The Refusal to Think

"The other reason why Congress has been so sanguine about their headlong rush towards bankruptcy is that they know that their willful ignorance is shared by many if not most of their constituents. This is certainly not a modern phenomenon -- as the following quote shows clearly:
"The greater part of men are much too exhausted and enervated by their struggle with want to be able to engage in a new and severe contest with error. Satisfied if they themselves can escape from the hard labor of thought, they willingly abandon to others the guardianship of their thoughts." (Friedrich Schiller: 1759–1805)"

The Refusal to Think
by William (Bill) Buckler

Early this year, Cornell University in the US did a "study" which was designed to see if Americans equate the money they receive from the US government with government "programs". They asked a large number of "ordinary" Americans if they had ever used a government program. The findings -- as reported by the New York Times in February this year -- were astonishing. Forty-three percent of Medicare recipients said NO. Forty-four percent of those on Social Security said NO. Forty-three percent of people on unemployment "benefits" said NO. And to crown the whole study -- FIFTY-THREE percent of those getting student loans -- likely including Cornell students -- said NO.

The Internet postings of participants at "Tea Party" rallies holding signs up saying "Hands Off My Medicare!" have been proliferating for months, to the great glee of the Democrats. In late July as the debt limit circus was ratcheting up by the hour, President Obama mentioned a letter he had recently received from a Medicare recipient. He quoted the letter as follows: "I don't want government-run health care. I don't want socialized medicine. And don't touch my Medicare!"

Surveys taken in the last days of the debt limit "debate" showed that an overwhelming majority (70-80 percent) of those Americans polled were fully in favor of a constitutional amendment to force the federal government to balance its budget. But as Ron Paul (quite rightly) never gets tired of pointing out, without MAJOR cuts to so-called "entitlement" programs, a balanced budget is IMPOSSIBLE.

In "normal" times, this evidence of a massive delusional streak running through the American electorate would be welcomed by (most) politicians. It is what lets them get away with such amazing idiocies as claiming that debt limit increases are being matched by budget "cuts" -- while blanking out the fact that the debt limit goes up NOW while the budget cuts take place over the next ten years. The problem is that to people who actually think -- or claim to think -- that their "entitlement" checks don't come from government, the sky is the limit as far as manipulation of the "truth" is concerned.


Willful Ignorance

In his book -- End The Fed -- Ron Paul maintains that there is an almost total disinterest in monetary policy amongst members of Congress. He is undoubtedly right. Dr Paul relates one private conversation with a Congressman when he was asked if the US Dollar was "backed" by Gold. The Congressman came away amazed, having blithely assumed up to that time that it was. Dr Paul goes on to say that because of this disinterest and ignorance, members of Congress are "convinced" that there is no limit to what they can legislate because there is no limit on what they can spend. What he describes is a fools' paradise. Like any fools' paradise, the only thing which rouses the inhabitants to fury is a suggestion that they might be mistaken. The just completed debt limit "debate" is proof positive of that.

Members of Congress have been able to get away with this willful ignorance because all they have had to do in the past to go on borrowing and spending is to give themselves permission to do so by raising the Treasury's debt "limit". Thirty years ago, the majority of them were sure they would be able to go on doing this in perpetuity. Ten years ago, the majority of them were sure they would be able to go on doing this for the rest of their lives. Today, this "certainty" has hit the wall.

The other reason why Congress has been so sanguine about their headlong rush towards bankruptcy is that they know that their willful ignorance is shared by many if not most of their constituents. This is certainly not a modern phenomenon -- as the following quote shows clearly:

"The greater part of men are much too exhausted and enervated by their struggle with want to be able to engage in a new and severe contest with error. Satisfied if they themselves can escape from the hard labor of thought, they willingly abandon to others the guardianship of their thoughts." (Friedrich Schiller: 1759–1805)


The Struggle With "I Want"

Throughout this debt debate, the Democrats were defending the message that government "services" are "free" while the Republicans were countering with the argument that they are actually not "free" but that doesn't mean that it is necessary to tax to pay for them. Both sides were wrestling with an insoluble problem. Almost half (47 percent) of all Americans either don't pay any income tax or get more money back from the Internal Revenue Service (IRS) than they pay in income tax.

There are three major reasons for this. First, the income of MANY American families falls below the tax "threshold" once deductions and exemptions are factored in. Then there are the MANY "senior citizens" whose income is partly or wholly derived from Social Security. Social Security payments are tax-exempt. Finally, there are those Americans whose "benefits" exceed the income taxes they pay. Add it all up and you arrive at a situation where HALF of the American people are paying ALL the income taxes.

Income taxes are not the only source of revenue for the US government. There are many other taxes and government charges built into almost every transaction. But income taxes are the major proportion of what the IRS collects for the US Treasury to spend every year. And, of course, federal government employees don't "pay" income taxes because their income IS taxes.

The situation is similar everywhere in the world. It differs only in degree. When looking at their budgets, most governments divide them into some equivalent of what is known as "discretionary" spending and "mandatory" spending. "Discretionary" spending includes everything except entitlement programs and the servicing costs of government debt. Fiscal 2011, which ends on September 30 this year, will be the fourth year in a row in which the US government would have been left with a deficit even if they had wiped out ALL "discretionary" spending -- which includes "defense" spending.

In the US (as in most if not all other "developed" countries), most of the people simply refuse to see these facts. Having refused to acknowledge their existence, these people are in no position to consider their implications. This makes a rational debate on the unsustainability of government debt -- the vital need to cut it and the certain results of failing to cut it in REAL terms -- extremely difficult. The circus in Congress leading up to the August 2 "compromise" illustrates just how difficult it is.

The "liberals" say don't cut spending but raise taxes on the "rich" (anyone who has more than me) and don't touch my entitlements. The "conservatives" say don't raise taxes and cut spending -- but don't touch my entitlements. When either side is asked how -- both sides answer -- SOMEHOW!

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William (Bill) Buckler
Captain of The Privateer
email: capt@the-privateer.com

http://www.321gold.com/editorials/buckler/buckler080811.html