In case you’re wondering why the U.S. economy is in such a mess, consider this sobering statistic: for the first time since the Great Depression, U.S. households received more in cash handouts from the government in 2010 ($2.3 trillion) than they paid in taxes ($2.2 trillion). Census Bureau numbers from 2009 show that 59 percent of Americans get at least one federal benefit such as Medicare, food stamps or housing subsidies. At the same time, the Tax Policy Center estimates that 46 percent of Americans will pay no federal income tax in 2011. A growing number of people on the receiving end of government money, coupled with a shrinking number of taxpayers, is a formula for disaster.
Businesses are also getting government support in the form of bailouts, as well as tax breaks for industries with deep pockets for campaign contributions. The latest revelations surrounding Solyndra and other so-called “clean energy” companies are only the tip of the iceberg. Solyndra recently declared bankruptcy after receiving a government loan for $535 million. Another solar panel manufacturer, SunPower, got a federal loan guarantee for $1.2 billion, which they say will create 15 permanent jobs, meaning each job cost the taxpayer about $80 million. Your tax money will also enable SunPower to build another plant – however, the plant will be in Mexico!
Government handouts are like a highly addictive drug – it’s easy to get hooked on “free” money, and people will fight rather than give it up. Look at the Occupy Wall Street demonstrators. As far as I can tell, what they really want is for the government to take money away from the wealthy and give it to “the little guy.” This is the result of hearing that, ever since President Obama took office, the rich need to be taxed more (income redistribution), capitalism needs to be controlled and corporations are the enemy of the working class. These misguided, desperate people bought into Obama’s socialist propaganda, and now they want the rainbows and lollipops they were promised.
Americans have been told that everyone is entitled to own a home (hence the Community Reinvestment Act, which started the whole housing bubble). They’ve been told that every American is entitled to a high-paying job, a free education and free healthcare. And this not only applies to citizens – even illegal immigrants are entitled to all these things. The question is, who pays? According to The Heritage Foundation, the top 10 percent of earners pay 70 percent of the federal taxes. There isn’t enough tax money to support all these pie-in-the-sky ideas, so Congress keeps running up more debt to support entitlement programs that should never have been instituted in the first place.
These lies buy votes in the short term, but it doesn’t take long before the house of cards comes tumbling down. Look what’s happening in Greece. The government spent itself into debt during the early 2000’s when the economy was booming, and now that they’re forced to cut back and reduce government jobs and subsidies, people are rioting in the streets. Don’t think it can’t happen here – it’s already started.
I don’t blame the Occupy Wall Street protesters for being frustrated and angry. We’ve all been lied to – they’re just the folks who believed the lies. The Tea Party people are just as frustrated and angry, but they were smart enough to see through the lie to the bitter truth – Obama and the Progressives are selling our future in order to get votes and power for themselves today. It’s time to join with your local Tea Party or like-minded group and demand that the government put an end to entitlement programs financed by deficit spending.
Originally published in Nevada Business Magazine: