Preface

Reflections on a Nation Gone Mad

“What has always made the state a hell on earth has been precisely that man has tried to make it his heaven”

Johann Hölderlin

            In May of 2011, the Federal government of the United States hit its debt ceiling, the total amount of debt allowed it by law. At that particular moment, the debt ceiling was at $14,294,000,000,000. To put this in perspective, the Gross Domestic Product (GDP) for the United States was $14.12 trillion in 2009. This means that if the total value of every good and service produced for a full year in the world’s largest economy (the European Union is not counted here, as it is not a country, but a group of countries) were 100% dedicated to debt reduction, the United States would still have a credit card balance of over $100 billion dollars.

            After weeks of the two ruling parties in the U.S. Congress making a big show over playing hardball with each other, which included some of the most dishonest pandering and emotional appeals in political history, both sides apparently got tired of taking the American public for a ride and reached an inevitable agreement that increased the debt ceiling to $15 trillion in exchange for what turned out to be around $38 billion, or 1% of the annual federal budget, in spending cuts.

            This increase in the nation’s credit card limit didn’t last long; the $15 trillion limit was hit in November of 2011, meaning that the U.S. government managed to rack up nearly $800 billion in debt in a matter of 6 months. At the time that the debt ceiling was hit, government was borrowing at the rate of $4 billion per day, and has projected deficits of more than $1 trillion per year for the foreseeable future.

            Where does all of the money go? Most is spent on entitlement programs; the combination of Medicare and Medicaid cost the United States $793 billion in 2010, and Social Security payments totaled $701 billion. Together, these programs represented 43% of the 2010 federal budget. The defense department, including the military operations in Iraq and Afghanistan and the approximately 1,000 bases being operated on foreign soil, consumed $689 billion in 2010, making it the third-largest component of the federal budget, and representing nearly half of global military expenditures. This madness cannot continue; Standard and Poor, one of the world’s largest credit-rating agencies, has already downgraded U.S. credit, and China, one of the United States’ largest debt holders, began divesting itself of U.S. debt in 2011[1].

            In addition to crippling debt, individual liberty is at its lowest level in American history. The economic freedom rating of the United States, as measured by the Heritage Foundation, continues to slide, and will likely leave the top ten within the next few years[2]. Reporters Without Borders, which ranks press freedom annually, ranked the United States 47^th in press freedom in their 2011-2012 assessment[3]. For a nation that was founded with the intention of being the freest society in the world, this is an embarrassment. Economic liberty is not the only liberty in decline; Americans are subject to over 150,000 pages of federal regulations, dealing with everything from the construction of baby cribs, to the operation of tractors on family farms, to the amount of water their toilets and showerheads use. There is literally nothing that the federal government does not believe that it has the authority to regulate about your business or your private life.

            Any student of American history knows that this is not the way things were supposed to be. The architects of the Declaration of Independence and the American Revolution originally set the nation up as a loose association of autonomous states, which were united for the purpose of common defense and economic development. Thomas Jefferson, who penned the Declaration, spent not only his public life, but his private life following retirement, arguing against government authority and in favor of a political system that today would be considered extremely libertarian. The overall mood of the Revolutionaries was possibly best summed up by Thomas Paine, who opined that “Society in every state is a blessing, but Government, even in its best state, is but a necessary evil; in its worst state, an intolerable one.” In the minds of these men, the only proper purpose of government was to protect life and private property, allowing men the freedom to do whatever they wished, provided that those urges did not infringe upon the similar freedoms of his neighbors.

            This sentiment was not universal, however. There were men, such as Alexander Hamilton, who almost immediately advocated for a strong central government. As libertarian as Jefferson’s ideals were, Hamilton’s were just as authoritarian. In fact, given Hamilton’s philosophy on government, it is hard to believe that he risked life and limb to fight against the British monarchy, which appears to have all the hallmarks of what Hamilton considered good government. As members of Washington’s cabinet, Jefferson and Hamilton would frequently and passionately disagree. To this day, a bust of Hamilton adorns a pedestal in the foyer at Jefferson’s Monticello; it is speculated that it was placed there as a conversation starter, so that Jefferson could regale his visitors with expositions on how wrong Hamilton was.

            The debate on the proper role of government has been part of America since the beginning, and while the United States may have started with principles closer to those of Jefferson, the current role that the federal government occupies is far more in line with Hamilton’s vision. Given the financial situation that the nation is in, perhaps we have a final verdict on whose philosophy was correct.

            In 1944, following Europe’s descent into socialist authoritarianism, and in the midst of America’s transformation under the leadership of Franklin Roosevelt, economist F.A. Hayek warned of the dangers of a centrally-planned economy. In The Road to Serfdom, the case is made that central planning will necessarily lead to a loss of liberty, as central planners build a nation’s economy around a ‘bigger picture’ instead of allowing market forces to direct its trajectory. He also makes the case that any centrally-planned economy will fail to accomplish the goal of a ‘greater good’ because all men have different definitions of good. The ‘greater good’ then becomes the good as defined by those in charge, not the nation as a whole. In Hayek’s own words:

“The ‘social goal’ or ‘common purpose’ for which society is to be organized is usually vaguely described as the ‘common good,’ the ‘general welfare,’ or the ‘general interest.’ It does not need much reflection to see that these terms have no sufficiently definite meaning to determine a particular course of action. The welfare and the happiness of millions cannot be measured on a single scale of less and more. The welfare of a people, like the happiness of a man, depends on a great many things that can be provided in an infinite variety of combinations. It cannot be adequately expressed as a single end, but only as a hierarchy of ends, a comprehensive scale of values in which every need of every person is given its place.”

The attempt to plan for the ‘greater good’ of millions will necessarily result in the planner’s choosing of one man’s definition of ‘good’ over another’s. This is the very definition of totalitarianism; one man’s destiny is determined by another in a superior position.

            Any attempt to maximize the winners through central planning will also be met with disaster. The more people that a central authority tries to serve, the more complex the plan becomes, and since definitions of ‘greater good’ differ from man to man, those ends will necessarily become contradictory, resulting in a massive bureaucracy that is often redundant and frequently contradictory in its goals.

            When viewed this way, it becomes clear that not only does government centralization result in a loss of liberty; our suffocating regulations and entitlement programs have over-burdened our economy to the point where we are drowning in debt. Reasonable debt, by itself, is not a bad thing. In Common Sense, founding father Thomas Paine argues that the debt incurred to properly staff and equip an army sufficient to defeat the British occupation would be a good thing for the Colonies, as it would form a bond between the states. However, Paine also envisioned a libertarian society unencumbered by governmental regulation, and the fortune such a society reaps makes for easy payback on such a debt[4].

            This is not the situation today, however. We have become a nation that wants things handed to us, and we expect our ever-expanding federal government to supply those wants while making us feel safe and secure. This combination of handouts and restrictions has stifled growth and resulted in a fiscal situation that is unsustainable, and an individual lifestyle completely removed from that which the founders of the United States envisioned.

            As with any crisis, it is instructive to see how and where things all began, and try to determine where they all went wrong. This journey begins in 1776, and takes us all the way through to 2011, with stops along the way to see where the federal government has overstepped its legal authority, and how that overstepping has resulted in a nation that is less free and less financially stable.

            When the entire history of the United States is looked at with an eye to determine what happened to move it from libertarian federal republic to authoritarian socialist state, there are five primary periods that stand out. The adoption of the Constitution set up a strong federal government with a strong executive, and while it also set up a clear balance of power to prevent abuse, subsequent generations have ignored those protections, allowing the Constitution itself to set the stage for the problems to come. Westward expansion, which grew out of the almost religious belief in manifest destiny, began the shift from state to federal authority. The Civil War effectively ended state sovereignty and cemented federal supremacy. The Progressive Era set the federal government up as supreme not only over the states, but over the lives of individuals, and began the shift of power from a three-branch balance to the executive. The New Deal completed that shift, and also gave birth to the idea of the federal government as not only authority, but provider.

            Through these five periods, the nation was fundamentally changed, and not for the better. The loss of liberty and crippling debt currently faced by the United States are a testament to this fact.