What is it about people with wealth/power? They don’t seem to stop and think about what it is that they’re saying and what impact it may have. On the other hand, may be they do know exactly what they’re doing. In the case of Mr. Buffet, who I have great respect for as an investor, he is neither an oracle nor even plain old smart when it comes to public policy and taxes. What he said this morning about our government budget deficit was not only severely outrageous, but also totally and absolutely dead wrong! The problem that I have with Mr. Buffet was his statement about our current government overspending problem, which went something like this: We fought a civil war, and two world wars and we worked through those issues, we can work through our current issue. He is implying that given the massive deficits that we ran up during the Civil war, world war (WW) 1 and WW2, and the fact that we were able to work out of those deficits, we should be able to work out of our current government fiscal problem. This is utterly untrue, not false, but untrue.
Here’s why. Yes, while it is true that the deficits that we ran up after each of those wars were far worse than the situation that we have today, and we were able to pay-down those debts, those situations are not even remotely comparable to what we have today. First of all, those were ONE-TIME run-ups in the deficits, second, and most importantly, we, as a country, had a lot of excess financial capacity to service those debts, and third, once those debts were paid-down, they were gone. This is not even remotely the situation that we have today.
Today, what we have is, first, continuing deficit problems that are definitely not one-time, i.e., that are recurring, due to entitlement programs that are bottomless and endless pits, second, we don’t have anything remotely close to excess financial capacity that we had back then (for example, at the end of WW2, the US was 90% of the global economy), and third, unless we eliminate the entitlement programs, the deficits will not go away. This should have been obvious to Mr. Buffet, but it doesn’t seem to be. This implies one of two things: 1) Either he is ignorant, or 2) he is deliberately misleading. Either way, this is unacceptable, especially coming from a person who wields so much attention, respect and influence.
If Mr. Buffet is trying to influence public opinion so that taxes get raised and more so called “social programs” are instituted or existing so called “social programs” are expanded then his pitch was perfect, and props to Mr. Buffet for using his influence and audience to further his political agenda. However, I don’t think that this is the case. I think he’s ignorant. Because if he is really pushing a so called “liberal/socialist” agenda then he’s beyond a hypocrite and no words could express how much of a despicable position he represents.
If he is ignorant then I hope he reads this and realizes his mistake. Here’s why he is mistaken. At the heart of our problem today isn’t revenue. Mr. Buffet said so as much when he said that he could live with the government being about 20%-21% of US GDP, while the revenue is about 18%, creating a 3% deficit. He further went on to confirm that he doesn’t want the government to head towards 25% of GDP and that a 3% deficit is very manageable. As an aside, it may be manageable if we have moderate inflation that cheapens the government debt, but this is at best a maintenance of debt levels and not a reduction in debt levels. The problem is that the maintenance of debt levels will become a big problem over time. Anyway, getting back to the issue, government revenues aren’t the problem, it’s spending. In particular, entitlement programs are the problem.
Entitlement programs are the single and only issue because they are a bottomless pit. Not only will the bottom 75% of income earners continue to demand more and more from the top 10%-25%, they will use force to do so and justify it through democratic processes, i.e., through voting. This means ever more higher and higher tax burden for the top 10%-25%, the ones that drive the long-term prosperity of the country — this is very different than the short-term prosperity, which is shared by all in proportion to their spending, not in proportion to their income. Then there’s the liberal/socialist agenda that will make it impossible for our deficits to be reduced.
Here’s how it works. When things are going well, economically speaking, the libs/socs demand more and more entitlements, because “we can afford it.” Meaning the wealthier segments will pay more because the economy is humming and the libs/socs use guilt as a very powerful weapon. If all else fails, they’ll take their message of destruction and evil to the greater public and make the masses indignant by feeding them the bullshit that the rich are greedy and the rich don’t care about the poor and their suffering because the rich refuse to help the poor in good economic times when the wealth grow their wealth, while the poor continue to suffer. Then the libs/socs will use this bullshit message to make the masses vote for more social programs. But then, when the economy takes a dive, the libs/socs demand that no cuts to entitlements be made because the poorer segments can’t afford to lose their entitlements. So, while the rest of us, in particular the wealthier segments of society, have to deal with the declining economic metrics, the poorer segments don’t get impacted or hardly get impacted. Job loss for the poorer segments and the wealthier segments favor the wealthier segments, but the poor and less educated should be more at risk, so that shouldn’t be an issue. However, to compensate for the fact that the poor are more at risk in terms of job losses and overall economic impact is felt more by the poor, the libs/socs demand and usually get expanded aid for the poor during harder economic times, which typically doesn’t get reversed during better economic times. This is how the bottomless pit is created.
This is why entitlements are the issue and why we have to eliminate them, but the libs/socs are too short-sighted, invested and entrenched in their views to even acknowledge this trend despite the plethora of historical evidence to support the fact that entitlements, not revenue, have always been and always will be the problem, and certainly, never the solution. The bottom-line is that we must not allow the short-sighted and irrational people dictate to those of us that can actually think how to run this country, and yet, because of the democratic process, we have no choice. And, the fact that someone like Mr. Buffet espouses this evil is ridiculous and unforgivable. Yet, here we are!
To solve this quagmire, we must eliminate all so called, “social programs.” And, for this to happen, we need to amend the Constitution so that no one is allowed to steal.
For more, please read my books, “… Under the Constitution with Liberty and Justice for ALL,” available at http://www.CreateSpace.com/3978962 and also available on Kindle, and “The New Constitution for Modern America,” available at http://www.CreateSpace.com/4281897 and also available on Kindle. Please don’t forget to rate this post. Any comments or questions are welcome and can be left for me on this blog, @Ahmedinejahd on Twitter, on Facebook or via email at AlexAhmedinejahd@Yahoo.com. Thank you in advance for buying my books, and rating this post. And, thanks for visiting my blog; I hope you get an opportunity to read my other posts. Have a great day!