The End of Coercive Transfer Payments

“To the wise, life is a problem; to the fool, a solution.” – Marcus Aurelius

Harry Reid is a Deadbeat

“We are not a deadbeat nation,” said President Obama on Monday.  When you consider the many fine individuals that comprise the nation, President Obama is right.  Nonetheless, the nation is governed by deadbeats.

How else can one explain Senate Majority Leader Harry Reid’s letter to President Obama urging him to circumvent Congressional approval to raise the debt limit?

Sidestepping one’s responsibilities and obligations is archetypical deadbeat behavior.  No doubt, Harry Reid is a deadbeat.  If you have any reservations, just look at the man’s face…it has deadbeat written all over it.

You see, Harry Reid can’t help himself.  He has the ill-fated occasion of presiding over the Senate at the very moment the government’s breaking down.  Reid, like most Senators, has no clue what’s going on.

What he does know is that the old checks and balances of the republic no longer jive with the bread and circuses of the empire.  He’d rather render the controls unto Caesar than risk a Senate standoff that brings into question the full faith and credit of the United States government.  Reid thinks consolidating power with one individual is an intelligent thing to do.

Government Promises

Reid is just doing what he must do.  He is a deadbeat.  Deadbeats always try and take the easy way out.  The President, on the other hand, is eager for more power…especially if it will be given to him…

“If the House and the Senate wants to give me the authority so they don’t have to take these tough votes… I’m happy to take it,” said President Obama.

Of course, a crisis – like hitting the debt ceiling – is a golden opportunity for a government power grab.  Public fears of the end of the gravy train are too much for many to contemplate.  They prefer to relinquish more of their freedom for the promise that everything will be okay.

Unfortunately, the debt ceiling comedy is merely a single act in the great big tragedy that’s well underway.  What we are referring to is the breakdown of the social welfare state.  This is the real story that Reid’s missing.

It’s never dawned on the lunkhead that transfer payments no longer support all the promises the government’s made to everyone.  There are too many dependents.  There are too many obligations.  They are too massive for the productive class to support.

What’s more, increases in government debt are going vertical.  If this keeps up, the great default or great inflation will occur.  Despite what Reid may believe, raising the debt ceiling is not the solution…it compounds the problem.

The End of Coercive Transfer Payments

Harry Reid’s flummoxed.  He’s been bequeathed a system that’s on the outs…but he doesn’t know it.  The New Dealers, with Social Security, and the Great Society, with Medicare, created a system of coercion that’s doomed to fail.

The taxpayer is involuntarily paying into a system of wealth-redistribution.  The government has promised them that one day they’ll be on the receiving end of the transfer payments.  Statistically this is not possible for everyone.  The system cannot go on forever.

In fact, the system is breaking down before our very eyes.  Consider Medicare…

“The unfunded liabilities for Medicare now total $105 trillion and growing,” explains Forbes.

“Last year, there were 3.3 workers contributing to Medicare for every person receiving benefits.  That ratio is set to fall drastically in the future, dropping to only 2.1 workers per Medicare beneficiary by 2086.  Simply put, we’ll see increasingly higher costs divided among increasingly fewer people.”

Long before 2086, we suspect America will go broke for good.  This will bring a tax revolt that ends coercive transfer payments.  Regrettably, dependents and recipients who paid into the system their whole working lives will be cutoff.  In the meantime, the Fed will keep propping the failing system up by creating money from nothing and loaning it to the Treasury.

In conclusion, deadbeat Harry Reid doesn’t know what’s going on.  Aging baby boomers, who’ve hardly saved at all, are counting on something that’s been promised them their whole lives to support them in their golden years.  They are in for a rude awakening.  Yet Harry Reid thinks raising the debt ceiling will make everything fine.

It won’t.


MN Gordon
for Economic Prism

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