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Adding a new principle of government not
intended by our founders,
which is all-consuming and weakening America's families and national
security,
has caused a huge shift from small to all-consuming government-dependence
and to a nation where households and business are more debt-dependent than ever before
and more dependent on foreign products and financing than ever before.
- a legacy to the next generation - a cross-road - a
wish -
(this page is a part of the Grandfather Economic Report series, a review of
economic trends revealing threats facing young families and youth, compared to prior
generations - displaying hard data evidence from reliable sources in color graphic form on
subjects such as debt, government, family incomes, social security, international trade,
regulations, inflation, productivity, energy, national security and education quality. The
page you are now visiting is one of the summary pages documenting mega-trends)
|
Is the path now followed a road to serfdom
and reduced individual freedom and security?
"The decline of great powers is caused
by
simple economic over extension" (quotes)
A cross-road and our legacy to the next
generation:
A review of economic data trends, from my childhood to the present,
clearly reveals several mega-trend changes in the economic functioning of America -
- major departures from the past, by actions not intended by our nation's founding
forefathers - which have placed economic, social and security threats on the backs of many
- AND, the 'chickens have come home to roost' to face our children and
grandchildren - and, generations to follow. Such data confirms the warning by 1974 Nobel
Laureate Friedrich A. Hayek (1899-1992) in his classic, 'The
Road to Serfdom,' warning of government interference with the economy.
NOTE: this survey was prepared prior to the September 11, 2001 terrorist attacks
on America - - and the start of a new global war called the 'War on Terrorism.'
America is now at a 'cross-road'. Options
include - continuing to increase the socialization and debt-dependency of our economy
driven by large, dominant government, retaining the status quo, or re-structuring to
return our nation closer to the core root principles envisioned by our forefathers of
small, non-intrusive government with concentration on national security and an aversion of
debt, both government and private. Do we wish government to be restrained to the four main
principles outlined by our founding forefathers, which were: national defense,
preservation of public peace (civil war, riots), regulation of trade between states &
with other nations, and international relations - - as they envisioned? Or, do we wish to
continue with a 5th dimension, not envisioned - - one which converts most of our people
and economy to a dependence on big government for their social needs, and on debt, instead
of on themselves?
SUGGESTION to Reader
Before clicking any of the following links, read the full page to understand the Mega
Trends
- - then return to the link of choice
As stated above (from the Federalist Papers of 1787, Alexander
Hamilton, etc. - see famous quotes),
the framers of our Constitution outlined but four (4) core reasons for forming a
federal government: (1) national defense, (2) preservation of peace between states
(civil wars, riots), (3) regulation of trade between states & with other nations, and
(4) international relations. (note > 'national defense' was listed as #1 - - thereby
being the priority).
If successful in carrying out those principles, it was believed the
'welfare' of citizens would be assured. (note - this was their meaning of the word
'welfare', not income redistribution and entitlements). As further evidence of original
intent, for the following 1 ½ centuries the federal government stuck by those
principled reasons, and by the late 1920s was still consuming/controlling only about 3% of
national income (the economic pie). Taxation was used only to pay those bills. Such
principles did not include such items as social welfare, entitlements and income
re-distribution functions. We were a nation that used government primarily only for those
4 principles, relying on ourselves for all other needs.
Additionally, the founders were against debt. At the writing
of the constitution they were concerned about debt incurred to finance the Revolutionary
War; and it was their intention to pay off debt, using excise taxes on imports. Alexander
Hamilton (federalist #7) called for the 'extinguishment of all debt'. Later,
Jefferson wrote ""I place economy among the first and most important of
republican virtues, and public debt as the greatest of the dangers to be feared."
40 years after the Federalist Papers, in 1825, we have evidence that
some wanted to alter the core principles - - but they received a strong warning from one
of American's most respected presidents. "Aided by a little sophistry on the
words 'general welfare', [they claim] a right to do not only the acts to effect that
which are specifically enumerated and permitted, but whatsoever they shall think or
pretend will be for the general welfare." --- Thomas Jefferson 1825 to W.
Giles. Such warnings as Jefferson's were effective for the next 105 years, as evidenced by
spending continuing in the area of but 3% of the economy - - until, as we shall see - -
came the "New Deal" of the 1930's.
"We can pinpoint a time - the late 1800s to early 1900s -
when America rose to world dominance, as the balance of power shifted from the Old
World to the New World, a period of small government, no income tax and strong
constitutional support for free enterprise - when market entrepreneurs (Dow, Gerber, Ford,
Kellogg, etc.) succeed by creating better products at lower cost and out-performed
political entrepreneurs of the Old World who used government to gain an unfair advantage.
The 1920s was the last decade when such could be built without major interference from
government." (historian Burton Folsom, Jr. -
senior fellow, Mackinac Center in Imprimis, 12/97). If federal
social programs were nearly non-existent for the first 150 years of our republic - - why
was such allowed to be invented out of thin air later on - at about the time of my birth?
Following is a short review of mega-trends
during my life-time, to highlight the road traveled and some consequences experienced:
In the 1920s, a decade before my birth, "America's
fundamentals were strong - - nevertheless, it was about to enter the Great
Depression - a financial collapse brought on by disastrous macro-economic policies of
the government - followed soon after by the worst world war in history" (The Economist, 12/20/97, pg. 15).
Researchers (see "The
Bubble That Broke the World" by Garet Garret, 1932) place prime blame for the Great Depression on the new Federal Reserve Bank
and its undisciplined creation of 'money' (debt) out of thin air, which created a huge
bubble and the 'roaring 1920s, followed by the eventual collapse.
"The 1929 stock market crash didn't cause The
Depression.The Depression, contrary to popular belief, was caused by a
collapse in the bond market, which resulted when The Government attempted to step in and
prevent the (downward) correction in (over-extended) asset prices that was taking place as
the speculative air came out of the bubbles blown in the1920s.The bond market collapse
caused an instantaneous ramp in borrowing costs (interest rates and borrowing terms) which
shut off the flow of capital at the precise time that market participants needed access
(to more borrowing to roll over and refinance their excessive debts)."
Karl Denninger, 4/7/2008.
Note also: this calamity was not generated by free enterprise.
While pro-government forces began tinkering, free-enterprise auto sales zoomed from
181,000 in 1910 to 5,000,000 by 1929, and private truck freight out-performed the railroad
industry (with its price fixing and government controls) - - mothers were able to buy
Gerber's baby food and low cost bleach (as Dow defeated the European cartels).
With the Great Depression came the invention of a 'justification'
for a collectivized rapid expansion of centralized federal powers in the
1930s - - called the New Deal - - as America's leaders imported certain
big-government ideas invented in Europe (from socialist Russia under dictator
Joseph Stalin and from Italy
under dictator Benito Mussolini,
according to historian Amity Shlaes).
At the time those advocating socialization of the economy and centralized government took
charge of our nation, unnatural to its history, at variance with the
consitituion and the intent of our nation's founders.
This resulted in an explosive 4
fold expansion of the federal government's share of the economy (from 3% of
national income to 13%, see chart below).
(The chapter on famous
quotes proves our nation's founders intended the Federal Government NOT be
involved in social issues concerning citizens, such as: social security,
Medicare, Medicaid, health, welfare, education, income redistribution, entitlements,
unemployment insurance, farm subsidies, housing, flood insurance, etc.
And, it is amazing that any true believer in the core
principles of our founders would discard their wisdom and intent and, instead, listen to
'ideas from Europe,' especially recognizing that much of our nation was populated by those
fleeing European history and its reliance on big-government and centralized power.)
The U.S. economy was driven by certain forces away from
dependence on individuals and families as in the past, toward more
and more dependence upon centralized government. Many labels were given to
government encroachment: President Roosevelt's National Recovery Administration (NRA),
which included pressuring auto firms and others to produce artificially high wages,
prices, work hours, etc. - although Auto already led industry in high wages, the
Smoot-Hawley Tariff (the most restrictive tariff in history), the Reconstruction Finance
Corp.(government financing banks, railroads and other industries), The Agricultural
Adjustment Act (regulate farm production), the National Industrial Recovery Act
(regulating the others, the Wagner Act (shifting balance of power from entrepreneurs to
labor union bosses), etc. Tax revenues needed to pay for such government expansion soared.
Additionally about making government bigger, read > Failure to Learn
From FDR's New Deal.
GOVERNMENT GROWTH: Let's take a look at government
growth in America, as measured by its spending as a share of the economy's total national
income. Did it expand faster than the economy, or slower?
1. As recorded by this chart
> For a many, many years prior to the 1930s (the New Deal) the Federal Government's
spending consumed about 3% of national income. With the New Deal the federal government
expanded its control of the economy from the prior 3% of national income - - up to a 13%
share of the economy during the 1930s before World War II. As the chart shows, after the
war it continued its upward march to higher and higher shares of our economic pie,
reaching today's 26% of same - - an 8 fold expansion in economic control and federal
government-dependence of our economy - - shown in the Federal Government Spending Report.
2. If we add federal government spending of 26% of the economy plus
the spending of state & local
government of 17% of the economy (much of which was caused by federal government
mandates), the sum total now consumes/controls 43% of the total economy - - up from 12%
for combined spending - - indicating total government has grown faster than the economy -
much faster. (see the long-term trend chart on Government spending).
- 3. This reduced the pure private sector (that part of the
economy not dependent upon government) from an 88% share of the economic pie - - down to a
57% share. That's a 31 point reduction in the private sector's share, and said
reduced share was further eroded another 13 points by mandated regulation compliance costs created
and imposed by increased government at all levels.
- 4. America has become much more a socialistic economy, and
less a free-market one - - as more and more power and control was transferred to
government at federal and other levels - - away from individual and family control.
Basically, the movement was to one of centralized government 'knows best', compared to individuals
- and government is a 'wiser & better parent', than natural parents.
- This 31 point move in government dominance (from a 12% to a 43%
share) included 23 extra points controlled at the federal level and 8 extra points at the
state & local government level. As stated above, the federal government sector increased
its share of the economy 8 times higher than before - from 3% of the national
income economic pie to 26% of same. Currently, 68% of the federal budget is consumed by social spending and interest on the debt resulting
therefrom. (the author blames all interest on social spending since that was the primary
growth area of the government). In addition, state & local government
tripled its share after WW II (from 6% to 17% of national income), much in response to
social mandates from the expanded federal sector. All such government increases came by
subtracting parts of the economic pie that is non-government spending dependent - - called
the pure free-market private sector.
- Looking at the movement from federal + state/local government control
of 12% of the economy to a 43% share, the overwhelming driving new item was Social
Spending - - a function not included by the founding forefathers as one of the four core
functions of government - at the framing of our constitution in 1787. (see Federalist
Papers, James Madison and Alexander Hamilton)
- In addition, this expansion in the social arena was to a great part
financed by debt with zero plan to pay it
off - authorize and spend now, let future generations carry the debt burden - and, act
like a 'free lunch' has been created out of thin air. Peacetime debt moved from about 10%
of the economy's GDP to the current historic peace-time record six times higher - - or, 6
times faster than the economy expanded.
- This expansion, or increased centralized control and dependence on
government, took various dimensions, with several specific surge points (a
color graphic showing several federal surge points is at the top of this page):
- 1930's - The New Deal -
Start of social programs for Social
Security pensions and welfare. The first, major departure from the four principles of
government outlined by our nation's founders. A 5th principle was added 'ad-hoc' -
socialization, which was a joining of those interested in large, all-powerful centralized
government with those interested in income re-distribution - - for which no end point is
envisioned, and for which history shows such eventually could produce an economy and
nation much like the former Soviet Union, or Nazi Germany. Many have documented the U.S.
socialization start was a concept imported from Germany in the early 1930s, when that
government was expanding its size vigorously and in the beginning creating public works
programs by the day. We know the result. The socialization expansion in America was
somewhat interrupted by World War II, only to regain its vigor sometime thereafter - in
greater force. The GREAT SWEEP
of government expansion is shown by a dramatic chart covering a 126-year period.
- 1960's - The Great Society
- Significant expansion of social pensions and welfare, with the start of creating medical
dependence on government via Medicare & Medicaid - - as well as moving high
percentages of education revenue
from 83% local control to a status whereby federal and state government's controlled
more than 54% of same compared to 17% before (3 times more), and pushing down into schools
mandates for social programs at the expense of learning and quality of the many. Since
such consumptive programs subtract from national
productivity, inflation began
to rise and the international purchasing power of the dollar began to fall, wheras a
$1 in 1950 is now worth less than 13 cents - - resulting in further socialization by
adding cost of living (COLA) adjustments to such spending which further accelerated the
looming problem. The U.S. became the world's largest debtor, and its international trade accounts moved to
continuing deficit.
- By the 1970's trends emerged of the ramifications, and 'chickens started to come home to
roost' from the aforementioned social expansions. After many years of solid family income growth, American median
family incomes stagnated and began to fall (adjusted for inflation)- which has continued
for 2 ½ decades - - personal savings percent disposable income declined for 20 years
despite families requiring two wage-earners instead of one - - the quality output of the
nation's education system (SAT
scores) became the worst in 35-years despite rapid increases in real per-student spending
- which caused the education productivity index to fall 71%. It became recognized that
social programs created previously had not only failed to achieve their goals in cost and
result, but some, such as Social Security and Medicare, were in fact 'Ponzi Schemes',
which were in a financial solvency/fairness crisis. Add to this rapid expansion of debt to
ratios never before witnessed in peace-time, without a single amortization plan to remove
said debt from future generations. Our nation's social fabric weakened in a way never
before witnessed, as evidenced by crime, drugs, teen-age pregnancies, divorce, father-less
families, and generations of welfare-dependents. America was not feeling good about
herself.
- 1980's - Reagan Era - Beginning
against the back-drop of dangerous threats and trends, The Reagan Era Report documents a
major challenge to run-away government. 1. The first era in 50 years when the private
sector share of the economy did not decrease as a result of government spending expanding
its share of the economic pie. (Prior to this era, such spending had increased from 12 %
of the economic pie to 43% of same, reducing the private sector by large amounts.) 2.
Declining real median family incomes were reversed to the upside. 3. Double digit
inflation and interest rates were eliminated. 4. The Evil Empire was brought to its knees,
ending a 40-year cold war. 5. Taxes were reduced, and still government revenues increased.
6. Congress spent all of the increased revenues and more, causing deficits. It is clear
that President Reagan believed the statement of Nobel laureate Milton Friedman:
"We know full well that government will spend every penny - and more - that is
yielded by taxes. A cut in taxes will mean a cut in spending, and there is no other way to
get a cut in spending. The big spenders know very well that a multi-year tax cut will
force multi-year spending reductions." There can be no doubt that the 'Reagan Era'
represented a revolution in that it significantly departed from significant trends of
government growth relative to the size of the economy at the federal and state/local
levels - - which prior to the 1980's had been well outside that envisioned by the nation's
founding fore-fathers for generations - - all of which was a shock to those believing
the-more-government-the-better crowd. As the Reagan Era closed, many wondered would this
revolution, which basically stopped the up-swing of the socialization pendulum, be
sustained into the 1990's or negated with the initiative recaptured by big-government
forces.
- 1990's - New World Order, and The Bridge to a Global
Society. Despite such clear negative results prior to the
Reagan era and some positive results during that era, pro-centralized 'government knows
best' leaders in the 1990's planned to further increase citizen dependence on
government - first by implementing the two largest tax increases in history (1990
Bush, 1992 Clinton), trying to more than compensate for the Reagan-era tax cuts and fund
further social expansion, then by proposing health care programs for all citizens despite
our nation having less life
expectancy at higher health cost than others, which if implemented would have
increased government's control of the economy another 14 points - - to approximately 60%
of the total - and transfer even more sources of private sector revenue to government
control. This meant, instead of the sum of federal and state & local government's
share of the economy just being 4 times larger than before, it would be moved to a 5-6
times larger share of the economic pie. Such a plan would have been implemented had
not at the same time national debt and the financial consequences of past social programs
essentially placed the nation's national government in a 'broke' situation, and by virtue
of the carry-over impact of the Reagan revolution. Still, some leaders continue to
'sneak-in' parts of this medical expansion, with hopes another opportunity to accelerate
said agenda will emerge. Concerning education in the 1990s, Nobel Laureate Milton Friedman
called education quality the worst in 35 years, education economist W. Williams
said there is a negative correlation between quality and spending, the Organization of
Economic Cooperation and Development (OECD) called relative international education performance
and the quality of U.S. schools mediocre at best, the Secretary of Education said he
is disappointed, a 1997 poll
of voters in Florida released by AP reported 67% considered public schools mediocre
or a failure concerning academics, and the President in November 1996 called on volunteers
to teach children to read and proposes to throw more money at the situation instead of
restructuring the delivery system. In November 1997 USA Today reported that 60% of new
students to California colleges, and 70% for Florida colleges, require remedial courses -
- a further implication of the decline in education quality - - as colleges lowered their
own standards to meet lower high school output quality. Additionally, the Federal Debt Report shows over half of
our entire federal debt was created in 1990's, and by 2000 43% of all outstanding public
debt was owed to foreign entities. During the latter part of the 1990s it was claimed with
great fanfair that the federal government was in surplus and no longer deficit spending,
when in fact it was deficit spending every single year (per that Federal Debt Report). What was going on
here was that the federal government was siphoning-off every penny of
incoming social security trust fund surplus as fst as it arrived from workers and
spending it on non-pension stuff. Even worse, this example to create federal debt
for government expansion has spilled over into the private sector, as the entire nation
has thereby become more debt dependent than ever before, as dramatically shown in the
highly-acclaimed America's
Total Debt Report - with soaring financial sector and household sector debt soaring
much faster than growth of the economy - - and each new dollar of added debt producing a
diminishing amount of GDP. Most disturbing trends that the 1996 (and in 2000) presidential
elections represented a 36-year low in voter participation turn-out ratios per the Voting Report, and the Trust in Government Report showed but
20-30% trusting government and new lows in citizen trust of honesty & ethics of
elected officials - - a massive drop in trust from 3 decades ago - both of these are far
from the performance of a representative democracy envisioned by our nation's founders.
- 2000 to Today - more of the same negative trends, but
even worse. Examples > continued soaring debt
ratios in every sector to new all-time records as shown in the chapter 'America's Total Debt Report'
and in the 'Federal Government Debt Report'
- Exploding trade deficits to new all-time records as shown in the chapter 'International Trade and Debt' proving
America's lack of competitiveness as more and more assets are transferred to foreign
interests and their emerging control of America - Plunging international buying power of the
U.S. Dollar' - The manufacturing
base and its employment decline month after month - U.S. students lagging even further
behind those of other nations as documented by the International math & science
test chapter - Trust
fund surpluses continue to disappear as the social security deficit explodes - Total
(federal plus state & local) government spending ratios remain extremely high compared
to the past as shown in the Government
Growth Report - Federal
Government Spending ratios and entitlements continue high - State & Local Government
continues to add employees faster than general population growth with higher average pay
and benefits than private sector workers - Stagnant to declining real wages (see Family Income Report) - Negative personal savings to
record lows. Additionally, as the U.S. became even more energy dependent on others (proven
in the Energy Report), the
U.S. started waging a war in the middle east which officials state will last a generation
while over-stretching the military in face of other emerging threats, while China and
Russia modernize their war-making capacities (National Security Report). In the face
of these trends officials often point out rising productivity when in fact the right
question is 'What Productivity?'
and they also point out what they call America's superior medical system when in fact the Health Care Report documents that
U.S. health care quality and life expectancy seriously lags that of other nations.WARNING !!!!
Each of these trends > debt ratios in all sectors, trade deficits, U.S. dollar,
manufacturing base, education quality relative to others, trust fund siphoning and soaring
entitlement deficits, government spending ratio share of the economy, state & local
government employee counts, real family incomes, personal savings, energy imports,
national security and health care < must be reversed
to better assure a safer, fairer, more prosperous future for then generation of our
chlordane and grandchildren compared to ours - - or, else our generation miserably fails those that follow.
- Such major changes to the past, as government increasing its share of
the economy by 30 points as measured by spending, further laid the groundwork for an
expansion in economic costs not shown in government spending - - accelerating
government regulations mandated on the private sector without compensation - - which further
eroded the effective share of the economy of the pure private sector, compared to
prior generations. Larger government does not make less regulations than smaller government
- it mandates more , now consuming 14% of the economy. Larger government does not result
in less tax drain on families - - the Tax
Report shows federal and state/local government consume on average 5.3 months of a
persons income to cover all taxes, 4 times more months than prior generations - with
current tax revenues now at the highest peace-time ratio to economy size in history.
- The results of social experiments is that the nation has become so government spending-dependent, partly
fueled by calling everyone a 'victim' with some lack of social right yet to be
guaranteed and financed by government at the expense of others, that a frame of mind has
been entrenched in many citizens that they have a 'right' to being taken care of socially
by 'big brother', instead of being responsible for their own lives and well-being -
- as were their forefathers. America had become a socialistic society, a
government-dependent society, a collectivist society, an irresponsible society, and an
overly consumptive, demanding and greedy society. As a result, tremendous pressure has
been built by vested interests of the many dependents (government employees and recipients
of said spending, plus organizations such as the teacher's union and AARP) to fight
against any reduction or taking of their new rights - as such would mean they must learn
to become dependent upon themselves.
- It appears to this observer that God and Family has been replaced by
Government and its created Dependents. Citizens have been 'conned' into accepting that
there is a 'free lunch', if only they will trust in government power as their
'Father' instead of in themselves and their Maker. America has become a
government-dependent 'socialized junkie', and as with any addiction and dependence created
during a lifetime it is very difficult to break. We know it must be done, but will not
require our leaders to do it for us (if it affects us today, even if our children must pay
the price) and feel powerless or unwilling to do it ourselves.
- A solution: Like any 'junkie', we need a dry-out period for our
own sake, and for that of the young generation. We need a 'bite-the-bullet' plan that
calls for a steady reduction in the share of the economy represented by government
spending, its regulations, and its debt - implemented in a fashion where any burden
therefrom is shared equitably by all. We will bite whatever 'bullet' to do our part to
meet a noble plan which we believe will benefit those to follow us. While Europe, with its
even higher government spending ratios, march to even higher levels of allegiance to a
super-European bureaucracy in Brussels, American can move in the opposite direction
- - to lower spending ratios, by reducing support to that 5th 'principle '
(social spending), which was not one of the 4 original principles of government by our
founders - - but which was created out of thin air. We owe it to ourselves to become
responsible as individuals again, especially to our children and the generations to follow
- and as a salute to our nation's wise founding fathers. "The best government
governs least."
- The New Millennium, Legacy and Cross-road:
Forces are in place moving America away from its glorious strength and independence of
the past - - toward a centralization of many nations into a higher level of government
- - a type of global government. Today we are witnessing the prototype of such a global
government in the construction of the European Union and its single currency (see The EURO), and
with such broader organizations as expanded NATO, and the World Trade Organization. As
America has become more and more dependent on government, debt and foreign entities, and
less so on individualism, family, religion, and a large pure free market society - - and
less so compared to the main principles outlined by the framers of our Constitution - -
its entire independence is threatened to be merged into something further from the
reach of citizens - - a form of government of which our nation's founders attempted to
circumvent. This sets us up for a potential step-up in government control at a higher
level.
- Today America's economy is faltering under the load of historic
debt of the government, household, business and financial sectors. The various chapters of
these Grandfather Economic Reports contain significant evidence of many long-term negative
trends that require correction - - especially government spending in areas not
contemplated by our nation's founders which dilutes their intent and our focus, more
reliance on the historic ratios of private sector debt and government debt, and a shrunken manufacturing
base with the lowest
savings in history and highest houshold debt ever, and
more
dependence on importing from
others instead of producing needed goods ourselves. The Energy Report shows that
America, which used to be self-sufficient regarding energy supplies, is more dependent on
foreign supply than ever before. We must remember the top of this page, in the 1920s when
America was booming - - and, then the Great Depression loomed - - which provided the
'justification' for accelerated dominance of big government. The unsettled nature of the
world's monetary and debt situation in the late 1990s may signal trouble ahead. With
today's government spending in American now consuming 44% of the economy, with record debt
ratios to economy size for government, the financial sector and households - - there can
be little doubt that another major financial crisis would result in those justifying big
government to grow same to even higher shares of our economy - - as evidenced by history.
- Defense of our nation is the first of four core reasons for a
federal government, as outlined by our founders (see top of page). Prior to 9/11/01 we
could be proud that we were a nation without war or pointing missiles as shown in the Celebration Report - - yet a
clear warning was issued regarding the over-downsizing our military to finance spending on
items not in the four founding principles, especially in the face of a history of major
surprises, the concern for which was recently expressed by the Chairman of the Joint
Chiefs of Staff. We may be placing our young generation's national security at risk,
compared to the past - due to spending in areas not contemplated by our founders - - which
significantly reduced the economic surge potential that won World War II - - and in the
1990s halved our military - -and which reduced our federal government's focus on the prime
reason for a federal government (see National
Security Report).
- Regarding America's increased dependance upon foreign entities
for its energy and for the
financing of its economny and supply of goods as evidenced by its huge trade deficits - - brings to
mind the arguments for and against so-called 'free trade' and the march of globalism to
some sort of new world order (or, as some say, to a world government and currancy), one
needs to study the writing of Joseph
Schumpeter, economist and political scientist, who said that while 'free trade
is economically efficient, national independence is even more fundamental. He wrote,
"[If] we have got to live in a mercantilist, nationalist, bellicose world dominated
by a few great empires, on the one hand, and if the domestic policy of this
country is to remain free to shape its own destiny, on the other hand, I do not
see the possibility, and I should very much doubt the wisdom, of any major deviation from
the policy of protection. More thought, much deeper thought, needs to be
applied to thinking this issue and better defining America's best goals toward the future
to best protect its children and grandchildren.
- America is at a cross-roads. We have seen the creation (out of
'thin air') of a function of government (social welfare and large, dominating government)
not contained within our constitution, or intended by its framers or intended by our
elected officials for the following 150 years - - has grown to consume many times more of
our budget than the funding of the original 4 core principles. (the 2nd chart in the Federal Spending
Report shows it all). Former British prime minister Margaret Thatcher warned that
we must invoke our "national pride and offer our people a genuine identity in a world
of cardboard cut-outs, an anchor against the pull of bureaucratic internationalism and
cultural globalization." Will we re-affirm our independence and the ultimate
power of the individual free-man instead of the State, and cause trust in government to
reach new highs instead of new lows, as envisioned by our founding fore-fathers, by
reducing our internal dependence on big government, by reducing the impact of same along
the lines of item 12 above - - and will be stop the 'drug' of ever increasing dependence
on private sector and
government debt owed domestically and foreign leading to national "decline by
simple economic over-extension" as shown
in history - - or, will America succumb to the death of our economic independence
and individual freedom as she is pulled along the road to bureaucratic internationalism
and indebtedness - - continuing a march along the Road to Serfdom - - for her citizens
of future generations?
ITEM: when someone says, "The Era of Big Government is
Over"
You should respond, "Compared to What?"
Then ask them to tell you, "to what lower shares of our economy
will federal and state & local government be reduced - and by when?" Then,
show them real history in the 3 -
charts of Government Growth
And - - also ask them if the new war on terrorism, which came
about because America was not using its federal government to focus on its prime mission
(National Security) as intended, will further expand the share of the economy consumed by
government even beyond that showed in this graphic - - instead of reducing the
non-national security spending areas.
This author is hopeful these reports will serve to assist a better
outcome. |
THIS IS MY WISH
FOR MY CHILDREN AND GRANDCHILDREN -
a better economic future with more
freedom and self-reliance and less government-dependence - than indicated
That's why the Grandfather Economic Report series
was created - -
- - to pass on to others the findings of this study such that they may
have better data from which to reflect and assist the healing of America, as well as
preparing actions to protect their loved ones. This report series covers various subjects,
from family incomes to debt to social security, using hard data from reliable sources
presented in color-graphic form. The author hopes it will be informative to many, and may
assist one small step in an improved direction - - such that our young generation may
experience more freedom and economic well-being than ever before.
The author pays a Tribute to Milton Friedman,
who, along with the innocence of my new grandchildren, was an original motivating force
resulting in these Grandfather Economic Reports,
which are summarized by 5 core threats in Summary
Report page 1.
A tribute is also paid to the WISE WORDS FROM A FOUNDING
FATHER OF OUR GREAT NATION
"There is in the nature of government an impatience of control
that disposes those invested with power to look with an evil eye upon all external
attempts to restrain or direct its operations. This has its origin in the love of power.
Representatives of the people are not superior to the people themselves." Alexander
Hamilton - Federalist Papers, 1787. (see other pertinent quotes)
RETURN To HOME PAGE & INDEX of Mini-Reports
of dramatic pictures reviewing economic threats facing young families and their children,
compared to the past. (this is a listing by subject of each mini-report in the Grandfather
Economic Report series - - the Summary Page you have just reviewed).
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Copyright © 1997-2008 Michael W. Hodges. The Grandfather Economic Report series is the
intellectual property of its author; all rights reserved under Copyright Conventions.
Permission to redistribute all or part of this series for non commercial purposes is
granted by the author, provided the associated web page address is included and full
credit given to the Grandfather Economic Report and the author, Michael Hodges. Notice
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