The cause of American decline

If one looks beyond the mainstream media reports, one can easily tag attributes to present day American life that have often been associated with life in the third world. The most predominate of these characteristics is well documented and quite indisputable –  the living standard of the American middle class is in decline. If one elaborates this condition to better understand the phenomena, much of its cause is due to high levels of unemployment and underemployment among the American populous and stagnant wages of those who do manage to be employed.  This condition is not healthy ergo, research shows lower living standards often lead to increases in all types crime, growing corruption and a palpable decline in a nation’s most venerable institutions and infrastructure.  Using open minded analytical thought, one can reasonably see a correlation between America’s  decline in personal freedom and our nation’s migration towards third world status.

Consider the control government, at levels, has on the American economy; America does not have free markets anymore. The invisible hand Adam Smith spoke about is now highly visible and used by the government to pick economic winners and losers. Many segments of the American economy (healthcare, education, communications, manufacturing, transportation, etc.) are highly regulated and taxed such that true market forces such as price discovery and competition are not even present. For example, government bureaucracy sets healthcare prices to the extent that providers rarely compete on price and quality. Today, a medical services choice is rarely based upon price and quality of service. Likewise in higher education, the invisible hand is almost gone and replaced by the strong arm of the federal government; nearly all students can obtain government loans today to pay tuition. Institutions understand this fact and price their services accordingly.  It is not a coincidence as the increasing amount of student debt tracks the rise in college tuition.

Declining freedom can also be seen in governmental incentives/dis-incentives to work and wealth generation. It is well documented that welfare and disability benefits have grown significantly and have destroyed the self worth of millions. Many books and studies have pondered the question, would not most people be happier with meaningful work, earned paycheck, and a career path that could elevate them to a better life and come up with an answer of yes.  In a similar manner, government destroying personal freedom and is exerting greater control on those who do manage to generate wealth. Government’s high tax rates and its corrupt, overly complicated tax code have driven American companies overseas and led them to exploit loopholes to avoid paying taxes. There are many other examples of declining economic freedom in America however, government is working for more control over the most cherished freedoms American’s hold sacred.

America’s most precious freedom, that of free speech and the guarantee of a free press are under assault by government.  What is happening across America on college campuses is truly frightening. New restrictions placed upon the speech of the younger generation is actually happening. One well known institution of learning is going so far as to restrict the use of personal pronouns on campus as to not to offend anyone.  Declines in our first amendment rights go well beyond higher education to the new internet-based media that is under continual threat by the FCC and congress in their desire to police their speech.

Where does this assault on our freedom end? It will only end when Americans take heed to John Locke’s words, “whenever the Legislators endeavor to take away, and destroy the Property of the People, or to reduce them to Slavery under Arbitrary Power, they put themselves into a state of War with the People, who are thereupon absolved from any farther Obedience, and are left to the common Refuge, which God hath provided for all Men, against Force and Violence. Whensoever therefore the Legislative shall transgress this fundamental Rule of Society; and either by Ambition, Fear, Folly or Corruption, endeavor to grasp themselves, or put into the hands of any other an Absolute Power over the Lives, Liberties, and Estates of the People; By this breach of Trust they forfeit the Power, the People had put into their hands, for quite contrary ends, and it devolves to the People, who have a Right to resume their original Liberty”.1

  1. Powell, Jim (01. August 1996): John Locke: Natural Rights to Life, Liberty, and Property. In: The Freemann. Publisher: The Foundation for Economic Education, Irvington, New York, USA.

 

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America’s addiction to its Government

In looking at the upcoming congressional election I began to ponder why change is so elusive.  This led me to:

Large shifts in partisan control of U.S. House are uncommon

Large shifts in partisan control of U.S. House are uncommon

Upon further examination and holding a general knowledge of our nation’s government, I propose gerrymandering and being dependent on the dole (personal and corporate) encourages stasis in some of the stagnate House districts.  I suspect some districts with large corporations do not want to change their sugar daddy. Likewise, in areas where the rate of public assistance is high, there would be resistance to cut off funding from Uncle Sam. Although, you do see shifts in the elections of 94, 06, 10; however, they seem to be a populous repudiation of the chief executive.

My thesis of economic dependence on the federal government as shown in the chart seen in this link made me question as to what would happen to the economy if interest rates and debt were more normalized and in balance – removing corps and public from dole.  Would we see massive shifts in the make up of congress? Maybe, but not likely, instead I see a pessimistic looking Japan as a model of our economic future.