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October 20, 2010

This is our future

This is our future if we don't change our ways.

Exhibit A: England faces the largest budget cuts since World War II.

Exhibit B: France is tearing itself apart over a move to bring state pensions under control.

This is the end result of the welfare-state. The Europeans (and Democrats here at home) want a utopia where all needs are met, all the hungry are fed, all the children warm and safe, all the sick made whole, all the evil punished and the innocent made free, a land where all is peace and all live in harmony. Instead, the welfare-state is waste and weakness and impoverishment and upheaval and ennui. It is generational warfare, class warfare, enormous debts, squalor, meanness, shortages, selfishness. It is, at base, the end of civil society. Communist economies fall faster because they take the poison pure; it takes the merely socialist ones more time to sicken and die.


It is not clear to me that either England or France will be able to make these reforms "stick". England might perhaps have more of a chance than France does, but even in Albion the days of Dame Margaret Thatcher are well past -- much of the country not only relies on the dole (and I count the NHS as part of that), but remembers nothing else. Entire generations of citizens have been born and grew to adulthood in a land of a debased civil society, outlandish political promises and a hidebound, near-moribund private sector. A country with "free" healthcare, a generous welfare system where it was often more remunerative not to work, and a private sector so sclerotic and union-infested that a structural unemployment rate of 8-10% was accepted as perfectly normal. Young people pursue endless, meaningless degrees (using state-provided funds more often than not) and have basically given up on the antiquated notions of marriage and family, to say nothing of religion. (No building in England is so empty as a Christian church nowadays.)

It's no accident that Germany is doing so much better in relative terms than England and France. Germany had to re-assert the traditional Teutonic work-ethic after World War II out of absolute necessity. The re-integration of East Germany in the 1990's forced them to be even more efficient, more productive, more financially conservative. England and France, contrarily, went the route of social welfare -- the more "liberal" route. And in the end instead of reaping "fairness" and societal harmony, they reaped instead penury and unrest. The redistributionist route led -- as it always, always does -- to a dead end.

We see our future playing out in England and France right now. Only our upheavals are going to be much larger and more violent than theirs. Our population is larger, more diverse, and more polarized; our politics more fraught; our debts and obligations massively larger. Our passions are harder to rouse, but once aflame, take a long time to burn out.

As in France, we have let an enormous segment of our population -- perhaps as much as half -- fall into a state where they depend on government largesse for a substantial part of their income. This is not money they earned themselves, not wages or savings, but rather money squeezed from the more productive half of the country. Half of our citizens pay no income taxes at all. An increasing number will draw public-sector pensions, Social Security, and medical insurance (Medicare/Medicaid) in amounts that far exceed what they contributed to those plans. Half of the US population, in short, lives not by the fruits of their own toil but by the (coerced) charity of others, as filtered and distilled through the hand of the government. This can not -- it can not, by the laws of economics and simple physics -- continue. The mathematics of the problem trump even philosophical issues of fairness, of governance, of ethics or law. The mathematics simply will not allow it.

Consider the French. They are rioting over a proposal to raise the national age of retirement from 60 to 62. Germany's is 65 (going to 67) -- how happy will German workers be to subsidize the early retirements of their French neighbors? The French labor unions are on a rampage, denouncing the move as a violation of a "promise" the country made to the workers. (If this reminds you of California, New Jersey, New York, and Michigan -- well, the situations are closely analogous.) The word "promise" is illuminating: people have stopped thinking of social welfare as a "benefit" or a "perquisite", and have begun instead to think of it as a "right" or a "promise". A legally-binding promise which cannot be broken, though the heavens fall. Well, the heavens are falling, and the sovereigns will discover a universal truth: a government "promise" is not a suicide pact. Reality will assert itself, one way or another.

Governments the world over are discovering that the river of money is not endless. That seemingly-inexhaustable mountain of wealth has been turned into an ocean of debt that will take decades to pay off. The spendthrift habits of the Western nations will put burdens on our children, and other generations not yet born, that should outrage us as a people. We are investing in the old rather than the young, and are punishing risk-taking and entrepreneurship rather than rewarding it. Our tax regimes seem to be deliberately crafted to kill innovation and long-term thinking. (What does "legacy" mean if the wealth I have accumulated in my life cannot be passed on to my children or heirs, but is instead eaten by the all-consuming government?) Young people -- young families -- are the foundation upon which Western Civilization is built. Neglect them, overburden them, cheat them, and you are committing societal suicide.

One measure of how self-destructive Europe has become can be seen in the birthrate. In developed countries like France, the birthrate among natives has plummeted to below the replacement rate (though some dispute this). Among immigrants who share little cultural affinity with the French (or are actively hostile to it), the birthrate has soared. What this means in 20 or 30 years is that what is "French" (or "English" or "American") will be determined by those same children. The same goes for Spain, for Portugal, for Germany, for England -- indeed, for the entire continent. (America at least has a positive population growth, albeit not by much. And our immigrants are also outbreeding the natives by a wide margin.) Demographics is a game of last man standing: the people who make the laws 20 or 30 years from now are the babies being born today. If you don't produce children, you have no voice in the future.

If the governments of the West have an excuse -- however weak and puling -- it is this: they meant well. It is not wrong to wish that every citizen have free health care, free food, free housing, and some money to spend even if they have no job. It's not wrong; it's just impossible. Health care is a service that has huge costs associated with it. These costs cannot be "magicked" away just because we find them inconvenient. Food must be grown, transported, packaged, and prepared -- all costs that must be accounted for. Shelter does not precipitate out of thin air. We cannot delude ourselves into thinking that "the government" can provide these things to us at no cost, because "the government" must pay for these things just as individuals do, and because the government has only one source of wealth -- the citizens -- that's where it must go for the money. So if Bob is given 'free' health care, 'free' food, and a 'free' apartment, the government isn't paying for it; Tom, Jane, Howard, and Sue are paying for it. And at a vastly inflated cost due to the innate governmental inefficiency that dilutes every dollar that passes through their hands. Soon the social welfare costs eat up the money intended for good and necessary governmental expenditures like the military, the police, and infrastructure. Social welfare becomes a beast that eats everything.

We are living in an age where citizens will have to re-think their basic relationship to their government, and to each other. The government is not -- cannot be -- the cornucopia that provides for all needs for all citizens. It cannot even provide for most needs for most citizens. The math only works if the producers outnumber the welfare recipients, and by quite a large margin; but this margin is long gone. France and England blew past the 50% mark long ago. The United States is teetering on the edge of a 50/50 split.

Citizens must once again be taught that they, and only they, are responsible for their lives. A civilized nation provides for the helpless, the weak, and the defenseless. But it does not expand the definition of those words so broadly that it encompasses half of its citizens. A nation that values self-reliance and ambition must accept that "opportunity" emcompasses the possibility of failure. Failure -- even ruin -- is a necessary and inevitable part of any market-based economy. You cannot engineer failure out of the equation without rendering it meaningless.

As I said, I am not hopeful for most of Europe (and even Germany is weaker than it seems). England may yet surprise me, but their culture is weaker now than it has ever been. The primary ingredient of recovery is will, and I just don't know if the dependent scions of Albion have enough left to climb out of the hole they're in.

Which brings us to America. Do we have the will to climb out of the gargantuan hole we have dug ourselves into? It remains an open question. I find encouragement in the rise of the Tea Party, but discouragement in the sweeping victory of Barack Obama. Half of my fellow citizens would prefer to bleed the body politic until it dies; as long as they do not outlast the flow of money, they care nothing for what comes after. But I care about legacy, about culture, and about the whole idea of America as a place where you can go as far as talent and ambition can take you. The unfortunate fact, though, is that much talent and ambition will have to be expended in simply paying off our massive debt, and in reforming our nonsensical entitlement programs. (I've said it many times, but it bears repeating: if you're not going to reform Social Security and Medicare, then don't bother doing anything, because it won't matter anyway.)

We are poised on the edge of a knife. On one side: bankruptcy, insolvency, and dissolution. On the other: a reinvigorated individualism, a sense of the government as servant of the people, not the master.

France is lost; England is sinking. America must survive if Western Civilization is to have any hope at all of surviving the perils yet to come.

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posted by Monty at 07:54 PM

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