The Big Think

September 25, 2013

Welfare State

Filed under: Politics — jasony @ 8:15 am

Dutch King Willem-Alexander declares the end of the welfare state:

“King Willem-Alexander delivered a message to the Dutch people from the government in a nationally televised address: the welfare state of the 20th century is gone.

In its place a ‘participation society’ is emerging, in which people must take responsibility for their own future and create their own social and financial safety nets, with less help from the national government.

‘The shift to a ‘participation society’ is especially visible in social security and long-term care. The classic welfare state of the second half of the 20th century in these areas in particular brought forth arrangements that are unsustainable in their current form.’

You don’t say? Good that at least some world leaders see the writing on the wall and are trying to change things before the math overtakes them.

The most frustrating thing about all this is that leaders from Ron and Rand Paul to Ted Cruz to even (at one point) President Obama himself have proclaimed loudly that our current fiscal path is unsustainable. But a combination of a sclerotic political system, dependent and entitled citizens, and a complete lack of foresight and ability to plan (as well as the quiet hope on the part of many that the system will stay solvent just long enough for them to enjoy it before shuffling off), has prevented any sort of meaningful reform. Detractors are torn somewhere between abject denial and open ridicule of coming fiscal realities. And meanwhile we get this:

Graph.png

The vast majority of that debt has been enshrined as untouchable in our current system. We can cut the Departments of Education, Defense, Interior, the FDA, and every single security and intelligence agency— we can leave only Medicare, Medicaid, and Social Security (completely shut down the rest of the government)— and we still do not have enough revenue to pay our bills. But “lalalalalala-I-can’t-hear-you!” is sometimes the best that opponents can do. But what can’t go on forever, won’t.

Not to be alarmist about it (as if alarmism isn’t called for), but as a country we are on a fiscal boat that is sinking rapidly and half of the passengers are screaming “EVERYBODY BAIL” while the other half denies that there is a hole in the side, ignores the water, or claims that it’s nothing to worry about.

Meanwhile there’s a guy giving a quasi-filibuster on the floor of the Senate about the insustainability of our fiscal path and it goes unreported by the broadcast media and ridiculed by people on the other side of the political aisle.

I really do fear for the future of our country.

What is one person out of 350,000,000 to do? Well, for starters, realize that if we’re to patch the boat then spending must stop or at least be drastically curtailed. We see many analyses that the deficit could be reduced and reversed completely in a sane amount of time if only baseline budgeting were ended. That’s the practice of baking in an increase to all Federal Departmental budgets every year automatically. When you hear “draconian cuts” by one side of the aisle being used as a club against the other for short term political gain, rest assured that these “cuts” are almost always a reduction in the amount of increase and not an actual cut. Second, we have to get used to the idea that in a future America we all will be forced to give up whatever part of the budget we personally deem irreplaceable. Defense (yay! “Bakesales for Bombers!” my liberal friends will say). The Dept of Education (yes, really). The ACA (it really is actuarially impossible to maintain). The N.E.A. (bye bye Big Bird!). And on and on an on. Not because we want to do without these things. I mean, why not have all the goodies you can buy and then put on a red hot credit card? We need to do without because, at some point in the future, there is no more money. No increasing tax revenue from a growing economy (we’re seeing that now), a downgrade of our national credit rating which will further increase borrowing costs (it has happened before and we’re on the way to another), no country willing to loan us money to finance our national lifestyle (we’ve seen this lately as well) and the ability of the Fed to essentially loan itself 85 billion dollars per month will be met with the inflation that inevitably comes from running printing presses non stop (for reference, see…. every country that’s ever tried it). Combine this with a growing lack of accountability among our leaders and a media ripe with malfeasance and bias and the public begins to believe that we have reverted to a nation of men instead of a nation of laws.

Are the problems insurmountable? Ten years ago I would have said no, we can solve this, if only… But now? I believe they are, and I’m not going to say otherwise. Why? Because we’ve forgotten as a culture how to delay gratification for shiny things. We have put off fiscal responsibility and two whole generations have never been taught that you have to live within your means.

The bill is about to come due. The repercussions are not going to be pretty.

UPDATE: Don’t miss this article.

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