A Shift in the American Mind

I have detected a shift in the American mind and it is a good thing.  I see more and more people awakening to the fact that government is not there to look after people.  I see more people realizing that these ongoing wars are ridiculous, unnecessary, and quite harmful.  I see more people realizing that government is not the answer to their problems.

For young Ron Paul supporters, they have no idea just how much this country has changed in the last 5 years.  Libertarianism was barely on the map.  There was no such thing as a libertarian giving a speech to thousands of people in an audience.

But I also see very subtle things in every day life where the government weakens slightly and the spread of information increases.  The government has promoted, and sometimes even forced upon people, unhealthy things.  Fluoride in water is one example and yet I see most people drinking bottled water now.  They know that most of the tap water is bad.

I am actually seeing several products in the grocery store advertising that they contain no high fructose corn syrup.  Of course, this is something that has been promoted by government with subsidies and high tariffs on sugar.  But the fact that some products are starting to advertise in bold letters that they do not contain high fructose corn syrup, attests to the fact that consumers are conscious about it.

Changing subjects, but still on the same theme, I saw a piece on Fox News talking about military requests for ballots being way down from past presidential election years.  In other words, it looks like a lot of military men and women are not going to vote.  While the Republican hacks on Fox were talking about Obama and his administration most of the time, they couldn’t explain why the military people were not going to vote in big numbers for Romney.  And I doubt that there is any more apathy than in years past.  Of course, the most logical explanation, which terrifies the establishment, is that more people, particularly in the military, don’t want to vote because they see little difference between Romney and Obama.

We now live in a world of open communication.  We live in a world of Google and YouTube.  Things get around fast.  Politicians can’t get away with things as much as they could in the past.

With a bad economy, more people are doing their own independent research to find out why.  They want to know the reasons for the bad economy and what can be done to fix it.  They are tired of the same old Keynesian explanations.  More people are finding Austrian economics.

While I think it will still take some time to change hearts and minds, we are actually headed in the right direction.  The government continues to grow, but its structural foundation is weakening.

It isn’t really considered “cool” this time around to support Obama.  If anything, the Ron Paul supporters are where the action is.  People aren’t as excited about Obama this time around and rightly so.  And it seems that most of the Romney supporters are only Romney supporters because they are anti-Obama.

So while it seems like things are getting worse and worse with bigger and bigger government, we need to look at the positive things and realize how many more libertarians we have today than we did just 5 short years ago.  I’m not sure if Americans will be better off 5 years from now, but I think we will be much better off in 20 years.

Ron Paul and Unfunded Liabilities

The unfunded liabilities run up by the U.S. government are estimated at anywhere from $100 trillion to over $200 trillion.  While the estimates vary quite a bit, does it really matter?  Nobody can even conceive of what it means to owe $100 trillion.  In other words, it will be impossible for the government to keep its promises.

The biggest piece of the unfunded liabilities is Medicare.  Then comes Social Security.  There is also Medicaid and government worker pensions.  These are the big ones.  For now, I will just focus on Medicare and Social Security.

These unfunded liabilities keep growing every year.  There is no way that the government can keep these promises over the next 75 years, let alone the next 20 years.  There will be some kind of a default.  Many libertarians assume that the default will come in the form of inflation.  But that will not take care of the bulk of the problem.

If there is high inflation, then Social Security is supposed to be adjusted for a cost-of-living increase.  It will not solve the Social Security problem, unless the government stops giving a COLA or redefines it. If that happens, then seniors will get checks that buy less and less.

It is even worse for Medicare.  If there is high inflation, then medical costs will just continue to skyrocket.  This will make it even harder for the government to keep its promises.

The easiest form of default will be to increase the retirement age substantially.  If Congress raises the age to 75 overnight, then that will wipe out tens of trillions of unfunded liabilities immediately.  Of course, Congress won’t do this.  It will take smaller steps in defaulting on its promises.  It will only do them when it is necessary.

I have always found it ironic that older people probably made up the smallest voting group (by age) for Ron Paul.  Most of Paul’s support came from younger people.  It is ironic because Ron Paul is probably the only person who could have somewhat “saved” Medicare and Social Security, at least from a major default.

Ron Paul had a plan to cut one trillion dollars from the budget in the first year and to balance the budget by his third year (as president).  He was the only major candidate to offer any significant cuts.  He would have cut military spending significantly by ending the wars overseas.  He called for the elimination of several departments.  If Paul had become president and used the bully pulpit to get Congress to go along, there would have actually been a slight  chance that Congress might not have to declare a major default on Medicare and Social Security.

Instead, we will get Obama or Romney, neither of which will cut federal spending.  Even if they froze spending over the next 4 years, the federal debt would still continue to grow by massive amounts.

The so-called entitlement spending, the military spending, and the interest on the debt are greater than the total tax collections.  In other words, you could eliminate everything from the federal government except for those few things and the budget would still not be balanced.  And Romney doesn’t want to cut anything at all from the military.  And we know Obama won’t cut anything unless the situation is dire.

In conclusion, there will be some kind of a default in regards to Medicare and Social Security.  The main avenue of default will be through raising the age to collect.  If you are in your 40’s or 50’s right now, don’t plan to retire in your 60’s, unless you have done a really good job of saving for yourself.  If Ron Paul had received the Republican nomination, there might be some hope right now of making good on at least some of these promises.  But it isn’t going to happen with the continuation of big spenders in office.  Welcome to Greece soon.