November 27, 2013
"It is an inescapable fact that there will always be the rich among us and there will always be the poor among us. Sometimes the rich will make a wrong decision, lose their wealth and join the poor. Sometimes the poor will break the bonds of poverty and join the ranks of the rich. It is the natural order. When government tries to even the playing field by passing laws, they muck it up every time and their meddling usually hurts the poor and the middle class, but never the rich. In the process, their entitlement programs allegedly designed to even the playing field, become the great sucking siphon of America's Wealth." -Ron Ewart
The other night, not being able to find anything worthy to watch on what has become a mostly useless and debase entertainment venue, we turned the TV to the history channel and watched a documentary on America's aging infrastructure. In the two-hour long program, they touched on every form of infrastructure, from roads, bridges and rail corridors, to water and sewer systems and dams, to oil and gas pipelines, to generation facilities and the electrical power grid, to river and lake levies and to our our sea and fresh water ports.
Many of these systems were built well over 50 years ago and some over 100 years ago. But like all systems, they begin to fail over time from the ravages of weather, rust and corrosion, electrolsis, earth movements, growing loads beyond capacity and inattention by those in charge. Water pipes burst daily all over America, releasing billions of gallons of domestic water onto streets and into houses and businesses. Bridges fail costing millions in replacement and lost lives, like the 2007 collapse of the I-35W Bridge in Minneapolis, Minnesota and the 2013 collapse of the Skagit River bridge in Mount Vernon in Washington State. Roads age, crack, slip and slide costing millions in vehicle damage, lost commerce and even lives. Gas pipelines blow up resulting in millions of dollars in property damage and again, more lives. Levies break during times of severe floods and destroy thousands of buidlings, crops and lives. Derailments occur due to aging steel rails, decaying ties and loosening rail spikes, ground slippage and sometimes sabotage. Hazardous chemicals are released into the atmosphere and wholesale evacuations are mandated. Sea and fresh water ports fill up with sediment requiring constant dredging and aging docks are deteriorating and failing. As the entire infrastructure systems age without maintenance, upgrades and replacement, the cost to the economy, jobs and lives will accelerate.
In a recent report by the American Society of Civil Engineers they forecast a short fall of at least $1.6 trillion by the year 2020. Public safety is being marginalized due primarily to lack of state and federal funds. Why?
Since FDR instituted Social Security and a laundry list of government subsidies for individuals and businesses and President Johnson implemented Medicare, Medicaid and the Great Society programs, the cost of entitlements has exploded.
At the beginning of the 20th Century entitlement spending was around 0.4% of the nation's Gross Domestic Product (GDP). By the middle 1930's FDR expanded social programs to 2% of GDP. By 1950, entitlement spending increased to 3.3% of GDP. But by 1960, in just 10 short years, entitlement spending jumped to 5.1% of GDP. In 1965 the Congress passed Medicare and Medicaid and the Great Society programs, sending entitlement spending to 11% of GDP by 1975. By the 1980's entitlements were 13%. In 2010, entitlement spending had jumped to 19% of GDP. In 110 years entitlement spending in the U. S. has increased almost 5000%. Why?
Pensions, especially to unionized government employees, are also on the upward march. Huge portions of pension liability are totally unfunded and a ticking time bomb for future generations.
Government health care costs have also risen sharply. In 1980, health care costs were at around 3% of GDP. 20 years later in the year 2000, they were at 5% of GDP. With the implementation of Obama Care in 2014, health care costs are projected to skyrocket. The unfunded liability for this increase will grow exponentially as well. The tax burden to fund this built-to-fail program will be born on the backs of the working middle class and the young.
Today, it has been reported that over 47,000,000 Americans are using food stamps, now called SNAP credit cards. Today over 50% of the American population is receiving some kind of government assistance, not including social security and Medicare. Why?
The 2013 federal budget, around $3.5 trillion, shows 62% for welfare, Medicare and other health care, social security, unemployment and labor. Military spending is only 18% of the total budget. That 62% of the budget is mandatory spending with built-in annual increases. Discretionary spending is just 30% of the budget, where the Congress can fudge with numbers. 6% of the budget is in interest payments on the ever-rising debt due to borrowing money from the Federal Reserve and foreign nations to fund entitlements. What happens when the interest rate on the debt rises? Now, it is being kept artificially low by the Federal Reserve. The FEDS can't keep the interest rate low forever. On $17 Trillion of the nation's debt, if the interest rate rose just 1%, the interest payments on the debt would rise by an astounding $17,000,000,000. (That's Billion with a capital "B")
It is estimated that 110,000,000 producing Americans are supporting 88,000.000 non-producing Americans. That equals 1.25 producing Americans supporting the non-producing Americans. This number continues to decrease as more Americans find out they can lie, cheat and steal (just like the President) to get on the producing Americans' gravy train, enforced by a liberal government who is more interested in buying votes than doing something altruistic. Where is the money to come from to pay for the rising number of non-producing Americans? Government borrows it on the backs of your children and grandchildren!
This is exactly what is happening to social security. The ratio of workers to beneficiaries is decreasing. In other words, the funds are slowly drying up. In 2005 it was 3.3 workers for each beneficiary. In 2040, when Social Security is expected to exhaust its pool of funds, it is projected that there will only be 2.1 workers for every beneficiary. That is a recipe for an unmitigated financial disaster and an economic melt down. Medicare and Medicaid are taking us even closer to this disaster, every single day.
This is how the liberal agenda works. Liberals come up with a plan to supposedly help people, but never take into account the long range unintended consequences for not adjusting the plan over time to changing demographics or funding sources. Obama Care is on the same path to ultimate destruction.
There is an analogy of the situation where the producing Americans are replaced by people pulling a cart going up hill. In the cart are other people getting a free ride. The pullers of the cart start to grow uneasy and begin to ask why the people in the cart don't have to pay for their ride. (It was the Obama Administration that removed the requirement to work for welfare subsidies.) Some of the pullers decide to break out of the pack of pullers and join the people in the cart. Eventually, human nature being what it is, the cart grows too heavy loaded with free riders and the pullers can no longer pull the load, or even hold the load against the force of gravity. The cart, no longer supported by the pullers, begins to roll backwards down hill where the people in the cart crash at the next sharp turn. If you don't get the analogy, you are one of the free riders in the cart.
In 110 years have Americans grown so weak that 50% of Americans can't exist without some form of financial, housing and/or food assistance, or all three, from Mother government? Or, has government, in its continual search for votes to stay in power, lured millions of weak Americans into the welfare trap? If you don't know which party has been doing the "luring" for the last 110 years, once again you are one of the free riders in the cart and are doomed to crash.
By now it should be readily apparent why there is no money to maintain, repair and replace our aging infrastructure, the infrastructure that keeps the wheels of commerce turning, the infrastructure that delivers our food, water, electricity, sick and injured people and the goods we buy to maintain an American life style that we have grown used to and depend on.
It is this great liberal sucking siphon, over the last 100 years, that has so degraded America's wealth to the point where the "pullers" can no longer hold the cart of "free riders" against the force of gravity. Without a bunch of "free riders" getting out of the cart and joining the "pullers", the cart will crash. Like family members enabling an alcoholic and thus ruining any chances of recovery, so the liberal government enables the "free riders" purposely, to buy their loyalty and their vote, so that liberals can remain in perpetual power without any regard to the damage they have done to a once-free and prosperous America.
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The "pullers" have become enablers to the "free riders", at the point of a government gun. Perhaps it is time for the "pullers" to let the cart go and let the "free riders" try to save themselves so that maybe they, in their life times, can raise their heads up high with pride in self-reliance, independence and individual responsibility and join the ranks of the "pullers" ..... before the cart crashes and America just becomes another third-world country.
Next week we once again take on the IRS in an article entitled: "An Angry Warning to Obama's IRS." Instead of rolling over for IRS demands, we are taking them on in a full frontal attack. Remember, the best defense is a convincing and determined offense.
© 2013 Ron Ewart — All Rights Reserved
Ron Ewart, a nationally known author and speaker on freedom and property issues and author of his weekly column, "In Defense of Rural America", is the President of the National Association of Rural Landowners, (NARLO) a non-profit corporation headquartered in Washington State and dedicated to restoring, maintaining and defending property rights for urban and rural landowners. Mr. Ewart can be reached by e-mail for comment at firstname.lastname@example.org, or by 'phone at 1 800 682-7848.