If Americans want to see where our country is headed, all they have to do is look at Greece, the country whose government spent and borrowed the nation into bankruptcy. But now we have another welfare-state “success” story much closer to home — Puerto Rico, whose government, which is deeply in debt, has just defaulted on its bond payments.
Just like in Greece and just like here in the United States, the Puerto Rican government has long been spending much more than it brings in with taxes. How does it do that? Easy — it just borrows the difference.
What’s finally happened is that there just isn’t enough wealth among Puerto Ricans to tax to fund the government, its massive welfare state, and its debt payments.
Keep in mind that government doesn’t operate like a business. In order to pay its expenses, it forcibly takes money from the private sector through taxation. When the level of expenses exceeds the tax revenues, the government has two options: slash expenditures or borrow the difference.
In the case of Greece, Puerto Rico, and the United States, the decision has been: Don’t dare slash expenditures because that will bring about a recession or an “economic downtown.” So, the decision has been: spend, spend, and continue spending, and borrow, borrow, and continue borrowing.
Here in the United States, that’s what the debt ceiling debate is all about: Should the amount of the debt that the federal government has incurred be permitted to exceed a certain maximum amount? The reason that there is a debt ceiling is because even the president and the members of Congress acknowledge that too much federal debt is a very bad and very dangerous thing.
Of course, for all practical purposes, there is no debt ceiling because every time it’s reached, the mainstream media goes ballistic over the possibility of reducing government expenditures and demands that the debt ceiling be raised again, a demand that the president and the members of Congress always accede to.
Here’s what ends up happening. Imagine a hypothetical horse that is healthy. One day, a tick attaches itself to the horse. The tick begins sucking blood out of the horse but the horse, while discomforted, finds it manageable. Then another tick. Then 100 ticks. Gradually, the horse loses its vitality and becomes weak. At some points, the numbers of ticks become so voluminous and are sucking so much of the lifeblood out of the horse that the horse dies, thereby, ironically, denying the ticks any more sustenance.
That’s precisely what has happened in both Greece and Puerto Rico and what is happening in the United States. That’s what the welfare-state way of life is all about. It is a way of life in which one group of people use the force of government to live at the expense of another group of people. The first group is the parasitic sector and the second group is the host sector.
At first, the host sector is able to handle the parasitic sector. Theoretically, the parasitic sector can reach a happy medium — one by which the host sector is able to survive and thrive despite what the parasitic sector is doing to it to survive.
But what oftentimes happens is that number of people in the parasitic sector begins growing, much like the ticks on our hypothetical horse. Moreover, the amount of the welfare being sucked out of the private sector begins soaring.
For a while the private sector can handle it. But at a certain point, the host begins teetering, much like our hypothetical horse that finally is unable to sustain the burden of all those ticks.
The amusing part of all this is how liberals, who foisted the welfare-state way of life on America during the 1930s, will look for every excuse in the world on which to blame the economic debacle. The last thing they will ever concede is that the welfare state is the root cause of the economic disaster.
So, they’ll say it’s all just the failure of “free enterprise” and call for even more spending and debt, thereby accelerating the downward spiral. Or they’ll say that the problem is “greed” or “income inequality,” and call for more taxes on the rich, thereby contributing to the death of the private sector on which the parasitic sector is dependent.
But the reality is that the root of the problem is the welfare state, the system by which people are trying to live at the expense of everyone else while doing their best to ensure that their own pocketbooks are not being plundered and looted by the state.
Liberals assure us that what has happened in Greece and Puerto Rico can’t happen here in the United States. “We’re different,” they tell us. “We’re exceptional. Our government can spend and borrow to its heart’s content because we’re Americans.”
What they are referring to is the tremendous amount of wealth in the U.S. private sector, along with the ability of the private sector to produce new wealth. All that wealth, they say, can easily sustain all the future payments for Social Security, Medicare, Medicaid, education grants, farm subsidies, foreign dictatorships, the Pentagon, the military-industrial complex, the CIA, the NSA, foreign and domestic military bases, regulators, federal bureaucrats, corporate bailouts, the drug war, and the rest of the welfare-warfare state.
That’s what they mean when they refer to “growth” — the hope that the private sector will expand, thereby providing the sustenance needed to sustain the parasitic sector.
But what happens when the private sector is no longer expanding — that is, when there isn’t “growth” but instead contraction? That’s when the downward spiral begins and then accelerates.
Today, the so-called millennials are struggling financially to start families and to accumulate wealth. Many of them are already deeply in debt with student loans. They are feeling the heavy burden of the parasitic sector, much as our hypothetical horse at some point begins feeling the burden of all those ticks.
It’s really not a question of if but when. When the burden of the parasitic sector in American society becomes too heavy, the private sector will begin to cave in on itself. It’s what a welfare state does to a society. Just ask the Greeks. Just ask the Puerto Ricans.