"No doubt about it". MC
After a status quo election, American politics seems fairly stable – two relatively equal parties are jockeying for position. Nevertheless, James Piereson, a Manhattan senior fellow at American University, sees President Barack Obama as “a figure from a dying era.” The bureaucratic state, he says, teeters on the edge of collapse.
Monday night, Piereson told a brief story of America – past, present, and future – to a crowd of about 80 concerned citizens at the American Enterprise Institute (AEI), in Washington, D.C. as part of a lecture explaining why he believes that American’s next revolution is just around the corner. In order to predict the future, we must first learn from the past, he argued.
In 1800, Thomas Jefferson’s party called John Adams a “blind, bald, crippled, toothless old man,” while
Adams’ party said a Jefferson presidency would bring “murder, adultery, rape, incest, and robbery” to America.
When Jefferson’s Democrats won in 1800 (and in the next five elections), they brought along something worse – Manifest Destiny. Under their rule, the Republic grew from thirteen colonies along the East Coast to a continental empire “from sea to shining sea.”
After this first “party regime,” Piereson said that Lincoln’s Republicans, who held the reins of power from 1860 to 1930, grew the economy through the free market, tariffs on European goods and the gold standard. America’s population rose from 30 million people to 130 million, and America became an industrial nation.
After the stock market crash of 1929, “the Democratic welfare regime” sought security for the middle and working classes. Their programs of Social Security, labor unions and federal spending stabilized the economy.
In recent years, however, that system has started falling apart.
“Since 2001, federal spending has grown at roughly twice the rate of economic growth,” and states and individuals keep asking the U.S. government for more money.
Negative demographic trends also test the system. While between 80 and 90 million people will be set to draw old age benefits in the 2020s. The current workforce (people able to work) stands at 158 million, and perhaps only 120 million of them have full time jobs.
“Even if we assume an expanding economy and a declining unemployment rate, the nation will eventually reach a point where there are less than two people working to support each beneficiary,” Piereson said, explaining that 150 million people will be working to support 80 million. “That’s not a good situation.”
The bad news doesn’t stop there. In order to meet America’s economic needs, Pierson said, the U.S.’s gross domestic product (GDP) needs to grow at least by about 2 percent per year, so long as spending does not increase. If the economy grows even faster, we can cut the deficit and debt. However, given the decades of decline in the U.S. GDP, that is not likely to occur.
Increasing federal spending, an aging population, and lagging economic growth will drive up deficits further, no matter how well Republicans and Democrats deal with the impending “fiscal cliff.”
These problems are likely to hit Millenials hardest, since those currently entering their twenties will drive the workforce in the next two decades.
As in the 1860s, something’s got to give in America. Politicians did not face the problem of slavery head on in the 1840s and 1850s, and it led to a civil war. America may need another cataclysmic event – like the Election of 1800, the Civil War, or the Stock Market Crash of 1929 – to force the people to deal with these problems, he argued.
The “fiscal cliff” may just the beginning of the U.S.’s fall from grace.
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