How much Governance can we really afford?
There appears to have been a fundamental shift in American thinking over the last half century. Tom Brokaw's "The Greatest Generation" admires the self-reliant ambition of the people who returned from the Second World War to build the greatest economy the world has ever seen. These entrepreneurs took charge of their own future and built businesses that profited owners and workers alike -- with the result that the average "poor" of today lives as well as the middle class of that generation.
But this appears to be changing. Many of us no longer look to the business world and our own initiative to provide for our needs. Instead, we look to the government. We have become risk-averse, wanting guarantees that our retirement, our job security, our health care, and all the needs of our poor will be taken care of by the government. In return, we seem willing to give up our personal freedoms and pay exorbitant taxes. Unfortunately, this dream of government being able to provide for our needs is an illusion -- something that, in the final analysis, simply doesn't work.
Our founders understood that individual freedom, the rule of law, and the ability to own private property are the key to a prosperous and civilized society. History's lesson, from ancient Greece to today, is that people who give up their freedoms for the "common good" are starting down the slippery slope to tyranny.
But after Eastern Europe's devastated economy was fully revealed, these countries quietly shelved their plans in favor of free markets. The result has been the explosion of countries like China and India into the global economy. They are shedding government controls while we are moving in the opposite direction.
The ownership of property is the incentive that drives people to generate wealth. It's when you know you can improve your life by owning the home you want, the car you like, and the clothes you desire to wear that it becomes worthwhile to work hard. If you are only working so you can give your money to the government for redistribution, what's the point? And people take better care of what they own. Low-income housing projects around the world prove the point. When governments make it possible for people to own their own homes, they are well cared-for. Government owned properties are not.
But back to the initial question: Where are we headed? Let's look at an example. Swedish citizens face a top personal income tax rate of about 57 percent. A payroll tax is also levied, with the employee paying a 10 percent tax and the employer paying 32.28 percent. Wealth is taxed, as are capital gains. And, if a taxpayer has any disposable income left after paying these taxes, the value added tax (sales tax) is 25 percent. The expansion of the welfare state has badly undermined Sweden's competitiveness. "Real" unemployment -- including government programs for unemployed persons -- has been estimated by various sources at 15 percent to 20 percent. Is this the future you want here?
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