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Works and Days

As Predictable As the Sun Rising

March 25th, 2010 - 7:03 am

Giddy About Remaking America

If we assume that Obama & Co. wish to radically remake the United States — along the lines of a European socialist society, or perhaps to the left even of a Belgium or Denmark — then the past 14 months were as predictable as the sun rising.

To transmogrify a center-right country into a liberal utopia, certain things follow: higher taxes on the better-off to pay for redistribution and to bring “fairness” to society (e.g., called “redistributive change,”“spread the wealth,” “patriotic,” “paying your fair share”); increased government coercion to force the reluctant to conform (e.g., new IRS agents, more regulations and government intrusion, mandatory new fees); a growing constituency to administer and receive entitlements (e.g., I never really heard much about ACORN or SEIU until the Obama ascendancy); a public relations campaign to demonize the skeptical as enemies of civil society, starting with “selfish” and “greedy,” escalating to “racists,” and finally reaching the dangerous level of “terrorists” who “threaten officials” (those who used to court Michael Moore, or snooze about books and movies suggesting scenarios of killing George Bush are suddenly worried about uncivil discourse); a new neutralist foreign policy to match defense cuts on the horizon and to adjust our stature abroad with our new more revolutionary profile at home (cf. the treatment of an Israel or Britain to the new efforts at winning over Iran and Syria; or our shrinking Navy and Air Force); a highly educated, urban technocracy not subject to its own new protocols and dependent on an ever growing bureau (e.g., Geithnerism, or the strange career of Van Jones); and a new euphemism  in language (there is no “terrorism” any more, liberals disappeared and were replaced by “progressives,” we have no more enemies from the radical Islamic world, etc.)

Taxes and Spending

As these nearly two trillion dollar annual deficits mount, as the combined local, state, federal, and payroll taxes approach 60-70% on the top brackets and yet do little to meet the shortfalls, we will have to either cut programs or tax the middle class or both — or implode.

We are floating huge amounts of debt at historically cheap interest. One can borrow $ 11 trillion at the price of what would be borrowing $20 trillion in the old days of interest, as rates hover around 2-4% rather than the old 6-10%. But this is a fool’s delusion; any spike in inflation will almost immediately turn this mortgaging into an unsustainable disaster, sort of like those old 1980s adjustable mortgages at 3% that drew buyers in to purchase enormous homes only to climb within a few years to 15% and insolvency, or like those introductory credit card offers that offer 6 months at 3% only to climb to 19% when you are maxed out. (As a rule, all interest rates climb as borrowing increases [ask a petulant Greece]).

If we cut some spending, as in the Clinton years, it will eventually fall mostly on defense — fewer planes, armor, divisions, personnel. Etc. If we continue to increase taxes, we will see some sort of federal sales, VAT, or special user taxes on the tens of millions who are now tax exempt. The untaxed will be taxed and told they are not taxed (sort of like poor George Stephanopoulos in his interview with Obama, being bewildered by the president’s postmodern linguistic gymnastics, and thus reduced to looking up “tax” in the dictionary, only to be ridiculed by Obama that Stephanopoulos had to rely on a dictionary in the first place.)

There are simply too many new entitlements and too few left now to pay for them. Note — it is not as if we were extending novel universal health care to a 1920s self-reliant and much poorer populace, but rather to the most affluent, most leisured and most taken care of generation in the history of civilization. It is not as if those without health insurance plans either get turned away from the emergency room or are bereft of cell phones and flat-screened TVs.

No, entitlements subsidize the good consumer life of both the poorer and the middle class. Go to the poorest section of a poor county in a bankrupt state (e.g., 2 miles from my residence), and the electronic and warehouse discount stores are crammed with the shopping “poor” — poor maybe in comparison with the contemporary wealthy, but in a way rich compared to most in the world today or to Americans a generation ago. Cheap interest, the welfare state, 1 billion Indians and Chinese working night and day, high-tech, and instant communications and entertainment have made life not as it was. Today’s Selma resident not far from this farm has access to “things” that an earl or duke could only dream of 50 years ago.

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