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Americans are naturally optimistic. They want to believe good things will happen. They want to believe this is the greatest country in the world. They want to believe people have good intentions.
Of course optimism, like any good thing, can be distorted into something bad. Specifically, politicians and the media have used American optimism and good faith in our system to perpetuate some dangerous myths about our society, government and economy.
Myths are an important part of any culture. They’re not inherently bad. They help people define who they are and what they believe. However, there are a few American myths that are particularly destructive because they’re being used as excuses to make some very bad decisions at the highest levels.
One of these myths being perpetuated by the powers that be is that we have a free-market economy. This myth is particularly laughable, inaccurate and destructive.
We definitely do not have anything close to a free-market economy in this country. Education, finance, energy, health care, agriculture and now automobiles, just to name a few major sectors of our economy, are either almost entirely government-controlled or so heavily regulated and subsidized by the government that they might as well be run by the government.
This myth of a free-market economy is used by left-wing politicians to justify constantly increasing the size and scope of government every time something goes wrong in our economy or society.
Here are just a few real-life examples. There’s an oil spill. Better increase government control of energy. Kids aren’t learning. Better increase government control of education. People can’t afford health care. Better increase government control of health care. People have too much debt. Better increase government control of finance. Auto companies are going bankrupt. Better increase government control of the auto sector. Farmers can’t get the prices they want for crops. Better increase government control of agriculture.
The fake logic used is that these problems are created by failures of the free market, which is why the government needs to get involved to fix them. Of course many of these problems, especially in education, finance and health care, are actually caused by too much government involvement in the first place and more government is going to make the problems even worse.
For some problems, such as car companies failing, the cause may be market forces, but there is no reason to believe that the government can somehow magically make car companies more competitive. It shouldn’t even need to be debated that governments are not well-qualified to run private businesses, yet some people running things in Washington, D.C., seem to feel differently. They need a history lesson. Maybe Mikhail Gorbachev is available to teach them.
Another outrageous myth is that public-sector employees, such as teachers, firefighters, police and administrators are dutiful, underpaid servants who never get the compensation that they deserve. Nothing could be further from reality in today’s economy.
It has been recently shown that public-sector employees typically make 40 percent more than comparable private-sector employees and work fewer hours and days. In addition, if you include the extremely generous benefits and pensions of public-sector employees, they actually make closer to 100 percent more, or double, what comparable private-sector employees make.
According to a recent study, adjusting for benefits and pensions, a typical teacher, firefighter or cop in major cities who has worked long enough to qualify for a pension is making in excess of $150,000 per year. That would put them in the top 2 percent of individual earners. Senior public-sector administrators and executives often make the equivalent of more than $300,000 per year after making these similar adjustments. That would put them in the top 1 percent of individual earners.
Public-sector employees in reality are a wealthy and politically powerful lobby at both the state and the federal level. Their vast resources allow them to buy politicians who help them to create this myth that public-sector employees are constantly underpaid and need more and more taxpayer resources from people who in reality make less money than they do and work harder. The irony would be amusing if it weren’t so pathetic that struggling, economically stressed taxpayers are being used in this way.
A third myth is that senior citizens are mostly poor and helpless with massive government assistance. This is also completely the opposite of what is true.
Seniors typically have more savings and, excluding health care, lower expenses than any other demographic group. Many of them also still work by choice to earn extra income or just to keep busy even into their 70s. By some accounts, nearly 60 percent of the federal budget is programs for seniors, mostly Social Security and Medicare. These and other programs are the biggest financial challenge faced by this country.
If these programs for seniors were simply means-tested (i.e., only provided to those with a demonstrated financial need to receive the assistance), that would dramatically lower the costs associated with these programs and go a long way toward fixing our increasingly severe problem with budget deficits.
It would also contribute greatly to lowering health-care costs because health-care providers couldn’t just keep relying on more and more government subsidies to serve the senior market.
Without means-testing these programs, enormous tax increases on working people and severe cuts in other government spending will cripple our economy or send our government debt into default if we fail to raise taxes or cut spending.
Either way, we face an economic collapse and dramatically lower standard of living for everyone in this country if we do not reduce these massive subsidies to senior citizens.
Nevertheless, there is no political will to substantially cut benefits for seniors because they have an extremely powerful political lobby. Once again, this myth of senior dependence on massive taxpayer assistance to survive was created by AARP and others in the senior lobby themselves. They buy politicians to help promote this myth and they shout down anyone in the media who dares to challenge this factually wrong nonsense that they’re spreading around as gospel.
These myths demonstrate that perhaps the most important rule of thumb in the media and politics is that the more a group claims to need public assistance and taxpayer money, it’s probably true that they deserve it the least.
Think about it. If certain groups are so helpless and weak, how come they are already absorbing so much of our public resources? How come they have so many lobbyists and so much money to promote their agenda? It’s obvious that these groups are not weak. They’re not really in need of taxpayer help. It’s quite the opposite. They’re part of the establishment that is feeding off of taxpayers and bankrupting this country.
Going back to the first myth that we live in a market economy, the only effective way to fight back against these greedy interest groups is to reduce the size of government.
There is no way for government to efficiently allocate resources in our economy. Government will always give the most money to those who are the most powerful and need it the least even as they claim to be helping society or those in need. That has been proven over and over again no matter which political party is running things.