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Unsinking the Titanic: Repairing the Hole that is America’s Debt Dilemma – Part 2

21 Jan

by Providence Crowder

Ethical Implications

Spending of this sort is immoral; it is sure to hurt the poor and others who are dependent upon the government for their livelihood.  America’s reckless entitlement spending has baited many American’s into dependency and has promised future payments that won’t be worth the paper they are printed on.  Even the social security program—the biggest entitlement program to date—is set to have major problems, and soon!  Started under President Franklin D. Roosevelt’s 1930’s New Deal, the idea behind social security was admirable.  The pay-as-you-go structure of the system worked well as long as there were more people paying into the system than receiving benefits, and it has been a lifeline to many retired and disabled Americans.  The program was designed to be self-sustaining, and it was in 1935 when it was first implemented.

However, the program did not take into account factors such as population spikes, rising life expectancy, skyrocketing healthcare costs, and a smaller working-aged population in comparison to a much larger elderly population.  With the retirement of millions of baby boomers[9] on the horizon, the ratio of workers to retirees will soon shift.  Additionally, many of the young and disabled recipients of social security/disability insurance and benefits have never paid into the system, adding to the imbalanced debt to income ratio.  According to the 2011 annual report by the program’s Board of Trustees, within the next 10 years, the interest and income received from payroll taxes will no longer be sufficient to cover expenditures to Social Security beneficiaries.[10]  

Even though working citizens are required by law to pay Social Security and Medicare taxes from their wages, they have no promise or guarantee from the government that in their elderly years, they will receive benefits.  Social Security reform should be at the top of every elected officials list.  Reform is needed to end the government’s policy of taxing the income of working citizens on the premise that they may or may not receive future payments.  It’s like the government is playing the scratch-off lottery tickets with other peoples earned income—and like the lottery, not everyone’s a winner. The federal government should, at a minimum, allow citizens the option of opting out of the current high risk government system with proof that they are allocating a comparable retirement savings elsewhere. 

Contrary to popular belief, America is not too big to fail.  However, on her current path, she is a sinking ship.  Thankfully, it’s not too late for America.  If only she would repent of her sinful monetary squandering and return to God, because only God himself can unsink the Titanic.  If the American government does not curb its appetite for spending and end its experimentations and flirtations with socialism, she will become as all the great empires before her, a celebrated chronicle of a fallen nation.  Our current president, Barack Obama, has expressed a desire to “spread the wealth around” in what I suppose is an effort to minimize the gaps between the rich and the poor, alleviating the effects of poverty.  He has pushed for increased government control over schools, banks, housing, and healthcare—to name a few.  He apparently has not heard of the disastrous results of the first socialism experiment of early European settlers in America—the Pilgrims.  Widespread poverty and starvation resulted and nearby Indians had to bail them out!

Enough with the mechanics; America’s problem is more than political, it’s moral.   America is facing a very real ethical dilemma.   I say this because not all of our spending is the result of greed and politics.  Some is the result of good intentions but bad methodology.  Well-intended people have supported policies that have had egregious, unintended consequences for American industry as a whole.  Much of our federal government entitlement and social program spending were efforts to help those in need—the poor, the indigent, the socially rejected and economically depraved.  For example, President FDR’s New Deal government programs were meant to end the Great Depression, but instead deepened and lengthened it.  Lyndon Johnson’s “War on Poverty,” started in the mid-1960’s cost trillions of dollars to date and has not worked.  It has essentially turned America into a welfare state.[11]  

As a compassionate people who care about the poor, sick, and elderly, America cannot afford not to pursue entitlement reform.  Excessive entitlement spending is intricately related to other issues that adversely affect the poor, such as an unfair tax code, skyrocketing healthcare costs, and rising costs of goods and services due to inflation.  Talks of reducing entitlements sound cruel to some Americans.  Some believe that if the federal government cuts entitlement spending, the poor, disabled, single parents, women, and minority groups in this nation will suffer.  But to date, the welfare state has caused economic and social problems even worse than those it was meant to eradicate.  The unintended consequences of increased government control through massive entitlement programs are: “the breakdown of the family and illegitimacy, especially among poor and urban minorities, and white Appalachians—and creating cycles of dependency that transfer from one generation to the next.”[12]    

Besides that, welfare system abuses have exploded the number of voluntarily unemployed because welfare is generally a disincentive to work.  It has caused anger and class warfare, and a poverty trap that is difficult to escape.  It has caused despair, hopelessness, and envy.   Long-term dependency upon welfare is degrading and has adversely affected poor black and white communities all around the country.  In black American homes, illegitimate children, poverty, and illiteracy rates are greater today than they were in the 1920’s when racism was rampant and blacks faced harsh discrimination and vast societal disparities.[13]   The harsh reality is, though federal spending has skyrocketed over the past few decades as a result of entitlement spending, we have zilch to show for our looming debt except generations of dependent citizens of a welfare state.  We need serious reforms to the welfare system and policies that would promote a strong job market to draw those on welfare into the workforce.

Stay tuned for Part 3 of Unsinking the Titanic.  Excerpt: ” If we as a nation truly want to do right by our poor, we must urge our politicians to get out of salvation politics and leave the “saving” of the poor and needy of society to the faith-based communities.  A safety net of government services can be a good thing, but it profits no one if we put so much on it that it rips under the bureaucratic pressure of big government.   If our federal government truly respected American citizens, then they would stop robbing us and selling us back our own goods at a higher price!”

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Posted by on January 21, 2012 in Uncategorized

 

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