Can American socialism ever be reversed?

COMMENTARY Civil Society

Can American socialism ever be reversed?

Sep 12, 2008 3 min read
COMMENTARY BY

Former Distinguished Fellow

Ernest served as a Distinguished Fellow at the Heritage Foundation.

Is socialism too entrenched in America to be reversed?

Sen. Jim Bunning is one lawmaker who has had it

Even as others such as The Heritage Foundation label it "unfortunate but necessary," the Kentucky Republican is incensed by the proposed federal bailout of Fannie Mae and Freddie Mac. To shore up the shaky mortgage giants, the plan would put taxpayers on the hook for as much as $5 trillion.

As the head of the Congressional Budget Office announced, the mortgage giants are now part of the federal government.

Bunning calls U.S. Treasury Secretary Henry Paulson a socialist for promoting that plan - and says he should resign. Bunning also wants Federal Reserve Chairman Ben Bernanke to resign for similar reasons: Bernanke's role in throwing billions at bankers in the Bear-Stearns matter.

Bunning's words are probably too harsh, but they spotlight a major issue.

No matter how necessary it might have been, the situation is a signal that demands an appraisal of how far our government has gone away from free markets and personal responsibility. You don't have to look hard for signs of creeping socialism in today's America. You'll find them wherever government writes big checks from the federal treasury to "help" struggling businesses and individuals. Of course, the more government "helps" them, the more government can control their lives.

And many businesses are just fine with that. America's automakers are now going for the government gold. They're asking for a $50 billion handout. Is that a step toward making Uncle Sam their main stakeholder, too?

Government is more than eager to help - even when help isn't necessary. A few months ago, only a presidential veto stopped a plan to put the majority of America's children - including those in comfortable, middle-class families - into government-run health programs.

And once government gets in helping mode, the rallying cry quickly becomes "Hang the expense" - especially if lawmakers feel the help will buy them votes. Hence we see Congress, having already sent out $110 billion in checks to 130 million taxpayers this summer, poised to authorize a second round of checks, just before the elections.

Barack Obama's campaign platform is packed with giveaways that he disguises with the label "refundable tax credits," but which have a following in both political parties. That means government writes checks to people who don't even pay taxes. So now he and others propose new "refundable tax credits" that include checks to make mortgage payments, pay college expenses and buy "green" automobiles.

As The Heritage Foundation's Brian Riedl recently noted, "Since 2001, federal spending has surged by 59 percent - 6.8 percent per year on average." He notes that it's led by 7 percent annual growth in spending on entitlement programs that include Social Security, Medicare and Medicaid.

Even without passing a single appropriation this year, the current Congress has managed to double the federal deficit. The $407 billion deficit will become official when the fiscal year ends Sept. 30, and it's forecast to continue climbing.

That's why the big spenders in Congress want to put tax cuts "off the table." They fear any reduction in taxes would jeopardize their ability to keep spending more and more.

It's often noted that Washington's spending spree is at the expense of the next generation, which will inherit the debt. But the current generation is having its values warped by the moral hazard of depending on government. The headlines tell us about how Wall Street is bailed out, but there's more.

Perhaps the biggest "dirty little secret" is that many of America's poor stay poor because they don't work. They don't need to work thanks to government giveaways. The Manhattan Institute's Steven Malanga studied the latest Census updates and writes:

... of the 7.6 million families in poverty in America, more than 80 percent did not contain an adult who worked full time in the past year. In fact, in more than half of families in poverty, the householder did not work at all in the last year. ... In this latest study, Census asked non-working impoverished adults between the ages of 16 and 64 why they are out of the workforce. Only 6 percent said it was because they could not find work.

Government giveaways aren't limited to one economic group, but tend to cluster at the low end and the high end of the economic scale, and are getting worse at each extreme.

As Sen. Bunning noted about the Fannie/Freddie bailout, "We no longer have a free market in the United States, we have a government-controlled free market." About Treasury Secretary Paulson (formerly the CEO of Goldman Sachs), Bunning said he "is acting like the minister of finance in China."

As Bunning commented back in July when Paulson announced his plan, "When I picked up my newspaper yesterday, I thought I woke up in France. But no, it turned out it was socialism here in the United States."

The issue isn't whether he's right; the issue is what we'll do to stop socialism from happening here.

Ernest Istook is recovering from serving 14 years in Congress and is now a distinguished fellow at The Heritage Foundation.

First appeared in the WorldNetDaily