close to our freedom or standard of living I believe highly unlikely. The Jamestown rule — no work, no eat — will be rigidly enforced. Each of several challenges facing us is both complex and over-whelming, and we no longer seem to have “the right stuff” to deal with any of them. While we might successfully, though not painlessly, face down each of them individually, their convergence makes the Republic’s survival highly problematic. Americans want the benefits of the good life, but far too many want someone else to pay the costs and make the sacrifices for them to have it. Few are willing to sacrifice their comfort, their cash or their standard of living — never mind their lives — to protect the Republic and the system of political and economic freedom that created the material wealth that is the envy of the planet, far beyond what our grandfathers could have dreamed. Just one example: In WWII, our forces were led by graduates of Harvard, Yale and other leading institutions. Since Vietnam, military services is disparaged and shunned by the elites who benefit the most from our system. We are victims of our economic success. Fat and comfortable Republics have ever been prey to wolves and barbarians, and, in our case, there are as many inside the gates as outside. Here are the convergent forces that I believe are likely to destroy the Republic: Fiscal Chaos: The National Debt is now $12.6 trillion, up $2 trillion in President Obama’s first 421 days. That debt now measures 64% of Gross Domestic Product. Add to that projected annual deficits of over a trillion dollars a year for the rest of the Obama years. Every dollar that government spends must be taxed from the private sector, or borrowed, thus reducing money available for private sector economic development while increasing the debt, or printed. Fiat money creates hyper-inflation, as Robert Mugabe could tell Barack Obama, destroying savings and wealth. What happens when no one will lend us more money? Moody’s says the US is in danger of losing its AAA bond rating. That downgrade would, of course, cost billions annually in increased payments on the national debt. And at some point, China and everyone else will say, “That’s all there is!” After all, we are not the only debtor nation in the world. Europe is in worse shape than we are. It now looks like the EU will put a temporary patch on Greece, the canary in the Europe’s coal mine, but that will only delay their coming disaster. Just like us, the EU politicians are kicking the can down the road, getting reelected by buying benefits through debt on their watch. But the day is fast approaching when the can won’t budge no matter how hard it’s kicked. Add to all this a Social Security System that has started paying out more money than it is taking in, a Social Security Trust Fund that has been spent and is now basically a shoebox full of IOUs from the Treasury, and a Medicare System that, even before ObamaCare, was predicted to be insolvent in seven years, the massive retirement of the baby boomers, and will need a lot more in taxes from everyone, not just the top 5% as Obama promised, just to slightly postpone the disaster. Then look at the other entitlement obligations the government has to veterans and government retirees. And I’m sure I’ve left out other benefit groups that we owe huge sums to. Throw in the ever expanding government workforce, supported by a shrinking private sector. Government employee wages have done quite well in the recession. The percentage of federal civil servants making more than $100,000 a year jumped from 14 percent to 19 percent during the first year and a half of the recession, according to USA Today. The ruling party is as much indebted to public unions (the SEIU) as to trial lawyers and welfare recipients for their power base. See: http://www.americanthinker.com/2010/02/obama_and_the_government_emplo.html Government doesn’t create wealth. Yes, government workers pay taxes. Let’s say that they pay 30%, though that’s wildly inflated I’m sure. That leaves 70% of their salaries to be paid by the shrinking private sector. Plus the private sector has to also pay for the office buildings, computers, cars and paperclips the government employees need to operate. (The government may be trying to get into the wealth-creating business by owning companies like GM and Chrysler. But government-run businesses are always economic disasters, as decisions get made on the basis of politics and bureaucratic rules, not economic factors. Ask the leaders of the defunct Soviet Union.) And government intervention in the economy, from price controls to “affordable housing,” always ends badly. Then they cover it up by making things worse. Now comes the huge new entitlement of ObamaCare, which they say will reduce the deficit by covering 30 million more people, through additional taxes and Medicare cuts. The additional taxes, even if they were only on the top 5% of earners as Obama solemnly pledged, will take money from the economy those payers would have spent on other things, perhaps on sustaining your job. The Medicare cuts WILL. NOT. HAPPEN. The politicians are never going to anger millions of seniors, all of whom vote. Medicare is probably the site of the most fraud and scams in the country, worth maybe $100 billion annually. But if getting rid of fraud was easy, or even possible, why haven’t they already done it? Because government is big, slow, inefficient and bureaucratic, thus an easy target for fraud. And that fraud target just got a lot bigger. ObamaCare is predicted to cost about $1 trillion in the first six years — it will only be in effect for six of the ten years the CBO guessed at, though many of the taxes will be in effect for all ten. (Note that the CBO is required to accept the projections of the politicians, so if they say they are going to save $500 billion in Medicare, the CBO accepts that as though it had some basis in reality. And if they say they are going to transform lead into gold, the CBO…well, you get the idea.) What will be the cost of ObamaCare be for the second ten years and how will it drive the deficit? No one can really guess how many trillions. The National Center for Policy Analysis has gathered the predicted costs from various sources. They are astronomical. See: http://www.john-goodman-blog.com/obamacare-by-the-numbers/?utm_source=newsletter&utm_medium=email&utm_campaign=HA#more-9545 And it’s only the beginning. We can’t stop this avalanche, regardless of Tea Parties and republicans. Obama, Reid and Pelosi have all promised supporters the next step is a public option. The fact that the government now orders vastly increased insurance company payouts through eliminating caps, requiring coverage of pre-existing conditions and expanding mandated coverage, while being able to do the popular thing and deny rate increases means the Obama administration can now bankrupt the insurance companies at their leisure, leaving a public option as the only option. In 10 years, it will be Medicare for all. To the fiscal disaster, throw in the many states, led by California, Illinois and other bastions of Democrat legislative control that are beyond insolvent. It’s not just the recession. Many state legislatures have spent far beyond their states’ ability to pay even if the economy was booming. Add to their huge deficits the over $1 trillion the states owe to retirees that is not there, and the problem becomes insoluble. See: http://www.uncoverage.net/2010/02/unfunded-pension-liability-trillion-dollar-gap/ Then include unfunded liabilities by local governments and government agencies. The Chicago Transit Authority had a $1.5 billion pension deficit in 2007. Peanuts by ObamaCare standards, but multiply that by all the cities and agencies in the country and you’re talking real money. See: http://www.bloomberg.com/apps/news?pid=20601109&sid=alwTE0Z5.1EA Now add to the states’ un-payable fiscal burden the vast expansion of Medicaid mandated by ObamaCare. The wonder isn’t that several states immediately announced they were suing to stop ObamaCare. The wonder is that the all 50 aren’t. Yet. Now add in demographics. The United States currently has a birthrate of 2.1 live births per woman. This is exactly the replacement rate, which puts us in far better shape than Europe, where the birthrate ranges from 1.89 to 1.23 or lower, a decline that the native populations probably can’t recover from. But America is only barely at the replacement rate due to groups like the Mormons, and to Hispanic immigrants. Will these be the high-work-ethic, well-educated workers needed to support us baby boomers in our golden years? Can Jose doing a “job Americans don’t want” support two seniors on Social Security and Medicare? Doubtful. And another large percentage of the birth rate is the children born to single mothers in the inner cities. I’ve read that 70% of black births are out of wedlock. Our PC worship of multiculturalism has long made obeisance to the black ghetto culture that Dr. Thomas Sowell reports blacks took from southern, poor whites. It is a culture which disdains education, is always ready to do violence over touchy points of honor, and where young males glory in leaving a trail of abandoned children doomed to poverty. For Democrats, the bright spot is these children will be their economic slaves, locked in as voters of the plantation-welfare state, doing the party’s bidding for their daily crust. These are not the workers who will pay the taxes to support millions of retirees, who, thanks to the medical system now being destroyed, enjoy the longest life span in the world (after you factor out homicide and car wrecks). I’m not picking on blacks, but on the liberals whose philosophy has enslaved so many minorities in permanent poverty. The coming dark ages will be harder on our minority citizens than on anyone. Besides, minorities are hardly alone. In 2005, according to the IRS, the lowest 50% of income earners paid 3% of federal taxes, while the top 5% of earners paid 60%. This was under Bush, who you will recall was always accused of helping the rich! By the end of Obama’s first term, it is likely the lowest 50% of earners will pay no taxes at all, and a good many will get checks from the government at tax time, taken from the more productive. This majority of non-payers have every incentive to vote for politicians who promise ever more government programs and spending, at someone else’s expense. As Frederic Bastiat, a French Economist, said over 150 years ago, “Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.” Will the economic recovery save us? JFK started an economic boom — and increased government revenue — by cutting capital gains taxes. Obama promises to raise them, just one of many factors, including ObamaCare and attacks on banks and insurance companies, which are keeping investors jittery and trillions sitting on the sidelines, stifling our efforts to recover from the “affordable housing for everyone” driven recession. People with any cash aren’t sure if they should put it in the market, or into gold coins in Switzerland. Trillions are being held back from the economy in fear of higher taxes and greater efforts to milk the prosperous. But speaking of Europe, their welfare and healthcare systems are far more “progressive” than ours. (Workers in Greece get to retire at 56, giving them lots of time to riot in the streets over badly-needed benefit cuts.) They have far fewer younger workers. Their importation of Muslim “guest” workers is creating more problems than it solves, as a significant portion of those Muslims are on the dole, refuse to integrate, and recognize only Shari’a law which includes wife beating, child-marriages, polygamy, and second class status for women. They include a significant number of radicalized Muslims determined to impose Islam on Europe by violence, make all non-Muslims second class citizens and exterminate the Jews. Muslim guest workers are not the “change we can believe in” that will save Europe. Given how interrelated the world’s economy is, when the socialist system in Europe collapses, it may draw us into the maelstrom, years ahead of our own pre-destined economic collapse. Both political parties have been passing this entitlement fiscal crisis forward, since at least 1932. The pain of fixing it was greater every year. To seriously try to do so guaranteed you would be defeated by the Barack Obamas of the world, who believed in ever larger government and ever more government spending. So the crisis has worsened from year to year, and is now long past fixing. Members of both parties get elected by making it worse. George W. Bush took a whack at some Social Security reform, and got clabbered for it, adding to his unpopularity. (See: http://www.publicintegrity.org/investigations/broken_government/articles/entry/1054/) Since our tax system is dependent on the millions of citizens who honestly and voluntarily comply, we may face a tax revolt that will make things even worse. Looking at the massive increase in government spending, won’t more taxpayers chose the Tim Geithner/ Tom Daschle/Charlie Rangel “honest mistake” approach to taxes and seek ways to not pay? When Massachusetts citizens forced a vote on lowering the state income tax from 5.85% to 5.20%, 41% of the people voted for higher taxes. So the bureaucrats helpfully left both rates on the tax forms. Few of those who thought taxes should be higher have paid at the higher rate. See: http://answers.yahoo.com/question/index?qid=20070719182659AAzCo79. If 20% of Americans become disgusted tax scofflaws, most will get away with it because the IRS will be overloaded. And the fiscal crisis will get worse. (Of course, maybe they already are and only you and I are now paying our fair share.) No party will be able to get elected supporting the ever more painful measures that would fix the fiscal mess. We all belong to entitlement groups and want our entitlements. I turn 65 in 13 months, and I have some health challenges. You bet I want my Medicare and Social Security. So the fiscal crisis will grow worse and the US will descend into chaos, until there are riots in the streets, fiscal collapse and martial law as the entitlement obligations cannot be met by taxation, printing monopoly money or borrowing. Cities like Detroit will be no-go war zones. Fiscal collapse may well be followed by political disunion, and certainly a pounce by our enemies. I’ve been telling my friends that they should teach their kids to shoot, hunt and grow potatoes, skills that will be needed in the transformed America Barack Obama promised us. And we’d be lucky if the Fiscal Crisis was our only problem. Islam, mentioned above, is on the march. Pablum about “Islam is a religion of peace:” and “moderate Muslims” will not deter one murder. Yes, there are millions of moderate Muslims who want only to live in peace, just as there were millions of moderate Germans and Japanese in 1938 who wanted the same. And they are equally irrelevant. As with Shinto, another religion we had to put down, most of the mainstream schools of Islamic thought teach the dominance of Islam over the entire world, accept or proselytize the necessity of it being achieved by violence, and offer three choices to non-believers: convert to Islam, die or accept second-class citizenship as Dhimmis. There are Islamic movements working to achieve this through agitation, demands, and the courts, the so-called “stealth jihad,” and there are movements seeking it through violence. But the number of Muslims seeking it is growing, and is not a “tiny minority of extremists.”. We have faced down nation states before, but how do you face down a combined religious-political system that is an entire way of life, has 1.3 billion followers and is in almost every country on earth? (Shinto was only in Japan.) That seems impossible, so the official position of both parties has to been to placate Islam with foreign aid to Muslim-ruled countries and concessions to the stealth Jihad at home. This only buys more demands for more concessions or more “aid.” And our ability to pay Jizra (the Qur’an-mandated, often-ruinous tax tribute required of non-Muslims in Muslim countries) in foreign aid is going to be destroyed by the fiscal crisis discussed above. One option is surrender. Allowing the gradual imposition of Shari’a (Muslim) law means abandoning gender equality, freedom of speech and freedom of religion, but allowing child marriages, polygamy and wife beating. The other is a war so awful that it goes beyond what our respect for persons and rights now allows. It’s one thing to fire bomb civilians in Japanese and German Cities. It’s quite another to have firing squads here and men with knives in dark allies. Waterboarding isn’t the half of what victory will require. Faced with that, our leaders in both parties have chosen a gradual approach to option one, postponing the defeat until after they are safely out of office. Muslim populations are growing rapidly in Europe, and soon will be able to prevent, through violence or voting, any European action against Muslim regimes that sponsor terrorism. Then we will be America Alone as Mark Steyn points out in his excellent book of that title. And if — maybe when — an a-bomb goes off in Tel Aviv, New York and/or Washington, DC? What then? One thing will be certain — there will instantly be a 90% majority of US citizens who will demand security over the Bill of Rights. Civil Libertarians might want to contemplate a post-atomic-attack America. But we have no good options for denying Iran nuclear weapons and the Obama approach of turning the other cheek has only gotten us slapped. And if Pakistan becomes a failed state and it’s nukes fall into Taliban hands? Or it gets into a shooting war with our ally, India? Not to mention that the on-going and highly necessary War on Terror/Overseas Contingency Operations (is Fort Hood overseas?) will require a lot of treasure to protect our freedoms — treasure that is fast pouring down the federal rat hole. They also require troops and those troops may be brought home to deal with chaos here. China. Islam, of course, isn’t our only international challenge. China is building a military, including a blue water navy and advanced tactical fighters of the kind Obama just cancelled. Who are they expecting to challenge with them? Their Tibetan slaves? The Uighurs? Russia, while it’s preoccupied with its own Muslim problem? Perhaps. But the Chinese economy is growing and will be the largest in the world, and China, the “Central Kingdom” has always seen itself as a potential superpower. They may own our debt, but they are still a tyranny. They don’t love us, even if Obama bows and scrapes, sneaks the Dali Lama out past the trash cans and doesn’t dare to mention human rights in their presence. Note to the global warming alarmists. Even if you are right about AGW, we could beggar ourselves and not make a dent into the carbon output China will put out in the next twenty years, regardless of what they say to our taxpayer-funded congressmen vacationing in Denmark. Name a Communist country that was good for the environment? East Germany? Mexico. I saved the boil on the border for last. The leftists like to portray themselves on the moral high ground, defending the poor “undocumented workers” who strive for better lives. (Next they will call street drug dealers “undocumented pharmacists.”) But can the United States take in every person in the world who would like to come here? Of course not. Doing so would give us a standard of living below Zimbabwe and a crime rate above South Africa. So we have to have limits on immigration. To do that we have to have laws, and enforce them. Currently, the limit on immigration is all those who we let in legally, and all those who sneak in illegally, who we don’t catch at the border. They are proposed to have a “path to citizenship.” But as the fiscal train wreck hits, can we afford to care for 12 million illegals in our hospitals, educate them in our schools and put them on our welfare rolls? Or the millions more yet to come? Yes, there are many who can be self-supporting and pay taxes, or who serve in our military with honor. I’m okay with them. But what about the majority when the fiscal crisis hits? And this is just the tip of the enchilada. Mexico is losing a very violent war with the drug cartels. If they weren’t busy killing each other and anyone in the line of fire, they could take over the government. Our military has contingency plans for two potential failed states: Mexico and Pakistan. Lovely. That drug war is spilling over the border and exploding into our inner cities as the cartels establish branches here to further operations, aided by the flood of illegals (which also serves as cover for Islamic terrorists to enter the US). They are ruthless enough to make us long for John Gotti, or at least Tony Soprano. This is going to get a lot uglier — and more expensive — very rapidly. Expect additional hand-wringing and strongly worded statements from the White House. And as it gets nastier and more dangerous in Mexico proper, the barrios of Little Mexico in LA and Chicago will look all that more attractive to potential “undocumented workers.” With militant Islam, China and Mexico piling on the fiscal crisis, it is hard for me to see how we survive as a stable, free Republic. And I haven’t mentioned North Korea’s nukes or a resurgent tyranny in Russia. Add to all this an energy policy and environmental lobby that prevents us from developing new nuke plants, refineries, oil reserves, coal or natural gas in homage to global warming, thus beggaring our economy to support our enemies abroad, and I promise you that in twenty years, your kids won’t be the least bit worried about global warming. They’ll be too busy scrounging for food and re-loading. Now imagine a Presidential Candidate of either party honestly addressing this crisis convergence: “My Fellow Americans, we face hard times, and the need for shared sacrifice and pain if we are to save the Republic. If elected I promise to reduce Social Security payments by 10%, to raise the Social Security retirement age to 70, to cut all Federal employee salaries, including Congress, by 10%, to lay off 10% of Federal employees, excluding combat troops and security agencies, to cut Federal retirement payments by 10% to everyone, including veterans, to cut off Medicare for anyone with over $300,000 in assets, to eliminate the Departments of Education and Energy, to cut off spending on environmental matters for things based on bad science like Global Warming (see http://tartanmarine.blogspot.com/2010/03/global-warming-articles.html), to cut off all funding for Agent Orange related claims (see http://tartanmarine.blogspot.com/2009/12/agent-orange.html), to eliminate all funding for the arts and public radio or TV, to eliminate all earmarks, to eliminate school lunches and Federal support for anything in education except teaching the basics, to eliminate school loans, to eliminate support for agencies like Fannie Mae and Freddie Mac, to cut federal funding to states that don’t take similar steps, and to eliminate all foreign aid, earmarks and an additional long list of government programs and agencies which my team is drawing up.” “In addition, my fellow Americans, we will start executing people convicted of Medicare or other government fraud, without appeal, right after conviction. We will establish marshal law in the drug-infested inner cities and send in the military to destroy the gangs, foreign or domestic, with shoot-on-sight orders and officers authorized to hold military tribunals on the spot, followed by execution. In addition, our military will seal the southern border and conduct punitive raids into Mexico against the drug cartels. I am also drawing up plans to confront Islamic terrorism. Foreign terrorists will be declared to be outside the US Constitution and Geneva Convention, and all actions against them authorized. We will immediately blockade Iran, and bomb their nuclear facilities, so be prepared for gas at $10 a gallon. We will open all areas of American territory to development of oil, gas and coal resources, and fast track both nuclear plants and new refineries, eliminating all environmental laws that slow or block them. Plans to deal with China and North Korea are being developed. We will not hesitate to use nuclear weapons against Iran, Pakistan, North Korea or any other states if that’s what is needed to keep terrorists from obtaining nuclear weapons.” Such a fascist candidate would be unlike to live to Election Day, let alone get any votes at all, probably not even mine. This program violates Americans’ constitutional rights and, worse, their sacred sense of entitlement to all the benefits that big government is now expected to provide. It risks their personal safety and would require more economic pain, personal suffering and sacrifice than the country has endured since the Civil War, when we were a hardier and more stoic people. No one would dare run on 10% of what is outlined above. So the coming fiscal and geo-political chaos will just have to happen. I’m lucky, I guess, that with my health challenges and age I won’t be here with your kids to enjoy the world that the Obots are making. This doesn’t mean that I’m out of the fight. Over my desk I have a Marine bumper sticker that reads, “Don’t you quit on me, Maggot.” Every day I hear Sgt. Harris, my Senior DI, screaming it in my ear. I’m going out punching. As a teen, I was into traditional poetry — and I still am. One of my favorites for over 50 years is “The Kings” by Louise Imogen Guiney, which concludes: While Kings of eternal evil Good luck. Keep fighting. Robert A. Hall is a Marine Vietnam Veteran who served five terms in the Massachusetts state senate. He blogs at www.tartanmarine.blogspot.com Back To Leeconomics.com
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