“To the wise, life is a problem; to the fool, a solution.” – Marcus Aurelius
Harry Reid’s Dilemma
“We are not a deadbeat nation,” asserted President Obama on Monday. While this sentiment resonates with the many admirable citizens of the country, the actions of its leaders may tell a different story.
How else can we interpret Senate Majority Leader Harry Reid’s letter to President Obama, urging him to bypass Congressional approval in order to raise the debt limit?
This avoidance of responsibilities reflects classic deadbeat behavior. Indeed, Harry Reid’s actions raise suspicions about his commitment to fiscal responsibility. If you have any doubts, just glance at his demeanor—it certainly conveys a lack of accountability.
Reid finds himself in a unique situation, presiding over the Senate during a critical period of governmental decline. Like many of his colleagues, he appears bewildered by the evolving political landscape.
What he does recognize is that the traditional checks and balances of the republic seem incompatible with the demands of an overreaching empire. Faced with potential gridlock, Reid has opted to centralize power rather than risk undermining the nation’s creditworthiness. He mistakenly believes that consolidating authority in one individual is a prudent strategy.
Promises of Government and Their Consequences
Reid’s actions are seen as necessary from his perspective, yet they reflect the mindset of a deadbeat. Deadbeats tend to favor the path of least resistance. Conversely, the President is ready to seize additional powers, especially when they are offered willingly.
“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,” noted President Obama.
In moments of crisis—like approaching the debt ceiling—governments often exploit fear as a means to expand their power. Many citizens, apprehensive about the future, willingly relinquish their freedoms in exchange for a false sense of security.
However, the farcical nature of the debt ceiling debate is merely a chapter in a larger narrative of decline. What remains overlooked, especially by Reid, is the unraveling of the social welfare state.
It seems not to dawn on him that the system of transfer payments is unsustainable, plagued by an overwhelming number of dependents and obligations that the productive members of society cannot support.
Moreover, government debt is escalating at an alarming rate. If this trend continues, it may lead to either a catastrophic default or crippling inflation. Contrary to Reid’s belief, increasing the debt ceiling does not offer a solution; it only exacerbates the underlying issue.
The Impending End of Coercive Transfer Payments
Harry Reid is bewildered. He has inherited a faltering system, yet remains oblivious to its impending collapse. The New Deal programs, such as Social Security, and the Great Society initiatives, like Medicare, have established a coercive framework that is destined to fail.
Taxpayers are forced to contribute to a wealth redistribution system with the unrealistic expectation that they too will one day benefit from these transfers. Statistically, this cannot hold true for everyone, signaling that the system is unsustainable.
Indeed, the fragility of this system is becoming ever more apparent. Consider Medicare…
“The unfunded liabilities for Medicare now total $105 trillion and are on the rise,” states Forbes.
“Last year, there were 3.3 workers contributing to Medicare for every beneficiary receiving benefits. This ratio is projected to plummet to just 2.1 workers per beneficiary by 2086. In simple terms, costs will be shared by an increasingly smaller workforce.”
Long before 2086, it is likely that America will face a financial crisis, leading to a tax revolt that may ultimately terminate coercive transfer payments. Unfortunately, those who have relied on the system throughout their careers may find themselves abruptly cut off. Meanwhile, the Federal Reserve will continue to artificially support this failing system by generating money and lending it to the Treasury.
In conclusion, Harry Reid remains unaware of the precarious situation at hand. Aging baby boomers, who have saved little for retirement, are pinning their hopes on entitlements that have been promised to them throughout their lives. A harsh reality awaits them. Yet, Reid believes that simply raising the debt ceiling will resolve these mounting issues.
Sadly, it will not.
Sincerely,
MN Gordon
for Economic Prism
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