Have you thought much about our way of life?
I think about it a lot, and I rarely come away from such thoughts pleased with what I concluded. Our way of life, as I see it, represents a lot of the reasons our nation–and really the entire western world–is in trouble.
My previous statement, as grandiose as it is, will cause most people to tune out, and perhaps that is for the best, because I am not sure it’s possible to convince them that something else has to be done anyway. For those of you who are still reading, all I can ask is that you stick this out with me because it’s going to be hard.
I have concluded in all my thinking about our way of life that the reason that we don’t have enough money, are so dependent on government, and have such a hard time figuring out what to do now is that we have destroyed the complex fabric of life that used to be knit together in the form of families, communities, and shared origins that used to define all of us.
This destruction resulted in the creation of one of the most inefficient periods in human history, defined by the word “consumer” and underscored by the word “debt”.
I am certain of this fact because I have spent a lot of time studying the period that just preceded our own, and it’s remarkable how different that period looked than our own.
The official narrative is that, before the passage of the 16th Amendment in 1909, the United States was a poor, backward nation, and it was the government’s job to change that fact. Yet, if you dig into the actual facts, you discover that the people of the United States were doing just fine. It was the federal government that was poor and backward, just as the founders intended it to be.
If you look at the United States in the 1880s, you discover a vast amount of personal wealth stored up in sprawling family farms and the impressive and beautiful retirement homes many farmers built in nearby towns. It was these families and farmers that started so many of the businesses and industries that are now household names today.
I am not saying that there were not poor people, nor am I saying that there were not huge inequities just like there are today. What I am saying is that the distribution of wealth and power in the United States in the 1880s rested with the people, and left alone, no one can say whether or not those inequities would have righted themselves or not.
So what happened? My conclusion is that the United States and the western world became the victims of one of the most destructive deceptions any society in history has ever inflicted on itself.
Think about what has happened since that time: the children of wealthy farmers in the 1880s became well-to-do business owners in the early 1900s. Their children became middle-class workers by the 1920s. Their children saw the combined wealth of their parents and grandparents wiped out in the 1930s, and by the 1940s, most Americans were content to work anywhere that would pay them. By the 1950s, the goal most Americans shared was to work long enough to enjoy a short retirement, and by the 1970s, even such retirements began to be in doubt. By the 1980s, most of what defined the “American Dream” had been replaced by massive personal and government debt, and starting with the Dot Com bubble, things began to slide.
At the same time, people left the family homestead in droves, selling off their land and flocking to cities for the promise of jobs whose wages stagnated in the 1980s and which have been in decline relative to inflation since then. The drive toward individual ownership of houses, cars, and consumer items has driven the average family to the point that it spends somewhere between 60 and 80 percent of its annual income paying for stuff while the same family spends less than 7 percent of what it earns on food.
What we have now is a nation full of people living isolated lives that consist of working themselves to death as individuals to pay for the same groceries, rent, mortgages, cable, cell service, car loans, and credit card bills that, if we shared even some of these things, would return us to a state of solvency in short order.
This labor in isolation serves to destroy everything that defined what America was in the 1880s: small towns filled close-knit extended families and community networks built around common work and trades. People in 1880s American rarely went hungry or unemployed for long, and even in the worst of times, everyone helped everyone else until things got better.
I do not point these things out to create some sort of idealization of those times, because there were things wrong back then too. Yet most of us, if we are honest with ourselves, know it was better then than it is now.
And now, we face stark realities whose immensity only a few can understand in their fullness:
- As many as 50 million Americans (16 percent of the population) living below the poverty level
- As much as 18 percent of the population effectively out of work
- A debt that will exceed the total earning potential of the United States as early as 2015 (4 years from now)
- Debt payments that may exceed $1 trillion a year by 2020 (9 years from now)
- A Medicare program that will reach insolvency anywhere between now and 2024 (13 years from now)
- A Social Security program that will be bankrupt anywhere between 2017 and 2037 (26 years from now)
- A population that will have more adults collecting retirement than producing income as early as 2025 (14 years from now)
From my point of view, the only way to fix these problems is to work toward rebuilding the things 100 years of consuming and debt have destroyed. We need to rebuild our families, our communities, our towns, and thereby, our nation, and we can do it by returning to the things that worked.
What worked was a society where things were shared. Homes were shared. Meals were shared. Work was shared. Success was shared. Hardship was shared.
People in that era of shared life could cushion the burden of things as diverse as paying for a house or sending a kid to college through a network of people who all had the common good in mind. Wealth could be accumulated in such networks and disbursed through those networks in a way that benefited everyone in it.
This is not some kind of appeal toward some sort of communistic system, although it does represent a kind of practical socialism that has dominated human societies since there have been such things. What’s more, this kind of practical socialism worked, and everyone was better off for it.
Until we, as families, communities, towns, and an entire society realize this is the only way it can work, I believe the problems we face as a nation will only grow worse. Coming back together is the only way to survive.
I cannot help but get the sense as I watch events unfold in Greece that we are watching the unfolding of a slow motion disaster, the beginning of a whole series of disasters as western economies begin to fold under the weight of the incredible debt they have accrued over the past 50 years paying for social programs their nations could never afford.
No one ever wants to believe these kinds of things will happen to them or in the time they are living, but a quick look around the world right now with any kind of realistic outlook shows that they are happening and that they are going to affect every one of us soon.
The question that remains is what each of us is going to do in response to the massive and enduring changes that will result from this slow motion disaster. Now is the time for people who care to stop talking in terms of rhetoric and to start doing. Get ready while there is still time to do so.
I often wonder–as the debates rage on about government budgets, deficits, and taxation–how many people realize that most taxation is an assault on their productivity.
You see, all you have available to you in life is your time and your effort, collectively referred to as your productivity. You choose to invest your productivity in a certain way, then along comes the government who says that a certain amount of that productivity–quantified as income–belongs to them off the top. Then, they say another amount belongs to them if you take your quantified productivity and do anything with it–that is, spend it. Finally, the government says that they are going to spend the productivity they took from you on infrastructure, products, and services it is now going to force you to use–literally force you, as the government has engineered a near monopoly on the use of force–and they’re going to take even more of your productivity in the form of fees for the privilege.
As far as I can tell, this system of robbing people of their productivity means that people, in general, have become less productive. Why should anyone work hard and apply themselves if the government is just going to come along and take what you’ve done, especially since it takes more as you are more productive.
So, the reason that local, state, and federal governments are going broke, and are taking all the rest of us down with them, is that they have effectively capped the amount of productivity their citizens can produce even as they demand more of it to pay for their infrastructure, products, and services they are going to force you to use by taking even more of your productivity.
This is a self-defeating system and can only result in collapse. What’s ironic about this whole mess is that this is not the first time in the history of the world this very thing has happened, nor will it be the last. People think that letting the government force them to do something certain ways in return for giving up their productivity seems like an easier way, but it always fails. There is no such thing as something for nothing, and as the number of people to cease to be productive goes up, it’s not possible for those who try to continue to be productive to make up the difference. The system collapses into an tragic, entropic heap, usually a lot of people die, and those who worked the hardest–that is, those who were most productive–rebuild on the ruins.
The manifestation of this condition in 2011 is massive global budget shortfalls. The US federal government alone has spent $14 trillion more productivity units than it managed to collect since the end of World War II, or 280 million household-years worth of productivity. That means that, even at full employment (unemployment around 4 percent, or about 68 percent of the total population working), it would take all of the salary of all of the households two years to pay off the debt, and that would not provide a dime to the government to maintain anything.
So, what’s the solution? It’s easy: stop penalizing people for being productive. How do we do that and still keep all of our pet programs? In short, we can’t do that exactly. The pet programs will have to change, get cut back, go away altogether, but that reality cannot help but be offset by the benefit most people will gain from having access to more or most of their own productivity.
In real terms, this probably means some sort of flat or “fair” tax, probably in the form of a transaction (sales) tax on things regulated by the government. And, no, I do not believe such a scheme would penalize the poor more because, frankly, the poor would be less so as wages rose because businesses could grow because they would have more money being spent by people who have more of their productivity back.
Of course, these sorts of things rarely resolve themselves by way of reason, dedication, and hard work in any kind of mutually beneficial way. Again, history tells us, they usually resolve themselves by bloodshed and hardship, but there is always a first time for everything. What this first time would take is the people demanding their productivity back at the ballot box.
- A- Archives: the National Archives, Library of Congress, and the US Copyright Office would be forced to close.
- B- Banks: all of the banks still dependent on TARP funds will lose their lifelines and FDIC insurance guarantees will become null because no one can disburse the money.
- C- the Capitol: operation of the US capitol would cease and the capitol area would be forced to close down.
- D- The Drug Enforcement Agency: the DEA will no longer be interdicting supplies of illegal drugs entering the United States.
- E- Education: student loan disbursements and student loan rate guarantees will no longer function.
- F- The Federal Bureau of Investigations: the FBI will no longer be available to assist in investigations of bank robberies and kidnappings. Domestic intelligence operations may cease or be cut severely back.
- G- Governments: State and local government programs dependent on Federal money will be forced to reduce activities or shut down altogether.
- H- Hospitals: medical programs dependent on federal grant money will cease to function.
- I- IRS: the IRS will not be able to collect taxes, disburse refunds, or process returns.
- J- Judges: the federal court system, including the Supreme Court, will be forced to shut down.
- K- Khalid Sheikh Mohammed: KSM and the the other detainees at Guantanamo Bay will suddenly be guarded and cared for by people who are not being paid.
- L- Land: farmers utilizing government land, especially for grazing, may discover that land is no longer accessible.
- M- Medical: Medicare and Medicaid disbursements will cease, even for individuals undergoing treatment.
- N- The National Aeronautics and Space Administration: NASA will not be able to fund its ongoing missions, including the International Space Station.
- O- Open Skies: US enforcement of the Open Skies treaty would cease.
- P- the President: While Barack Obama will still be our duly elected president, he will cease to have quite a bit of executive power because that power is derived from the authorization of Congress as part of the budget process.
- Q- A government shutdown Q&A. And another.
- R- Research: federal research grant money will cease.
- S- Social Security: eligible recipients be able to apply for benefits and, if a shutdown goes on long enough, checks may not be issued.
- T- Taxes: the federal government will not be able to collect taxes while it is shut down.
- U- Unemployment: Federal unemployment benefits will cease.
- V- The Veteran’s Administration: VA hospitals may not be able to see new patients and may have to discharge patients.
- W- War: we have combat troops in harms way, but those troops will not be paid and they will have to depend on supplies already available because resupply will stop because those moving the supplies can no longer be paid.
- X- X-rays: the TSA will no longer function.
- Y- Yemen: the US embassy in Yemen, and all other US embassies, will have to cease providing services.
- Z- Zoos: national parks will shut down, such as the National Zoo in Washington D.C.
I doubt very many people give much thought anymore to the tired media adage that the United States is addicted to oil. Sure, people see the price of gas, and they understand that price is somehow tied to oil, but what they’ve never comprehended is that the price of almost everything else is also tied to the same price of oil.
I think about that addiction a lot these days, because I think both its existence and its end will come to define who we are as people here in the early 21st century. I think about it mostly because I wonder how any of us are going to succeed at providing for ourselves–and I’m not talking about whether or not the internet will still work or whether we’ll have cell phones, but whether we’ll be able to feed, clothe, shelter and protect ourselves–once the oil’s gone.
For me, this point is driven home by our precarious food system. Right now, virtually every part of the process most people depend on to feed themselves depends on oil to work, yet most people don’t even understand that it is true.
If we start with, say, seed corn produced to plant, the seed itself is already so laden with oil from the previous year that it’s kind of amazing it even exists, but for my purposes here, I will concentrate on this year. Most seed corn is grown hundreds, and sometimes thousands, of miles from where it is planted, so oil fueled, lubricated, painted, and upholstered semis must haul it from where it has been stored on oil-based tires across oil-paved roads to get it to the seed salesman.
Often, the seed bags are printed with oil-based ink, as are the shiny sales brochures and the price sheets, along with the oil-based dies used in the hats that were shipped from somewhere in the far east in oil-powered cargo ships. Farmers come to get their seed and paraphernalia in pickups as oil fueled, painted, upholstered, and tired as their semi brethren across similarly oil-paved roads.
Once back at the farm, the seed goes in the oil lubricated and painted planter, sometimes manufactured overseas and shipped to the States in oil-powered cargo ships and hauled on oil-powered locomotives and semis. But, before the farmer can use the planter, he must sometimes plow with his similarly oil-dependent plows using is oil-guzzling tractor, and then spray oil-based fertilizers, herbicides, and insecticides using the same tractor.
Then, finally, he’ll actually plant, using the same oil-dependent tractor, followed by more spraying throughout the spring and summer, all dependent on oil to even exist, let alone happen.
When fall comes, the farmer will pull out his oil fueled, lubricated, painted, upholstered, and tired combine, shipped via oil from who knows where, to harvest the corn and dump it into his oil fueled, lubricated, painted and tired semi to haul it to the elevator where oil fueled, lubricated, and painted locomotives will haul it to processing facilities where the corn will be rendered into its constituent parts, then packaged and shipped by other oil fueled, lubricated, painted, upholstered, and tired semis across oil-paved roads to other factories where those parts will be combined into other oil-soaked parts into what most people think of as food.
And, it doesn’t end there, because then the food, as they call it, will be packaged in oil-based ink printed cardboard and loaded on yet other oil fueled, lubricated, painted, upholstered, and tired semis to be hauled across more oil-paved roads to warehouses stuffed full of oil-saturated goods from all over, to then be hauled again to your grocery of choice, once again using oil.
And we’re not done yet.
Because, you will get into your oil fueled, lubricated, painted, upholstered, and tired car and drive, sometimes quite a distance, to get to your oil-filled grocery to by your oil-based things you call food, but on the way home you’ll be so tired that it’ll just be easier to burn some extra oil waiting in the drive-through of your favorite oil-saturated fast food joint that was actually five extra miles out of the way.
When you finally get home to eat your oily food–let’s face it, even most of the carbon dioxide the corn plant used to make whatever part of the corn ended up in your food came from oil somewhere along the line–you’ll do so unironically in your house on your couch in front of your television watching cable all of which could not exist without the consumption of billions and billions of gallons of oil.
And to think that, just a little over a hundred years ago, most people had no idea what oil even was. Most of them lived on farms, still farmed with horses, and planted seed corn they grew the previous year using the same horses they fed with grass from their own pastures. They hauled their corn to the local market in wagons drawn by the same horses, and the people who came to buy it walked or rode horses themselves.
Now, I’m not saying we should go back to how things were a hundred years ago, but then again, I don’t have to, because the question that should be on everyone’s mind is how expensive oil has to get before we won’t be able to afford to do it any other way than the way they did it a hundred years ago. And how many people will be able to even do anything like that living in their suburbian sprawl, floating in a sea of oil they depend on everyday for their very survival, yet are so unaware of that the fact that they are probably sitting on, touching, eating, drinking, even exhaling oil right now that the idea would be a shock to them if they bothered to notice.
No, Americans aren’t addicted to oil, they’re consumed by it, and they have no idea what is going to happen to them when the oil runs out.
I believe a significant part of the debate over everything from massive deficits to union bargaining rights centers around a question most people never consciously consider: who do they believe in?
In this case, I am not talking about belief or lack of belief in God, but rather whether they believe in themselves or the government.
I suspect that most people will immediately claim they believe in themselves and dismiss the question as irrelevant, yet in doing so, they will not have considered what the question really means.
For instance, do they believe that it is their responsibility or the government’s to pay down the national debt? Who do they believe is responsible for making sure they are provided for in their retirement? Who should be responsible for making sure they can afford health care? That they can afford gas? That they can afford food?
Too many people, even faced with those questions, will respond with something like, “Well, me, I guess,” even as they then say, “Someone should do something about…” without any sense of irony.
From my perspective, Americans have gone from a collection of people who depended on themselves to a collection of people who depends on the government. In transferring that dependence, only the surface of things has changed–that is, the government still depends on the people, but the people have given up the power to a proxy.
So, even as people depend on the government, what they depend on in a phantom parasite of their own creation, one they believe they can cleverly hide their excess in, yet one that progressively bleeds them dry as time goes on.
It has taken two generations–the Baby Boomers and Generation X–for the United States to go from the most prosperous and powerful nation that has ever existed to a teetering ruin built on ever expanding government and a debt a dozen generations will still not have paid off. That entire transition happened through the auspices of a single idea, that the people handed the government responsibility for aspects of their lives they no longer wanted to be responsible for themselves. The people stopped believing in themselves and started believing in their government, and their government started bleeding them dry.
This transition should be no surprise to anyone who has a decent view of history. Many of the world’s greatest civilizations broke and fell on the same premise. Reading the history of societies as diverse as the Roman Empire and the Middle Ages Chinese dynasties shows the effect of the same corrosive idea.
Our fate as Americans will be no different unless we somehow figure out how to do something that has never been done in history: reverse the trend. Until we, as a nation, return responsibility for the debt, our retirement, health care, our jobs, our well-being, and the well-beings of our most vulnerable citizens to ourselves, we have set ourselves on a path whose destiny is certain.
Yet, even if the destiny of our nation is certain because of our dependence on government, those of us who see this reality for what it is can take heart: something will come next and we can be prepared for it. Hope for the present and plan for the future, but do so knowing this could get ugly before its over.
I’ve been watching the progress of the collective bargaining revocation bills in Wisconsin and Ohio with great curiosity and not a small amount of amusement. What I see on all sides of this debate is a failure to deal with reality.
Teacher’s unions fail to understand that there is no more money. Wisconsin is in the hole $2.2 billion. Ohio is in the hole $7 billion. Those deficits are only the ones for 2011. Sure, they are just trying to protect their own, but at what cost? What else has to get cut to protect them? Who else has to pay?
On the other hand, you have the conservative law makers and those who elected them. They claim union busting–because that’s what revoking state collective bargaining agreements really is–will save the tax payers millions. That’s true, but so would cutting state programs, especially the costly social welfare programs even conservatives are addicted to.
The problem, as I see it, is that nobody wants to admit the truth: we’re not going to get out of these problems with selective, politically motivated cuts. Instead, we’re going to have to make far-reaching, across the board cuts at all levels of government that will last decades, and those cuts will only serve to allow us to tread water.
Unfortunately, no one is listening. Liberals and progressives want to tax more and spend more. Conservatives want to attack their political opponents’ pet programs without doing anything real to face the problems. Libertarians are too wild-eyed and disorganized to do anything other than make incoherent noises.
In the midst of all of this, our nation is failing. Our currency is devaluing. Our economy is not creating jobs. More than half our citizens effectively do not pay taxes, and the other half are paying so much they can’t make anything happen. Our tax system penalizes success. Our laws make starting and maintaining businesses unnecessarily complex. This year, local, state, and federal governments will spend between $2.5 and $3 trillion more dollars than they collect in taxes. The total US debt burden carried by all levels of governments could exceed $25 trillion–or twice the entire GDP of the US in 2011.
If we really want to fix the problems that got us here, we have to end–no, destroy–the disincentive to perform, succeed, and innovate on the strengths of our own merits. We have to wipe out the notion that we can somehow treat every individual and situation as some kind of an average and deal with reality in all its uniqueness and complexity. For the first time in decades, we have to think, act, and react in accordance with the situation we have, not the one we are convinced we should have. We have to return the bulk of control to the individual and stop expecting governments to take care of us.
And all of these solutions are going to happen whether we want them to or not. We cannot continue what we are doing because what we are doing is failing. The question that remains is whether we participate in the process by which the next thing comes into being or whether we stand and watch as the terms are dictated to us.
I suspect most will do the latter, which is why I’m pretty sure you should be getting ready for some really tough times ahead.
To me, 2010 was defined as much by what did not happen as by what did. It was an anxious year, one that could have been far worse or far better.
Last January 1, I endeavored to make several predictions about the coming year, an impossible task, yet an interesting intellectual exercise nonetheless. Let’s see how I did:
- The Pakistani conflict with al Qaeda and the Taliban will come to a head: While the Pakistani government did not fall in 2010, the intensity of the country’s internal struggles increased to the point that the distinction between insurgency and civil war is almost irrelevant. The list of major terrorist events inside Pakistan is immense, and reminds me a lot of how Iraq looked in 2005 before the surge. Frankly, it is amazing that the national government managed to survive, and I suspect it owes a lot of its survival to the fact that it ceded control of broad swaths of the country to militants.
- Iran will demonstrate its capacity to build and deliver a nuclear weapon: I was very surprised that this did not happen, but I think we can congratulate on thing for the fact that it did not: Stuxnet. The Stuxnet worm was a stroke of genius on some nation’s part that was more effective in hampering Iran’s nuclear progress than a thousand bombers could have been. Still, Iran is moving forward with its projects, including the potential of basing missiles in Venezuela capable of reaching the United States.
- The war in Afghanistan will be revealed to be even more difficult than first officially acknowledged: I think I nailed this one, mostly because the Obama administration has demonstrated no resolve for winning this conflict directly. Coupled with the deep problems in Pakistan, Afghanistan looked increasingly dire in 2010, although there are signs victory is still within reach, especially now that General David Petraeus is in charge of the show.
- A major terrorist attack against a Western nation will succeed: They did not fail for lack of trying. 2010 was full of attempts to attack the west that failed or were thwarted. The only thing that amazes me more than their lack of success was their apparent ineptitude.
- Third party candidates will make significant inroads in the November general election: The Tea Party thwarted my hopes for the 2010 midterms as much as it did the Democrats. Perhaps it is not fair to just blame the Tea Party: American voters are creatures of habit, hence our 200-year-long two party system. That said, the next two years should be an entertaining political train wreck.
In a way, I guess some could say that the world turned out far better than I expected it to on 2010.