Our government spends a trillion dollars more than our annual tax collections and makes up the difference with loans from China, our number one geopolitical adversary. They loan us the money so we have the wherewithal to keep buying stuff made in China by manufacturers who used to make stuff in the U.S. and, along the way, they accumulate the fruits of our basic R&D free of charge.
And we tell ourselves how lucky we are to live in a free and democratic society compared to the Chinese folks subject to the whims of a dictator. As a democracy, we have elected the people who led us into this subservience to a country who, a few decades ago, couldn’t pick up the tab for our table scraps. Who’s stupid?
A little history will answer that question and the method employed is called “Frog Water”—more on that in a moment. For people who don’t like numbers, this is going to take some concentration but it’s worth it if you really want to know how pigs are fed.
The Arithmetic
President Dwight Eisenhower’s last budget for fiscal year 1960 was 92 billion dollars with the difference between taxes collected and money spent yielding a 30-million-dollar surplus for the 180,671,158 people living in the U.S. That works out to $510 per person as our cost of government. This was while we started construction of the interstate highway system and maintained a military necessitated by the Cold War with Russia.
Moving ahead to FY 2017, tax collections of 3.3 trillion dollars and a deficit of 665 billion dollars works out to a cost of government of $12,224 for each of our 325 million citizens. We will eventually need to pay that deficit.
To put it in constant dollars, when we look up the inflation rate spanning 1960 through 2017, we find that a 1960-dollar costs us $8.41 in 2017. Adjusting the cost per citizen for government at $12,224 equates to $1,453 1960- dollars. This compares with the $510 as the cost of government in 1960, an increase of $943 per person.
To put it another way, if we were paying the cost of government at the same rate as we were in 1960, in today’s dollars, that would make our per capita cost $4,300 instead of $12,224, a net increase in your bank account of nearly eight thousand dollars per year. For a family of four, that’s almost $32,000. Well, not actually; a significant part of the tax levy is paid by businesses which means that they would have that money to create more, higher-paying job opportunities.
Since the people elected the preparers who do the budgets, then it stands to reason that the message from the people is, please, government take more of my money. Has anyone seen a poll supporting that notion? Probably not. So how did we, a free people, get that way?
Frog Water
It’s called Frog Water. If you put a frog in boiling water, he will immediately jump out but if you put it in room temperature water over low heat, he will just sit there with a smile on his face until it boils and then, well, he’s got no jump left.
Whether a dictatorship or a democracy, it’s all about power and who possesses it. The dictator grabbed his power by hook or crook while the politician gets his by, hmmm…let’s see, hook or crook. Currency in the first case is bullets and, in the second case, it’s bucks, and the more of those he has, the more power he has. Remember, in a democracy, power comes from the people and the more money a politician has, the more people he can buy.
Every year at budget time, the crafty pol puts together a story about a needy this or that which can be addressed by just a few federal bucks, and a good-hearted electorate says we should do it. As budgets come and go, those few federal bucks grow into numbers beginning with a B and there is never an end of new needies.
A prime example is life in the inner cities of metropolitan America. In the mid-sixties, President Lyndon Johnson initiated The Great Society, touted to bring an end to big city squalor. How did that work out? From the Boston Globe we learn that after 87 years of Democrat hegemony, the average black person in Boston has a net worth of $8. That’s not a typo—eight dollars.
Under The Great Society, Aid to Dependent Children (ADC) was available to any household with children and no resident male, and so, exit all males from inner city families. Now, we decry the lack of father figures in troubled households.
Whose Money?
In case you just drifted in on a UFO from planet Zwingel, growing federal budgets are not the beneficiaries of politicians’ personal generosity. It is through the manipulation of the tax code that politicians are able to buy the people they need to stay re-elected. For example, brand new bureaucrats and their family and friends are beholden to sponsors of the new bureaucracy that provides the papers they shuffle each day. The beauty of it is, they are unfireable if their sugar daddy fails in a re-election effort and his replacement will initiate his own people-acquisition.
Another favorite method used to buy “loyalty” is pension fund generosity to a union, using government money. These unions, in turn, make generous campaign contributions to keep that politician in power. The proverbial mutual back-scratching alliances are alive and wealthy. Since by the time the fiscal irresponsibility becomes obvious, the pol will have retired to his multi-million-dollar estate and somebody else will raise the taxes needed to clean up the mess.
In case you haven’t figured it out yet, the crafty pol is nursing at the taxpayer’s teet and that’s how taxes have tripled in a scant 57 years. Anybody checking the water temperature?
