Amidst massive financial losses being suffered by the American people in the current financial crisis, at least they can take solace in one comforting point — that the U.S. government is rebuilding Iraq. While people are seeing their savings frittered away, having trouble making ends meet, and finding it difficult to pay their children’s education, shouldn’t they at least be patting themselves on the back over the fact that the U.S. government is spending billions of IRS-collected tax dollars to rebuild the nation that the U.S. government destroyed with its invasion?
How’s that for some consolation? And if that’s not good enough, then perhaps people will find it comforting to know that the Pentagon and its thousands of contractors aren’t suffering at all. In inflation-adjusted dollars, their budget is the largest since the end of World War II.
But, heck, the U.S. government is rich, right? It’s got the money to do whatever it wants, right? Last night, I couldn’t help but be amused by a financial commentator on CNBC who went overboard to assure people that the U.S. government has tremendous resources still at its disposal to fix the economy.
I wish that commentator had told us what those resources are. After all, for years the U.S. government has been spending much more than it has been collecting in taxes. Nonetheless, U.S. officials just keeps spending more and more and more. Iraq. Afghanistan. Social Security. Medicare. AIG. Bailouts. FDIC. It seems as though there are no limits on what the U.S. government can fund. It just keeps spending and spending and spending.
But where are those resources to which that commentator referred, when the government is spending much more than what it is bringing in?
Americans can’t deny that they’ve blithely gone along with all this. The federal government is not a magician. What people have steadfastly blocked out of their minds is that there are only three ways for the federal government to get the money to pay for its ever-growing expenditures: taxes, borrowing, and printing the money.
Despite ever-growing federal expenditures, U.S. officials, led by President Bush, repeatedly assured people that taxes would not be raised. So, Americans just innocently assumed that massive federal borrowing, to fund overseas military adventures and ever-growing domestic welfare, would have no adverse effect on them. And since most Americans are consciously ignorant of how inflation works, they couldn’t care less when the Fed Reserve cranks up the printing presses to pay the bills.
As I have been repeatedly pointing out for the past few years, no longer do conservatives remind people of how Ronald Reagan brought down the Soviet Union — by making the Soviet government spend the nation into bankruptcy. Can you guess why they no longer make that point?
Last January, I wrote an article entitled “Brace Yourselves,” in which I stated:
“My advice? Given that the American people and their federal officials are not yet ready to give up on either their welfare state or the warfare state — and the massive expenditures that are needed to fund them, my advice would be the same I’d give to people on a ship heading directly toward an iceberg: Brace yourselves.”
Alas, the American people are a stubborn people. Despite the massive chaos in the economy and the marketplace, they simply cannot yet bring themselves to accept that the responsibility lies with the welfare-warfare state way of life to which they unfortunately remain so wedded. Instead, all too many of them continue to maintain that it’s all the fault of greed, laissez faire, unfettered capitalism, and not enough regulation.
And they continue to look to their federal officials to pull a rabbit out of the hat and show them that their socialist, interventionist, and imperialist system, along with the out-of-control federal spending that comes with it, will bring them peace, prosperity, and harmony.
Meanwhile, we libertarians must simply continue speaking our truth and confronting people with the reality that they do not want to face — that the only way out of the chaos and crises lies with the libertarian paradigm, which entails a dismantling, not a reform, of both the foreign warfare empire and the domestic welfare empire. The only way out of the morass lies with a restoration of the principles of economic liberty, free markets, and a constitutional republic on which our nation was founded.
As reality continues to mug Americans in the face, we can only hope that they will finally stop listening to the charlatans and begin listening to us libertarians.