"IN DEFENSE OF RURAL AMERICA"
a weekly column published every Sunday by
Ron Ewart, President of the
NATIONAL ASSOCIATION OF RURAL LANDOWNERS
For the week of:
Sunday, September 4, 2016
The "In Defense of Rural America" column archives are available HERE.
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"The Masses Need a Course in Economics, Capital and Freedom"
From * In Defense of Rural America *
By Ron Ewart, President
National Association of Rural Landowners
and nationally recognized author on freedom and property rights issues.
We are helping to spread freedom and liberty around the globe.
© Copyright September 4, 2016 - All Rights Reserved
Letís start out with some simple, undeniable truths:
1. Only the profits from private enterprise create income, which can be taxed by government.
2. Government can only create jobs, or pay for social services, using the money from the taxes on private income. Government does not create money. It is a net absorber of money, even if it prints it. Government only creates debt. Government-issued currency is evidence of that debt.
3. Government over-regulation inhibits, or in some cases, prohibits the creation of jobs, start-up businesses, or the expansion of businesses. With too much regulation there is less capitalism and thus less private income to tax and decreasing jobs, forcing government to print what it needs to pay for the irrational promises it has made ..... for votes.
4. If government takes too much in taxes on private income, capital becomes less and less available to create private jobs, or create new businesses, or expand existing ones.
5. If there is not enough capital in the markets for new business creation or expansion because government is taking too much of the capital for social services, coupled with massive government inefficiency, waste, fraud, abuse and corruption, freedom cannot survive and socialism takes its place.
6. History proves that eventually, this expanding socialist system runs out of private capital and it collapses into fascism, or an absolute socialist oligarchy, or a dictatorship, where the people become nothing but slaves to an almighty government. That's what most of the nations in Europe have become today.
7. Democratic Progressivism is a direct path to national bankruptcy and irreversible socialism.
The next graph explains it all:
(see "US National Debt Chart")
In approximately 55 years, the national debt went from somewhere near $1 Trillion to $19 Trillion, or a 1900% increase. In 2008, after two wars in Iraq and Afghanistan, and before Obama took office, the national debt was 76% of America's Gross Domestic Product (GDP). But wars always create debt. However, by 2015, under Obama, a Democrat, the national debt shot up to over 104% of GDP. On its current path with an anemic GDP growth rate of less than 2%, the national debt will increase to 136% of GDP in 10 years, a financial death spiral, created by mostly Democrats and over 100 years of Progressivism.
Even after World War 2 was over, the national debt to GDP was a little over 100% but was whittled down to around 30% by 1975. That decrease in the national debt was due to a robust manufacturing base during that period. There were lots of private sector jobs and the real unemployment rate hovered around 5%. Women who were in the war-time work force, came home and raised their children to be productive and honorable Americans. Returning war veterans were able to fill the millions of manufacturing jobs. America was a manufacturing powerhouse for the rest of the world.
But then Congress ratified and Bill Clinton signed into law, the North American Free Trade Agreement (NAFTA) in 1992, which started the steady decline of manufacturing jobs in America. Without a significant manufacturing base, the national debt could not be decreased and by 2015, under Obama, a Democrat, the national debt breached $19,000,000,000,000 (that's Trillion), headed for $33,000,000,000,000 by 2026, according to the Congressional Budget Office (CBO).
Combined with the loss of manufacturing jobs came an explosion in social benefits, especially under Obama, a Democrat, with the passage of the Affordable Care Act, euphemistically known as Obama Care. Obama Care is set to implode as more and more private insurance carriers abandon the program, which will rapidly accelerate the national debt, if something isn't done to stop it.
As the jobs decreased and welfare benefits increased, government kept taking a larger and larger share of available capital from the profits of private industry for expanding social services. This government TAKING has been going on and accelerating since FDR created a massive increase in social welfare programs and subsidies, both personal and business. President Johnson exacerbated the TAKINGS with his Great Society. Obama and the Democrats further threatened America's financial security with the passage of Obama Care. This is an inescapable path to national bankruptcy, socialism, or even fascism, brought on by Progressive policies based on buying votes to stay in power, under the guise of compassion.
As we have stated many times in past articles, there are now more people in the wagon than are pulling the wagon. Eventually, there became less and less capital available for new business starts, job increases and business expansion. The GDP slowed to less than 2% in 2016 and even though the unemployment rate allegedly decreased, most of the new jobs are on the low end of the pay scale.
On top of an exponential increase in social spending, came the inevitable increase in regulations, a natural outcome of a Democrat-driven, Progressive ideology. In spite of the picture they paint, Progressives abhor freedom. On the other hand Progressives love dependency (for votes) and control of the masses through ever-increasing social and environmental regulations.
Added to massive federal laws and rules from unaccountable bureaucracies, are the local and state laws and rules. There are literally millions of laws on the federal, state and local law books. Many of those laws are in direct conflict with each other, creating confusion and unequal application throughout the entire court system, assigned to enforce and prescribe punishment for violations of the laws and rules.
Laws and rules are meant to inhibit or prohibit human behavior, coupled with punishments for violations. However, every time legislators or bureaucrats write a new law, no matter at what level of government, they immediately trigger three very costly events: 1) Increase government employment to analyze, research and study not only the science to justify a new law, but to monitor the effects of the law; 2) Increase government employment to administer or defend the law; and 3) Increase government employment to enforce the law. Since new legislative bills are drafted by staff, with influence from special interests, the legislators seldom read the laws they pass. Therefore, each new law adds to government employment and government continuously grows, exponentially while sucking more dollars out of the private economy.
By just sheer numbers, the more laws that are written, the less likely the entire population will even know about the laws, or understand them, or know of their consequences or penalties for violation, much less be in compliance with them. The consequence of too many laws is that huge segments of the public are totally unaware of their existence. And yet, under the law, ignorance of the law is not a defense. Then, when the hapless individual comes face-to-face with the law, it results in anger and frustration for that individual and a spiraling degradation of freedom and liberty for all of us.
Many laws are written at the insistence of lobbying or special interest groups with very narrow and purposely hidden agendas. The public never has an opportunity for real input and society as a whole is not benefited. Partisan politics often compromises a new law into meaningless, often conflicting legislation, leaving loopholes over which lawyers can argue over for decades. Just ask the environmentalists. They have made an entire multi-million dollar industry out of suing government over government's environmental laws.
But businesses must deal with tens of thousands of those laws and rules on a daily basis or face huge fines and penalties, or having their business shut down for persistent violations. Businesses create jobs. Individuals, especially poor ones, don't. Thus, businesses are forced to deal with all the laws and rules and that burden comes at a huge price in lost profits, time and production. Those losses end up being added to the value of their product or services.
Sadly, this short course in economics, capital, regulations and freedom will reach only an infinitesimally small segment of the population. Those that do read the information are probably already aware of it. The over 60% of the population that should read it, will never see it and therefore will not know that what they are receiving from government in handouts and subsidies has an end to it. The end is when Democrat Progressive Socialism runs out of other people's money to redistribute to the over 60% receiving it. When that happens is determined by politicians who are still bent on buying votes with a very limited supply of money and how rapidly they accelerate the draw down of that limited supply. With Democrats in control, the end will come much sooner, but the end will come nevertheless because America has gone past the point of no return.
Anyone who believes that somehow we can slow down this death train America is on, is delusional. Anyone who believes we can just continue spending money into oblivion and printing more money to make up the losses is living in the Land of Oz. There is always a day of reckoning to reckless behavior.
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Ron Ewart, a nationally known author and speaker on freedom and property issues and author of his weekly column, "In Defense of Rural America", is the President of the National Association of Rural Landowners, (NARLO) a non-profit corporation headquartered in Washington State and dedicated to restoring, maintaining and defending property rights for urban and rural landowners. He can be reached by e-mail for comment at email@example.com or by 'phone at 1 800 682-7848.
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