Google+
Close
The Progressives’ Legacy of Bankruptcy
The roots of our current crisis.


Text  


There is a growing sense in the minds of Americans that we, as a nation, are reenacting the dramatic climax of Thelma and Louise: The pedal’s to the metal, the car’s gaining speed, and we are about to plunge into the abyss. The abyss is not the Grand Canyon, of course, but its fiscal equivalent — national bankruptcy. Americans are finally waking up to the fact that our government has been — and still is — on an unsustainable spending spree. According to the International Monetary Fund, our gross debt — which passed the $13 trillion mark in June — is now at 92.6 percent of GDP, and is projected to surpass our GDP (meaning the debt-to-GDP ratio will exceed 100 percent) by 2012.

Advertisement
As bad as that seems, however, even the gross-debt figure does not capture just how serious the situation is, for it does not include the growing costs of our three largest entitlement programs — Medicare, Medicaid, and Social Security. It is the costs of these three programs, and not the bailouts, wars, stimulus, etc., that are the primary cause of our exploding deficits and debt. “Under current law,” the Congressional Budget Office (CBO) explains, “the federal budget is on an unsustainable path. . . . Almost all of the projected growth in federal spending other than interest payments on the debt comes from growth in spending on the three largest entitlement programs — Medicare, Medicaid, and Social Security.” Our debt crisis is thus essentially an entitlement crisis. When the unfunded liabilities of these programs are added to the gross debt, the figure rises from $13 trillion to a mind-blowing $60 trillion. So grossly underfunded are these programs that the CBO estimates Congress would have to raise the lowest marginal-income-tax rate from 10 percent to 26 percent, the 25 percent rate to 66 percent, and the 35 percent rate to 92 percent, to close the gap.

Who has driven America to this precipice? Certainly part of the blame belongs to the politicians, primarily Democrats, who created and enlarged these entitlements without imposing taxes anywhere near sufficient to sustain them, and otherwise seriously mismanaged the programs’ finances. On a deeper level, however, the blame belongs to the late-19th- and early-20th-century Progressive movement. Despite recent claims that the Progressives had little impact upon the development of liberalism in the New Deal and beyond, including in the realm of social insurance, the Progressives were in fact the founding fathers of social insurance in America. Far from making a break with Progressivism, accordingly, the enactment of these programs during the New Deal and Great Society represents the clear policy fruit of the philosophical revolution as to the end of government, and the fundamental conception of morality underlying it, that the Progressives fought so vigorously to effect.

Of course, persuading many Americans that Progressivism initiated a struggle over the soul of America is a hard sell. For decades, liberal scholars and politicians have attributed the 20th-century growth of government to changes in the mere material circumstances of American life. The Progressive era’s progressive reforms, we have been told, were the necessary and inevitable response to problems created by the closing of the frontier, the rise of huge corporations and a transition to large-scale factory production, population shifts out of the countryside and into the city, large waves of immigration, etc. The New Deal, in turn, was simply a response to the economic hardships caused by the Great Depression. By attributing these periods’ reforms to America’s changing material circumstances, the orthodox view implies that there was no change of philosophical or moral import likewise under way. More to the point, it implies that the Progressives’ reforms were guided by the principles of the American Founding.

And yet this is demonstrably false.


Pages


Text