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Who Will Bail Out the U.S. Government?

by

The Los Angeles Times is reporting that city governments, who are suffering severe financial strains, are looking to the federal government to bail them out. And the federal government, our nations daddy, is responding favorably. Congressional Democrats are pushing a bill that would give cities and counties $75 billion. Thats on top of all the $787 billion in stimulus money that was sent to localities last year.

Of course, as well all know, U.S. city governments arent the only ones who are experiencing tough times. The Greek government is in desperate economic throes as well. Like U.S. cities, the Greek government wants a bailout too.

The Greek government has borrowed money to the hilt to pay for its ever-increasing welfare-state programs. The debt in Greece has gotten so large that investors are shying away from buying Greek bonds. They fear a default, one that would likely cost them at least 50 percent of their investment.

The problem is that Greek tax revenues are insufficient to cover the interest on the debt, much less reduce the principle. Moreover, Greek dole recipients dont want to let go of their dole, insisting that European taxpayers, especially those in Germany, help them out. As a backup plan the Greeks are also looking to U.S. taxpayers to come to their rescue, with the IMF serving as intermediary and buffer to protect U.S. public officials from the wrath of U.S. taxpayers.

But as everyone knows, the U.S. government is itself deeply in debt. Its also spending money and incurring new debt as if there were no tomorrow. Its also cranking up the printing presses to print up the money needed to sustain this house of cards.

Imagine that! All these deadbeat governments are looking to a deadbeat government to bail them out.

There really are some simple solutions to all this. For example, at both the state and federal level drugs could be legalized, which would enable federal, state, and local governments to lay off lots of officials whose jobs revolve around that immoral, idiotic, and destructive war. But needless to say, all too many public officials oppose losing their access to bribes, payoffs, asset forfeitures, and political power that accompany the war on drugs.

Localities could also eliminate all programs that dont directly relate to crimes of a violent nature. The problem, again, is that the people who benefit from all these programs, including the public officials, simply will not let go of their largess.

The problem at the federal level is no different. Statists will simply not let go of their favorite welfare-state programs, regulatory programs, and warfare-state programs, even if they are taking our country down.

Consider the welfare-state programs that form the biggest portion of federal domestic spending the so-called entitlements, such as Social Security, Medicare, and Medicaid. All we would have to do is repeal them, along with all other welfare-state programs, departments, and agencies. Yes, I said repeal, not reform.

But when Americans hear that, they have a conniption fit. As psychologically dependent on the dole system as the Greek people are, they simply cannot imagine that life could actually be possible without a system based on the dole.

So, while complaining about how bad federal spending, debt, taxes, and inflation are becoming, except for libertarians Americans remain committed to all the things that the feds are spending money on. The hope is that someone will come up with the magic reform to make it work.

Its no different with respect to the regulatory programs. Americans are so scared of speculators, profiteers, bankers, illegal aliens, and drug dealers that the thought of truly free enterprise that is, enterprise that is free of government control or regulation absolutely terrifies them.

Its the same with respect to the warfare state, which also constitutes a large portion of federal spending. Despite 8 or 9 years of continued occupations of Iraq and Afghanistan, Americans are still not willing to let go of their beloved empire and its imperial adventures. Fear of terrorists and Muslims now seems to match or even exceed peoples fear of the communists, causing them to want to keep the troops in the Middle East, Korea, Europe, Africa, Latin America, and, well, all over the world.

Dismantling all the welfare-state programs, the regulatory programs, and the warfare-state programs would resolve Americas fiscal problems immediately. Alas, however, the American people are still not prepared to let go of their socialism, interventionism, and imperialism.

Thus, America continues to travel down the same road that Greece has traveled down. While the Greeks are looking to German taxpayers and American taxpayers to bail them out, who will be bailing out Germany and the United States when they reach the point where Greece is today?

This post was written by:

Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.