The Fall Of The American Democracy!
| January 12, 2011 | Posted by Roshawn Watson under Uncategorized |
By: Roshawn Watson
For the most part, China’s economy doesn’t seem to be missing a beat and is quite a force in the global economy. While modern China’s economy is blazing, the economies of Western democracies are growing more conservatively and still licking wounds from the recession. The late English historian, Alexander Tytler, has some fascinating writings on this subject. While the accuracy of his following quote is debatable, as our the conclusions, it does have obvious and potent implications today:
A democracy is always temporary in nature; it simply cannot exist as a permanent form of government.
A democracy will continue to exist up until the time voters discover they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by dictatorship.
The average age of the world’s greatest civilizations from the beginning of history has been about 200 years. During those 200 years, these nations always progressed through the following sequence:
- From bondage to spiritual faith;
- From spiritual faith to great courage;
- From courage to liberty;
- From liberty to abundance;
- From abundance to complacency;
- From complacency to apathy;
- From apathy to dependence;
- From dependence back to bondage.
How Does This Apply To America?
- In 1620, the Pilgrims sailed to America for religious freedom from the Church of England (bondage to spiritual faith to great courage). When you risk beheading and dying en route or after settlement for your beliefs, I’ll call that great courage too.
- In 1776, the signing of the Declaration of Independence meant that America was declaring war on the most powerful country in the world — England. With the Revolutionary War, the 13 colonies in North America broke free from the British empire, and the democracy was formed (courage to liberty).
- By 1933, the Great Depression caused Franklin Delano Roosevelt to allow the US dollar to no longer be backed by a gold standard.
- At the conclusion of WWII in 1944, the US dollar, now backed by gold, became the reserve currency of the world.
- Since the U.S. entered the war late, the U.S. essentially became the creditor to the world and financed the rebuilding of England, France, Germany, Italy, and Japan. This made America rich, our democracy moved from liberty to abundance.
- President Nixon took the U.S. dollar off the gold standard in 1971 because America was spending more than it was producing and the U.S. gold reserves were being depleted.
- The following year, Nixon opened the door for trade to China, which caused a huge economic boom. The U.S. borrowed money through the sale of bonds to China, which was then one of the world’s poorest countries.We stopped much factory production. We borrowed and printed money to maintain our lifestyles (abundance to complacency)
- We continued to borrow for the next three decades (complacency to apathy)
- You know what’s next. Fast forward to 2007, America has the subprime and general lending crisis, and by 2010 we have double-digit unemployment. Moreover, we are dependent on China to buy our bonds and produce cheap products for us (apathy to dependence). Additionally, we have millions of individuals and businesses dependent on the government for provision.
When I read Robert Kiyosaki’s review and commentary about the fall of the American Democracy a month ago, I knew I had to share it with you. Regardless of your feelings about him, these facts may have a tremendous impact on Americans and several other countries. That’s because the theory of decoupling remains just that: a theory. Our economies are still intrinsically linked, as proven by the global reverberations felt by the credit crisis. Personally, I’m hopeful that we will innovate and return to prosperity. However, given this historical basis, where do you see this going? According to Tytler’s cycle, the next stage is from dependent back to bondage.
When Mr. Credit Card shared We Don’t Export Enough, many argued. Where do you stand now?
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Copyright 2012, Roshawn Watson, Pharm.D., Ph.D. All Rights Reserved.
Let's call it empire instead of democracy, and then terms like decline or breakup become more than a little plausible. Independence or nullification movements by the states are variables that I don't think get enough consideration. I'm skeptical of theories that set forth a "return" to bondage through dictatorship or an overarching Federal Government. The bondage under the British was external, not internal.
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In my view you hit the key point at the end. If we can be free to innovate America will survive albeit at a weakened state. We have the power to make changes in the political process and we act when we come up against emergencies. We'll solve the deficit problems (federal and trade) but only after they reach the crisis stage. Our nation is a mirror of what is happening at the micro level. People went through a phase of thinking they could live in mansions and live like millionaires when it was all borrowing. At the macro level our nation is slowly realizing that it can't pretend any longer it is a millionaire. It can't make promises that it doesn't fund and expect to fund them out of economic growth.
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There's a famous quote from Ben Franklin– "“When the people find that they can vote themselves money, that will herald the end of the republic.”– that fits right into this theme. We are clearly well beyond that point. For me, the sea-change began to happen in the 1920s and 1930s with the Great Depression and the wave of socialism that swept over the world. Central planners thought they could solve the people's social and economic problems with "demand-side" economics by dramatically increasing government spending. The spending has never stopped and keeps getting ratcheted up with every perceived crisis. Are we finally at the breaking point as a country where we can no longer live off of borrowed money? No one knows, but I think it is an encouraging sign that the voices advocating fiscal responsibility are getting louder and more numerous.
Where do we go from here? Either into the dustbin of history by continuing on our current trajectory, or people of courage in both political parties must step up and show uncharacteristic leadership in reducing spending, slashing the bureaucracy, simplifying regulations, simplifying the tax code, granting back to individual Americans the freedom to shape their own fate based on their talents. I am not optimistic that this will happen. There are many entrenched interests fighting to prevent this from happening from the unions to big business. Politicians are weak in general and have few principals other than their own survival. It will take an extraordinary group of people, like at the founding of the country, to clean up the mess that has been at least 80 years in the making. I see few people of this caliber. So the only hope is a grass roots uprising from We the People.
Equally disturbing is the way many people deal with problems. They first look to the government for a legislative solution which is a very passive, apathetic approach, instead of looking inside themselves and making themselves an agent of change. This may be in part due to the conditioning of our mass media society which over emphasizes what goes on in Washington and hypes each major Act of Congress as if Moses had just descended from Mt. Sinai with the Ten Commandments in hand. Until We the People return to the founding philosophy of individual responsibility we are doomed to endure massive wastes of money on programs that make little sense as we fix the fix to the fix in a never ending cycle good intentions gone horribly wrong.
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Biz usually hits the nail on the head.
I believe that we're doing it to ourselves via the vote and by falling for politicians that sell us sweet lies, but I also believe that the elites are taking advantage of us via the printing press.
These guys say it better than I do, so I'll just link to a few of my favorite sites that discuss the problems with the current processes and possible solutions:
http://blog.mises.org/ http://seasteading.org/ http://www.ruwart.com/Healing/rutoc.html
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Empire: that's very interesting, and I never thought about it quite that way. I think the return to bondage aspect is quite controversial indeed.
I don't appreciate our growing weakness internationally. I'm fine with others doing well, but we need to be innovative and productive as well. Otherwise, I don't know how you continue to remain independent or even interdependent (as equals).
My recent post The Fall Of The American Democracy!
What a phenomenal analogy, and it's nice to hear it without political spin. Yes, it is a "let's live like a rock star" mentality that in unsustainable. You are right that the urgency to act only comes at the crisis level, which is quite unfortunate. Very well said… I always appreciate your insight!
My recent post The Fall Of The American Democracy!
Well said but also very troubling. I think you accurately describe the lack of individual responsibility and lack of political courage plaguing many of us. Like you, I believe that it would take an extraordinary group of leaders to do what you propose, and quite honestly, I really don't know who would do it. The problem is doing these things would require someone to endure scrutiny and criticism at a level that even most politicians are not familiar with. That's because the primary job would be to tell people NO. You are an entitled baby (people or businesses or organizations… doesn't really matter who)… that's your job/problem not your neighbors. I don't think most people are wired to want to be that person delivering that news nor do I think we the people are wired to here it.
My recent post The Fall Of The American Democracy!
"sweet lies…" how poetic! You are right that we have to get busy being a part of the solution.
My recent post The Fall Of The American Democracy!
I hear what you are saying, but Governors and State Legislatures do it every year. Granted, they don't have the power of the printing press to create more money. But they have to make the tough decisions. New Jersey and Virginia have slashed spending, while Illinois (glad I don't live there) has elected to raise taxes by 75%. Sometimes it feels like the US is at the Bread and Circuses stage of the Roman Empire. The leaders are trying to buy off their subjects with goodies, instead of requiring the people to earn those benefits through the sweat of their labor. It will be painful for many, but this level of spending can't continue unless the US wants to be a second rate power on the world stage. I wish I had the answer, but each year our elected representatives seem to get more bold and brazen in their spending. There are no immediate and personal consequences to prevent Congress from spending like lunatics, few deterrents to stop them from raiding the treasury to pay off supporters and constituents. Raising the debt ceiling has become a running joke. I would like to tie their pay to the yearly deficit. So if they spend 50% more than the government takes in, their pay would be cut by 50%. If they spend 10% less (fat chance) than the government takes in, their pay gets increased by 10%.
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Interesting thought about tying compensation to the effectiveness of the budget. The primary problem I see with this is that the money that they earn while in office pales in comparison to what they earn outside of office. At the national level, think about the over $100 million Bill Clinton made on the speaking circuit after his presidency or the $13 million +/- a million Sarah Palin has made with no present office. It's just funny, but the money made during the tenure of a public office possibly won't be much of a motivator for many of these people. Often, several are very accomplished/high earners anyway and are statistically wealthier than the general population. I wish it would work though.
Yes I read about Illinois today. It ended being 2/3 increase in state income taxes with a clause that if spending increased by more than 2%, then the tax increase would be void.
My recent post The Fall Of The American Democracy!
RB40,
It's definitely an issue of international ramifications.
My recent post The Fall Of The American Democracy!
Kris, I so resonated with what you said that I didn't even want to respond initially because I wanted to just think about it for a while.
You are sad and what you seem to be referring to in every situation is a lack of personal responsibility. We don't take ownership or have little pride in ownership, and as a result of our irresponsibility (our schools, our jobs/employees, our finances) we get a mess.
It's quite tragic, but I am happy that advocates for fiscal responsibility are rising. I am happy that people are decrying that it is unacceptable that their kids be "taught" how to pass a test without getting an education.
And that's a key point, about needing to be productive. Productivity breeds innovation, productivity in the strict sense of manufacturing. With the rapid de-industralization of the US, we wind up with a large share of the population that is deficient in hard skills. China is led by engineers, while we are led by lawyers (literally).
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I don't think most people are against globalization as they are against our the growing weakness of our national economy. In other words, find ways to compete globally that doesn't screw us economically.
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In other words, find ways to compete globally that doesn't screw us economically.
Canada is in a better financial situation right now, but we're sleeping under the giant that is the U.S.A., and should the U.S.A. fall, we would be squashed like a bug underneath them.
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