A nation of addicts, by design

There’s a pervasive “bail-out” mentality that no matter how much trouble you get yourself into, it’s never your fault and Uncle Sam will eventually help you out. 

So don’t worry about running up your debts, investing badly, buying a house you can’t afford, dropping out of school, having 5 kids by the time you’re 20, feeding those kids, or borrowing a hundred grand to get a degree in French philosophers of the Middle Ages – no harm no foul. 

Uncle Sam will make it all right.  Someone else will always pick up the tab for your gross irresponsibility. 

This same generosity and absolution of irresponsibility is also applied to favored businesses.  So even if you’re a nit-wit CEO who has flagrantly mismanaged your company and lied to your investors – but you are in a green-energy business, employ a lot of people, or are a big deal on Wall Street – there’s hope for you, too.  Uncle Sam will do practically anything to keep you afloat. 

Yes, it’s a Faustian bargain at times – you’ll have to do whatever the government demands in return, like produce self-immolating cars nobody wants, for example – but the money and support will be there to keep you floundering along. 

This holds true for elected officials and bureaucrats in the public sector as well.  Maybe you let pay, perks and benefits for public employees skyrocket.  Maybe you agreed to ridiculous union contracts you can’t afford.  Maybe you issued now-worthless bonds.  Maybe you even robbed your pension funds and then projected fanciful rates of return to paper things over.  So what?  You just have to trot out the usual hostages – firefighters, police, and teachers – and wait for help to come. 

Past experience shows it will. 

When the rest of the economy was on the skids and private sector workers were being pink-slipped by the millions, did the public sector suffer?  Nope.  In fact, it added jobs. Was this because there was a desperate need for more public sector workers?  Nope.  Cities and states got Federal “stimulus” money – you remember, for “shovel-ready” jobs to build infrastructure – which they promptly used to postpone layoffs and even give raises in some cases.  State and local governments got to keep the good times rolling, while politicians took credit for “creating or saving jobs.”  

Now, of course, after squandering those temporary boosts in funding – eating the proverbial seed corn, as it were – and the sequester on future, not current, spending, everyone in the public sector and anyone dependent on government spending is freaking out. 

It’s not like nobody knew this would happen.  They just expected to dodge reality again, either by more rounds of “stimulus” money or higher taxes, neither of which appear to be forthcoming.     

Now they have to suffer withdrawal.   

The problem is that the Federal government increasingly is stepping in to take the pain – and any useful learning lesson – out of the consequences of stupidity and irresponsible behavior, whether that’s personal, institutional, big business, or governmental.  Then the media make it seem like these government actions are acts of compassion to be praised. 

The reality is these bail outs and handouts are more akin to giving an addict another hit off the crack pipe to keep them coming back.  These are only happening out the self-interest of politicians; there’s rarely any higher altruistic purpose at play here.   

It’s obvious that a lot of politicians want the public, businesses, and institutions wholly addicted.  They know that if the dependency on government programs is strong enough, they’ll stay in power until they die.  They know that people won’t vote against their own self-interest, and all politicians need to do is make certain a majority of voters are dependent on handouts.  They also know that business executives and unions contribute to the campaigns of politicians who protect them from real market forces, foreign and domestic competitors, and having to pay their fair share of taxes. 

So don’t buy into the bullshit that all these assistance programs, entitlements, tax credits and subsidies are designed by a caring, compassionate government to be a hand up instead of a handout. 

They may be packaged as generous gifts, but they are intended to be powerful and addictive drugs. Which, in fact, they are.  

People, businesses, and state and local governments have been hooked on these drugs so long, they can’t imagine life without them.  Like true addicts, they’ll do almost anything to get that next fix.  They’ll lie about how much money they make, they’ll lie about how much help they need, they’ll pretend to be destitute when they’re not, all to keep these drugs flowing. 

At every step they’ll have the media helping to make the case for them.  The media will put out slanted stories about how essential all these programs and handouts are.  If these aren’t continued and enhanced children will starve, jobs will be lost, families will be made homeless, women will die, there will be mayhem in the streets, cities will burn down, the sick and elderly will meet nasty ends, and of course grinding poverty will get worse. 

Honestly, the Federal government encourages this view – it feeds its propagandists in the media with half-truths, misleading stats and sob stories out of context to make America feel ashamed that so much remains to be done to take care of the less fortunate among us.  And how much what seems to be a naked political payoff is really an “investment in our future.”      

At the same time it actually advertises to recruit as many future addicts as possible, going the extra step to produce ads in multiple languages so even recent immigrants can learn how to get in on the action.  The drugs are made to appear so attractive, so easy to get, and so much a part of a “normal“ American lifestyle that taking them almost seems like the patriotic and right thing to do.  Only a fool would say no to such beneficence – and that’s part of the pitch.   

This is what’s happened with food stamps, TANF, tax credits, subsidies, extended unemployment comp, and entitlements in general.  Government and politicians are actively promoting these to demonstrate how much they “care” about us.  In reality they are pushers with an agenda that has virtually nothing to do with caring about the public’s well-being; they want more people and businesses dependent on them.    

You can see how successful this strategy is by the number of people in the general population who are now arranging their lives primarily around getting and keeping government benefits.  You can also see it in the growth of loan guarantees and special programs for businesses. 

That’s the system our government has created.  They’ve made it more attractive for many people to rely on benefits than on a regular job. 

They’ve also created an alternate universe that incents people and businesses to make often questionable decisions based on artificially distorted economics.

For example, realtors and homeowners are hooked on the mortgage interest deduction, which most first-time homebuyers really don’t understand.  Some homebuyers think the government is going to help them pay their mortgage, when the reality is that government is simply going to let them deduct a portion of their mortgage interest from their gross income for tax purposes.  However, I’m pretty sure many people have signed up for more home than they could afford thinking the government would cover a lot of their initial interest costs. 

When Bowles-Simpson recommended ending this costly and market-distorting program, their proposal was automatically DOA because realtors and banks were opposed.  

Then there’s the healthcare industry – which some see as almost 15% of our total economy and where costs seem to be soaring well beyond any reasonable rate of inflation.  Wonder why?

Okay, have you seen the ads for adult scooters?  You know, the ones that imply that Medicaid will pay for all or part of a new scooter?  Or the ads for diabetes testing meters?  Or the virtual wall-to-wall ads for prescription drugs on TV and in magazines? 

Do we really believe that Medicare and Medicaid, and now the coming ObamaCare, haven’t already spawned thousands upon thousands of products and schemes designed almost exclusively to get money out of these programs?   

Every time the government creates some new healthcare benefit or entitlement – or regulation – there’s sure to be some business out there ready to exploit it, from prescription drug companies, to medical supply houses, to physician group practices, to hospitals, to insurance companies, and more.   

Our entire medical system is addicted to government programs.  Which is what the Feds want. 

The general business community is no better.  Businesses that have become addicted to subsidies and credits spend millions in lobbying fees to retain and grow these – rather than investing that money into making and producing things that have real market value and provide jobs here.  They’re more interested in protecting what they have than competing in an open market.

The run up in the stock market is yet another example. 

The Fed is pumping $85-billion into the economy every month buying up worthless debt by printing increasingly worthless U.S. currency.  That means cheap money.  That means Wall Street is happy and pushing stock indices higher and higher.  For now.  Wall Street worries that if the economy improves and employment goes up – which would seem to be a good thing for most of us – the Fed will stop buying those worthless bonds.  And if that happens the market may collapse.  So they hope unemployment stays relatively high and economic recovery remains lackluster. 

Nice.  But it makes sense that from an addict’s viewpoint – it’s all about the drugs. 

So how do we end this? 

That’s hard to say.  The nation clearly isn’t ready to go cold turkey and face the pains of sudden withdrawal.  Maybe the best to hope for is that we can start the process of weaning people, businesses, and institutions off their addiction over time. 

Realistic means testing for benefits and entitlements would be a good place to begin, along with zero tolerance for benefits fraud.  We all know there’s absolutely no reason in the world we should have as many people as we do now on food stamps, or entire generations of people who’ve never known any other lifestyle than being on the public dole. We also know there's incredible waste and outright theft in the Medicare and Medicaid programs; that needs to be stopped and the perpetrators prosecuted to the fullest extent of the law.  

Throwing more money after the same problems over and over again and expecting a different result is tantamount to insanity.  So the era of using tax dollars to continually repeat failed social engineering experiments has to end.  These haven't worked; if anything, many of these programs have had the opposite effect, producing institutionalized poverty and a permanent, self-perpetuating underclass.       

Last, but certainly not least, the tax code needs to be overhauled to strip out all the specious credits, subsidies and special tax treatments that rob the U.S. Treasury and reward people and businesses for doing what they should do already, without an extra incentive.  

That’s how I would begin to end our addiction. 

It won’t be easy.  Yet as is often said, the first step in recovery is to admit you have a problem. 

As a nation, we seem unable to do that.  But until we do, our collective addiction will only get worse, and stopping it will inevitably grow more painful.