Wednesday, September 19, 2012

The Romney Tape: Independence or Dependence?

Two conflicting visions of America are colliding in this election cycle- the individual or the state.

The Romney Video, released Monday, presents the issue of the election: The Role of the State versus the Individual.

Every election is for the future. The 2012 election is truly the one. America is on the precipice of abandoning 400 years of self-reliance, individuality, and personal liberty for dependency on the state.

We all know what Governor Romney said at the Florida fundraiser: “There are 47% of the people who will vote for the president, no matter what.  All right, there are 47% who are with him, who are dependent upon government, who believe that they are victims, who believe that the government has a responsibility to care for them, who believe they are entitled to health care, to food, to housing, to you-name it. That’s an entitlement. And the government should give it to them. And they will vote for the president no matter what…. These are people who pay no income tax.”

He added his job is “not to worry about those people. I’ll never convince them to take personal responsibility and care for their lives.”

His self-proclaimed inelegant remarks wove together two separate threads of the modern American state – those who receive benefits from the government, and those who are not paying income taxes.

Democrats are the party of the state, of government. Republicans are the party of the individual and personal liberty.

Americans have been a self-reliant people, relying upon themselves to succeed, going back to the time of the original settlers.

However, slowly but inexorably since the days of the New Deal, Americans have become increasingly dependent upon the federal government for benefits. Social Security, Medicare, Medicaid, Social Security Disability, unemployment, extended unemployment, food stamps, VA benefits, and farm subsidies pour out of Washington.

These government benefits don't include ObamaCare which hasn't fully kicked kick in. The British Health System is the largest employer in England with 1.4 million employees. Once the federal government takes over the 16% of the economy that is health care, the percent of Americans receiving benefits from the government will greatly exceed 50%. There will be no turning back until the system inevitably collapses.

Some commentators derisively make a distinction between the makers and takers in life, but those receiving government benefits may have paid into them, such as social security or been thrust into economic distress through no fault of their own. 16.2% are on social security and 14.9% on Medicare. Many Americans, especially those receiving “temporary” benefits might well want to return to the workforce. Labeling the beneficiaries as takers is therefore grossly unfair.

Economists label though these payments as transfer payments.

The Obama vision of the role of the state versus the individual is incorporated in his campaign’s Julia video (See June 1, 2012 blog) in which Julia is dependent upon President Obama for everything.

President Obama was a community organizer whose role was to obtain favors from the government, and that as an Illinois State Senator he had the power to allocate and distribute government favors. He believes in government. That has been his existence.

The President is not for economic growth. He’s for fairness and redistribution as decided by government.

Today, 49% of all American households have at least one resident receiving government benefits according to the Census bureau, up from 30% in 1980.

Americans receiving food stamps have climbed by 15 million over the past four years to 47 million; one out of every seven Americans is on food stamps. The Department of Agriculture was actually advertising a few months ago for Americans to sign up for food stamps.

A Tax Policy Center study shows 46.6% of Americans do not pay income taxes; hence the assertion that 47% do not pay taxes. One of the sayings about taxes is “Don’t raise my taxes; raise the other guy’s. Raise the taxes of the one behind the tree.” The non-income taxpayers will often not be the same as those receiving benefits from the government. Nor may they have a sense of entitlement.

A proposal to cut the taxes of the 53% who pay income taxes will not appeal to those not paying taxes. Nor will raising taxes on the 53% offend the 47%. Thus, the Governor’s tax arguments cannot appeal to them.

Several problems exist with these transfer payments. First, they create a culture of dependency. Cutting seniors off Medicare is not a viable political option, witness the backlash in France, Greece and Spain over austerity.

Americans understand that private employers can terminate them, but they do not expect the government to cut off benefits to them or lay them off.

Second, these payments are not being covered by savings or revenues, but $1.5 trillion in annual borrowings. The benefits are unsustainable.

Third, as the public sector grows, it can no longer be sustained or supported by the private sector. At some point it will suck the economic life out of the private sector, and head to collapse, such as Greece and Spain.

Fourth, the government is notoriously inefficient and costly in the delivery of services, often staffed with excessive staffing and salaries, and subject to fraudulent claims.

Independence or dependency – Do Americans want to be dependent on government or themselves? That’s what this election is about.

Governor Romney may be beginning to understand the theme. He told reporters Monday night that his comments addressed “a question about direction for the country – Do you believe in a government-centered society that provides more and more benefits? Or do you believe instead in a free enterprise society where people are free to pursue their dreams?”

He followed up Tuesday with Neil Cavuto of Fox News: “The President’s view is one of a larger government. I disagree. I think a society based on a government-centered nation, where the government pays a larger and larger role, redistributes money, that’s the wrong course for America.”

He explained “The right course for America is to create wealth, create wealth …. Not to redistribute wealth.”

Then he said it “This is a decision about the course of America – where we are going to head.”

This election is for the future of the country.

The defining question is: Does Governor Romney understand this reality? Now that his own words have been used against him, has he found, truly found, his theme for the remainder of the campaign?

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