Sometimes societies find themselves in pernicious cycles in which the perceived medicine seems worse than the known disease. The Roman satirist Juvenal lamented the ill effects of free food and free entertainment for the masses (“bread and circuses”) in part because he knew there was no remedy for the pathology in sight — and thus only a slow decline toward fiscal insolvency or riots were on the horizon. Any Roman emperor bold enough to rein in the Praetorian Guard, charge the mob for grain, and curb gladiatorial shows would earn a usurper marching on Rome from the provinces. So most did not.
When Ronald Reagan sought to end the so-called misery index, he knew that higher interest rates, tax cuts, and efforts to prune entitlements would in the short term lead to higher unemployment, more deficits, slower growth — and growing unpopularity. His recovery came just in time for the 1984 election; just a year earlier Reagan had been demonized as a heartless bastard who had strangled the economy for the benefit of the rich.
We are currently mired in the slowest recovery from any recession in our modern history — and we face the same circular dilemma. A good argument could be made that President Obama’s gargantuan new health-care initiative, federal takeovers of businesses and failed subsidization of green industries, vastly expanded food stamps, unemployment insurance, and disability insurance, and “You didn’t build that business” boilerplate have ossified the private sector. Many businesses have plenty of cash, but their owners are terrified to risk much of it in hiring, buying, or expanding. This results in fewer jobs and slower growth — and again, in this squirrel cage of an economy, yet more need for entitlements.
How to break the cycle of less money coming in, ensuring more money going out? Curbing entitlement spending is critical if we are to rein in debt and foster initiative, but in the short term such sobriety will raise howls of protest from those who are hurting and the legions invested in administering their entitlements. Business incentives are needed to spur growth, but may spike for a time our already unsustainable deficits. Vast new investments in energy production could create real wealth and millions of jobs — but not without eliciting environmental hysteria. Raising interest rates slightly would restore some of the dollar’s value and allow savers to earn something more than the present pittance on their deposits — but it would anger those who are already deeply indebted.
The federalization of the private sector, the constant talk of higher taxes, the demonization of the entrepreneur, and the war against the gas and oil industries seem to ensure an ossified economy that guarantees, in turn, a need for more entitlements that, in turn again, only raise the deficit and slow down the economy further — in a self-perpetuating cycle that cannot be stopped and yet cannot go on. And yet it can go on for a while longer on borrowed money to the benefit of those invested in receiving from big government.
Given human nature, societies never voluntarily reduce entitlements. That is the subtext of much of the critique of popular democracy, beginning with Plato and Aristotle. It will do no good to note that before the 2006 Medicare prescription-drug benefit, Medicare recipients felt that payouts were already generous. It will do no good either to note that the country once felt that its Social Security disability program was humane enough without 85,000 new enrollees each month. Nor would it be wise to remind Americans that vast new improvements in technology — from laptops, cell phones, and flat-screen TVs to new prescription drugs — have made life far less harsh and far more entertaining than at any time in the past. Tell today’s Kia owner that his car is far more comfortable and reliable than the rich man’s Mercedes of the 1970s — and he is still upset that someone else has the money for a new Mercedes right now.
Appetites are never judged by an absolute standard, only by a relative one — as “cuts” to entitlements that draw hysterical invective almost always prove to be cuts in the rates of increase. Political suicide would follow any frank reminder that the present level of entitlements leads to bankruptcy. Or that we could easily prune back the welfare state and yet still live far more lavishly than we did a decade ago — given the vast rate of growth in federal spending and the explosion in technological progress.
We see the symptoms everywhere of a political discourse that has nothing to do with reality. Agribusiness and its apologists in an age of record farm prices insist that growers will perish without direct crop subsidies. We are lectured that the inner-city impoverished go to bed hungry, even as a greater number suffer from obesity; the administration cannot decide whether overeating or starvation plagues the underclass. Poor flash-mobbers rarely go after bulk foodstores when they can loot pricey sneakers and electronics. Entire industries exist to figure out how to sign parents’ assets away to their heirs so that the instantly impoverished mom and pop can receive free government nursing-home care. Police, firefighter, and non-combat military pensions and benefits are considered sacrosanct and are a third rail to anyone foolish enough to question them — even though the all-night 7-Eleven clerk, the freeway construction-crew member, and the private security guard are far lower paid, may face as much danger, and as taxpayers are expected to fund compensation for others that they could never dream of for themselves. Pious professors and administrators hector the public about the value of a college education and worry little about creating newly indebted generations — who will never attain the lifestyle of those professors and administrators whom they subsidize.
Our salvation lies in a group of politicians who will balance budgets, put entitlements on a fiscally sustainable basis, and remind Americans that in comparison with our predecessors — who gave us much of what we enjoy — we live amazingly prosperous lives. If history is any guide, such frankness will never happen. Financial implosion, not prudent correction, is the usual remedy for reckless expenditure.
In that regard, the president has offered $5 trillion more in debt, rather than a way to reduce the $11 trillion debt he inherited. As gas hits $4 a gallon, he talks about tapping oil reserves that others invested in, rather than using vast new finds of oil and gas on federal land. He has borrowed to fund more food stamps, unemployment insurance, and disability entitlements although we could not pay for the existing recipients.
Remember the Nika riots, which followed the naïve emperor Justinian’s efforts to trim Byzantium’s bloated civil service. The triggers for the revolutions of 1848 included the cancellation of social workshops for the poor that just months earlier had never existed. Postwar Britain demanded nationalization of industries, national health care, and greater worker compensation, which ensured that Britain would soon be outproduced by war-flattened Germany and Japan. Reagan’s air-traffic controllers preferred to lose their jobs and endanger travelers rather than face wage restraints. I grew up with large farmers swearing that the end of cotton allotments and pay-not-to-farm setasides would mean the end of them.
The strangest thing of all? Americans watch both parties demagogue proposed cuts in Medicare, knowing full well that the present rate of expenditure cannot go on — and yet they are fully prepared to blame those who agree with them and reduce the rates of yearly increases. In other words, we know that we are doomed on the present course; we oppose those who agree and take action to avert it; and yet we might some day praise them for saving us after we did all we could to destroy them.
One wonders whether we have any leaders who wish to save the country even if it means endangering themselves.
— NRO contributor Victor Davis Hanson is a senior fellow at the Hoover Institution and the author most recently of The End of Sparta, a novel about ancient freedom.