Michael Waldron: Are Occupy Wall Street demonstrations harbingers of things to come?Published 10:09pm Wednesday, December 7, 2011
Two very serious things are happening in the United States. One is our national debt crisis and the other is the Occupy Wall Street (OWS) demonstrations. My purpose in this column is not to characterize the OWS demonstrations. My purpose in relating OWS to the debt crisis is to wonder what will happen when politicians finally become serious about reducing entitlements. What will Americans do when changes are made to taxes, Social Security, Medicare, food stamps, etc. that may affect them adversely?
The United States must deal with the debt crisis in this country and deal with it quickly. The national debt has surpassed 15 trillion dollars. In 10 years, the debt will be at least 21 trillion dollars, probably a lot more. After that, estimates of our national debt become inaccurate. As I write this column, the deadline for the Super Committee to report out a budget deal hasn’t passed. It really doesn’t matter whether the super committee succeeds or fails. Suppose the Super Committee succeeds and suppose that future congresses adhere to the deal made in 2011. In 10 years, this country will be seven trillion dollars deeper in debt! Suppose the super committee fails, then an automatic sequester of $1.2 trillion will happen. Keep in mind future congresses can vote to void the deal or stop this sequester. Then we will be at least $8.2 trillion deeper in debt. We’re just tinkering around the edges of our debt problem.
Governments around the world are spending more money than they take in taxes. The United States has the world’s largest economy, but it cannot be immune forever to the balance sheet. The economic tsunami that began in Greece and threatens Italy, Spain, Portugal, Ireland and possibly all the countries of Europe will wash over our shores if we don’t change our spending habits. One common factor to all these countries is that they are democracies. More on that later.
Our debt is based largely on entitlements. There is no way to reduce the budget deficit seriously without touching entitlements. Even if we reduced our defense budget to zero, our growing entitlements will drown us eventually. At some point in the future, we must change entitlements or raise taxes to European levels. The only other options are to continue to borrow to support current spending levels or print more money. If the government prints more money, the dollar will become correspondingly worthless. I hope the government does not do that because that’s a form of national suicide. The only correct course is to modify entitlements. By modify I mean cut. We must cut fairly. One place to start is to mean test benefits and tax deductions. There is no fairness in Bill Gates receiving Medicare and Social Security. There is no fairness in millionaires and billionaires taking deductions on million-dollar home mortgages. Raising tax rates during an economic downturn is stupid. The government, however, can close loopholes.
So what happens when entitlements are cut? Will each American shrug his or her shoulders and just carry on? Given the current OWS demonstrations, I doubt it. My pessimistic prediction is that some section of our society will take to the streets to demonstrate extreme displeasure. That section of society may be encouraged by politicians, who see a political advantage dropped in their laps. Even now, President
Obama and Nancy Pelosi have made statements supporting the OWS demonstrations.
If politicians try to use the mob, our democratic government will suffer because political power will pass to the streets. It boils down to the question of whether people can govern themselves. Can we tell ourselves that we must do with less or will we listen to someone who promises everything in return for granting him authority to make it happen? That has happened many, many times in history. It could happen here as well.
In the next few years, we may see whether our founding fathers were correct. Can man govern himself or is an authoritarian government required? If our politicians exercise maturity and vision to discipline ourselves, we will make it through our debt crisis. If politicians give in to baser instincts of political self-interest, our future looks dark. In the final analysis, we’re to blame for this because we elected them. Every four years, people speak of the presidential election as the most important event in a generation. Surely, the 2012 election will indeed be that event.
It will determine whether the United States will be more like Europe or whether we will remain a democracy where freedom is prized. In case you have a doubt about whether we should become like Europe, consider that the European model isn’t working.