There is “good” government and “bad” government and, for us to move forward as a nation, we must recognize the difference. As I look into the world and our country’s political history, there’s an axiom I discover: Government Regulations are “good” government, and Government Programs are “bad” government – almost to a tee, it’s that simple. Government regulations that intend to prevent us from experiencing another failure, the proverbial red tape that bridles capitalism and ensures a proper playing field, typically exist for good reason. Like a red-guarded switch in a cockpit, we usually want to leave the red stuff alone. An old pilot saying is, “If it’s shiny and clean and you haven’t touched it, touch it. If it’s dusty and red, leave it alone.”
There are certainly exceptions but for the most part, when we take a look at red tape of government regulation, we want it there. At a minimum, we want to keep the reason it was put there. Government regulations which set the environment in which the capitalist operates, legislation like lending rules and regulations, equal employment mandates, workplace legislation, minimum wage laws, Food and Drug Safety laws, IRA tax legislation encouraging retirement savings, the Glass-Steagall act enacted after the financial collapse in 1929, repealed in 1999 before our 2008 financial collapse, and then re-instated in the resulting Dodd-Frank legislation – these government regulations are “good” government. Red tape is good, leave it alone.
“These capitalists generally act harmoniously and in concert, to fleece the people.” – Abraham Lincoln
Government Programs, however, are just the opposite. Time and again they prove their inefficiency, lack of worth, and destructive nature. The government program loses to the capitalist one every time. This should not surprise us – a system that monopolizes control to the government will lose to a system in which the government only sets the stage and private industry determines the best answer. Call it “natural selection” or “survival of the fittest,” the simple truth is this: Competition breeds excellence. This truth should not surprise us. America, better than anyone, understands the power of limited government and private enterprise – at least, we used to. The resulting corollary is that non-competing Government Programs will lose. This is why and how we won the Cold war – we used this Truth to our advantage until the government programs of communist Russia failed, until their people were standing in government bread lines with no bread inside the store. Government programs are inherently flawed as they are a monopoly unable to adjust to the world around them, a service not reliant on good performance for its revenue, and from a party not accountable to anyone for their mistakes. We should stay away from them whenever possible – Government Programs are “bad” government.
“A wise and frugal Government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned. This is the sum of good government, and this is necessary to close the circle of our felicities.” – Thomas Jefferson
Case in point: Let’s take a real look at our Social Security government program. Initially designed as a part of the “New Deal” to assist the disabled and elderly who had lost everything in the economic collapse of 1929, it is now a glaring example as to why Government Programs are “bad” Government. As with most government programs, the Government retirement program sounds good when you hear it:
“12.4% on every paycheck in your life is put away in a safe investment with your friendly government. These monies will cover you with government provided disability insurance payments in the event you can no longer work, as well as provide a defined government benefit in retirement if you are able to work until your golden years.”
What a great idea, right? All government programs sound nice – that’s why the Sirens were so alluring, they sounded nice. The Vision of the 1960’s, the idea that we could fight our problems with a federal program to fix it, the notion that we should entrust government with our livelihood… I suppose We didn’t yet understand the difference between “Good” and “Bad” government – or more accurately, we forgot the lesson. Oh America, how did you ever get seduced by that crazy lie and deception called Government Programs? You of all nations should have known better….
“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.” – Thomas Jefferson
But can’t we see it today? Can we recognize the sweet sound of government programs as a Siren Song?
Today, our Social Security government program eats up 25% of our current tax revenue through payroll taxes. Payroll taxes were raised in 1956 to 4% of salary (2% individual, 2% employer) and in 2012 the rate is 12.4% (6.2% individual, 6.2% employer) with Congressional “tax cuts” now and again because most of us realize that penalizing an employer who hires an American stunts job growth in America. So we just go further in debt. Here is where our Social Security program is today: Dollars available in our government “Social Security Trust Fund:” $0. Dollars owed to our account: $2.6 trillion. Debtor owing the money: Us.
The end state of this course is completely visible if we but choose to see it. In Greece, the employer’s contribution of payroll tax amounts to 28.06% of salary, and the employee’s contribution is 16%. They have raised the taxes on their working and employers so much that they simply now have unemployed people and bankrupt businesses – and no money to give their retired to boot. Their unemployment rate is 18.2%, their credit is junk, and their nation is bankrupt. It is our eventual destination as well if we fail to change course.
“History, in general, only informs us of what bad government is.” – Thomas Jefferson
As in Greece, our Government has slowly but surely indebted not only us, but our children and grandchildren, to the Government. We are again enslaved. Our government spent all of our retirement money, borrowed more on the “good credit” of our children, and continues this tack today. What will it take for us to realize that borrowing for more Government Programs is not good for the collective us? In 2011, as our working class no longer could support our obligations to our elderly, we had to draw $46 billion from the Social Security “Trust Fund.” Next year the drain is projected to be $212 billion. We pretend like there is a Social Security Trust Fund to draw from but there is not – our Government spent the $2.6 trillion dollars that were supposed to be in it. Should we be surprised? We were not meant to live this way — we aren’t meant to have a government take care of us.
“I know of no safe depository of the ultimate powers of the society but the people themselves; and if we think them not enlightened enough to exercise their control with a wholesome discretion, the remedy is not to take it from them but to inform their discretion.” – Thomas Jefferson
If only we would have been allowed to keep those funds away from the government, if we would have been able to put them into a retirement account and told to plan for our own retirement, we would be better off – after all, that’s how we’re supposed to live. I would rather take care of myself than count on a government to do so – particularly when that government’s plan is for my kids to pay for me. I wouldn’t mind being forced by the government to plan for my own retirement if we find that not enough people are doing so. If “Good” government had forced me, through law and regulation, to put 6.2% of my paychecks into a private retirement fund, if said regulations defined the disability and unemployment insurance minimums that my fund must meet or exceed, if the private retirement fund had my name on it and no one from the government could touch it, if it was heavily regulated so that the private entity holding the funds could not invest it in risky investments, I would be well on my way toward paying for myself in my retirement – we all would. But as it is, we have nothing. And everything we give gets recorded as debt that we owe. The government took our money, spent it, and then gave the bill to our children.
“I have no fear that the result of our experiment will be that men may be trusted to govern themselves without a master.” – Thomas Jefferson
This entire notion that my child will pay for me, that my government will ensure that I’m taken care of by my kids and grandkids, churns my stomach. The suggestion that if we just raise payroll taxes more we can “fix” the government retirement program, makes my jaw hurt. I see why some refer to Social Security as a “Ponzi Scheme” but, whatever you wish to call it, we must come to the realization that it needs to be replaced with a private sector solution – and the sooner the better. In a private solution with necessary government regulation, the $2.6 trillion we worked so hard for might still be there for us – we may well have avoided a couple wars in the meantime.
“It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.” – Thomas Jefferson
In my industry, the airline industry, every competitor has been forced to scrap its defined benefits retirement programs and shift to a retirement plan that pays into a separately managed 401k account. Airline businesses did this, not because they wanted to increase their large profit margins and make even more money, they did it because they were going to go bankrupt otherwise. They realized the truth that a business can’t survive if it is unable to determine future costs – they must pay those costs as they go. Must our government actually die before we can apply this same truth to US?
Let’s honestly ask ourselves some questions:
Are we better served with a Government Postal Service program, or a contract with the private sector to determine whether Fedex, UPS, or some other up and comer should perform services?
Are we better served by no-bid government contracts to pre-determined businesses and union shops, or a system in which competitors are able to make their case and we contract the government-funded project to the most competitive bid?
Are we better served by a Government Schooling program, or by earmarked education funds to go to qualified private schools, regulated by government, that allow parents to choose which school best fits their child’s needs? A system in which the schools compete to help you determine what one best prepares your child for life?
How come we can answer the question, “are we better served with a Government program providing us cell service or by private industry competing for our business?” correctly, but we cannot apply this same principle to our existing government programs? It doesn’t matter where or when you ask the question, throughout the history of man, the answer is always the same and the political lesson is absolutely clear – Monarchy, Autocracy, Democracy, Fascism, Communism, Socialism, Liberalism, you name it because it doesn’t matter, the lesson is always the same:
If it’s ever possible for you to prevent your future well being from lying in the hands of the Government, if it’s ever possible for you to actually take control of your own future and well being,
if it’s ever possible to limit the Government solely to law and regulation that defines and provides a safe and fair system in which you can excel,
than by all means do so.