The American Dream, Democratic Style

Posted: Apr 05, 2008 12:01 AM
The American Dream, Democratic Style

Listening to Barack Obama and Hillary Clinton debate, one wonders why we didn’t all think of it before. It’s so unobjectionable, really. It turns out that Obama and Clinton just want to help out the average American worker by making everything more affordable. And it turns out that all you have to do to make things more affordable is get the federal government involved.

Healthcare costs got you down? Well, let’s make them more affordable. All we have to do is funnel more money and decision-making power through the federal government. College tuition? Let’s make that more affordable by having the federal government pay for it. Housing costs? Retirement? Job training? Groceries? TVs? Cars? Boats? There’s nothing you can think of that the federal government can’t make more affordable.

The old-school practice is to have Americans pay for things directly—with money they take out of their own pockets after earning it through their own efforts. But why not have the federal government pay instead?

What is that, you say? Our federal government has no money except for what we, the taxpaying American citizens, give it? That’s not a problem.

Rather than pay for healthcare—or whatever product—directly, you can huddle over forms and receipts and figure out how much to pay the IRS. The IRS, in turn, will funnel your money to the Department of Health and Human Services. The DHHS will then pay a well-staffed team of bureaucrats, some of whom will eventually direct some portion of your money back to pay for some portion of your healthcare. You sent in a dollar and it emerged as a quarter? Not to worry. This is all part of the process of making things more affordable.

You see, no one has a handle on limiting wasteful overhead spending like the federal government. And by sending your money to Washington, which eventually sends part of it back to your doctor, you become empowered. It may seem like you’ll have dramatically less control over your own healthcare decisions and your own life, but that’s just a mirage. This is actually the path to efficiency, affordability, and contentment. This is a “change” one can believe in.

Sure, given that the federal government can’t spend a cent that we don’t send it, and given that it must waste at least some money along the way, it would appear to be a mathematical certainty that funds would be lost in the transaction, that things would in fact become less affordable. But that’s before one considers the Democrats’ other solution to the affordability problem.

As Barack Obama is fond of telling us, it’s time to unite the country. And if there’s any idea Americans can unite behind, it’s the idea that someone else should pay for their healthcare. Never mind that the wealthiest 1% pays as much in taxes as the middle 80% combined—not the same percentage, but the same amount (each group pays roughly one-third of the overall federal tab)—despite earning just $1 for every $4 earned by the middle 80% (source: the non-partisan Congressional Budget Office). Never mind that this means the wealthiest 1% pays four times the tax rate, on average, that the middle 80% does. The way to enable the federal government to make everything more affordable is to have the top 1%, or 2% (depending on which Democrat you’re listening to on a given day), pay more. And what about that bottom 40% that doesn’t pay federal taxes at all (some of whom actually get paid by the tax-collector), despite making 1/6 of the income in America? Barack wants to expand that group, increasing the number of Americans who don’t pay federal taxes at all. That way, more people will have even less incentive to oppose new federal programs. Who says there’s no such thing as a free lunch?

The Founders had a name for this. They called it majority tyranny. The simplest, most obvious problem in setting up a democracy is how to keep the majority from voting itself a nice slice of the minority rich’s pie. The only real way to protect against this is to teach respect for property rights, for self-reliance, for the benefits and justness of getting to keep the fruits of one’s own labor—to inculcate faith in the American Dream, in the faith that you too, or your son, or daughter, or grandchildren, might one day become rich, through hard work and ingenuity—and to have representatives and Presidents who cherish and protect such quintessentially American ideals. But our public schools haven’t exactly emphasized such things in recent decades, and Obama and Clinton are finding that the longstanding barriers against their particular brand of majority tyranny have weakened.

Of course, apart from the injustice of such an approach, it doesn’t work. Trying to soak the rich only prevents them from starting businesses, making as many investments, and propelling the economy through their free-enterprise endeavors. So everyone loses. Instead, the rich become more likely to hoard their money or take it offshore. The rich can always move their money around more cleverly than the rest of us. And if you tax companies more, they just become less profitable and employ fewer people—or they go offshore.

Besides, any additional money that the Democrats manage to wring from the rich will be fully offset, with interest, by the wastefulness of having the federal government play a much larger role. The net result will be a financial loss for most American taxpayers. Even after adjusting for inflation, the federal government now gets four times the money it got when Kennedy was President, despite the defense budget’s having dropped from 50% to 20% of the overall budget. This means that we now spend more than six times the money on non-defense-related programs that we did under Kennedy—even after adjusting for inflation.

Has anyone felt their quality of life dramatically improve as a result of such liberal funding of Washington? Has anyone felt the tremendous benefits of our sending six times as much money toward those programs? Furthermore, our taxes aren’t even covering their costs, a fact to which our $9 trillion debt attests all too clearly. The truth is, the federal government is like a slow-moving version of a bank robber making a get-away with an open satchel, out of which money flies to the wind with every step.

And, yet, when Barack Obama and Hillary Clinton look at this distressing picture, they conclude that we need to launch more federal programs and send more money to Washington. They conclude that we need to put Washington in charge of healthcare. If they get their way, the rest of us will not only suffer from financial waste but will be swamped with bureaucratic regulations. Socialized medicine would combine tremendous financial inefficiency with maddening bureaucratic senselessness.

For all of the Democrats’ railings against business, this sounds a lot like when a CEO repeatedly botches the management of a company and yet is continually rewarded with more money and more responsibility. Not happy with the job the government is doing? Want a change? Then let’s give the government more control over our lives!

Americans will be dramatically better off if we reestablish healthcare as something that people pay for out of their own pockets, patient to doctor (remembering that people wouldn’t have nearly so much taken out of their paychecks for healthcare premiums and taxes if that were the case). Legislation needs to push to that end, not in the opposite direction. Under socialized medicine, only one of two things can happen: either total costs will rise further—they certainly can’t drop as a result of funneling things through a massive government apparatus—or else doctors will get paid less. And if doctors get paid less, then fewer people will go to medical school. So there will be fewer doctors, which will further decrease access to healthcare.

Thankfully, there will always be a new Democratic program to make medical school more affordable. We’ll just tax the rich more—along with other taxpayers—and send that money to bureaucrats, who will funnel it to other bureaucrats, who will eventually funnel some of it back to some aspiring young medical student who, along with the rest of us, would have been far better off if the federal government had stayed out of healthcare in the first place.

Ah, isn’t it beautiful? The American Dream, Democratic style! The Founders must be proud.

But it’s not too late to change direction—to move away from stifling, encumbering, wasteful, unmanageable, federal government intrusion into nearly all aspects of our lives. Barack Obama wants to lead us further down the road toward centralized power, labeling further steps in the same wrong direction as “change.” Let’s veer off that road, onto one that starts curving around in the opposite direction, toward greater individual freedom and responsibility, paving it as necessary as we go.

To do so will take great leadership, determination, and the willingness on each of our parts to teach our fellow citizens the wisdom of changing course. But it is possible. We need change, but it needs to be a change in direction. We need to reduce, not increase, the amount of money we send to the federal government and the amount of control it exercises over our lives. That will make things more affordable.

Obama isn’t offering a change in direction, but he is promising change—and don’t doubt that he’ll deliver. Evoking LBJ, he vows to increase our rate of acceleration down Old Democrat Road, shifting us into high gear in the wrong direction. For reasons that go well beyond the financial, that’s a change America can’t afford.