For the past seven decades, Government formula has been the same. Start a program whenever something seems wrong. Intervene if the economy does not produce the desired results. Repeat again and again, all the while convincing citizens that government is the only one that can solve the problem. This ad hoc interventionism enabled Governments around the world to expand at rapid rates, growing haphazardly into behemoths.
We are now at a turning point in history regarding Government. They have become Rube Goldbergcontraptions, grown beyond effectiveness or control. Their failures are readily apparent. Their perception as “problem-solver” is morphing into “problem-causer.” They are inefficient in their responsibilities while draining the vitality out of the economies they rule. Rick Newman in a recent article on Seeking Alpha discusses Gary Schilling’s findings about the US:
“Economist Gary Shilling has calculated that 58 percent of the population is dependent on the government for “major parts of their income” including teachers, soldiers, bureaucrats, and other government employees; welfare and Social Security recipients; government pensioners; public housing beneficiaries; and people who work for government contractors. By 2018, Shilling estimates, an astounding 67 percent of Americans could be dependent on the government for their livelihood.”
The size of the US government debt and obligations causes concern around the world that will likely make Shilling’s trend impossible. We have already passed the point where these obligations can ever be serviced in an honest, contractual fashion. No plan is mathematically feasible. That is why no one in authority addresses this problem. It is a kick-the-can-down-the-road strategy that works until the can goes over the cliff. Resistance to additional debt/dollar holdings by other countries and our zombie economy, propped up only by unsustainable government spending, suggest that we are very near that cliff.
The history books a century or so from now are likely to marvel at the naivete of our era. People reading them will wonder how their ancestors could have engaged in a sort of religious worship of government, believing that any and all problems could be solved by this God. But the bigger story is apt to be the civil and social unrest. Devout believers do not react well when their God is shown to have been little more than a giant Elmer Gantry scam.
Our current economic crisis will be the first few pages in the chapter of this period. Like a good mystery, the ending is not yet knowable. My suggestion for a title for this period is “The Myth of Government.” If we don’t destroy ourselves in the process, our descendants will wonder why we arrogantly chose to ignore the prudent advice available to us. As an example, Frederic Bastiat told us more than 150 years ago:
“The State is the great fiction by which everyone seeks to live at the expense of everyone else.”
Perhaps that is a better title of the era we are living through.