As we celebrate the birth of our great nation today, it’s worth recalling why our country came to be, and why it has been throughout its history a beacon to the dispossessed. The United States was founded by men and women seeking freedom and independence from England. They revolted against the taxes imposed by a far-off king who wanted too large a share in the prosperity of the fast-growing colony.
Today, just as in 1776, there is a struggle taking place between those producing our country’s wealth, and those who would like to take it away. This tension exists not just in the United States, but across the developed world. In Greece, in the U.K., and in other financially pressed lands, those whose fortunes are tied to tax collections – public service workers, retirees collecting government-administered pensions, and those unable to fend for themselves – are resisting the cutbacks imposed by the financial crisis.
Though the recession brought this confrontation forward by many years, it was – in all these countries – inevitable. As growth has slowed in the developed world, the ever-rising plenty that funded spiraling social services and the public sector has dwindled. It is now a battle between the funders and the funded.
The debate today over the debt ceiling, and cutting government spending, is not just about the reckoning of budgets and accounts – there is profound disagreement about whether the burden of constantly widening support services will eventually dishearten our productive class. This is a debate worth having.
The world has generally come to agree that Communism, at least as it was practiced in the Soviet Union and Cuba, failed because the philosophical underpinning was untrue.
Marx believed in a world where workers would be motivated by the common good. He was wrong. It turns out that self-interest is the great motivator of humankind.
The astonishing rise of China came about because its leaders acceded to this reality, and allowed workers there to enrich themselves. As a consequence, hundreds of millions have emerged from poverty – the greatest economic expansion the world has ever seen.
The United States has long managed a prudent balance between protecting the rights of workers and of employers, of investors and retirees, of taxpayers and public sector workers. Today, many feel that that carefully wrought balance is askew. Our land of opportunity has become a land of limitation.
This is not the first time this tension has surfaced. Economist Gary Shilling noted that Ronald Reagan became president at the moment when the country first had more people taking from the government than contributing to it. That is, the number of people paying taxes into the system had been eclipsed by those reliant on unemployment, Social Security, welfare and Veterans Administration payments.
That year, 1980, we elected Ronald Reagan, who set about to unleash the great capabilities of our entrepreneurs and manufacturers, our small business managers and all those who, at the end, allow us to care for those in need. He didn’t dismiss that obligation, but realized how it might best be met: “Welfare’s purpose should be to eliminate, as far as possible, the need for its own existence.”
Faced with an inflation rate of 11% and rising unemployment, which ultimately topped out at close to 11%, Reagan moved to cut back the sway of government, defusing entangling regulation that had stymied growth and frustrated those trying to do business. His credo: “It is not my intention to do away with government. It is rather to make it work – work with us, not over us; stand by our side, not ride on our back. Government can and must provide opportunity, not smother it; foster productivity, not stifle it.”
Unhappily, in this cycle we are led by President Obama, who neither sympathizes with nor understands the private sector. He thinks that the government will push the economy forward; he believes that the private sector will perform its job if only regulated more stringently.
In order to boost the economy, the Obama administration has offered up a bewildering slew of government policies that have retarded the recovery, and that threaten our future. President Obama does not intend to weaken the country; it’s simply that he is misguided. As President Reagan said, “It isn’t that liberals are ignorant, it’s just that what they know is wrong.”
The nation took heart from Reagan’s common sense game plan. When he took office, a USA Today/Gallup poll showed a mere 17% of the population “satisfied with the direction” the country was taking; three years later that figure was at 50% and two years after that, 69% thought we were heading the right way.
When President Obama took the oath of office, only 13% liked the path we were on; three years later, only 19% are satisfied.
Our founding fathers gave us the most brilliant template for progress the world has ever seen. Generations of ambitious, hard-working souls have built on that foundation. Our nation’s independence is dependant on our continued success; we cannot allow this great nation to falter.
As President Reagan said, “Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same.”