Liberals are feeling triumphant these days, but in the backs of their minds there must be a sense of foreboding. They won this year by demonizing Republicans and by bribing various demographic groups with government largesse. But the Left’s tactical victory can’t conceal the fact that its ideology is bankrupt. The left’s real enemy isn’t Republicans, it is arithmetic.
Welfare states are collapsing all around the world. Ours is on the same course. It is commonly observed that America’s entitlement programs are Ponzi schemes, which is correct. What is less often noted is that federal government spending in general is a Ponzi scheme, sustained only by influxes of new money–real money from China and a handful of others, and fake money from the Fed–that cannot long continue.
It is characteristic of any Ponzi fraud that the people who get in on the ground floor do well. That makes the scheme popular; people clamor to get in. This is what has happened with Social Security and Medicare here in the U.S. Past and current beneficiaries are receiving benefits that are entirely disproportionate to what they paid in. This obviously cannot continue indefinitely. Every Ponzi fraud inevitably crashes when its exponential growth cannot be sustained because there is not enough new money–not enough suckers, to put it bluntly. In the context of entitlements, “new money” means young people. That point is now approaching rather rapidly.
This is why the Democrats cannot adopt a budget. A budget requires arithmetic, and arithmetic demonstrates that the welfare state must either come crashing down, or be exposed as the terrible deal it is for those who didn’t get in on the ground floor.
A frequent correspondent points out this post by Walter Russell Mead titled “Illinois’s Blue Robin Hoods Stealing from the Young to Give to the Old,” which relates to another instance of the same phenomenon.
After pension reform went down in flames last week, Illinois moved to Plan B: war on the young. Governor Pat Quinn’s administration claims that the upcoming budget will include major cutbacks on state services to make room for a $1 billion increase in pension spending. Most notably, education spending will decrease by $400 million, which would make 2013 the third straight year in which education spending has dropped. …
Sticking it to either group, the young or the old, isn’t appealing, but the boomers are politically organized and better positioned to fight for their interests, particularly because powerful unions are on their side. The young, by contrast, are among the least politically active groups in the country, making them much easier for politicians to ignore. Illinois has obviously chosen the path of least resistance.
If there’s a clearer illustration of the blue war on the young, we have yet to see it.
Our correspondent adds:
Just wait until the Occupy kiddos find out that they’re totally screwed by the entitlement state and its appendages–specifically, public sector unions and their unfunded pensions. Especially when the entire, ever-expanding middle class non-means tested entitlement regime is based on a Ponzi type lie, viz., that the current beneficiaries deserve and have actually “earned” their benefits. Wait until young people find out that THEY are the suckers in this Ponzi scheme, and that any minor tweaks to the cash flows to sustain the scheme still leave them with an incredibly lousy deal.
Do you think that the increasingly brown, progressive young New America will enjoy being serfs to preserve the benefits of the reactionary old white middle class?
The Progressive project is at its strategic end-state, doomed by its internal contradictions and deceptions, and Obama, the left and the Dems are trapped. He can’t do any meaningful entitlement reform; the whole New Deal framework unravels if you tug on one string (payroll taxes, e.g.). The left will go bonkers if He tries. They didn’t elect Him to end the New Deal “tax and tax, spend and spend, elect and elect” machine. And He cannot be for tax reform: it just hammers His limousine liberal base in the blue states. And, crucially, He cannot, for obvious reasons, get enough tax revenue to support all the spending. Any significant revenues must come from the middle class. Heh. Good luck with that!
Whatever temporary wedges He has against conservatives are weak in comparison to the many that we have against the left in the long term.
Heighten the contradictions, comrade!
I think it is clear that Progressivism is doomed; what is not clear to me is whether America is doomed to collapse along with its misbegotten Left.